DarioHealth Corp. Q3 FY2024 earnings call

• Dario has a comprehensive digital health platform supporting 6 chronic conditions, expanded through organic growth and strategic acquisitions like Twill, adding behavioral health capabilities. - Q3 showed growth in top line, reduction in operating expenses, and decrease in net loss. - Implemented cost management strategies, reducing non-GAAP operating expenses to $12.3 million, a 15.9% sequential decline from Q2 2024. - Signed 10 new contracts in Q3, with aim to secure ~5 more before end of year, totaling 17-20 new clients in H2 2024. - B2B2C channel progress, focusing on converting new clients to revenues, expanding in employer, health plan, pharma, and medical device channels. - Rebranded product suite for unified brand, leveraging AI and data for better client experiences and outcomes.

In Q3 2024, DarioHealth reported $7.42 million in revenue, representing an 18.7% sequential increase and an impressive 111% year-over-year growth. The core B2B2C business is the engine of the revenue base. The B2B2C business has gross margins of 83%, and full business non-GAAP gross margins reached 70%. The revenue contribution from B2B2C is significant as it drives the overall growth.

• Expect to reach ~25 new client signings in 2024, leading to ~35% growth in client base. - Aim for $50 million run rate by end of 2025, positioning the company for operational cash flow-positive point. - Projected 69% reduction in non-GAAP operating losses from Q1 2024 to Q1 2025, aiming for cash flow breakeven run rate by end of 2025. - OpEx expected to reduce to a run rate of $41 million by Q1 2025 on a non-GAAP basis.

• Actual events or results may differ materially from projections due to changing market trends, reduced demand, or competitive nature of the industry. - Forward-looking statements subject to known and unknown risks, uncertainties, and factors from SEC filings and press releases that could cause actual results to differ.

Q: Wondering about 2025 growth range for B2B2C revenue A: While not precise, aiming for $50 million run rate by end of 2025, with B2B2C revenue growth expected with client base expansion Q: B2C revenue driver and future range A: B2C revenue in ~$8 million range, stable, and B2B2C revenue expected to grow 50%-70% in 2024 Q: Contribution of new pharma customers and pipeline A: New pharma customers contribute between ~$500,000 up to $5 million, depending on client goals; wins driven by platform services subscription fee model, with pipeline ongoing for expansion Q: OpEx improvement levers and future base A: OpEx reduced by merging organizations, offshore activities, rotating budget from R&D to sales and marketing; aiming for $41 million run rate by Q1 2025 on non-GAAP basis