DarioHealth Reports First Quarter 2025 Financial and Operating Results
- Gross margin improved significantly to 57.5% (GAAP) and 70.5% (non-GAAP)
- Operating expenses decreased by 35% YoY and 16% sequentially
- GAAP operating loss improved by 47% to $9.4 million
- 14 new clients signed YTD, bringing total client count to 97
- Over 90% contract renewal rate maintained
- Debt refinancing completed, extending runway to 2028
- Revenue decreased 11.2% sequentially to $6.75 million
- Lost scope with large national health plan client due to insourcing
- Timeline extensions due to tariff-related pressures affecting hardware sourcing
- Still operating at a significant loss despite improvements
Insights
DarioHealth shows revenue growth and cost cutting progress but still faces challenges on path to break-even by year-end 2025.
DarioHealth's Q1 2025 results present a mixed financial picture with noteworthy progress toward operational efficiency despite revenue challenges. The company achieved
The gross margin improvements are particularly impressive, rising to
Operating expenses showed dramatic improvement, decreasing
The company's strategic direction appears increasingly focused, with 14 new clients secured year-to-date (including a national health plan, regional plan, 12 employers, and two pharma companies), bringing its total client count to 97. The
Two financial maneuvers strengthen Dario's position: an equity raise completed in Q1 and debt refinancing on April 30, which deferred amortization from late 2025 to 2028. This provides critical runway for their stated goal of achieving operational cash flow breakeven by year-end 2025.
The ongoing AI transformation initiative targets a further
However, challenges remain evident. The revenue dip resulting from client scope changes and implementation delays attributed to tariff-related pressures shows vulnerability in the business model. The net loss of
The company's strategic realignment to focus on higher-quality, recurring revenue versus transactional business appears prudent but may create short-term revenue volatility as this transition continues. Investors should closely monitor whether the 40-client acquisition goal for 2025 remains on track, as the current pace of 14 in the first quarter + suggests they are executing well against this target.
- First quarter revenue of
$6.75 million 17% increase year-over-year, driven by employer and health plan (B2B2C) growth, and a decrease of11% sequentially. - Gross margin increased to
57.5% compared to42.2% in the first quarter of 2024 - Gross margin (non-GAAP) increased to
70.5% , up from62.4% in the first quarter of 2024 - Operating expenses decreased by
35% compared to the first quarter of 2024 and16% sequentially, with additional efficiencies anticipated through ongoing AI-driven process optimization - GAAP operating loss decreased by
47% compared to the first quarter of 2024, improving to$9.4 million - Non-GAAP operating loss decreased by
36% compared to the first quarter of 2024, improving to$5.8 million - 14 new clients signed year-to-date, including a national health plan, regional plan, 12 employers, and two pharma companies
- Strategic platform expansion through GLP-1 prescribing (MediOrbis), behavioral health (Rula), and cardiometabolic support via a national benefit plan administrator
- GLP-1 solution expanded with virtual prescribing and integration into chronic condition programs
- Artificial Intelligence (AI) transformation underway, automating workflows, lowering costs, and enhanced operational scalability
- Refinanced debt and raised equity, strengthening balance sheet, extending cash runway and providing operating flexibility to drive strategic plans
- Dario remains on track to achieve operational cash flow breakeven run rate by the end of 2025 given existing account expansion, new contract wins and a pipeline of near-term opportunities
- Dario will host an investor conference call and webcast at 8:30 a.m. ET today.
First Quarter 2025 and Recent Highlights
"We are building a business that is fully aligned with the most important trends in healthcare," said Erez Raphael, Chief Executive Officer of Dario. "From the expansion of GLP-1 therapies beyond weight loss into chronic condition management, to the scalability unlocked by AI and the market shift towards integrated, multi-condition solutions, we believe that our platform and our strategy are uniquely positioned at the convergence of these trends. We believe that our commercial wins, cost reductions, and continued product innovation reflect that alignment and move us closer to predictable, sustainable growth with high-quality revenue streams."
Revenue for the first quarter of 2025 was
Dario also faced timeline extensions in other projects due to tariff-related pressures, which impacted both hardware sourcing and partner-side execution. Some of the Company's medical devices and hardware components are manufactured in
Gross margin improved to
The Company expects a further 15–
GAAP operating loss declined to
"We are seeing a clear and growing demand for integrated digital health solutions that span multiple conditions and deliver measurable value to payers and employers," said Steven Nelson, Chief Commercial Officer of Dario. "Our commercial pipeline is stronger and more strategic than any point in the Company's history. We're focused on building durable, recurring revenue through strategically aligned collaborations and intentionally phasing out transactional, low-margin business that no longer fits our future state. While we are disappointed with the top line performance of this quarter, we believe that this is a temporary shortfall relative to much larger wins and related revenues during 2025."
As part of the Company's ongoing strategic realignment, Dario is actively refining its sales pipeline to ensure that revenue streams are more consistent and aligned with long-term growth objectives. This includes prioritizing high-quality, strategically aligned opportunities while de-emphasizing or phasing out lower-value or misaligned deals that may have historically contributed to short-term revenues but no longer support the Company's future direction.
The Company also expanded its platform through several key collaborations that should all contribute to revenue in 2025 and beyond:
- MediOrbis for GLP-1 prescribing and virtual chronic care delivery
- Rula for virtual behavioral health integration
- A leading national benefit plan administrator for scalable cardiometabolic channel revenue
These additions broaden Dario's multi-condition offering and support a more comprehensive, value-based care model for employers and health plans.
The Company's executive leadership team, significantly strengthened over the past year, continues to focus on improving execution, forecasting, and cross-functional alignment. Since June 2024, Dario has added a new Chief Commercial Officer, Chief Operating Officer, Chief Human Resources Officer, and, most recently, a new Chief Financial Officer, forming a unified and execution-focused team. With the team now in place, Dario believes that it is well-positioned to execute on its strategic priorities, drive operational efficiency, and support the Company's next phase of growth.
Dario also completed an equity raise in the first quarter and refinanced existing debt on April 30, 2025, strengthening its balance sheet and providing additional flexibility to invest in long-term growth. With the new debt structure in place, amortization was deferred from the end of 2025 to 2028, creating operational runway and the opportunity to generate funds from operations in support of the Company's multi-year goal of achieving cash flow positivity.
First Quarter 2025 Results Summary
Revenues for the three months ended March 31, 2025, were
B2B2C, employers and health plan recurring revenues for the three months ended March 31, 2025, were
Gross profit for the three months ended March 31, 2025, was
Pro-forma gross profit, excluding
Total operating expenses for the three months ended March 31, 2025, were
Total operating expenses excluding stock-based compensation, acquisition related expenses and depreciation for the three months ended March 31, 2025, were
Operating loss for the three months ended March 31, 2025, was
Operating loss excluding stock-based compensation, acquisition related expenses and depreciation for the three months ended March 31, 2025 was
Financing income was
Net loss was
Net loss excluding stock-based compensation, acquisition related expenses and depreciation for the three months ended March 31, 2025 was
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: Wednesday, May 14, 8:30am ET
Dial-in Number: 1-800-717-1738 (domestic) or 1-646-307-1865 (international)
Call me™: https://emportal.ink/41V6DZl
Participants can use the dial-in numbers 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 the scheduled start time.
Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1712636&tp_key=9017ab7efa
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 of the conference call through Wednesday, May 28th, 2025. To listen to the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and use replay passcode 111852334608.
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 Dario 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, the Company is using forward-looking statements when it discusses the implementation of additional efficiencies anticipated through the ongoing AI-driven process optimization; that the Company remains on track to achieve operational cash flow breakeven run rate by the end of 2025 given existing account expansion, new contract wins and a pipeline of near-term opportunities; that the Company expects a further 15–
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.
Operating expenses (non-GAAP). Our presentation of non-GAAP operating expenses excludes stock-based compensation expenses, amortization of acquisition related expenses and depreciation of fixed assets. 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 expenses 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 | ||||||
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) | ||||||
March 31, | December 31, | |||||
2025 | 2024 | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 27,854 | $ | 27,764 | ||
Short-term bank deposits | - | 697 | ||||
Short-term restricted bank deposits | 192 | 175 | ||||
Trade receivables, net | 3,207 | 4,804 | ||||
Inventories | 4,622 | 4,753 | ||||
Other accounts receivable and prepaid expenses | 2,687 | 2,336 | ||||
Total current assets | 38,562 | 40,529 | ||||
NON-CURRENT ASSETS: | ||||||
Deposits | 79 | 79 | ||||
Operating lease right of use assets | 955 | 1,065 | ||||
Long-term assets | 331 | 313 | ||||
Property and equipment, net | 646 | 709 | ||||
Intangible assets, net | 17,600 | 18,762 | ||||
Goodwill | 57,427 | 57,427 | ||||
Total non-current assets | 77,038 | 78,355 | ||||
Total assets | $ | 115,600 | $ | 118,884 | ||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) | ||||||
March 31, | December 31, | |||||
2025 | 2024 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Trade payables | $ | 2,745 | $ | 3,045 | ||
Deferred revenues | 1,305 | 1,583 | ||||
Operating lease liabilities | 490 | 504 | ||||
Other accounts payable and accrued expenses | 4,320 | 6,052 | ||||
Current maturity of long-term loan | 10,295 | 5,451 | ||||
Total current liabilities | 19,155 | 16,635 | ||||
NON-CURRENT LIABILITIES | ||||||
Operating lease liabilities | 653 | 765 | ||||
Long-term loan | 18,899 | 23,472 | ||||
Warrant liability | 3,103 | 5,968 | ||||
Other long-term liabilities | 91 | 25 | ||||
Total non-current liabilities | 22,746 | 30,230 | ||||
STOCKHOLDERS' EQUITY | ||||||
Common stock of | 4 | 4 | ||||
Preferred stock of | *) - | *) - | ||||
Additional paid-in capital | 478,104 | 462,358 | ||||
Accumulated deficit | (404,409) | (390,343) | ||||
Total stockholders' equity | 73,699 | 72,019 | ||||
Total liabilities and stockholders' equity | $ | 115,600 | $ | 118,884 | ||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) | ||||||
Three months ended | ||||||
March 31, | ||||||
2025 | 2024 | |||||
Revenues: | ||||||
Services | $ | 4,875 | $ | 4,160 | ||
Consumer hardware | 1,877 | 1,598 | ||||
Total revenues | 6,752 | 5,758 | ||||
Cost of revenues: | ||||||
Services | 865 | 965 | ||||
Consumer hardware | 1,130 | 1,198 | ||||
Amortization of acquired intangible assets | 875 | 1,163 | ||||
Total cost of revenues | 2,870 | 3,326 | ||||
Gross profit | 3,882 | 2,432 | ||||
Operating expenses: | ||||||
Research and development | $ | 4,108 | $ | 6,642 | ||
Sales and marketing | 5,873 | 6,910 | ||||
General and administrative | 3,310 | 6,735 | ||||
Total operating expenses | 13,291 | 20,287 | ||||
Operating loss | 9,409 | 17,855 | ||||
Total financial income, net | (204) | (8,686) | ||||
Loss before taxes | 9,205 | 9,169 | ||||
Income tax (benefit) | 22 | (1,994) | ||||
Net loss | $ | 9,227 | $ | 7,175 | ||
Deemed dividend | $ | 4,839 | $ | 2,034 | ||
Net loss attributable to common shareholders | $ | 14,066 | $ | 9,209 | ||
Net loss per share: | ||||||
Basic and diluted loss per share of common stock | $ | 0.14 | $ | 0.20 | ||
Weighted average number of common stock used in computing basic and diluted net | 47,370,317 | 34,442,578 | ||||
DARIOHEALTH CORP. AND ITS SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||
Three months ended | ||||||
March 31, | ||||||
2025 | 2024 | |||||
Cash flows from operating activities: | ||||||
Net loss | $ | (9,227) | $ | (7,175) | ||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||
Stock-based compensation | 2,342 | 6,858 | ||||
Depreciation and impairment | 94 | 110 | ||||
Change in operating lease right of use assets | 110 | 149 | ||||
Amortization of acquired intangible assets | 1,162 | 1,216 | ||||
Decrease (increase) in trade receivables, net | 1,597 | (1,401) | ||||
Increase in other accounts receivable, prepaid expense and long-term assets | (369) | (1,866) | ||||
Decrease (increase) in inventories | 130 | 146 | ||||
Increase (decrease) in trade payables | (300) | 708 | ||||
Decrease in other accounts payable and accrued expenses | (1,666) | (2,620) | ||||
Increase (decrease) in deferred revenues | (278) | 52 | ||||
Change in operating lease liabilities | (126) | (18) | ||||
Change in fair value of warrant liability | (1,115) | (9,181) | ||||
Non-cash financial expenses (income) | 293 | (83) | ||||
Other | 680 | (5) | ||||
Net cash used in operating activities | (6,673) | (13,110) | ||||
Cash flows from investing activities: | ||||||
Purchase of property and equipment | (31) | (56) | ||||
Payments for business acquisitions, net of cash acquired | — | (8,796) | ||||
Net cash used in investing activities | (31) | (8,852) | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of preferred stock, net of issuance costs | 6,815 | 20,206 | ||||
Net cash provided by financing activities | 6,815 | 20,206 | ||||
Decrease in cash, cash equivalents and restricted cash and cash equivalents | 111 | (1,756) | ||||
Effect of exchange rate differences on cash, cash equivalents and restricted cash and cash | (21) | — | ||||
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 27,764 | 36,797 | ||||
Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ | 27,854 | $ | 35,041 | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid during the period for interest on long-term loan | $ | 937 | $ | 986 | ||
Non-cash activities: | ||||||
Right-of-use assets obtained in exchange for lease liabilities | $ | — | $ | 28 | ||
Exercise of pre-funded warrants to common stock upon acquisition | $ | 1,750 | $ | — | ||
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, 2025 | ||||||||
GAAP | Stock-Based | Amortization of | Non-GAAP | |||||
Cost of Revenues | $ | 2,870 | (10) | (890) | 1,970 | |||
Gross Profit | 3,882 | 10 | 890 | 4,782 | ||||
Research and development | 4,108 | (526) | (40) | 3,542 | ||||
Sales and Marketing | 5,873 | (815) | (311) | 4,747 | ||||
General and Administrative | 3,310 | (991) | (15) | 2,304 | ||||
Total Operating Expenses | 13,291 | (2,332) | (366) | 10,593 | ||||
Operating Loss | $ | (9,409) | 2,342 | 1,256 | (5,811) | |||
Financing expenses | (204) | - | - | (204) | ||||
Income Tax | 22 | 22 | ||||||
Net Loss | $ | (9,227) | 2,342 | 1,256 | (5,629) | |||
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, 2024 | ||||||||
GAAP | Stock-Based | Amortization of | Non-GAAP | |||||
Cost of Revenues | $ | 3,326 | (7) | (1,177) | 2,142 | |||
Gross Profit | 2,432 | 7 | 1,177 | 3,616 | ||||
Research and development | 6,642 | (1,115) | (61) | 5,466 | ||||
Sales and Marketing | 6,910 | (1,756) | (76) | 5,078 | ||||
General and Administrative | 6,735 | (3,980) | (605) | 2,150 | ||||
Total Operating Expenses | 20,287 | (6,851) | (742) | 12,694 | ||||
Operating Loss | $ | (17,855) | 6,858 | 1,919 | (9,078) | |||
Financing expenses | (8,686) | - | (8,686) | |||||
Income Tax | (1,994) | |||||||
Net Loss | $ | (7,175) | 6,858 | 1,919 | 1,602 | |||
DarioHealth Corporate Contact
Mary Mooney
VP Marketing
Mary@dariohealth.com
+1-312-593-4280
DarioHealth Investor Relations Contact
Kat Parrella
Investor Relations Manager
kat@dariohealth.com
+315-378-6922
Media Contact:
Scott Stachowiak
Scott.Stachowiak@russopartnersllc.com
+1-646-942-5630
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SOURCE DarioHealth Corp.
FAQ
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