DarioHealth Corp. Q1 FY2025 earnings call

• DarioHealth has evolved into a leading healthcare technology company with a SaaS-like model, having signed 14 new clients in Q1 2025. - The acquisition and integration of Twill strengthened its position in the industry, creating a comprehensive clinically integrated digital health platform supporting five chronic conditions. - Revenue of $6.75 million was achieved, with growth from recurring B2B2C channels. - Strategic partnerships with Rula in behavioral health and MediOrbis in GLP-1 prescribing and chronic care were highlighted. - The AI-cubed strategy is driving operational efficiency, member engagement, and customer value. - The executive leadership team has been strengthened with new C-suite members, focusing on execution and cost alignment. - An equity raise and debt refinancing were completed, aiming for operational cash flow break-even by end of 2025.

In the first quarter of 2025, DarioHealth generated $6.75 million in revenue, a 17% year-over-year increase driven by recurring revenue growth from B2B2C channels. The core B2B2C business maintained over 81% gross margins on a non-gap basis for the last four quarters. Non-GAAP gross margins were 17.5%, and operating expenses declined 35% year-over-year.

• DarioHealth expects to achieve operational cash flow break-even run rate by the end of 2025, supported by existing account extensions, new contract swings, and a deep pipeline of near-term opportunities. - Anticipates recovery in revenues from delayed projects in future quarters. - Priorities include accelerating strategic commercial growth, leading whole-person AI-powered care across five chronic conditions, and driving toward profitability through margin expansion and cost optimization.

• Timeline extensions in projects due to tariff-related pressure affecting hardware sourcing and partner-side execution. - Potential impact of market trends, reduced demand, and competitive dynamics on actual results differing from projections. - Uncertainties related to large client transitions and external factors affecting revenue timelines.

Q: About timeline delays related to tariffs and large accounts.

A: Delays due to a large account transformation and some partner delays, expected to recover in next quarters.

Q: Partnership with Rula Health rollout.

A: Introduced in Q1, with adoption underway, initial integration with 3-4 clients, more to follow.

Q: Path to cash flow breakeven.

A: Combination of revenue growth and expense reduction, aiming for operational cash flow breakeven by end of 2025.

Q: Update on large pharma partnerships.

A: Sanofi commercial, two large pharma deals in pipeline, contributing 5-10% of revenue this year.

Q: Timing of large health plan RFP award.

A: Unclear exact timing but confident in launch, hedging with OpEx discipline.

Q: Fully diluted share count post-profitability.

A: Around 99 million including preferred shares converted.