So IM8 just absolutely dumped data on us in Tuesday’s earnings call.
20 months of cohort economics. A full cap table. Monthly CAC. Geographic splits. Third-party card data. Danny Yeung’s exact words: “With 20 months of data behind us, we are opening the books.”
He wasn’t kidding.
So let’s break this into the two things that actually matter:
1. What data did we actually get and what does it tell us?
2. What does the forward model look like? What CAC can IM8 tolerate? When does this thing actually make money?
This is going to be a big one. Strap in.
PART ONE: WHAT DATA DID WE GET?
1A. “Adjusted Free Cash Flow” And Why It’s a Self-Inflicted Wound
Let’s start with the thing that annoyed me most. IM8 gave us a wonderful new metric I have never heard of before in my life: “Adjusted Free Cash Flow.”
Where the “adjustment” is basically equivalent to just ignoring marketing spend. The headline was everywhere: “July Was the First Month of Positive Consolidated Adjusted Free Cash Flow and Expected to Remain Positive for Q3 and Beyond.”
Yeung called it “the single most important milestone we have been tracking since before the brand launched, arriving faster than I believed possible.”
Now read the footnote. Adjusted Free Cash Flow is defined as net cash from operating activities plus net fundings under the General Catalyst Customer Value Fund facility. The disclosure therefore does not establish positive operating cash flow alone.
They took the $1 billion General Catalyst facility which funds up to 70% of their marketing spend and added the drawdowns to operating cash flow to produce a positive number. I understand the intent. They want to show the market that the business can sustain operations under the current operating model and capitalisation structure. Fine. That’s a legitimate thing to want to communicate. But spinning what is effectively a giant merchant cash advance financing your marketing spend as “free cash flow” is a gut punch to the credibility of a company that really doesn’t need any more question marks around it.
The CVF structure is genuinely clever. It’s non-dilutive, it’s cohort-matched, it’s the right instrument for a business with these unit economics. But it is financing. Calling the proceeds of financing “free cash flow” is the kind of thing that gets you a reputation you spend three years trying to shake.
Just report the operating number and let the CVF facility be what it is: a smart way to fund customer acquisition without diluting shareholders. That story is good enough on its own.
1B. The Cap Table And the Theory That Just Died
There’s been a running theory in the comments and on FinTwit that IM8 is disguising its true CAC by paying for enormous celebrity exposure in equity rather than cash. The logic being, if you’re giving away stock to Beckham, Giannis, Jay Shetty, Aryna Sabalenka, Inter Miami and a scientific advisory board, then your reported CAC is artificially low because the real cost is sitting in the cap table instead of the P&L.
The disclosure kills this theory pretty comprehensively.
Here’s the fully diluted breakdown as of 5 August 2026:
6.5% of the fully diluted company for the entire ambassador, influencer and scientific advisory board pool. Combined.
That’s David Beckham, Giannis Antetokounmpo, Aryna Sabalenka, Jay Shetty, the Inter Miami partnership, and every scientific advisor for six and a half percent. For the amount of firepower they’ve brought on, that is genuinely modest.
Compare it to almost any celebrity-founded consumer brand you can name. Rhode. Fenty. Skims. Casamigos. The celebrity share of the cap table in those structures is routinely 15 - 40%. IM8 assembled arguably the most decorated ambassador roster in the supplement category for less equity than most brands give a single founder-adjacent celebrity.
1C. The Cohort Data: This Is the Juice
Right. This is what I actually spent the day on. I’ve been backing into assumptions to decompose the retention curve more granularly than the disclosure gives you directly. The difficult part is the offer switch to quarterly subscriptions, which has undoubtedly changed the shape of the curve.
Recall that new-customer AOV went from approximately $110 in FY2025 to approximately $240 in Q1 2026, driven by the international rollout of quarterly plans with roughly half of Beckham Stack customers and more than a third of Daily Ultimate Essentials Pro customers choosing quarterly subscriptions.
That’s not a small change. That’s a fundamental restructuring of the purchase cadence. Here’s what I’ve reverse-engineered, anchoring on the disclosed 14.2% figure at month 20:
Estimated retention curve (dollar-based):
Month 1: 100%
Month 2: ~51%
Month 6: ~32%
Month 12: ~21%
Month 20: ~14.2% (disclosed)
Month 36 (projected): ~5%
Imputed purchase frequency: approximately 6.5 purchases over 20 months. I’m fairly confident in this directionally.
One clarification before anyone emails me: this is dollar-based retention. Please don’t tell me you have some larger number that came out of your Recharge account, which is lying to you by counting people who didn’t actually buy but also didn’t cancel as “retained.” That’s garbage. Dollar-based or it didn’t happen.
So how good is 14.2% at month 20, actually?
Across 50+ subscription brands, the 90th percentile at month 20 is 14.6%. IM8 is sitting at 14.2%. That puts them almost exactly in the top decile of subscription consumer brands at meaningfully larger scale than most of the comparison set.
This is the single most important number in the entire disclosure, and it’s the one nobody is talking about because it requires actually reading the cohort tables. The company reports 87% of revenue is recurring from subscribers, with 140,000 active subscribers as of July. Top-decile retention at nine-figure scale is not a normal thing. That’s the whole investment case in one data point.
1D. The CAC Problem And It Is a Real Problem
Now the uncomfortable part. CAC is growing faster than new-customer AOV.
CAC has tripled in six quarters. AOV has not quite doubled.
Now, to be fair to the company the AOV improvement is real and structural (quarterly subs), and there’s a genuine bright spot in the most recent data: IM8 added 47,373 new customers in July at a CAC of $239 down 21% from Q2.
That’s a meaningful sequential improvement and worth watching. But the structural direction is unmistakable. The channel is getting more expensive. This isn’t an IM8 problem it’s a Meta-duopoly with 41% operating margins problem that every DTC brand on earth is absorbing right now.
The question isn’t whether CAC rises. It’s whether the retention curve can outrun it. That’s what the model is for.
1E. Geography: The Most Underrated Slide in the Deck
This one’s almost a throwaway in the presentation, and I think it’s one of the most interesting things in the entire disclosure. Not even half of IM8’s revenue comes from the United States.
The H1’26 split shows the US as the largest single market but Canada, the UK, Australia, Singapore, Hong Kong, Germany, UAE, Switzerland, Netherlands, Malaysia, France, Italy, Spain and Belgium all contribute meaningfully.
The brand ships to 46 countries and delivers well over 200,000 servings daily. Most DTC supplement brands scale to $200M+ almost entirely on US demand, then hit the wall and start the painful, expensive international expansion motion from a standing start.
IM8 built international distribution simultaneously with domestic which means the US market itself is arguably still under-penetrated relative to brand awareness. There is a lot of room left to run here, and I don’t think the market is pricing any of it.
PART TWO: THE MODEL
Right. Now let’s build the thing. Solving for the retention curve to make total revenue equal the new-plus-returning sum was enough for me to finally put together a working model with a full cohort waterfall.
The Key Assumption: CAC Elasticity
Historically, every 10% increase in ad spend has come with about a 4.6% increase in CAC. I’m holding that assumption constant.
I actually think that’s relatively conservative, given IM8’s shift to quarterly subscriptions took AOV from ~$110 to over $200 which structurally improves the economics of every dollar of acquisition spend. But let’s keep the elasticity factor as-is for argument’s sake.
Fitting the Revenue Curve to Guidance
Management has guided to $220-230M for FY26 (IM8 contributing $215-222M) and initiated FY27 IM8 guidance of $400M+.
Under the same elasticity factor, CAC lands at approximately $407 by the end of 2027. And the brand is still not profitable at that point.
When Does EBITDA Actually Cross Into the Green?
1Q28.
At a $575M annualised run rate, EBITDA finally crosses into positive territory and the mechanism is specific, It happens when new-customer revenue falls to roughly 25% of total revenue. Which means you’re looking at:
$100M+ in quarterly repeat revenue at 65% gross margin
versus roughly $75M in quarterly ad spend
Those two figures finally start washing each other out. And in reality, the repeat gross margin is likely substantially higher than 65% because IM8 rolls out the red carpet on first-order packaging. Anyone who’s operated a subscription brand knows the first box costs you materially more than box four. The blended 65% the company reported for Q2 understates repeat-order economics.
The margin trajectory already supports this direction: Q2 gross profit was $30.2M at 65% margin, up 3 points year over year. Fixed operating costs were $8.8M 19% of sales showing genuine leverage as revenue scales. Contribution profit reached $21.4M, 46% of sales, a 16-point margin improvement year-over-year. Fixed costs at 19% of sales and falling. Contribution margin at 46% and rising. That’s the shape you want.
Management guides Adjusted EBITDA loss improving to -$8M to -$12M in H2 2026, from -$24.6M in H1. My model has CAC reaching approximately $485 by the middle of 2029. I’d expect management to probably not run that hot. But even at that CAC, we can still squeak out about 5% adjusted EBITDA. And my genuine expectation is that these unit economic assumptions get refreshed well before then, because IM8 enters retail or sees success with additional product lines. Three new SKUs are launching in Q4 Hydration, Creatine and Kids’ Gummies and none of the new product launches are included in current guidance. Every one of those is potential upside to a model that already works.
THE VALUATION
Now for the part everyone actually scrolled down for.
The Comps Have Moved. Dramatically.
P&G buys Thorne: $3.8 billion
P&G is acquiring Thorne for $3.8 billion in cash from L Catterton, deepening its push into health and wellness. The numbers behind it:
Thorne went public in 2021 at a $525 million valuation. L Catterton took it private in 2023 at $680 million. Its annual revenue surpassed $500 million in 2025. Thorne’s projected 2026 sales of $650 million puts P&G’s offer at roughly a 5.8x revenue multiple and represents a 77% rate of return for L Catterton. 5.8x revenue. For a 42-year-old brand.
Unilever buys Gruns
Unilever announced a deal to buy US-based nutritional supplements brand Gruns for an undisclosed amount.
And Nestlé is doing the exact opposite
Nestlé is conducting a strategic review of its low-growth, low-margin VMS brands.
Read those three data points together and the picture is unambiguous. Nestlé is getting rid of the house of commoditised, mass-price-point VMS brands it paid nearly $6 billion for in 2021. Meanwhile P&G is paying $3.8 billion for Thorne and Unilever bought Gruns for over a billion.
The market isn’t paying for supplements. It’s paying for science-backed, premium, DTC-native supplements. Consumers younger than 40 account for the largest share of Thorne’s sales, and the brand has recorded notable gains in its direct-to-consumer channel.
That’s the exact profile IM8 has except IM8 is growing 288% year-over-year and Thorne isn’t. And there is a great deal more private M&A in this category that hasn’t been publicly reported.
So What’s IM8 Actually Worth?
Current EV: approximately $213 million.
FY26 revenue guidance: $220-230M. FY27 guidance: $400M+.
IM8 is currently trading at under 1x forward revenue in a category where strategics just paid 5.8x. The valuation is completely disconnected from the private markets.
If I’m any strategic acquirer in market for a scaling VMS brand right now post-Thorne, post-Gruns, with Nestlé actively dumping the commoditised stuff, I don’t know how IM8 isn’t the first look.
The Two Scenarios
Scenario 1: the 2027 story plays out: If my model is remotely accurate, and IM8 shows up at the end of 2027 with $400M in sales and a very clear path to profitability, the company fetches an EV in excess of $1 billion. That’s still only 2.5x forward revenue. Less than half what P&G just paid for a slower-growing asset.
Scenario 2: the market simply re-rates to the median: If the market starts to give credit for the FY27 plan sometime next year, when the company is trailing in excess of $300M, and prices the stock just at the median range on a multiple basis call it 2.7x:
At a share price of roughly $19.46 as of Tuesday’s close, that’s about 124% upside on the conservative scenario.
For reference, Benchmark raised its price target on PRE to $40 from $30 while maintaining a Buy rating following the quarter. So I’m not wildly out on my own here.
WHERE I LAND
I remain bullish on this company as of right now if nothing else, purely from a risk-reward standpoint. I genuinely don’t have much of an opinion on whether or not it’s a “generational company” or whatever it is you all get so worked up about in the replies.
The reality is simpler than that: IM8 is playing in the hottest category in consumer. It has top-decile subscription retention at nine-figure scale. It has a great team, real gross margins, genuine international diversification, and a management team that just voluntarily opened twenty months of cohort data to public scrutiny.
And it is so, so cheap relative to what strategics are actively paying for worse assets. The CAC trajectory is a real risk. The “Adjusted Free Cash Flow” framing was a credibility own-goal. Profitability is genuinely 2028, not 2027, and anyone telling you otherwise hasn’t built the waterfall. But at sub-1x forward revenue in a category where P&G just wrote a $3.8 billion cheque at 5.8x the asymmetry is about as obvious as it gets in public consumer right now.
Did you actually read the cohort tables, or did you just read this? Be honest. Reply and tell me which number surprised you most.
Standard housekeeping: this is analysis and personal opinion, not investment advice. I’m not a financial advisor, I hold shares in IM8, and you should do your own work before doing anything with your money. Models are only as good as their assumptions, and mine are visible above precisely so you can disagree with them.
P.S. The single most under-discussed number in the entire disclosure is the 6.5% fully diluted ambassador pool. David Beckham. Giannis. Sabalenka. Jay Shetty. Inter Miami. An entire scientific advisory board. Six and a half percent, combined. Every founder reading this who’s currently being asked to hand over 15 - 20% for one mid-tier celebrity should print that table out and put it on the wall. It is possible to build a world-class ambassador roster without giving away the company but only if the brand is genuinely good enough that people want to be attached to it. IM8’s cap table is the strongest available evidence that the product is doing the heavy lifting, not the equity.