Enhanced Group Q3 2026 Earnings Call Transcript

Quartr
Provided by Quartr
November 12, 2026

Key Takeaways

  • Negative Sentiment: Q3 revenue was $3.3 million, while net loss was $13.5 million and adjusted EBITDA loss was $8.8 million. Cash ended the quarter at $12.1 million; management cited roughly $47 million of potential liquidity when including expected proceeds from planned financing and other sources.
  • Positive Sentiment: Enhanced opened invitation sign-ups for Enhanced OS, with a full launch planned for January 2027. The platform will combine medical records, diagnostics covering more than 100 biomarkers, and wearable data; management said Live Enhanced gross revenue rose to $1.1 million from $0.4 million in Q2 with performance marketing spend flat, and is targeting profitability by year-end.
  • Positive Sentiment: Management plans to budget approximately $20 million for the 2027 Enhanced Games and expects the broader sports business, including Breakers, to break even or better that year. It is pursuing media rights, ticket sales, and host-city support in addition to sponsorship, though these targets depend on execution and revenue generation.
  • Positive Sentiment: Subject to completing the DEAG transaction, Enhanced expects the combined company to generate approximately $670 million in 2027 revenue and $26 million in adjusted EBITDA, about $65 million better in adjusted EBITDA than expected combined 2026 results. Management cited DEAG’s event and ticketing scale and potential synergies, while noting that its projections do not include synergies.
AI Generated. May Contain Errors.
Earnings Conference Call
Enhanced Group Q3 2026
00:00 / 00:00

There are 8 speakers on the call.

Operator

Good afternoon and welcome to Enhanced Group's third quarter 2026 earnings conference call. All participants are in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the call over to Susan Aylward, General Counsel of Enhanced Group. Please go ahead.

Speaker 1

Thank you and good afternoon. With me today are Maximilian Martin, Chief Executive Officer, and Sid Banthiya, Chief Financial Officer. This afternoon, we issued our third quarter 2026 results press release and filed our quarterly report on Form 10-Q. Both are available in the investor relations section of our website. Today's call contains forward-looking statements, including statements about our strategy, the proposed combination with DEAG, our sports and consumer health businesses, liquidity, and future events and products. These are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the risk factors in our SEC filings, including the materials we filed on November 6th in connection with DEAG. We undertake no obligation to update these statements except as required by law. We will also refer to adjusted EBITDA and adjusted operating costs, which are non-GAAP measures.

Speaker 1

Reconciliations to the most directly comparable GAAP measures are in our press release. All share and per-share figures reflect the one-for-10 reverse stock split. With that, I'll turn it over to Max.

Speaker 2

Thank you, Susan, and thank you all for joining. Last week, we announced our agreement to acquire a majority stake in DEAG, together with a concurrent $50 million private placement. Today, we're announcing Enhanced OS, the next major step for our consumer health business. Those announcements reflect the company we're building, helping people improve how they feel and perform, and bringing them together through extraordinary life experiences. I want to walk you through three parts of that business: Live Enhanced, the Enhanced Games, and DEAG, what we have built, where we are investing, and how we intend to turn that progress into profitable growth. Let me start with Live Enhanced, because we have spent the past several months building the foundation for a much larger consumer business. We recently added cognitive enhancements as a new vertical, alongside metabolic regulation, hormone optimization, and peptides.

Speaker 2

With the addition of six peptides, including BPC-157, TB-500, MOTS-c, KPV, epitalon, and Semax, we now offer approximately 20 prescription treatments, subject to clinical evaluation and prescribing by licensed physicians. Our supplements are also now, since Q3, available in 33 international markets. The launch of these six peptides is a significant expansion for us. Health and performance optimization is central to why people know Enhanced, and we believe we have an opportunity to build a leading consumer brand in this category through personalized care and medical oversight. The most important announcement today is Enhanced OS. On our last earnings call, we told you we were building it. Today, we are opening sign-ups for invitation-based early access ahead of the planned full launch in January 2027. Please read the press release on Enhanced OS that just went out now as well, and make sure to sign up for it.

Speaker 2

Enhanced OS brings your medical history, diagnostics covering more than 100 biomarkers, and wearable data together to generate personalized protocol recommendations for you. It starts with understanding who you are, where your health stands today, and what you specifically want to achieve. Are you 25 and training for a marathon, or are you 45 and looking for more energy to spend time with your kids after work? The platform is the same. However, the goals and recommendations people receive are personalized. As wearables sync and diagnostics are repeated, the platform proactively recommends adjustments so that your personal protocol can evolve with you. Early access begins with supplement protocols and health insights. Prescription integration is planned for the full launch in January, with every prescription protocol reviewed and decided upon by a licensed clinician together with the consumer. Our work with athletes is an important part of that foundation.

Speaker 2

In the run-up to the games, we have made, on average, one protocol adjustment per week per athlete. That work generated a body of medical intellectual property on personalized protocol development, which now trains the Enhanced OS algorithm. We believe the combination of that experience, our brand, and an integrated consumer platform can meaningfully differentiate Live Enhanced. Therefore, in Q3, we have deliberately held back on a major increase in paid marketing because we wanted to focus instead on strengthening and further building out this strong foundation. We wanted the product offering and the care experience ready before accelerating customer acquisition. However, even with paid marketing spend held flat this quarter, Live Enhanced gross revenue nearly tripled in its first full quarter. We have made strong hires, and we are also developing a refreshed brand that will launch soon.

Speaker 2

The ambition is to make Enhanced relevant to a much broader audience, particularly women, while keeping the focus on health and performance that make us distinctive. Our goal is to bring Live Enhanced to profitability by the end of this year, then accelerate our commercial push in January as we launch the full Enhanced OS platform. Moving on to sports. Our sports business is where people see the Enhanced brand come to life. It gives us a stage to showcase extraordinary athletes, create compelling content, and reach audiences around the world. The inaugural Enhanced Games demonstrated the reach we can achieve. Our first Enhanced Breakers event, which we held in L.A. in Q3, demonstrated that we can also create compelling events at a fraction of the cost, designed for digital distribution through our own channels.

Speaker 2

Breakers two is now scheduled for December 19 in Las Vegas, and we are already planning Breakers 3 for the first quarter of next year. We continue to attract exceptional athletes as we build a more consistent calendar of competition and content. For the 2027 Enhanced Games, we are in discussions with potential host cities, and we are planning around a budget of approximately $20 million for it. We believe we can deliver an equal or even better live experience and digital experience at that lower cost. Alongside that cost discipline, we are developing a broader revenue base. In addition to sponsorship, which was the only revenue line for 2026, we are pursuing media rights sales, ticket revenue, and host city economic development support. Together, those changes underpin our expectation that the sports business as a whole, including Enhanced Games and Breakers, can break even or better in 2027.

Speaker 2

Next, let's talk about DEAG. We see a significant opportunity in the flip side of AI, the growing value of shared and in-person experiences. As digital content becomes easier to produce and more of everyday life becomes online, people will continue to seek out experiences that bring them together. A concert with friends, a festival you return to every summer, a sporting performance you remember because you were there. Sports was our first live entertainment vertical. DEAG will substantially expand this offering with many more. It brings concerts, owned festival brands, major artist tours, family entertainment, spoken word events, and more. It also brings the third-largest ticketing business in Europe, myticket, adding a direct customer relationship alongside the live experiences. Across its business, DEAG stages more than 6,000 events and sells more than 12 million tickets annually.

Speaker 2

That gives us substantial diversification across event formats, audiences, and markets throughout Europe and the U.K. We see opportunities over time to connect that reach with our broader brand, sponsorship offering, and consumer products. DEAG also brings an established business with its own operating strengths and growth opportunities. Just as importantly, it brings experienced leadership. Markus Breitenecker is in the process of joining as CEO, and DEAG's broader management team adds substantial expertise in operating live entertainment businesses and executing acquisitions. DEAG has completed more than 30 acquisitions over the past seven years and has additional opportunities in its pipeline. We intend to build on that experience, invest in the team needed to execute well, and pursue further acquisitions in 2027. The expected financial transformation is pretty substantial.

Speaker 2

For 2027, we expect combined revenues of approximately $670 million and positive adjusted EBITDA of approximately $26 million, subject to completing the transaction. That represents approximately 20% revenue growth and a roughly $65 million improvement in adjusted EBITDA compared to the expected combined results for 2026. Enhanced has also hosted a webcast last week that you can access through our investor relations section on our homepage, talking in-depth through the transaction, our rationale, and the strategy going forward. The concurrent $15 million financing is intended to strengthen our balance sheet as we bring the businesses together. Our largest shareholder, Apeiron, and myself have also voluntarily extended our respective lockups by six months, reflecting our confidence in the company's future. Our priorities are clear: grow Live Enhanced profitably, bring our sports business to break even, and complete and integrate DEAG.

Speaker 2

I'm very much excited about what is ahead for Enhanced and grateful to all of our shareholders for being on this journey with us. With that, I'll turn it over to Sid.

Speaker 3

Thanks, Max, and good afternoon, everyone. I'll walk through revenue, costs, the balance sheet, and liquidity, and then close with what our recently announced DEAG transaction means for 2027. The third quarter was our first full quarter as a public company, and in many ways, a quarter of preparation. Given how much has changed over the past year, I think the most meaningful comparison is to the second quarter this year rather than the same period last year. That's also how we've approached the discussion in our Form 10-Q, and I'll provide both comparisons today. The second quarter was transformational for Enhanced. We staged the inaugural Enhanced Games, completed our de-SPAC, and became a publicly traded company. Coming out of that quarter, our focus shifted from executing those milestones to building on what we had accomplished and delivering on those priorities that we outlined during our last earnings call.

Speaker 3

In the third quarter, we focused on developing Enhanced OS, laying the groundwork for the DEAG acquisition, and strengthening our financial position. We significantly reduced operating expenses, settled a substantial portion of the obligations remaining from the inaugural games, and completed our $50 million private placement. I'll come back to DEAG after reviewing the quarter's results. Revenue. Revenue was $3.3 million compared with $17.7 million in the second quarter and no revenue in the prior year period. Second quarter revenue was driven primarily by the inaugural Enhanced Games held in May. Third quarter revenue reflects the acceleration of Live Enhanced telehealth sales during the quarter and continued recognition under the company's sponsorship agreements. Ahead of the Enhanced OS launch, we deliberately limited paid marketing while we continued developing our offering, including diagnostics and personalized protocols. Our priority was to strengthen the platform before accelerating customer acquisition.

Speaker 3

Even with performance spend approximately flat at $1.5 million, gross revenue per dollar of marketing spend tripled in the third quarter, reflecting a meaningful improvement in marketing efficiency. Costs. Total operating expenses in the third quarter were $16.8 million, down approximately 79% from $79.6 million in the second quarter, and compared with $6 million in the third quarter of 2025. Let me walk through the pieces. Games, athlete, and event costs were $2.7 million in the third quarter, down from $52 million in the second quarter, and compared with $1.3 million in the third quarter of 2025. These costs included our first Breakers event, athlete stipends in preparation for Breakers 2 on December 19, as well as about $1.5 million of non-cash share awards to athletes and games-related service providers. SG&A was $12.7 million, down from $16.6 million in the second quarter.

Speaker 3

A year ago, as a private company, it was $4.2 million. Third quarter SG&A included $3.1 million of non-cash Rumble marketing expense and $1.5 million of stock-based compensation. We are continuing to manage costs closely and plan to draw on our Rumble marketing credits when we see a return on that spend. On our second quarter call, I pointed to about $5.5 million of quarterly SG&A, excluding non-cash items, as representative of our ongoing cost base. In the third quarter, underlying SG&A was approximately $7.8 million after excluding $3.1 million of non-cash Rumble marketing expense, $0.5 million of stock-based compensation, and $0.3 million of severance and other one-time items. The increase from the second quarter primarily reflects our first full quarter carrying the costs of a public company, including $2.4 million of professional services for audit, legal, and compliance.

Speaker 3

Transaction expenses were $1.2 million, down from $10.9 million in the second quarter. These were mainly legal fees related to the proposed DEAG acquisition, the reverse split, and remaining de-SPAC activities. As we pursue acquisitions, we will continue to incur transaction costs, but remain disciplined in managing those expenses. Net loss and adjusted EBITDA. Net loss in the third quarter was $13.5 million. That compares with $61.9 million in the second quarter, an improvement of about 78%, and $5.9 million in the third quarter of 2025. Adjusted EBITDA was a loss of $8.8 million, compared with a loss of $42.7 million in Q2, an improvement of about 79%, and $3.8 million a year ago. A reconciliation of adjusted EBITDA to net loss is available in today's press release. Balance sheet and liquidity. We ended the quarter with $12.1 million in cash.

Speaker 3

During the quarter, the second and third tranches of our PIPE were funded, completing the $50 million private placement. Costs of the placement were deducted directly from the proceeds, so they did not impact our operating results. Our first priority for that capital was to settle outstanding obligations from the inaugural games. Accounts payable and accrued expenses fell from $40.1 million at the end of the second quarter to $25.4 million at the end of the third quarter, and much of that remaining balance is subject to negotiated payment terms. Looking ahead, we have several additional sources of liquidity. First, we expect to monetize $10 million in Rezolve shares after their unlock in December. Second, we announced a $15 million PIPE last week, which is expected to close alongside the DEAG transaction. And third, we expect $10 million in consideration under our Zoop arrangement.

Speaker 3

Together with cash on hand, that is approximately $47 million in liquidity. Looking ahead, the DEAG transaction represents a major step toward greater scale and profitability. As Max mentioned, DEAG stages more than 6,000 events annually, sells more than 12 million tickets, and owns more than 30 festivals across Europe and the U.K. For 2027, we expect the combined company to generate approximately $670 million in revenue and positive adjusted EBITDA of approximately $26 million, a projected improvement of roughly $65 million from 2026 on a combined basis. DEAG is profitable today, and we expect to acquire it at approximately 5.3 times its projected lease-adjusted EBITDA, with consideration paid entirely in stock. This represents a 63% discount to the listed peer median.

Speaker 3

On the Enhanced side, we are planning the next Enhanced Games with the goal of achieving break-even or better event economics through sponsorship, media rights, ticketing, and host city support. We are also excited about Enhanced OS, which moved from concept to live beta today. It brings our protocols, diagnostics, and coaching into a single platform, and it is the engine we expect to drive subscription growth and improve acquisition economics in our consumer business through 2027. While the third quarter reflects Enhanced on a standalone basis, we believe the combination with DEAG will put us on stronger footing as we enter 2027 with significantly greater scale and new opportunities for growth.

Speaker 2

Thank you, Sid. We are entering a new chapter for Enhanced. We expect to bring together the scale and the profitability of an established live entertainments business with the brand, technology, and ambitions we have built at Enhanced. We definitely see a significant opportunity at the intersection of sport, entertainment, and health and performance. Our events bring people together around shared experiences. Our athletes inspire people to push the boundaries of what is possible. Through Enhanced OS and Live Enhanced, we are building tools to help people better understand and improve their own health and performance every single day. That is the company we are building, and we are only getting started. Thank you as well for all of our shareholders, the team, and athletes for being on this journey with that. With this, let us open it up for questions.

Operator

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Susan Anderson with Canaccord Genuity. Your line is open. Please go ahead.

Speaker 4

Hi. Good evening. Thanks for taking my questions. Congrats on the launch of Enhanced OS. I think that is really exciting. I was wondering if maybe you can give us a little bit more color on kind of what this will look like. Will consumers do a blood test and get recommendations? I guess, will there be other types of tests? If you have any idea the cost of the personalized test, or will there be more of a monthly subscription that includes recurring tests and then supplements, et cetera? Thanks.

Speaker 2

Hey, Susan. Thank you so much for your question. It is awesome. Genuinely, it really is. What it does is it brings together what we have done for the athletes with the offering that we have built for consumers. As you just noted out, it starts with diagnostics. The first step of the diagnostics is actually that we will be able to pull all of your electronic medical records by you providing the last three addresses of where you have lived. That lets us see all of your doctor's visits, previous testing results, family history, other conditions, et cetera, et cetera. The first part of understanding who you are as an individual. Second, you can do blood testing and diagnostics with us. More than 100 biomarkers, anywhere literally throughout the country.

Speaker 2

It is super easily accessible, like you know it from other companies in this space as well, but it is all integrated into this one platform. What it then does is it has a conversation with you and your medical intake and tries to understand from you what is it that you are actually trying to achieve. Are you trying to work on your overall fitness? Are you trying to prep yourself for a HYROX that you are doing in six months? Et cetera, et cetera. Then once we know all of your diagnostic, electronic, and medical records, other questions about lifestyle, nutrition, et cetera, we have a great baseline understanding, which we benchmark against the specific goals that you have.

Speaker 2

Then based on who you are as an individual and what your specific goals are, we recommend to you a protocol to get you from where you are today to where you want to be. That all comes at an annual membership of $199, where you can do add-on purchases on it. Those add-on purchases can be across a variety of segments. The first is just additional diagnostics throughout the year. There is going to be bundling with more purchases of diagnostics that you buy to bring the cost down. But then also through in-app purchases, both for supplements and prescription drugs. With this first launch now, the protocol recommendations are going to be focused on supplementation strategy for you as an individual, exercise, and nutritional recommendations. By January, what is going to be in there is also recommendations for prescription drugs.

Speaker 2

With the supplements and everything, we actually have built a marketplace inside the app as well, through which you can immediately buy the supplements that are recommended to you. Those cover all of the major brands that you know of, and the pricing of those substances or the supplements is actually cheaper than when you would buy it from the manufacturer directly. We are extremely proud of that. Then the prescription drugs that will be recommended included by January, those are our own RX products that we offer today.

Speaker 4

Okay, great. That sounds exciting. Just on the games, I think you talked about starting to sell tickets for the Enhanced Games, and I believe maybe the Breakers this fall. I guess, what's the timing of that starting? Is it with the acquisition when DEAG closes? Do you think that you'll be able to break even on the games with those ticket sales? Also, just curious if you have the next Enhanced Games scheduled. Thanks.

Speaker 2

Yeah, the next games, we're planning them probably for Q4 of next year. We feel very, very confident in our ability to execute it by then. What we're doing with the next games, I want to talk quickly on top line with you, like your question, but also then on the cost side. On the top line sponsorship, we're looking to do similarly, if not better, for next year. We have three additional levers on the top line that we're looking to monetize on. The first is media rights sales. We have intentionally not sold our media rights in year one because we fully wanted to own the content and distribute it in whatever way and on which platform we wanted to.

Speaker 2

We, as you know, were actually on Roku, and we had the ability to monetize the partnership with them, but that would have required us for 30 days not to distribute the content other than two 90-second clips, so we decided against it. However, from Roku, we know actually that we were the most watched sporting event on their platform ever. We actually have, since the first games as well, the agency WME representing us on both sponsorship and media rights sales. What is for these two items specifically different than the first year is that we're not selling a vision anymore. We're not selling anymore a vision and a 3D rendering of a stadium that we're planning to build, but what we're now selling is a reference of what we have achieved, and that includes the billion people around the globe that we have engaged.

Speaker 2

Those are the first two top line items. Third is tickets. Tickets will probably differ a little bit depending on two things. One thing is either we build a competition complex in the same fashion that we did for year one, or we're also looking and we're speaking with a couple of arenas across the country. If we hosted the arena versus the competition complex, obviously seating will be different, impacting ticket pricing. The last bit is because we now, as I said before, have a reference that we can point to, we can also show the economic impact that we have on a city when we host the Enhanced Games there. This is both economic impact we produce from just building and operating the games there.

Speaker 2

Like for the Enhanced Games, I think we had more than 700 people working on making them happen. So massive benefit for Las Vegas of us being there. But then also everything on the tourism side, hotel nights, et cetera, that we have brought to that city. So that allows us to negotiate with the host cities on economic development financing. So that's how we see the top line developing. On the cost side, as I mentioned before, we're looking to decrease the budget to roughly $20 million. How is that possible? Firstly, we're going to shorten the event. This year, it was six hours long. We're going to shorten it to roughly three hours. Makes it much more palatable for the viewer at home and the people in the stadium. That means less events, less athletes, less prize money, less production cost overall.

Speaker 2

Additionally, every single line item that we have from the first games, whether that's the rental of the lights, the rental of the sound, hospitality, et cetera, are now also reference items that we can specifically steer how much we want to spend on them for next year. So the way that we've designed now the games for 2027, we feel very confident that with a $20 million budget, we can create equally as an amazing live experience, but also on the digital side, make sure that the content that we stream and distribute is equally as exciting.

Speaker 2

From sponsorships remaining the same, if not growing, plus the three additional items on the top line, combined with the $20 million budget, and then Breakers events that you throw in there in between, we believe that we're able to break even on the sporting business by next year.

Speaker 4

Okay, great. If I could just add one more, just on the six new peptides, it does look like they're available on your site now. I know it's very early, but are there any early reads on how consumers have responded and how these are trending on the site? Thanks.

Speaker 2

Apologies, I was just coughing. The consumers were very excited about this, right? We have a ton of consumers that already in the months leading up to this, since July, since the PCAC came out with the recommendation adding those peptides, that have asked whether they can buy it from us. Similarly, quite frankly, the athletes. The athletes were always curious on getting them from us. We are now very happy that we have a pathway to it. I think we have been very happy with the demand that we have seen thus far. If I look at the competitive landscape, it obviously changes every single day, but I think as of when we launched it, we were the first ones to offer all of those six peptides. Super excited about that.

Speaker 2

The pricing that we have is also extremely competitive, that you can attribute to the incredible new team hires that we have made that have really helped us on the supply chain, on vendor relationships, and acquiring really good deals for the substances that we are acquiring for them. I think our pricing is extremely strong. Consumers have been very excited about it. Even with day one, we are still waiting on guidance, particularly from Meta, around the marketing of those peptides. There is certain guidance that has been out by another platform, LegitScript, but we have been a little bit cautious because we want to do everything by the book. We are waiting for Meta's guidance and Google's. But yeah, so far the organic interest has been very, very good for us.

Speaker 4

Okay, great. Good to hear. Thank you.

Speaker 2

Maybe one add-on there. Yeah, and maybe one-

Speaker 4

Sorry, go ahead.

Speaker 2

One thing to add on that, which is very similar to our other prescription drugs that we had in the past, people not just come to us for one substance, also in peptides, but really for bundles. What is going to be launched next is bundles for three stacks. Those are the Wolverine, the GLOW, and the KLOW stack, which we are bundling certain peptides that are part of these stacks together and make the pricing for those even more competitive for our consumers. We are very happy to see the people, when they come to us, the average order values are not just for one product that they are buying, but multiple together, from the first order onwards.

Speaker 4

Okay, great. That sounds exciting. Thanks for all the details here.

Speaker 2

You are welcome.

Operator

Your next question comes from Ian Zaffino with Oppenheimer. Your line is open. Please go ahead.

Speaker 5

Hi, great. Thank you very much. Great color on the games that you provided. Thank you for that. As you think about the economics of the games, the fact that we are moving towards being potentially break-even and even a profit, what should we expect as far as what the market could bear as far as number of games per year and how many Breakers per year you think you could do? Is it limited by the market or is it limited by your appetite or the necessity of you doing a certain number of games? Give us any color there, that would be helpful. Thanks.

Speaker 2

This is actually a great question because alongside of everything that you mentioned, what is really important to consider as well is the athletes and their training regimens to train to peak. We have thought about this. I think what we can probably expect in a couple of years from now is, or target as a company, is to have games twice a year. You could do it then also geographically extremely diversified, where you have one in what we know as European summers, or to the Europeans, sorry, I am European, or like in America in the more warmer states in the winter and the more colder states in summer. Then you can have the second games, for example, South Africa, Australia, markets that are extremely interested from the viewership numbers that we have seen from the games.

Speaker 2

I think two times a year is sustainable for the athletes when you think about the protocols and the training regimens to build up to absolute peak, right? What is very important to consider with the sports that we have, very similar in the Olympics, World Championships, and everything else, is that compared to, for example, football, where people are much more used to more games throughout the year, or like baseball, more than 150 games a season. Our athletes are very, very dialed in on this peak performance, and so it takes some time to build up and then be ready and perform. I think twice a year is probably very palatable for the athletes.

Speaker 2

And then in terms of Breakers, the cadence that we have is we did one in Q3, we are now doing one in Q4, the next one for Q1 next year, the third one is being planned. So right now, what we have established is a quarterly cadence. I would not want to over-saturate the market on it, because we also want to maintain that level of caliber that the athletes are getting to when they perform in these Breakers events. As we look into 2027, though, in terms of more sports that we can offer, one thing that we have talked about in a webcast, actually, encourage everyone to have a look at it, where we talk about the DEAG transaction, is also the expansion from spectator sports to participatory sports.

Speaker 2

That is really important for us, because we want to give our fans the opportunity to become part of the Enhanced ecosystem and participate in events. So what we are planning on doing as of next year is co-brand events with existing sporting events that have a loyal participant base to say, for example, "Hey, we are doing the Miami Enhanced," call it, "Triathlon in April of next year." And why is that specifically important for us? There we can get a much greater velocity of events in, because we do not own the production, but we just bring our most valuable asset, the brand, to an already successful production. Why is that so cool? Because if we have those touchpoints with the people that are participating in those events, we can start cross-selling product to them already months in advance.

Speaker 2

So now with Enhanced OS, say, for example, in April of next year, you are doing this triathlon in Miami, when you get delivered your ticket and you sign up for it, you can get a discount, for example, to your blood work testing through Enhanced OS. Then Enhanced OS understands, "Hey, you are doing that triathlon in Miami. This is what your baseline is. How about consider a protocol of XYZ supplements and ABC prescription drugs to help you get in the best shape possible for that event so you can maximize your experience as you are in that event?" And that is really the key point, and also why DEAG is such an important acquisition for us, because it is all about maximizing our human experience.

Speaker 2

We can do that by, on the sporting side, offering our sporting offering from spectator to participatory, but then also festivals, concerts, family events, spoken word events, et cetera, and create this consumer flywheel of this vast offering of experience that we can offer to them, and then preparing their bodies to get the maximum out of those experiences.

Speaker 5

Okay, great. Thank you. Just about the deal from last week, DEAG, I was wondering if you could maybe. Clearly, this is a good deal, the multiple, et cetera. From a top-line perspective, from revenues, how do these two businesses, when you put them together, what are the synergies on the revenue side, and how do we think about maybe the magnitude of those as well? Thank you.

Speaker 2

From a synergy perspective on the revenue side, apologies, I think it will take a little bit of time for those to truly come to place. I think where you'll see synergies quicker is on the cost side. On the cost side, just because we can utilize myticket, for example, to ticket all of the Enhanced Games event, we can produce the Breakers now very easily with in-house capabilities across Europe. So there's a lot of immediate cost synergies that can be realized. From a top-line synergy perspective, I see specifically two synergies. One is on shared sponsorship. This means, for example, same sponsorship for the Enhanced Games that can also sponsor events across Europe. A lot of sponsors that we see are very much interested in culture, not just in one specific element, but really what is culturally relevant.

Speaker 2

If you're culturally relevant, for example, with the Enhanced Games and what we do in culture, you maybe also want to sponsor the best techno festival in Germany, which DEAG has a monopoly on the biggest and best EDM and techno festivals in Germany. So there's a lot of variety across that. Another one is, for example, within the artist and talent universe. What we're doing with Enhanced is, particularly for Live Enhanced, we're expanding from athletes being our only brand ambassadors. What you'll see coming more of is people in other industries. So, for example, artists as brand ambassadors for Live Enhanced. Why? Because actually, when you go on tour as an artist, that's quite taxing on the body as well.

Speaker 2

Rather than rock stars, say, 50 years ago, taking alcohol and other substances to survive tour life, artists that we speak to today are very much focused on their health and longevity and coming to us to work with us on enhancing themselves to give their fans the best version of them every single performance. So, there's a shared qualitative, I think, benefit on the artist universe that DEAG touches. Then lastly, but that I think takes a little bit of time, is really cross-selling our consumer offering to the 12 million ticket sales that DEAG does in Europe throughout the year. Think about it like this. You go to a festival in Europe, we'll call it Airbeat One in Germany. 4-day festival, more than 200,000 people a year, 350 DJs, nine stages, insanely cool festival. I'm actually super pumped to go next year. Whatever.

Speaker 2

If you go to a festival for four days, you're likely going to drink a lot of alcohol, you're likely going to drink less, and you're likely going to eat a lot of junk food. How about, because we own the customer relationship by selling them the ticket, we know from people what their behavior is like and say then, "Hey, in two weeks, you're going to Airbeat One. How about you bring this XYZ supplement stack with you to help your body be better while you're four days in the festival?" How does your recovery look like once you get home from a festival? That I think is more out there in terms of time it would take to be able to realize that, but definitely a huge top-line synergy that we see coming over the years to come.

Speaker 3

Also, Ian and Sid, just so you know, in terms of the financials that we put out with our deck when we announced the acquisition of DEAG, we didn't include any synergies in the forecast that we made, either on the cost side or on the top line side. Everything that Max is talking about isn't included in what we actually forecasted. We think all of those could be very interesting for us, and I think it's going to be a really interesting year as we start to think about how we put all of those and operationalize them.

Speaker 5

All right. Thank you very much. Sounds very exciting. Looking forward to seeing it all come together. Thank you.

Speaker 3

Thanks, Ian.

Operator

Your next question comes from Gabby Ingoglia with Cantor Fitzgerald. Your line is open. Please go ahead.

Speaker 6

Hey, guys. Congratulations on the myriad of exciting stuff happening. I thought I heard Sid say that revenue nearly tripled in the first quarter on the Live Enhanced platform. Can you talk about how that compared to your expectations, and since you did turn off or hold back on paid marketing, where that type of revenue came from? Was it more people who had heard from the games, or just any more description on that and your visibility into it would be helpful?

Speaker 3

Yep. Hi, Gabby. When we thought about Live Enhanced, just sort of like going back to when it started. We started on a partial basis in Q2, and Q3 was really our first full quarter of Live Enhanced. In both quarters, we spent about $1.5 million in performance marketing, and we moved on a gross revenue basis to $1.1 million in Q3 from about $0.4 million in Q2. From our perspective, just from an efficiency perspective, we moved up dramatically from Q2 to Q3. Our expectation as we think about the future, given what we're able to do, I mean, if you think about where we came from, we were expanding our product base. We learned from our customers in terms of what it is they needed in order to make decisions around both prescriptions and supplements, prescriptions being more important for us.

Speaker 3

That was the part from our perspective where we started to think about what else can we provide people so that they can learn more about themselves, and thus started sort of the development of the OS system. We deliberately kept that performance marketing the same as we moved into Q3, because we wanted to continue to get people oriented to the platform. Our expectation going forward, as Max sort of outlined, is we now have the beta version of OS out, so you can start to go out and actually learn more about yourself. At the same time, we've expanded our product portfolio.

Speaker 3

We expect that to really help us both from an efficiency perspective and also sort of a growth in top line as we start to get into the new year, because in January is when we'll be coming out with sort of the second version of OS.

Speaker 6

Okay, awesome. That's really helpful. Then with the Enhanced Games being in the fourth quarter, or planned for being in the fourth quarter, can you help us get comfortable with the level of visibility that you'll have on the sponsorship piece of the revenue and how that relates to where you want to finish the full year? Because I think, if I remember correctly, the sponsorship revenue from 2026, you were able to collect throughout the year. Would it be in the fourth quarter? Does it look a little bit different? Do you collect it all in the fourth quarter? Any reassurance on visibility would be really helpful.

Speaker 2

Hey, Gabby, it's Max. It's going to be always the quarter that the games are happening in is always going to be the most recognition of the sponsorship. What we had for this year is we had sponsors that were only engaged for sponsorship at the games, no representation at Breakers or anywhere else, but really just spot bought sponsorship at the games. But we'll keep for ourselves the ability to negotiate bespoke deals with sponsors as they come in. Some are really just keen on being there at the games, all front and present, and live for that one big moment. Other partners that we had, it might also be like some of the partners that we had for this year, strategically interested and able to work with us in other areas of the business, interested in doing that over time.

Speaker 2

The way that I would think about it for next year is that the majority of the sponsorship-related items, as well as the other top lines that we are working on, i.e., media rights, ticketing, and economic development financing, would come in the fourth quarter of next year.

Speaker 6

Okay. That's really helpful. Thank you.

Operator

Your next question comes from Alex Fuhrman with Lucid Capital Markets. Your line is open. Please go ahead.

Speaker 7

Hey, guys. Thanks very much for taking my question. Max, can you tell us a little bit about where the telemedicine business is in terms of its growth right now? From what we can see on the website, it's been up and running and certainly looking live to consumers for most of the year. I mean, I imagine it's not really going to see big numbers until you start putting a lot of marketing dollars before it. Can you give us a sense of where we are in that inflection now? You mentioned you're envisioning tens of millions of revenue for the telemedicine business next year, so I imagine at some point we're going to see more marketing behind that.

Speaker 7

Can you just give us a sense of how you're thinking of ramping up that marketing spending for the telemedicine business versus saving marketing dollars to grow the entertainment business that you're in the process of acquiring, and just help us understand that trade-off, please.

Speaker 2

Hey, Alex. Thanks for your question. The initial telehealth business, right, started around the games. What we did is we really threw everything we had behind having it live ASAP. What we have done now, particularly this quarter, this is what Sid was talking about, we took this quarter as a little bit of a breathing quarter. That is the brutal truth about, that we are still a little bit of a startup, listed on the stock exchange and need to report every three months. What we decided on doing is actually save marketing dollars to better work out the foundation that we want to market on. What we have now is a foundation that we feel is extremely solid and that we are comfortable in. We now have four categories of prescription drugs.

Speaker 2

Metabolic regulators, these are your GLP-1s, hormone optimization, hormone replacement therapy for women, and TRT for men, cognitive enhancements, and then peptides, with most recently the six new peptides. When you look at this, plus together the two supplements, right? When you look at this like a storefront. What people still have to evaluate themselves is, what substance is the right one for me? What we knew that we are always going to do is replicate the approach that we had for athletes for consumers, guiding the people. Because 80% actually of our existing consumers, we surveyed them, they told us they would prefer if we just told them which drugs to take rather than trying to figure out, "Hey, what does NAD+ do for me? Hey, what does tadalafil do for me?

Speaker 2

Hey, what does sermorelin do for me?" They would much rather give you all of their data and know that that data is in the best hands possible to then tell them specifically what to need. What we did not want to do is blow marketing dollars on this now because we believe that by the January of next year when Enhanced OS has prescription included, that is a much better product to advertise, which is going to yield us more return on every dollar spent on a marketing perspective. This is why we have scaled, as Sid said before, we have kept it flat, and we are much more focused on building out on the product side.

Speaker 2

What is also important for me to know is that we are planning on moving the entire customer experience from the care portal that you currently have on Enhanced OS, on its homepage, entirely into Enhanced OS, even if you are just buying a supplement. Because Enhanced OS is really the home for you, not just for selling you prescription drugs, but understanding your health. Why is understanding your health here the key word? It is because at the end of the day, taking people on a health journey is really becoming the product. Because if I just look at myself, for example, the protocol of drugs that I am taking today is different than it was six months ago, which is different to what it was two years ago. The common denominator, though, is always that I am enhanced.

Speaker 2

Now, I obviously work with a doctor who checks my blood, my lifestyle, monitors my improvements, et cetera, and then adjusts my protocol. Not anymore because I am switching to Enhanced OS. From what we now have is Enhanced OS as that kind of guiding hand that is taking you on a health journey. This is how we thought about it. The next big thing, right? I just said this in, I think, in the question before, which is that we are looking to differentiate in terms of brand ambassadors from only athletes to others. One thing as well is like, it is super exciting to see our athletes compete, win, break personal best at 34. But for some people, even though they like and find it entertaining to watch, that is not enough in terms of getting them over the finish line to purchase product from us.

Speaker 2

We are differentiating our marketing approach to brand ambassadors, affiliates, et cetera, in very other different areas outside of sports as well. This is longevity influencers, mommy influencers, et cetera, et cetera. By January, we will have this army of people, particularly on the organic side, that are going to push. Lastly, what are they going to push as well? Predominantly OS, but then also OS in different format. I mentioned this previously in the opening remarks, we are working on a little bit of a brand redesign. Currently, when you go to our page, if we are just realistic with ourselves, it is very dark, it is very male-led, very science-y, very tech bro-y. We found that particularly on the female side, that can sometimes be a little bit of a not as exciting homepage to be on and order product off.

Speaker 2

What we have been doing now over the past weeks is to do a brand redesign that is much more appealing to the general masses, but particularly as well women, while keeping at the core kind of this distinctiveness of sports and performance, but being much more approachable, much more there for the everyday person. Where not just the athlete is the hero that is inspiring, but your neighbor, your friend. Because those human connections, those shared experiences, working with your best friend on improving yourself, taking your wife out for a run every Sunday morning, that is really what makes enhancement a habit and really an exciting experience that you want to share. These are all of like, there is a lot more, but I am just trying to be mindful of time and respectful of people's time on the call.

Speaker 2

A lot of things that we have been working on to really improve the product offering that we then are going to buy new year, new me in January, spend a lot of marketing dollars behind.

Speaker 3

One thing I would just say as well, Alex, is, you asked about marketing. At the end of the day, I think one of the things we want to achieve is differentiation within marketing, right? That means that we have a product that is different than everything else that is out there. What you saw, I think, at the very beginning in the genesis of the company was effectively a pharmacy that was online. What we learned was that was not the thing that was going to connect us, nor was it what we did with the athletes, as Max mentioned. So, I think everything that Max said, you are going to start to, and we needed to do in order to put it into the marketing that we planned to get out to people.

Speaker 3

It just would not have made any sense for us to start plowing money behind our marketing dollars if we did not have the messaging in the right place, the product portfolio where we wanted it to be, et cetera, et cetera.

Speaker 7

Thanks, guys. That has been really helpful. Appreciate it.

Operator

There are no further questions at this time. I will now turn the call back to Maximilian Martin for closing remarks.

Speaker 2

Thank you so much. Thanks, everyone, once again for joining us. Really super exciting things have happened. If I just recap quickly, Enhanced OS launch, we just talked about it in the Q&A before. We had six peptides that we launched, the first ones to bring all six live at incredibly compelling pricing. We had, in record time, worked on a massive transformative transaction that's significantly changing who we are as a business from next year onwards. We've spoken in the webcast, for example, about further M&A that we're looking to do. We're going to build out an M&A team to look at very exciting other entertainment businesses in the life experiences space. Really what I want to leave you with as well is, we are still a very young company.

Speaker 2

We get more done than anything that I've ever seen, and the people that are working on this day and night are really dedicated to it with their heart, blood, sweat, and tears. I'm extremely proud of the team and what we have achieved. I know that our share price performance can be very frustrating for some of our investors. The only thing that we can do as management, the company, our athletes, and everyone else who's involved is to properly hunker down and work on operating and getting results done. I hope that you see that we get stuff done. This is still a journey for us. As I said, we're a young company. The spaces that we're in are still very, very new.

Speaker 2

I think we're primed for the macro thesis of the flip side of AI, where people will look to do more things that are social with the people that they care about, get real entertainment live, and experience goosebumps and not just be glued to their monitors. Really, I'm convinced in the ability of this team to execute on this vision. Thank you all who are shareholders already, for being part of this journey. So thank you very much, and we'll speak to you soon.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.

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