DarioHealth Reports Fourth Quarter and Full Year 2021 Results and Operational Highlights

NEW YORK, March 22, 2022 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO), a leader in the global digital therapeutics (DTx) market, today reported financial results for the fourth quarter and full year 2021 and provided a corporate and commercial update.

"The last year completely transformed Dario's company profile as our business-to-business (B2B) business grew significantly, both in terms of signed and launched, revenue-generating accounts and the overall growth of opportunity attributed to our integrated, multi-condition approach. The strategic shift to expand our suite of solutions through acquisitions, coupled with our ability to quickly integrate capabilities and launch new products, created a leadership position for Dario in the digital therapeutics market, helping accelerate B2B sales and deliver strong revenue growth," stated Erez Raphael, Chief Executive Officer of Dario. "With B2B revenue scaling up, and increased operational efficiencies, we are expecting margin improvement and decreases in our burn rate to occur during 2022.  Our ambitions are further bolstered by our new multi-year agreement with Sanofi, which represents a unique collaboration with a pharmaceutical company that we believe will accelerate our penetration in the health plan market and accelerate innovation and evidence on our platform."

"Further, our cash and cash equivalents totaled $35.8 million at December 31, 2021, which does not include the $40 million that we raised in March 2022, and is anticipated to meet our capital needs through 2023 and puts us in an excellent financial position to continue to execute on our strategic growth plan and take advantages of strategic opportunities," Mr. Raphael concluded.

"The integrated nature of our multi-condition digital health platform continues to resonate in the marketplace, as organizations increasingly want to contract with fewer vendors for their digital health needs. Dario made significant progress building a strong, diversified account base in 2021, easily surpassing our goal of 50 signed contracts," stated Rick Anderson, President and General Manager North America. "With the new customers launched, we are looking forward to revenue growth and continued customer wins in 2022."

2021 and Recent Highlights

• Total revenue increased 171% from $7.6 million in 2020 to $20.5 million in 2021 on the strength of Dario's rapidly expanding growth resulting from the acquisitions closed in 2021 and the increasing sales in the B2B channel.

• Increased the number of accounts to 54 across the health plan, employer, and provider market segments to create book of business worth $35 million in total contract value.

 

• Successfully implemented clients and achieved market-leading 40%-member enrollment rate with retention above 80%, proving the value of Dario's B2C2B strategy leveraging the company's successful consumer engagement capabilities.

• Signed a multi-year, multi-faceted agreement with leading health care company Sanofi to accelerate adoption of Dario's solution in the payer market through joint sales efforts and drive innovation through shared research initiatives and development of new products for use on Dario's platform.

• Signed three acquisitions – Upright Technologies Ltd. (Upright") for musculoskeletal health and PsyInnovations, Inc. (dba wayForward) for behavioral health; and executed an acquisition agreement with Physimax computer vision technologies - to expand platform solutions to cover four of the top five condition priorities for B2B buyers.

• Launched digital physical therapy product, Dario Move, which uses wearable sensor technologies developed by Upright, further differentiating the full suite of solutions and generating interest in the health plan and employer markets.

• Published five new clinical studies, including peer-reviewed clinical research demonstrating the impact of Dario's single platform approach in a leading peer-reviewed journal for digital medicine and health, the Journal of Medical Internet Research, providing the market with real-world evidence of the effectiveness of the company's integrated solutions.

• Subsequent to the end of the quarter, raised $40 million through a registered direct offering priced at the market under Nasdaq rules.

Fourth Quarter 2021 Results Summary

Revenues for the fourth quarter ended December 31, 2021, were $6.03 million, a 7.1% sequential increase from third quarter ended September 30, 2021, and a 190% increase from the $2.08 million in the fourth quarter ended December 31, 2020. The increase in revenues resulted from the new product lines acquired during 2021 and the expansion into the B2B market.

Gross profit in the fourth quarter of 2021 was $548,000, a decrease of $1,000, compared to gross profit of $549,000 in the fourth quarter of 2020. Gross profit as a percentage of revenues decreased from 26.4% in the fourth quarter of 2020 to 9.1% in the fourth quarter of 2021. The decreases in gross profit and gross profit as a percentage of revenues resulted from amortization of expenses related to the acquisition of Upright and wayForward, from higher shipping expenses and from price reductions as part of the direct-to-consumer promotion campaigns.

Pro-forma gross profit, excluding $782,000 of amortization of expenses related to the acquisition of Upright Technologies and wayForward, was $1.33 million, or 22.1% of revenues, for the three months ended December 31, 2021.

Total operating expenses for the fourth quarter of 2021 were $22.2 million compared with $9.6 million for the fourth quarter of 2020, an increase of $12.6 million, or 131%. The increase resulted from an increase in our research and development activities, sales and marketing, administrative expenses, and stock-based compensation. Total operating expenses excluding stock-based compensation, acquisition expenses and depreciation for the fourth quarter of 2021 were $16.4 million compared to $7.5 million for the fourth quarter of 2020.

Operating loss for the fourth quarter of 2021 was $21.7 million, an increase of $12.6 million, or 139%, compared to the $9.1 million operating loss in the fourth quarter of 2020. This increase was mainly due to the increase in our operating expenses.

Net loss was $21.6 million in the fourth quarter of 2021, an increase of $12.6 million, or 140%, compared to the $9.0 million net loss in the fourth quarter of 2020.

Cash and cash equivalents totaled $35.8 million on December 31, 2021.

Non-GAAP billings for the three months ended December 31, 2021, were $6.01 million, a 198% increase from $2.02 million reported for the three months ended December 31, 2020. The increase is a result of higher sales generated in the three months ended December 31, 2021, compared to the three months ended December 31, 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."

Full Year 2021 Results Summary

For the twelve months ended December 31, 2021, revenues were $20.5 million, a 171% increase from revenues of $7.58 million for the twelve months ended December 31, 2020. The increase in revenues resulted from the new product lines acquired during 2021 and the expansion into the B2B market.

Gross profit was $3.96 million for the twelve months ended December 31, 2021, an increase of $1.45 million, or 57.7%, from $2.5 million gross profit recorded for the twelve months ended December 31, 2020. Gross profit as a percentage of revenues decreased from 33.2% for the twelve months ended December 31, 2020 to 19.3% for the twelve months ended December 31, 2021. The decreases in gross profit and gross profit as a percentage of revenues were mainly due to amortization of expenses related to the acquisition of Upright and wayForward.

Pro-forma gross profit, excluding $4.1 million of amortization of expenses related to the acquisition of Upright and WayForward, was $8.07 million, or 39.3% of revenues, for the twelve months ended December 31, 2021.

Total operating expenses for the twelve months December 31, 2021 were $80.5 million compared with $32.4 million for the twelve months ended December 31, 2020, representing an increase of $48.0 million, or 148%. The increase is attributable mainly to the increase in our research and development activities, sales and marketing, administrative expenses and stock-based compensation for the twelve months December 31, 2021, compared to the twelve months ended December 31, 2020.

Total operating expenses excluding stock-based compensation, acquisition expenses and depreciation for the twelve months ended December 31, 2021, were $55 million compared to $21.3 million for the twelve months ended December 31, 2020, representing an increase of $33.7 million, or 158%.

Operating loss for the twelve months ended December 31, 2021 was $76.5 million, compared to $29.9 million net loss for the twelve months ended December 31, 2020, representing an increase of $46.6 million, or 156%. This increase was mainly due to the increase in our operating expenses.

Net loss was $76.8 million for the twelve months ended December 31, 2021, compared to $29.4 million net loss for the twelve months ended December 31, 2020.

Non-GAAP billings for the twelve months ended December 31, 2021 were $20.36 million, compared with $7.58 million for the twelve months ended December 31, 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, March 22, 8:30am ET

Dial-in Number: 877-451-6152

International Dial-in: 201-389-0879

Conference ID:  DarioHealth Fourth Quarter 2021 Results Call

Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1535684&tp_key=fbf3737388

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 April 22, 2022. To listen to the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international) and use replay passcode 13727795. 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. (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 states that it expects its margin improvement and decrease in its burn rate throughout 2022, the belief that its collaboration with Sanofi will accelerate its penetration in the health plan market and accelerate innovation and evidence on its platform, that it expects its cash to meet its capital needs for the foreseeable future to permit it to execute on its strategic plan and take advantage of strategic opportunities, that it looks forward to revenue growth and continued customer wins in 2022. 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

Suzanne Bedell
VP Marketing 
[email protected]
+1-347-767-4220

Media Contact:

Josephine Galatioto 
[email protected] 
+1-212-845-4262

SOURCE DarioHealth Corp.