DarioHealth (DRIO) Q1 2025 Earnings Call May 14, 2025 08:30 AM ET Speaker0 morning, ladies and gentlemen, and welcome to the DarioHealth First Quarter twenty twenty five Results Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, 05/14/2025. I would now like to turn the conference over to Kat Paralla, Investor Relations Manager at Dario. Kat, please go ahead. Speaker1 Thank you, ...

Core Insights - DarioHealth Corp. reported a revenue of $6.75 million for Q1 2025, marking a 17% increase year-over-year but an 11.2% decrease sequentially due to a shift in scope with a large national health plan client [2][12][5] - The company is strategically positioned to capitalize on trends in healthcare, including the expansion of GLP-1 therapies and the integration of AI in healthcare solutions [2][3] - DarioHealth signed 14 new clients year-to-date, increasing its total client count to 97, with over 80% of new contracts being multi-condition [3][5] Financial Performance - Gross margin improved to 57.5% on a GAAP basis and 70.5% on a non-GAAP basis, reflecting operational efficiencies [4][5] - Total operating expenses decreased by 35% year-over-year to $13.3 million, with non-GAAP operating expenses at $10.6 million [4][17] - The GAAP operating loss decreased by 47% to $9.4 million compared to Q1 2024, while the non-GAAP operating loss narrowed to $5.8 million [7][19] Strategic Initiatives - The company is undergoing an AI transformation aimed at automating workflows and reducing costs, with an expected further 15-20% reduction in operating expenses over the next 12-18 months [6][11] - DarioHealth is focusing on building durable, recurring revenue through high-quality collaborations while phasing out low-margin business [8][9] - Key collaborations have been established to expand Dario's multi-condition offerings, enhancing its value-based care model [9][14] Leadership and Operational Focus - DarioHealth has strengthened its executive leadership team, which is focused on improving execution and operational efficiency [10] - The company has refinanced its debt and raised equity, enhancing its balance sheet and extending its cash runway [11][21] - DarioHealth aims to achieve operational cash flow breakeven by the end of 2025, supported by existing account expansions and new contract wins [5][11]

Financial Performance - Total revenues for Q1 2025 were $6.752 million, a 17.3% increase from $5.758 million in Q1 2024[22] - Gross profit for Q1 2025 was $3.882 million, compared to $2.432 million in Q1 2024, reflecting a significant improvement[22] - Operating loss for Q1 2025 was $9.409 million, reduced from $17.855 million in Q1 2024, indicating better cost management[22] - Net loss attributable to common shareholders for Q1 2025 was $14.066 million, compared to $9.209 million in Q1 2024, showing an increase in losses[22] - For the three months ended March 31, 2025, DarioHealth reported a net loss of $9,227,000, compared to a net loss of $7,175,000 for the same period in 2024, indicating an increase in losses of approximately 28.6%[27] - The company recorded tax expenses of $22 thousand for the three months ended March 31, 2025, compared to income tax of $1,994 thousand for the same period in 2024, reflecting a decrease of approximately 98.90%[128]. - The basic net loss per share for common stock was $(0.14) for the three months ended March 31, 2025, compared to $(66.78) for the same period in 2024, showing an improvement of approximately 79.09%[132][134]. Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2025, were $27.854 million, slightly up from $27.764 million at the end of 2024[16] - The company used approximately $6,673,000 in cash for operating activities during the three months ended March 31, 2025, a decrease from $13,110,000 used in the same period in 2024, reflecting a 49.1% improvement in cash flow usage[27] - DarioHealth's cash, cash equivalents, and restricted cash at the end of the period were $27,854,000, down from $35,041,000 at the end of March 2024, representing a decrease of 20.5%[27] - The company intends to fund future operations through cash on hand and additional offerings of debt or equity securities, highlighting the need for ongoing capital[29] Assets and Liabilities - Total current liabilities increased to $19.155 million as of March 31, 2025, from $16.635 million at the end of 2024[19] - Total assets decreased to $115.600 million as of March 31, 2025, down from $118.884 million at the end of 2024[16] - DarioHealth has an accumulated deficit of $404,409,000 as of March 31, 2025, indicating ongoing financial challenges since inception[29] - The allowance for credit losses increased from $163,000 at the beginning of the period to $191,000 by the end of March 31, 2025, reflecting a rise of 17.2%[40] Revenue Breakdown - Revenue from Commercial - Business-to-Business-to-Consumer (B2B2C) increased to $4,737,000 in Q1 2025 from $3,470,000 in Q1 2024, a growth of 36.5%[52] - DarioHealth's major customer accounted for 19.1% of the company's revenue for the three months ended March 31, 2025, compared to 8.5% and 16.5% for the same period in 2024[40] - The Company recognized a price concession of $1,088,000 in fiscal year 2024, which was recorded as a reduction in revenue[50] - The Company expects to recognize approximately $1,305,000 in deferred revenue over the next 12 months[54] Stock and Equity - The company raised approximately $22,422,000 from the issuance of 17,307 Series C, 4,000 Series C-1, and 1,115 Series C-2 preferred shares at a purchase price of $1,000 per share[99] - The company accounted for deemed dividends of $2,194,000 and $744,000 for the Series C, C-1, and C-2 preferred stock for the three-month periods ended March 31, 2025, and March 31, 2024, respectively[101] - The company issued 7,055 and 11,750 Series D and D-1 preferred shares in December 2024, raising approximately $18,805,000[101] - As of March 31, 2025, there were 25,605 shares of Series D, D-1, D-2, and D-3 preferred stock outstanding, convertible into approximately 36,533,135 shares of Common Stock[113] - The company modified the terms of Series B, B-1, and B-3 preferred shares, resulting in a deemed contribution of $12,194,000[109] Expenses - Research and development expenses for Q1 2025 were $4.108 million, down from $6.642 million in Q1 2024, indicating a focus on cost reduction[22] - The total stock-based compensation expenses for the three-month period ended March 31, 2025, amounted to $2,342,000, compared to $6,858,000 for the same period in 2024[122] - During the three months ended March 31, 2025, the Company recorded share-based compensation expenses of $65 related to a consulting firm[96] - The company recorded share-based compensation expenses of $893,000 for the three-month period ended March 31, 2024, and $0 for the same period in 2025[99] Debt and Financing - The Company refinanced its existing $25,000,000 credit facility to a new $30,000,000 facility on May 1, 2023[59] - The interest rate on the Avenue Loan Facility is set at the higher of 4.50% plus the prime rate or 12.50%[60] - The Company recorded remeasurement expenses related to the Avenue Loan of $270,000 for the three months ended March 31, 2025[66] - The Company refinanced its existing $30,000 credit facility with a new $32,500 credit agreement, allowing for an additional draw of up to $17,500[138] - The additional $17,500 Term Loan includes $2,500 subject to revenue and gross margin thresholds and $15,000 at the discretion of the Agent and Lenders[138] Shareholder Actions - The Compensation Committee approved a grant of 575,000 restricted shares of Common Stock and warrants to purchase up to 1,050,000 shares of Common Stock in February 2025[97] - The Company appointed Chen Franco-Yehuda as CFO, issuing her 500,000 restricted shares vesting over three years[138] - Stockholders approved the issuance of 33,956,850 shares of Common Stock from the conversion of 25,605 shares of Series D Preferred Stock[138] Miscellaneous - The Company has a liability to pay future royalties to the Israeli Innovation Authority amounting to 3% of sales from related products, totaling $954 as of March 31, 2025[88] - The Company recorded remeasurement income of $1,085 and $9,156 related to the Pre-Funded Warrants for the three-month periods ended March 31, 2025, and March 31, 2024, respectively[75] - The fair value of the Avenue Loan Facility was estimated using a discount rate of 19% as of March 31, 2025[82] - The fair value of the Orbimed Warrant liability was estimated using the Monte-Carlo simulation valuation technique, with a stock price of $0.61 and volatility of 88.4% as of March 31, 2025[84]

New data, published in JMIR, demonstrates the value of personalized messaging encouraging flu vaccinations in Dario members with diabetes NEW YORK, May 8, 2025 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO) ("Dario" or the "Company"), a leader in the global digital health market, announced today new research published in the Journal of Medical Internet Research ("JMIR") demonstrating the effectiveness of personalized digital health interventions to drive flu vaccine awareness in Dario members living with ...

NEW YORK, May 7, 2025 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO) ("Dario" or the "Company"), a leader in the global digital health market, announced today that it will release its financial results for the 1st quarter ended March 31st, 2025 and will host a conference call and webcast at 8:30 a.m. Eastern Time, on Wednesday, May 14th, 2025, before the market opens. Erez Raphael, Chief Executive Officer, and Steven Nelson, Chief Commercial Officer, will host the call. Conference Call Details Date: Wedne ...

NEW YORK, April 21, 2025 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO) ("Dario" or the "Company"), a leading global digital health company, today announced that Zvi Ben-David, Chief Financial Officer, will retire from his role, effective May 15, 2025. The Company has appointed Chen Franco-Yehuda as its new Chief Financial Officer, Treasurer, and Secretary, and will assume the role upon Mr. Ben-David's retirement on May 15, 2025. To ensure a smooth transition, Mr. Ben-David will remain with the Company un ...

Strategic partnership expands Dario's employer footprint and has already started contributing to recurring revenues in Q1 of 2025 NEW YORK, April 17, 2025 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO) ("Dario" or the "Company"), a leader in the global digital health market, today announced a new strategic partnership with a leading benefit administrator to deliver its comprehensive cardiometabolic solution including a GLP-1 support program and full AI-driven digital health suite to employers, with initia ...

Second major healthcare employer signs with DarioHealth, accelerating growth in 2025 and reinforcing its leadership in AI-powered, clinically validated digital health solutions for chronic condition managementNEW YORK, April 8, 2025 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO) ("Dario" or the "Company"), a leader in the global digital health market, today announced a new employer partnership with one of the nation's most respected research and medical institutions. The signed agreement is already live a ...

Investors might want to bet on DarioHealth Corp. (DRIO) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by th ...

Core Insights - DarioHealth has secured a new agreement with a Blue Cross Blue Shield (BCBS) health plan, enhancing its presence in the health plan market and driving recurring revenue growth [1][2][3] - The agreement integrates Dario's AI-driven cardiometabolic digital health solutions into the health plan's services, contributing to the company's annual recurring revenue (ARR) in Q1 2025 [2][4] - Dario now serves nine health plans, reinforcing its role in delivering digital cardiometabolic care solutions as the market is projected to exceed $1.2 trillion by 2033 [3][4] Company Overview - DarioHealth is a leader in the global digital health market, focusing on chronic condition management through a user-centric digital therapeutics platform [5][6] - The platform offers personalized interventions driven by data analytics and coaching for conditions such as diabetes, hypertension, and weight management [5][6] - Dario's approach aims to provide continuous and customized care, enhancing user satisfaction and promoting sustainable behavior change [6][7] Market Position - The collaboration with BCBS highlights the increasing demand for scalable, AI-driven digital health solutions among payers [4] - Dario's expansion into the multi-billion-dollar payer market is expected to strengthen its trajectory toward profitability and long-term growth [4][3] - The cardiometabolic disease market is identified as one of the fastest-growing sectors in healthcare, further solidifying Dario's strategic positioning [3][4]