Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $6.75 million, a 17% increase year over year driven by recurring revenue growth from B2B2C channels [11] - Non-GAAP gross margins improved to 70.5%, up from 62.4% in Q1 2024, with core B2B2C business sustaining above 81% gross margins for four consecutive quarters [14][37] - Non-GAAP operating loss decreased from $9.1 million to $5.8 million year over year, representing a 36% reduction [14] Business Line Data and Key Metrics Changes - The company signed 14 new clients in Q1 2025, including one national health plan, one regional health plan, and 12 employers, increasing the total client base to 97 from 83 at the end of 2024 [13][21] - Over 80% of new contracts are multi-condition, with an average contract length of three years and a renewal rate above 90% [13][21] Market Data and Key Metrics Changes - The market is shifting towards whole person digital health and platform consolidation, with employers and health plans seeking trusted partners for multi-condition care [9][22] - The company is actively engaged with multiple national and regional payers, with two top-tier health plans evaluating the full suite platform for deployment in 2026 [27][28] Company Strategy and Development Direction - The company is focused on executing a strategy centered on platform differentiation, client quality, and commercial scalability, leveraging AI to enhance operational efficiency and member engagement [15][33] - The integration of Twilio has strengthened the company's position in the industry, allowing it to support five chronic conditions under a unified brand [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving operational cash flow breakeven run rate by the end of 2025, supported by existing account extensions and a deep pipeline of near-term opportunities [19][38] - The company is optimistic about the reset in the digital health market, emphasizing the importance of clinical credibility and financial discipline [38][40] Other Important Information - The company completed an equity raise and refinanced its debt, deferring debt amortization to 2028, which provides financial flexibility [19] - The leadership team has been strengthened with new appointments, enhancing execution and cross-functional alignment [18] Q&A Session Summary Question: Can you explain the timeline delays related to tariffs? - Management indicated that delays were due to a large account transforming its offering and some specific partnerships affected by tariff issues, which impacted revenue expectations [44][45] Question: How is the partnership with RULA Health rolling out? - The integration with RULA Health is underway, with initial adoption by a few clients and plans for broader campaigns [51][52] Question: What will drive the path to cash flow breakeven? - Achieving breakeven will be a combination of revenue growth and further reductions in operating expenses, with a focus on increasing gross margins from B2B2C business [54][56] Question: Can you provide an update on large pharma activities? - The company has signed new deals with large pharma companies, including Sanofi, and expects these to contribute revenue in Q2 or Q3 [62][65] Question: What is the impact of cleaning up contracts on revenue? - Most contracts are renewed, but transitioning to different revenue models for some accounts has created temporary headwinds [70][72]

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]

Core Insights - DarioHealth Corp. has published new research in JMIR demonstrating the effectiveness of personalized digital health interventions in increasing flu vaccination awareness among members with diabetes [1][2][4] Group 1: Research Findings - A pragmatic randomized follow-up study was conducted to assess how digital health tools can raise awareness and improve vaccination rates among people with diabetes [2] - The study involved 64,904 members segmented into three groups: one exposed to a previous flu vaccination campaign, one receiving a more personalized version of the campaign, and a control group with no exposure [3] - Results indicated that the group receiving personalized and frequent messages showed significantly improved awareness of flu risks and higher vaccination rates compared to the other groups [4] Group 2: Company Strategy and Impact - DarioHealth aims to deepen member engagement through personalized interventions that drive measurable clinical outcomes [5] - The company emphasizes the importance of personalization in improving health and transforming care through digital innovation [5][6] - Dario's platform provides continuous and customized care, promoting sustainable behavior change and enhancing user satisfaction and retention [7]

Core Viewpoint - DarioHealth Corp. will release its financial results for the first quarter of 2025 on May 14, 2025, and will host a conference call to discuss these results [1][2]. Group 1: Conference Call Details - The conference call is scheduled for May 14, 2025, at 8:30 a.m. Eastern Time [3]. - Participants can join via a domestic dial-in number (1-800-717-1738) or an international number (1-646-307-1865) [3]. - A replay of the call will be available approximately two hours after the event until May 28, 2025 [3]. Group 2: Company Overview - DarioHealth Corp. is a leader in the digital health market, focusing on chronic condition management through a user-centric digital therapeutics platform [4]. - The platform provides personalized interventions for conditions such as diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health [4]. - DarioHealth's approach aims to empower users to make sustainable lifestyle changes, enhancing user satisfaction and retention [5]. Group 3: Market Reach - DarioHealth offers its solutions globally to health plans, self-insured employers, care providers, and consumers [6].

Company Leadership Transition - DarioHealth Corp. announced the retirement of Chief Financial Officer Zvi Ben-David, effective May 15, 2025 [1][2] - Chen Franco-Yehuda has been appointed as the new Chief Financial Officer, Treasurer, and Secretary, set to assume the role upon Mr. Ben-David's retirement [2][3] - Mr. Ben-David will assist the company in an advisory capacity until the end of June 2025 to ensure a smooth transition [2] New CFO's Background - Chen Franco-Yehuda brings extensive financial leadership experience, particularly in corporate finance, capital markets, and strategic growth initiatives [3] - She previously served as CFO at Pluri Inc., where she led financial strategy and secured substantial capital through various fundraising rounds [4] - Franco-Yehuda has a background as an Audit/Assurance Manager at PwC and is a licensed CPA in Israel [5] Company Growth and Strategy - Under Mr. Ben-David's leadership, DarioHealth transformed from a single-condition solution provider to a comprehensive multi-condition digital health platform [6] - The company has expanded its offerings across various health conditions, including diabetes, hypertension, mental health, weight management, and musculoskeletal care [6] - DarioHealth aims to leverage Franco-Yehuda's expertise to continue driving innovation and growth in the digital health sector [6][7]

Core Insights - DarioHealth Corp. has formed a strategic partnership with a leading benefit administrator to provide a comprehensive cardiometabolic solution, which includes a GLP-1 support program and an AI-driven digital health suite, contributing to recurring revenues since January 2025 [1][2][4] - The partnership aims to address rising healthcare costs associated with metabolic conditions, particularly focusing on the demand for effective GLP-1 medication support [2][4] - Dario's approach includes a complete lifecycle management solution that supports members from medication initiation to long-term weight maintenance, addressing the challenge of medication discontinuation [3][4] Company Overview - DarioHealth Corp. is a leader in the digital health market, offering a user-centric platform for managing chronic conditions through personalized interventions driven by data analytics [5][6] - The company's platform aims to disrupt traditional episodic healthcare by providing continuous and customized care, promoting sustainable behavior change [6][7] Market Potential - The GLP-1 market is projected to grow to $100 billion by 2030, while the broader cardiometabolic disease market is expected to exceed $1.2 trillion by 2033 [3][4] - Research indicates that without proper behavioral support, 50-75% of patients discontinue GLP-1 medications within one year, highlighting the need for effective management solutions [3]

Core Insights - DarioHealth Corp. has signed a partnership with a major healthcare employer, enhancing its growth trajectory in 2025 and solidifying its leadership in AI-driven digital health solutions for chronic condition management [1][3] - The partnership is already generating recurring revenue and reflects a shift among employers towards data-driven health solutions that demonstrate measurable outcomes and ROI [1][3][4] Company Overview - DarioHealth is a leader in the digital health market, offering a comprehensive platform for managing chronic conditions through personalized, data-driven interventions [5] - The company's solutions include Dario Health, Dario Mind, and Dario Move, targeting conditions such as diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health [2][5] Market Position - The newly partnered institution is a significant player in U.S. healthcare, indicating Dario's growing influence and trust within the enterprise healthcare segment [3][4] - DarioHealth's engagement rates exceed industry averages, with early outcomes showing notable reductions in A1c levels, blood pressure, and musculoskeletal pain, alongside improvements in mental well-being [4] Strategic Direction - The partnership signifies a trend where leading organizations are moving away from generic wellness apps towards scalable, clinically integrated platforms that provide real-world results [3][4] - DarioHealth aims to establish partnerships with leading healthcare systems as a marker of trust and reliability in the digital health sector [4][8]

Core Viewpoint - DarioHealth Corp. (DRIO) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for DarioHealth for the fiscal year ending December 2025 is projected at -$0.22 per share, reflecting an 83.3% decrease from the previous year's reported figure [8]. - Over the past three months, analysts have raised their earnings estimates for DarioHealth by 58.5% [8]. Zacks Rating System - The Zacks rating system is based solely on changes in a company's earnings picture, making it a reliable tool for investors [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - DarioHealth's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for near-term stock price increases [10]. Market Influence - Changes in earnings estimates are strongly correlated with stock price movements, particularly due to the actions of institutional investors who adjust their valuations based on these estimates [4][5]. - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 20% of stocks are recognized for their superior earnings estimate revisions [9][10].

Financial Data and Key Metrics Changes - Total revenue for 2024 reached $27 million, a 32.9% increase from $20.4 million in 2023, with over 110% growth compared to Q4 2023 and a 2.4% sequential increase from Q3 2024 [19][22][48] - B2B2C employers and health plans recurring revenue grew approximately 400% year-over-year, with 35% of that growth coming from organic expansion [20][22] - Pro-forma gross profit margin increased from 51% to 72%, with gross margins for the B2B2C business around 80% for the last three quarters [21][22] - Proforma operating expenses were reduced by 35% from Q1 2024 to Q4 2024, with an anticipated further 20% reduction by Q4 2025 [22][56] Business Line Data and Key Metrics Changes - The acquisition of Twill has strengthened the company's position in the industry, allowing it to support five chronic conditions under a unified brand [9][12] - The GLP-1 companion model has been instrumental in securing employer contracts, with 10 new client wins in 2024 directly tied to GLP-1 solutions [15][19] - The client renewal rate remained above 90%, indicating strong value and impact of the platform [29] Market Data and Key Metrics Changes - The healthcare industry is shifting towards whole-person digital health and vendor consolidation, with employers and health plans demanding integrated solutions [11][12] - The rise of GLP-1 therapies has created a need for long-term behavioral and lifestyle support, with employers prioritizing comprehensive solutions [13][14] Company Strategy and Development Direction - The company aims to accelerate client growth and expand its business, targeting a 50% net client growth in 2025 [23][52] - The strategy focuses on three key priorities: accelerating commercial growth, leading the market shift to whole-person digital health, and driving operational efficiencies and profitability [52][56] - The company is positioned to capitalize on the transition towards integrated multi-condition platforms that deliver better outcomes and cost efficiencies [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive sustainable long-term growth, supported by a strong financial profile and market-leading AI-powered platform [24][48] - The company is on track for operational cash flow breakeven by the end of 2025, with a disciplined approach to expense management [22][56] Other Important Information - The company raised $25.6 million in capital in January 2025, providing a strong financial position to execute its strategy [22] - The company has a proforma cash balance of $34.5 million as of December 31, 2024 [22] Q&A Session Summary Question: What number of patients have successfully off-boarded from GLP-1 support programs? - Management indicated that they have seen a few hundred users successfully off-boarded and will present specific data in June [61][62] Question: What are the expectations for growth in 2025, particularly regarding GLP-1 programs? - Management targets to grow by more than 50 accounts in 2025, with GLP-1 expected to double in terms of accounts [64][66] Question: How significant is the role of GLP-1 treatments in the company's strategy? - Management sees GLP-1 as a major revenue driver, with expectations for significant growth in accounts related to GLP-1 solutions [95][96] Question: What are the opportunities to expand offerings through health plans? - Management confirmed ongoing discussions with health plans to expand offerings, particularly in behavioral health and cardiometabolic conditions [73][77] Question: What is the expectation for breakeven? - Management confirmed the objective of achieving operational breakeven by the end of 2025 [84]