DarioHealth Corp. Q4 FY2025 earnings call

• 2025 was the strongest year on record for new business wins with 85 new agreements signed, leveraging contract sizes 2 to 10 times larger than historical. Existing contracts provide a stable foundation with member growth and expansion opportunities. New clients signed in 2025 are ramping enrollment and engagement. 2025 sales season had $12.9 million in contracted and late-stage ARR. Pipeline of commercial opportunities expanded to $122 million. Revenue growth expected to continue in 2026 with second half showing strongest acceleration. - Growth strategy built on two compounding layers: client level with channel partnerships like Solera giving access to millions of covered lives, and member level with multi-condition platform reaching larger proportion of accounts' populations. Nearly 80% of commercial pipeline involves multi-condition deployments, with common request for managing diabetes, hypertension, and mental health. - Dario's fully vertical integrated platform is a compounding advantage with proprietary clinical data, 100-plus peer-reviewed studies, and deep integration. WIQ, AI-driven intelligence engine, trained on over 13 billion real-world data points. - Commercial progress includes distribution partnerships scaling, multi-condition demand from employers and health plans. Distribution moving towards large payer ecosystems and curated digital health networks. Access to over 116 million covered lives through distribution ecosystem. Contract extensions with Aetna and Centene. Florida Blue selection, Solera's HCSC launch, Amwell's upcoming relationships. Government-sponsored healthcare programs engagement. Employer pipeline with 102 opportunities totaling ~$54 million in value. Health plan pipeline with 81 opportunities totaling ~$60 million in value. Pharma services segment as emerging opportunity with discussions with three pharmaceutical organizations.

In the fourth quarter of 2025, revenue was $5.2 million with 620 revenue growth. For the 12 months ended December 31st, 2025, revenue was $22.4 million compared to $27 million in 2024, driven by a single legacy client non-renewal from the tool acquisition partially offset by organic growth. Gross margin expanded from 49% in 2024 to 57% in 2025. Full-year 2025 total operating expense declined by 31% to $49.3 million, with full-year non-GAAP operating expenses declining by $13.6 million, or 26%, from $52.2 million to $38.6 million. Q4 non-gap operating expenses declined 28% to $11.4 million, and non-gap operating expenses fell 28% year-over-year from $12.4 million to $9 million. Net cash used in operating activities declined from 38.6 million in 2024 to 25.9 million, a 33% reduction.

• Expect to narrow non-GAAP operating loss by approximately 30% in 2026. - Targeting towards cash flow break-even by mid-2027. - Revenue growth expected to continue in 2026 with first quarter growth and second half acceleration. - Business expected to be cash flow positive at ~$38 to $42 million in revenues.

Q: Congrats on the end of the year, talk about revenue growth in 2026 and cadence.

A: 85 wins and $12.9 million ARL. Q1 growth from Q4, second half acceleration. Comfortable with analyst consensus.

Q: Talk about breakeven target being pushed out.

A: 80% growth, 20% OPEX optimization. AI and top line growth driving cash flow positive at ~$38 - $42 million revenue.

Q: Talk about HCSC selection process.

A: Solera partner, preferred in-network. HCSC decisions with Solera, self-insured employers make calls.

Q: On operating expenses in 2026.

A: Continue to reduce OPEX, narrow non-GAAP operating loss by 30% in 2026.

Q: On commercial pipeline uptick.

A: Reflecting 2026 and 2027 combined, previously year-in view.