DarioHealth Corp. (Nasdaq: NASDAQ:DRIO), a leader in the global digital therapeutics (DTx) market, today reported financial results for the first quarter 2022 and provided a corporate and commercial update.
"Our first quarter results reflect our increasingly successful transition to a B2B model with growing revenue and gross margins," stated Erez Raphael, Chief Executive Officer of Dario. "We increased revenue nearly 124% over the first quarter of last year and nearly 34% sequentially, and we expanded our gross margin on a GAAP basis to 49.4% and on a non-GAAP basis to 61%. Additionally, in light of the demonstrable traction and increasing revenue in the B2B (commercial) market segment, we continued to rationalize marketing spend in the direct-to-consumer segment resulting in improved margins which drove a significantly narrower net loss and cash burn rate as compared to the fourth quarter of 2021.With the strategic agreement executed with Sanofi (EPA:SASY) (NASDAQ:SNY) U.S. (Sanofi) and the $40 million financing that we closed in the quarter, we believe that we are in an excellent position to achieve our financial and operational goals for the foreseeable future," Mr. Raphael concluded.
"In addition to the innovative, multi-year collaboration that we announced with Sanofi, we had a very productive quarter, adding 14 new B2B contracts, including two additional health plans, which we expect will contribute revenues in the back half of this year," stated Rick Anderson, President and General Manager of North America. "We continue to see increasing interest and demand for our integrated, multi-chronic condition platform, which continues to grow, and we anticipate announcing many more customer conversions from our growing pipeline over the remainder of the year."
Q1 2022 and Recent Highlights
- Generated total revenue of $8.06 million, representing an increase of 124% from the first quarter of 2021, and 34% from the fourth quarter of 2021.
- Added 14 new accounts across the employer, health plan and provider channels during Q1, reflecting continued momentum of B2B segment.
- Signed a multi-year, multi-faceted $30 million agreement with Sanofi to accelerate adoption of Dario's solution within the payer channel through joint sales efforts and drive innovation through shared research initiatives and development of new products for use on Dario's platform.
- Expanded GAAP gross margins to 49.4% and non-GAAP gross margins to 61%.
- Raised $40 million through a registered direct offering priced at the market.
- Announced acquisition of Physimax, a leading provider of validated computer vision for musculoskeletal health.
- Presented new clinical research demonstrating improved outcomes for participants using a single integrated digital solution to manage multiple chronic conditions at the Advanced Technologies and Treatments for Diabetes (ATTD) Conference, held April 27th – 30th.
First Quarter 2022 Results Summary
Revenues for the first quarter ended March 31, 2022, were $8.06 million, a 34% sequential increase from fourth quarter ended December 31, 2021, and a 124% increase from the $3.6 million in the first quarter ended March 31, 2021. The increase in revenues resulted from increased revenues in our B2B commercial market segment.
Gross profit in the first quarter of 2022 was $4.0 million, an increase of $2.9 million, compared to gross profit of $1.1 million in the first quarter of 2021. Gross profit as a percentage of revenues increased from 30.1% in the first quarter of 2021 to 49.4% in the first quarter of 2022.
Pro-forma gross profit, excluding $932,000 of non-cash amortization of expenses related to the acquisition of technology, was $4.9 million, or 61% of revenues, for the three months ended March 31, 2022.
Total operating expenses for the first quarter of 2022 were $19.9 million compared with $15.4 million for the first quarter of 2021 and $22.2 million in the fourth quarter of 2021, an increase of $4.5 million, or 28.9%, compared to the first quarter of 2021, and a decrease of $2.3 million, or 10.6%, compared to the fourth quarter of 2021. The increase compared to the first quarter of 2021 resulted from an increase in our operating expenses. The decrease compared to the fourth quarter of 2021 resulted from a decrease in our direct to consumer marketing expenses. Total operating expenses excluding stock-based compensation, acquisition expenses and depreciation for the first quarter of 2022 were $14.8 million compared to $10.6 million for the first quarter of 2021, and $16.4 million in the fourth quarter of 2021.
Operating loss for the first quarter of 2022 was $15.9 million, an increase of $1.55 million, or 10.8%, compared to the $14.3 million operating loss in the first quarter of 2021, and a decrease of $5.8 million or 26.7% compared to the $21.7 million operating loss in the fourth quarter of 2021. The increase compared to the first quarter of 2021 was mainly due to the increase in our operating expenses, and the decrease compared to the fourth quarter of 2021 was mainly due to the increase in the gross profit and the decrease in operating expenses.
Net loss was $15.9 million in the first quarter of 2022, an increase of $0.9 million, or 6.3%, compared to the $15 million net loss in the first quarter of 2021, and a decrease of $5.7 million, or 26.3% compared to the fourth quarter of 2021. Net loss excluding stock-based compensation, acquisition expenses and depreciation for the first quarter of 2022 was $9.9 million compared to $9.6 million for the first quarter of 2021 and $14.9 million in the fourth quarter of 2021.
Non-GAAP billings for the three months ended March 31, 2022, were $7.96 million, a 116% increase from $3.69 million reported for the three months ended March 31, 2021. The increase is a result of higher sales generated in the three months ended March 31, 2022, compared to the three months ended March 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, May 12, 8:30am ET
Dial-in Number: 844-826-3035
International Dial-in: 412-317-5195
Conference ID: DarioHealth First Quarter 2022 Results Call
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1547229&tp_key=ae83ab1839
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 June 12, 2022. To listen to the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international) and use replay passcode 10166824.