DarioHealth(DRIO) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Gross profit for Q3 2019 was 46.7%, representing an 86% improvement over Q3 2018 [10][39] - Operating loss decreased by $1.25 million to $2.8 million, a 48% sequential decline compared to Q2 2019 and a 31% decrease compared to Q3 2018 [12][40] - Q3 revenues were $1.87 million, a 13% sequential increase over Q2 2019 [12][39] Business Line Data and Key Metrics Changes - The company shifted focus from direct-to-consumer (D2C) to business-to-business (B2B), resulting in improved financial metrics [10][19] - The B2B channel is expected to address millions of patients, with initial successes already observed [20][23] Market Data and Key Metrics Changes - The company has access to tens of thousands of users through its B2B agreements, with around 20% of revenue generated from this channel [47] - The company is engaging with various market players, including self-insured employers, payers, and clinics, to expand its reach [20][31] Company Strategy and Development Direction - The strategic plan involves a disciplined approach to winning new B2B contracts, aiming for high-margin SaaS business model [9][11] - The company is also expanding its product offerings to include hypertension solutions, integrating multiple chronic condition management into one platform [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to raise capital and continue growth, emphasizing a focus on cost-effective operations [53][41] - The company believes it is well-positioned in the market due to its competitive pricing and clinical outcomes, which are appealing to employers and payers [31][44] Other Important Information - The company secured a U.S. patent for optical transmission of data between sensors and smart devices, enhancing its product capabilities [15] - The platform is designed to be open, allowing integration with multiple devices, which is expected to contribute to gross margins [27] Q&A Session Summary Question: How many type II diabetes patients does the company currently have access to across all B2B programs? - The company has access to tens of thousands of users, estimated between 100,000 to 200,000, with around 20% of revenue coming from the B2B channel [47] Question: How is the B2B sales team structured and what are its goals? - The B2B sales team consists of lead generation, sales, and client success roles, with plans to reinforce each part to enhance patient sign-ups [49] Question: What is the company's strategy regarding revenue growth in Q4 and 2020? - The company aims to balance investments between B2B and D2C channels, expecting to achieve significant growth in 2020 with lower customer acquisition costs [51] Question: What are the plans for additional capital requirements? - The company ended Q3 with $4.6 million in cash and is confident in its ability to raise capital through existing and new investors [53] Question: How does the launch of the hypertension solution impact B2B conversations? - The hypertension solution has generated significant interest across all channels, as many diabetes patients also suffer from hypertension [57]