DarioHealth Reports First Quarter Financial and Operating Results
- Sequential quarterly growth in revenue to
$7.07 million - Gross profit margin improving to
44.8% sequentially in the first quarter of 2023, up from40.1% of revenues in the fourth quarter of 2022 - Non-GAAP gross margin was
60.1% of revenues for the first quarter of 2023, up from58.1% of revenues in the fourth quarter of 2022 - Reduced cash used in operating activities in the first quarter to only
$4.76 million - Further reduced net loss to
$12.8 million $15.9 million $12.6 million - Expanded strategic relationships by signing with Amwell and the first account through our relationship with Sanofi, a national pharmacy benefits manager
- Announced the presentation of the first Sanofi of Dario data which showed statistically significant reduction in all-cause health care resource utilization, including a
23.5% reduction in hospitalizations. - Cash balance as of the end of Q1 of
$38.8 million - Proforma cash balance as of the end of Q1 inclusive of the private placement offering proceeds and the refinanced loan was
$61 million - Company to host investor conference call and webcast at 8:30 a.m. ET today
"During the first quarter, we continued to improve the financial profile of the Company as we capitalized on the growing demand for digital health solutions in the employer and health plan markets," stated Erez Raphael, Chief Executive Officer of Dario. "We generated sequential growth in revenue, improved gross margins and reduced operating expenses as our new business model matures. The strategic shift continues to yield results as we reduced our operating loss and net loss by
"Business-to-Business (B2B) revenues continued to increase, representing approximately
"We were very pleased to complete a successful private placement offering of convertible preferred stock along with a concurrent refinancing of our credit facility which together adds significant runway which is expected to extend through late 2025. We believe that our strategy is working, and with our strengthened balance sheet and the significantly reduced cash burn, I believe Dario is well positioned to lead the market for integrated digital health solutions," Mr. Raphael concluded.
"Our partnership strategy continues with the addition of American Well Corporation (Amwell), a leading digital care delivery enablement platform, which will integrate our cardiometabolic solution into its offering," stated Rick Anderson, President of Dario. "Our agreement with Amwell represents a substantial opportunity for Dario with an installed base of approximately 2,000 health plans and hospitals that reach over 90 million lives. Amwell joins a growing list of strategic relationships that includes Sanofi US Services, Inc., CVS Pharmacy Inc., Virgin Pulse, Inc., Solera Health, Inc., and Alliant Insurance Services Inc., that we believe see the value of Dario for their health plan and employer clients. We believe that these relationships will enable us to continue to accelerate market penetration and drive revenue growth this year and beyond.
We are very excited about the first study conducted by Sanofi in one of the largest and most rigorous study designs seen in digital health with the use of the Dario solution. As the digital health industry matures partners, especially health plans, are demanding greater levels of evidence. This study demonstrated statistically significant reductions in health care utilization and a
We exited the first quarter with
Q1 2023 and Recent Highlights
- Continued to improve the financial profile of the Company, driven by the continued growth of scalable, high margin B2B customers.
- Announced a strategic partnership with Amwell, a leader in digital healthcare enablement, to deliver its cardiometabolic solution to Amwell's customers.
- Entered into an agreement with Dexcom, the global leader in real-time continuous glucose monitoring (CGM) technology, to integrate its market-leading CGMs into Dario's multi-chronic condition platform.
- Announced a new contract with a leading national Pharmacy Benefits Manager (PBM) to provide its employer clients with Dario's digital therapeutics solutions, beginning with its diabetes solution, beginning in the second quarter of 2023.
- Announced hiring of digital health product leader Eitan Shay as Chief Product Officer and appointment of digital veteran Arnaud Robert as Strategic Advisor to the Chief Executive Officer.
- Announced the publication of new research in Pain Reports investigating the personalized efficacy of digital therapeutics for pain management, linking the reduction of back pain for users in a digital posture training program with the personalization of user journeys adapting machine learning models.
- Presented two new clinical studies at the 16th International Conference on Advanced Technologies and Treatments for Diabetes (ATTD) 2023, which was held February 22-25 in
Berlin . One of the studies demonstrated improved clinical outcomes in users with Type 2 diabetes and provided further analysis to understand the mediating effects of live human coaching and digital interventions across the Dario user journey, and the second study demonstrated Dario's ability to reduce hypoglycemic events in older adults with a digital chronic condition management solution. - Continue to demonstrate the strength of Dario's multi-condition suite, with more than
50% of pipeline opportunities for multi-condition contracts.
First Quarter 2023 Results Summary
Revenues for the first quarter ended March 31, 2023 were
Gross profit for the first quarter of 2023 was
Pro-forma gross profit, excluding
Total operating expenses for the first quarter of 2023 were
Operating loss for the first quarter of 2023 was
Operating loss excluding stock-based compensation, acquisition expenses and depreciation for the first quarter of 2023 were
Net loss was
Non-GAAP billings for the three months ended March 31, 2023, were
A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Conference Call Details: Thursday, May 11, 8:30am ET
Dial-in: 1-833-816-1389 (domestic) or 1-412-317-0482 (international)
Call me™: https://callme.viavid.com/?$Y2FsbG1lPXRydWUmcGFzc2NvZGU9JmluZm89Y29tcGFueSZyPXRydWUmYj0xNQ==
Passcode: 9873766
Participants can use Guest dial-in #s above and be answered by an operator OR click the Call me™ link for instant telephone access to the event. This link will be made active 15 minutes prior to scheduled start time.
Conference title: DarioHealth Corp. – First Quarter 2023 Results Call
Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1610598&tp_key=6f49dba576
Participants are asked to dial-in approximately 10 minutes prior to the start of the event. A replay of the call will be available approximately two hours after completion through Sunday, June 11, 2023. To listen to the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and use replay passcode 10178111.
About DarioHealth Corp.
DarioHealth Corp. (Nasdaq: DRIO) is a leading digital health company revolutionizing how people with chronic conditions manage their health through a user-centric, multi-chronic condition digital therapeutics platform. Our platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain and behavioral health.
Our user-centric platform offers people continuous and customized care for their health, disrupting the traditional episodic approach to healthcare. This approach empowers people to holistically adapt their lifestyles for sustainable behavior change, driving exceptional user satisfaction, retention and results and making the right thing to do the easy thing to do.
Dario provides its highly user-rated solutions globally to health plans and other payers, self-insured employers, providers of care and consumers. To learn more about DarioHealth and its digital health solutions, or for more information, visit http://dariohealth.com.
Cautionary Note Regarding Forward-Looking Statements
This news release and the statements of representatives and partners of the Company related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. For example, when it discusses that its increase in B2B share of total revenue reflects growing trends in the market favoring its single, integrated, multi-condition digital health platform, its expected runway, the belief that with its strengthened balance sheet and the significantly reduced cash burn, it is well positioned to lead the market for integrated digital health solutions, that its agreement with Amwell represents a substantial opportunity, that its growing list of strategic relationships reflects the value of its platform for health plan and employer clients, that such relationships will enable it to continue to accelerate market penetration and drive revenue growth this year and beyond, the expected timing of its product launches, that the study results will be valuable to its sales efforts for customers seeking to reduce cost and that its B2B is strategically aligned with employer and health plan demand and that it anticipate that it will continue to see strong growth. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the
Non-GAAP Financial Measures
We have provided in this release financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.
Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period and adjustment to the deferred revenue balance due to adoption of the new revenue recognition standard less any deferred revenue balances acquired from business combination(s) during the period. We consider billings to be a useful metric for management and investors because billings drive future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.
Operating expenses (non-GAAP). Our presentation of non-GAAP operating expenses excludes stock-based compensation expenses. Due to varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company's non-cash operating expenses, we believe that providing non-GAAP financial measures that exclude non-cash expense provides us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time.
Net loss (non-GAAP). Our presentation of adjusted net loss excludes the effect of certain items that are non-GAAP financial measures. Adjusted net loss represents net loss determined under GAAP without regard to stock-based compensation expenses, deferred inventory, depreciation of fixed assets, earn-out remeasurement and acquisition related expenses and amortization. We believe these measures provide useful information to management and investors for analysis of our operating results.
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | |||||||
INTERIM CONSOLIDATED BALANCE SHEETS | |||||||
March 31, | December 31, | ||||||
2023 | 2022 | ||||||
Unaudited | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 38,789 | $ | 49,357 | |||
Short-term investments | 4,304 | - | |||||
Short-term restricted bank deposits | 225 | 165 | |||||
Trade receivables | 2,797 | 6,416 | |||||
Inventories | 6,877 | 7,956 | |||||
Other accounts receivable and prepaid expenses | 2,484 | 1,630 | |||||
Total current assets | 55,476 | 65,524 | |||||
NON-CURRENT ASSETS: | |||||||
Deposits | 6 | 6 | |||||
Operating lease right of use assets | 1,170 | 1,206 | |||||
Long-term assets | 149 | 111 | |||||
Property and equipment, net | 765 | 788 | |||||
Intangible assets, net | 8,803 | 9,916 | |||||
Goodwill | 41,640 | 41,640 | |||||
Total non-current assets | 52,533 | 53,667 | |||||
Total assets | $ | 108,009 | $ | 119,191 | |||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
INTERIM CONSOLIDATED BALANCE SHEETS | ||||||
March 31, | December 31, | |||||
2023 | 2022 | |||||
Unaudited | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Trade payables | $ | 1,883 | $ | 2,322 | ||
Deferred revenues | 925 | 1,320 | ||||
Operating lease liabilities | 291 | 293 | ||||
Other accounts payable and accrued expenses | 5,935 | 6,592 | ||||
Loan, current | 8,583 | 8,823 | ||||
Total current liabilities | 17,617 | 19,350 | ||||
NON-CURRENT LIABILITIES | ||||||
Operating lease liabilities | 751 | 827 | ||||
Long-term loan | 16,745 | 18,105 | ||||
Warrant liability | 830 | 910 | ||||
Other long-term liabilities | 36 | — | ||||
Total non-current liabilities | 18,362 | 19,842 | ||||
STOCKHOLDERS' EQUITY | ||||||
Common stock of | 3 | 3 | ||||
Preferred stock of | *) - | *) - | ||||
Additional paid-in capital | 370,702 | 365,846 | ||||
Accumulated deficit | (298,675) | (285,850) | ||||
Total stockholders' equity | 72,030 | 79,999 | ||||
Total liabilities and stockholders' equity | $ | 108,009 | $ | 119,191 | ||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||
Three months ended | ||||||
March 31, | ||||||
2023 | 2022 | |||||
Unaudited | ||||||
Revenues: | ||||||
Services | $ | 5,257 | $ | 4,984 | ||
Consumer hardware | 1,809 | 3,075 | ||||
Total revenues | 7,066 | 8,059 | ||||
Cost of revenues: | ||||||
Services | 1,477 | 452 | ||||
Consumer hardware | 1,340 | 2,689 | ||||
Amortization of acquired intangible assets | 1,081 | 932 | ||||
Total cost of revenues | 3,898 | 4,074 | ||||
Gross profit | 3,168 | 3,985 | ||||
Operating expenses: | ||||||
Research and development | $ | 5,165 | $ | 5,927 | ||
Sales and marketing | 6,340 | 9,535 | ||||
General and administrative | 4,071 | 4,395 | ||||
Total operating expenses | 15,576 | 19,857 | ||||
Operating loss | 12,408 | 15,872 | ||||
Total financial expenses, net | 417 | 44 | ||||
Net loss | $ | 12,825 | $ | 15,916 | ||
Other comprehensive loss: | ||||||
Deemed dividend | $ | - | $ | 451 | ||
Net loss attributable to shareholders | $ | 12,825 | $ | 16,367 | ||
Net loss per share: | ||||||
Basic and diluted loss per share of common stock | $ | 0.45 | $ | 0.74 | ||
Weighted average number of common stock used in computing basic and diluted net | 27,570,013 | 19,624,079 | ||||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
Three months ended | ||||||
March 31, | ||||||
2023 | 2022 | |||||
Unaudited | ||||||
Cash flows from operating activities: | ||||||
Net loss | $ | (12,825) | $ | (15,916) | ||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||
Stock-based compensation, common stock, and payment in stock to directors, employees, | 4,856 | 5,343 | ||||
Depreciation | 97 | 70 | ||||
Change in operating lease right of use assets | 36 | 7 | ||||
Amortization of acquired intangible assets | 1,113 | 963 | ||||
Decrease (increase) in trade receivables | 3,619 | (3,264) | ||||
Increase in other accounts receivable, prepaid expense and long-term assets | (892) | (1,550) | ||||
Decrease (increase) in inventories | 1,079 | (1,555) | ||||
Decrease in trade payables | (439) | (890) | ||||
Decrease in other accounts payable and accrued expenses | (621) | (721) | ||||
Decrease in deferred revenues | (395) | (102) | ||||
Change in operating lease liabilities | (78) | (27) | ||||
Remeasurement of earn-out | - | (452) | ||||
Non-Cash financial income | (307) | - | ||||
Net cash used in operating activities | (4,757) | (18,094) | ||||
Cash flows from investing activities: | ||||||
Purchase of property and equipment | (74) | (66) | ||||
Purchase of short-term investments | (4,996) | - | ||||
Proceeds from redemption of short-term investments | 708 | - | ||||
Cash paid as part of Upright Technologies Ltd. acquisition | - | (115) | ||||
Net cash used in investing activities | (4,362) | (181) | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of common stock and prefunded warrants (net of issuance costs) | - | 38,023 | ||||
Principal payments on long-term loan | (1,389) | - | ||||
Net cash provided by financing activities | (1,389) | 38,023 | ||||
Increase in cash, cash equivalents and restricted cash and cash equivalents | (10,508) | 19,748 | ||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 49,470 | 35,948 | ||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ | 38,962 | $ | 55,696 | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid during the period for interest on long-term loan | $ | 1,072 | $ | - | ||
Non-cash activities: | ||||||
Right-of-use assets obtained in exchange for lease liabilities | $ | 28 | $ | 58 | ||
Reconciliation of Revenue to Billing (Non-GAAP) | ||||||||
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
GAAP Revenue | 7,066 | 8,059 | ||||||
Add: | ||||||||
Change in deferred revenue | (395) | (102) | ||||||
Billing (Non-GAAP) | 6,671 | 7,957 | ||||||
Reconciliation of Operating Loss, Net Loss and Operating Expenses to Adjusted | ||||||||
Operating Loss, Net Loss and Operating Expenses (Non-GAAP) | ||||||||
Three months ended March 31, 2023 | ||||||||
GAAP | Stock-Based | Amortization of | Non-GAAP | |||||
Cost of Revenues | $ | 3,898 | (27) | (1,112) | 2,759 | |||
Gross Profit | 3,168 | 27 | 1,112 | 4,307 | ||||
Research and development | 5,165 | (1,185) | (19) | 3,961 | ||||
Sales and Marketing | 6,340 | (1,847) | (44) | 4,449 | ||||
General and Administrative | 4,071 | (1,797) | (35) | 2,239 | ||||
Total Operating Expenses | 15,576 | (4,829) | (98) | 10,649 | ||||
Operating Loss | $ | (12,408) | 4,856 | 1,210 | (6,342) | |||
Financing expenses | 417 | - | - | 417 | ||||
Income Tax | - | - | ||||||
Net Loss | $ | (12,825) | 4,856 | 1,210 | (6,759) | |||
Three months ended March 31, 2022 | ||||||||
GAAP | Stock-Based | Earn-out | Non-GAAP | |||||
Cost of Revenues | $ | 4,074 | (23) | (954) | 3,097 | |||
Gross Profit | 3,985 | 23 | 954 | 4,962 | ||||
Research and development | 5,927 | (1,488) | (11) | 4,428 | ||||
Sales and Marketing | 9,535 | (1,651) | (41) | 7,843 | ||||
General and Administrative | 4,395 | (2,181) | 338 | 2,552 | ||||
Total Operating Expenses | 19,857 | (5,320) | 286 | 14,823 | ||||
Operating Loss | $ | (15,872) | 5,343 | 668 | (9,861) | |||
Financing income | 44 | - | 44 | |||||
Income Tax | - | |||||||
Net Loss | $ | (15,916) | 5,343 | 668 | (9,905) | |||
DarioHealth Corporate Contact
Mary Mooney
VP Marketing
Mary@dariohealth.com
+1-312-593-4280
Media Contact:
Scott Stachowiak
Scott.Stachowiak@russopartnersllc.com
+1-646-942-5630
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SOURCE DarioHealth Corp.
