DarioHealth Reports Third Quarter 2021 Results and Operational Highlights
Strong B2B new contract growth results in total of 47 signed accounts - 85% achieved in the last two quarters
NEW YORK, Nov. 15, 2021 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO), a pioneer in the global digital therapeutics market, today reported financial results for the third quarter of 2021 and provided a corporate and commercial update.
"The third quarter provided the strongest validation yet of our strategy of building one of the broadest multi-chronic condition digital health platforms in the industry," stated Erez Raphael, Chief Executive Officer of Dario. "We signed several multi-condition contracts in the last quarter, reflecting the demand for a single platform that can engage members across many high-cost conditions in an integrated user experience. Of particular note, we were able to quickly and efficiently integrate the technology we obtained through our acquisition of Upright Technologies in January into our business-to-business (B2B) product offering which has contributed to the accelerating sales momentum reflected in both our third quarter and recent contract announcements."
"We again delivered robust financial performance, with total revenue growth of 176% over the comparable period in 2020 and pro-forma gross margin of 45%, up substantially from 26.9% a year ago. We anticipate gross margins will continue to expand over the long-term as we scale our Software as a Service (SaaS) model. Finally, our balance sheet remains very strong, with $51.3 million of cash as of September 30, 2021. We believe that we are well funded to execute on our multi-faceted growth plan," Mr. Raphael concluded.
"We made significant progress advancing our B2B strategy across all three channels - payers, employers and providers - during the third quarter. We signed a national health plan and several employers and providers and ended the quarter with 47 contracts and several more in contracting. The rapid acceleration of new accounts in the third quarter is a result of the work we have done over the last 18 months to increase the visibility of Dario and build the pipeline, which is now coming to fruition. We believe that our development of an integrated multi-condition platform has been a key contributing factor in our competitive wins in the B2B space," stated Rick Anderson, President and General Manager of Dario North America. "We continue to see robust growth of the pipeline, which now stands at $1 billion, with multi-condition opportunities representing 80% of that pipeline."
Q3 2021 and Recent Highlights
Accelerating Market Access
Expanding Client Base
Third Quarter 2021 Results Summary
Revenues for the three months ended September 30, 2021, were $5.6 million, a 7% sequential increase from the three months ended June 30, 2021, and a 176% increase from the $2.0 million for the three months ended September 30, 2020.
Gross profit for the three months ended September 30, 2021, was $826,000, an increase of $277,000, or 50.5%, compared to gross profit of $549,000 for the three months ended September 30, 2020. Gross profit margin was 14.7% for the three months ended September 30, 2021, as compared to 26.9% for the three months ended September 30, 2020.
Pro-forma gross profit, excluding $1,706,000 of amortization of expenses related to the acquisition of Upright Technologies and wayForward, was $2.5 million or 45.0% of revenues for the three months ended September 30, 2021.
Operating loss for the three months ended September 30, 2021 was $22.5 million, an increase of $15.9 million, or 240.8%, compared to the $6.6 million operating loss for the three months ended September 30, 2020. This increase was mainly due to the increase in our operating expenses and stock-based compensation.
Net loss was $22.4 million for the three months ended September 30, 2021, an increase of $15.9 million, or 243%, compared to the $6.55 million net loss for the three months ended September 30, 2020.
Non-Generally Accepted Accounting Principles (Non-GAAP) adjusted net loss for the three months ended September 30, 2021, was $11.9 million, an increase of $7.2 million, or 151%, compared to the $4.7 million non-GAAP adjusted net loss for the three months ended September 30, 2020. This increase was mainly due to the increase in our operating expenses.
Cash and cash equivalents totaled $51.3 million on September 30, 2021.
Non-GAAP billings for the three months ended September 30, 2021, were $5.53 million, a 169% increase from $2.05 million reported in the three months ended September 30, 2020. The increase is a result of higher sales generated in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. 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."
Financial Results for the Nine Months Ended September 30, 2021:
Revenue for the nine months ended September 30, 2021, was $14.5 million, a 164% increase from $5.5 million for the nine months ended September 30, 2020.
Gross profit of $3.4 million was recorded for the nine months ended September 30, 2021, an increase of 74%, or $1.45 million, compared to gross profit of $2.0 million for the nine months ended September 30, 2020.
Pro-forma gross profit, excluding $3.3 million of amortization of expenses related to the acquisition of Upright Technologies and WayForward, was $6.7 million or 46.5% of revenues, in the nine months ended September 30, 2021.
Total operating expenses for the nine months ended September 30, 2021, were $58.2 million, an increase of $35.4 million, or 155%, compared with $22.8 million for the nine months ended September 30, 2020. The increase resulted from an increase in our research and development activities, sales and marketing expenses and stock-based compensation.
Operating loss for the nine months ended September 30, 2021, increased by $34 million to $54.8 million, compared to a $20.8 million operating loss for the nine months ended September 30, 2020. This increase is mainly due to the increase in our operating expenses.
Net loss was $55.2 million for the nine months ended September 30, 2021, compared to a net loss of $20.4 million for the nine months ended September 30, 2020. The reason for the increase in net loss was mainly due to an increase in operating expenses.
Non-GAAP adjusted net loss for the nine months ended September 30, 2021, was $31.7 million, a 171% increase from a $11.7 million non-GAAP adjusted net loss for the nine months ended September 30, 2020. This increase was mainly due to the increase in our operating expenses.
Non-GAAP billings for the nine months ended September 30, 2021, were $14.3 million, a 158% increase from $5.6 million in the nine months ended September 30, 2020.
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: Tuesday, November 16, 8:30am ET
Dial-in Number: 1-877-451-6152
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 December 16, 2021. To listen to the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international) and use replay passcode 13724897. The webcast replay will be available for two months.
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.
Cautionary Note Regarding Forward-Looking Statements
This news release and the statements of representatives and partners of DarioHealth Corp. 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. For example, the Company is using forward-looking statements in this press release when it discusses that its results provide validation of its strategy of building one of the broadest multi-chronic condition digital health platforms in the industry, that it anticipates gross margins will continue to expand over the long-term as it scales its SaaS model, its belief that it is well funded to execute on its multi-faceted growth plan and the belief that its development of an integrated multi-condition platform has been a key contributing factor in its competitive wins in the B2B space. 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. 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 and depreciation of fixed assets. We believe these measures provide useful information to management and investors for analysis of our operating results.
DarioHealth Corporate Contact:
SOURCE DarioHealth Corp.
Company Codes: Stuttgart:LS1P, NASDAQ-SMALL:DRIO, Munich:LS1P, Berlin:LS1P
© 2021 PR Newswire. All Rights Reserved.