• Continued to improve the financial profile of the Company
• Full-year 2022 revenue of $27.7 million increased 34.8% over $20.5 million in 2021, as B2B revenue growth more than offset managed reduction of B2C activities
• Commercial revenue contributed 59% to 2022 full-year total revenue, compared to 4% for the full-year 2021
• Gross margin was 40.1% of revenues for the fourth quarter of 2022, up from 9.1% of revenues for the fourth quarter of 2021
• Pro-forma gross margin was 58% of revenues for the fourth quarter of 2022, up from 22% of revenues for the fourth quarter of 2021
• 58.4% reduction in operating loss in the fourth quarter 2022 as compared to the fourth quarter of 2021
• Sequential 38.2% reduction in operating loss from the third quarter to fourth quarter of 2022
• Ended 2022 with cash and cash equivalents of $49.3 million
• Company to host investor conference call and webcast at 8:30 a.m. ET today

NEW YORK, March 9, 2023 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO) ("Dario" or the "Company"), a leader in the global digital therapeutics (DTx) market, today reported financial results for the fourth quarter and full year 2022 and provided a corporate and commercial update.

"During the fourth quarter, we continued to see substantial improvements in our financial results driven by our pivot to a Business-to-Business (B2B) business model, including robust revenue growth, an increase in gross margin, lower operating expenses and net loss, and reduced cash usage," stated Erez Raphael, Chief Executive Officer of Dario. "Notably, operating loss in the fourth quarter declined by 58% to $9 million compared to $21.7 million in the fourth quarter of 2021 and non-GAAP operating loss in the fourth quarter declined by 60% to $6 million compared to $15 million in the fourth quarter of 2021. These metrics demonstrate the significant revenue growth and operating expense efficiency that has resulted from the strategic transition to B2B integrated multi condition platform, which continues to gain traction in the market."

Mr. Raphael continued, "B2B represented approximately 59% of our total revenue in 2022, up from 4% in 2021. As our transformation to a multi-condition integrated platform continues to gain momentum in the market, we anticipate that the financial profile of the company will continue to improve driven by lower customer acquisition costs yielding gross margins of approximately 70%." 

"We achieved a key milestone during the fourth quarter by reaching 100 B2B contracts, which we believe is reflective of the market's desire for a multi-condition integrated, digital therapeutics platform," Mr. Raphael concluded. "Of note, 52% of the contracts signed in the second half of 2022 are for multiple chronic conditions, which can generate 4 to 8 times more revenues per customer in a multi chronic condition contract than a single condition contract. Multi-condition contracts also make up greater than 50% of our current pipeline. Taken together, our results and contract pipeline provide us with confidence for what we can achieve in 2023 and in the future."

"During the fourth quarter, we continued to experience strong customer traction across our B2B channels, with particular strength from employers," said Rick Anderson, President of Dario. "We now have more than 100 B2B contracts, with a signed value of more than $65 million, representing growth of 100% over the prior year. We began to see early traction through our key distribution partnerships, with Virgin Pulse, Solera, and Alliant, and our co-promotion with Sanofi.  We believe these partnerships will drive significant increases in customers in 2023 and beyond. In addition, the growth that we saw in reference customers in 2022 should contribute to our momentum in 2023. We continue to build a robust B2B business which we believe is strategically aligned with employer and health plan demand and anticipate that we will see strong growth in 2023."    

Q4 2022 and Recent Highlights

• Continued to improve the financial profile of the Company, driven by the growth of B2B customers.
• Achieved key milestone of 100 B2B customers.
• Existing partnerships are gaining traction and are beginning to accelerate recurring revenue streams from employers and health plans.
• Announced partnership with Dexcom to integrate its market-leading real-time continuous glucose monitoring (CGM) technology into Dario's multi-chronic condition platform.
• Strong pipeline growth continues to demonstrate the strength of Dario's multi-condition suite, with more than 50% of pipeline opportunities for multi-condition contracts.
• New fourth quarter B2B contract highlights include a Midwestern city and four employers, with more completing contracting for early 2023 launch.
• Announced the publication of a new study in the peer-reviewed journal Frontiers in Physiology demonstrating the effectiveness of the Company's musculoskeletal solution, which uses real-time biofeedback and behavior training to reduce back pain.
• Also announced the publication of new research in the peer-reviewed journal Applied Sciences demonstrating improved outcomes for users living with diabetes across different racial and ethnic groups. The research appears in the journal as part of the Special Issue: Digital Therapeutics Applications for Chronic Disease Management.

Fourth Quarter 2022 Results Summary

Revenues for the fourth quarter ended December 31, 2022 were $6.8 million, a 13% increase from $6.0 million for the fourth quarter ended December 31, 2021, and an increase of 3.1% from $6.6 million for the for the third quarter of 2022. The increase resulted from higher revenues from the Company's commercial (B2B) segment.

Gross profit for the fourth quarter of 2022 was $2.7 million, an increase of $2.2 million, compared to gross profit of $0.5 million for the fourth quarter of 2021, and an increase of 52% from $1.8 million for the third quarter of 2022. Gross profit as a percentage of revenues increased to 40.1% in the fourth quarter of 2022, from 9.1% in the fourth quarter of 2021, and 27.3% in the third quarter of 2022.

Pro-forma gross profit, excluding $1.2 million of amortization expenses and other costs related to the acquisition of technology, was $4.0 million, or 58.1% of revenues, for the three months ended December 31, 2022, compared to a pro-forma gross profit of $1.3 million, or 22% of revenues for the three months ended December 31, 2021. 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."

Total operating expenses for the fourth quarter of 2022 were $11.7 million compared with $22.2 million for the fourth quarter of 2021 and $16.4 million for the third quarter of 2022, a decrease of $10.5 million, or 47%, compared to the fourth quarter of 2021, and a decrease of $4.6 million, or 28.3%, compared to the third quarter of 2022. The decrease compared to the third quarter of 2022 resulted mainly from a decrease in our digital marketing expenses. Total operating expenses excluding stock-based compensation, acquisition expenses and depreciation for the fourth quarter of 2022 were $10 million compared to $16.4 million for the fourth quarter of 2021, and $11.4 million for the third quarter of 2022.

Operating loss for the fourth quarter of 2022 was $9.0 million, a decrease of $12.7 million, or 58.4%, compared to $21.7 million for the fourth quarter of 2021, and a decrease of $5.6 million, or 38.2%, compared to $14.6 million for the third quarter of 2022. The decrease compared to the fourth quarter of 2021 and the third quarter of 2022 was mainly due to the decrease in operating expenses.

Net loss was $12.6 million in the fourth quarter of 2022, a decrease of $9.0 million, or 41.5%, compared to a net loss of $21.6 million in the fourth quarter of 2021, and a decrease of $3.0 million, or 19.3%, compared to the third quarter of 2022. Net loss excluding stock-based compensation, acquisition related expenses and depreciation for the fourth quarter of 2022 was $9.6 million compared to $14.9 million for the fourth quarter of 2021 and $9.5 million in the third quarter of 2022.

Non-GAAP billings for the three months ended December 31, 2022, were $7.1 million, a 19% increase from $6.0 million for the three months ended December 31, 2021. The increase is a result of higher sales generated in the three months ended December 31, 2022, compared to the three months ended December 31, 2021. 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."

Full Year 2022 Results Summary

Revenues for the twelve months ended December 31, 2022 were $27.7 million, a 34.8% increase from $20.5 million for the twelve months ended December 31, 2021.

Gross profit for the twelve months ended December 31, 2022 was $9.7 million, an increase of 144%, or $5.7 million, compared to gross profit of $4.0 million for the twelve months ended December 31, 2021. Gross profit as a percentage of revenues increased to 34.9% for the twelve months ended December 31, 2022, from 19.3% for the twelve months ended December 31, 2021.

Pro-forma gross profit, excluding $4.36 million of amortization expenses and other costs related to acquisitions, was $14.0 million, or 50.7% of revenues for the twelve months ended December 31, 2022, compared to a proforma gross profit of $8.1 million or 39.3% of revenues for the twelve months ended December 31, 2021.

Total operating expenses for the twelve months ended December 31, 2022 were $66.5 million, a decrease of $14 million, or 17.4%, compared with $80.5 million for the twelve months ended December 31, 2021. The decrease resulted from a decrease in our sales and marketing and general and administrative expenses. Total operating expenses excluding stock-based compensation, acquisition related expenses and depreciation for the twelve months ended December 31, 2022 were $49.7 million compared to $55 million for the twelve months ended December 31, 2021.

Operating loss for the twelve months ended December 31, 2022 decreased by $19.7 million to $56.8 million, compared to an operating loss of $76.5 million for the twelve months ended December 31, 2021. This decrease is mainly due to the increase in the gross profit and the decrease in operating expenses.

Net loss was $62.2 million for the twelve months ended December 31, 2022 compared to a net loss of $76.8 million for the twelve months ended December 31, 2021. The decrease was driven by higher gross profit and lower operating expenses.

Non-GAAP billings for the twelve months ended December 31, 2022 were $27.8 million, a 36% increase from $20.4 million for the twelve months ended December 31, 2021.

Non-GAAP adjusted net loss for the twelve months ended December 31, 2022 was $40.9 million, a 13% decrease from a $47 million non-GAAP adjusted net loss for the twelve months ended December 31, 2021.

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, March 9, 8:30am ET

Dial-in Number: 1-877-451-6152 (domestic) or 1-201-389-0879 (international)

Call me™: https://callme.viavid.com/viavid/?callme=true&passcode=13732068&h=true&info=company-email&r=true&B=6

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. - Fourth Quarter 2022 Results Call

Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1601613&tp_key=560493f07f.

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, April 9, 2023. To listen to the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and use replay passcode 13736726.

About DarioHealth Corp.

DarioHealth Corp. (Nasdaq: DRIO) is a leading global digital therapeutics company revolutionizing how people with chronic conditions manage their health. DarioHealth offers one of the most comprehensive digital therapeutics solutions on the market - covering multiple chronic conditions including diabetes, hypertension, weight management, musculoskeletal and behavioral health within one integrated technology platform.

Dario's next-generation, AI-powered, digital therapeutic platform supports more than just an individual's disease. Dario provides adaptive, personalized experiences that drive behavior change through evidence-based interventions, intuitive, clinically proven digital tools, high-quality software, and coaching to help individuals improve health and sustain meaningful outcomes.

Dario's unique user-centric approach to product design and engagement creates an unparalleled experience that is highly rated by users and delivers sustainable results.

The company's cross-functional team operates at the intersection of life sciences, behavioral science, and software technology and utilizes a performance-based approach to improve its users' health.

On the path to better health, Dario makes the right thing to do the easy thing to do. To learn more about DarioHealth and its digital health solutions or for more information, visit http://dariohealth.com, the content of which is not incorporated by reference in this press release.

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, the Company is using forward-looking statements in this press release when it discusses the benefits realized from the strategic transition of its business to B2B integrated multi condition platform, that its integrated multi condition platform continues to gain traction in the market, that it anticipates that its financial profile will continue to improve driven by lower customer acquisition costs, its belief that the number of B2B contracts is reflective of the market's desire for a multi-condition integrated, digital therapeutics platform, its belief that its partnerships will drive significant increases in customers in 2023 and beyond, that its growth in customers in 2022 should contribute to its momentum in 2023, that it continues to build a robust B2B business which its believes is strategically aligned with employer and health plan demand and that it anticipates that it will see strong growth in 2023. 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 U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario™ as described herein) may differ significantly from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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 Corporate Contact

Mary Mooney
VP Marketing
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+1-312-593-4280

Media Contact:

Scott Stachowiak
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+1-646-942-5630