Sequential Revenue Growth
Q1 2026 revenue was $5.6M, up from $5.2M in Q4 2025 (+~7.7% quarter-over-quarter); this marks the second consecutive quarter of sequential revenue growth.
DarioHealth
· DRIO
May 13th, 2026
Summary
- Earnings Call Date:
- 2026-05-13
- Change Since:
- -25.19%
- Next Earnings Date:
- 2026-08-17
Earnings Call Sentiment
PositiveThe call emphasized sequential revenue growth, a materially improved cost structure, a sizeable commercial pipeline ($127M) and expanding channel distribution (targeting >175M covered lives), supported by proprietary data assets and early AI-driven engagement gains. Key positives include meaningful OpEx reductions, improving margins on core B2B2C offerings (~80% non-GAAP gross margin), a clear strategic push to participate in care- and outcomes-based revenue via partnerships, and accelerating consumer product demand. Offsetting these positives are a year-over-year revenue decline tied to deliberate removal of non-recurring pharmaceutical revenue, continued GAAP and non-GAAP operating losses, dependence on the timing of large partner conversions (implementation and onboarding risks), limited near-term revenue visibility and an ongoing strategic review that introduces some uncertainty. On balance, management presented measurable operational improvements and a clear path toward scaled, higher-margin channel revenue, while acknowledging conversion and timing risks that remain to be resolved.
Company Guidance
Management guided that revenue should accelerate in the second half of 2026 as 2025‑signed accounts convert, pointing to Q1 revenue of $5.6M (up from $5.2M in Q4), a $127M commercial pipeline across 241 opportunities, nearly $13M in contracted/late‑stage business closed at year‑end 2025 and management‑disclosed contracted ARR/late‑stage business of $30M expected to contribute later in 2026–2027; they highlighted commercial momentum (10 new accounts in Q1, 85 added in 2025) and expanded distribution to ~175M covered lives (including ~65M and ~3,500 employer relationships from a new partner, with partner channels already providing access to ~116M covered lives). Financially, they emphasized improving unit economics and lower cash burn — Q1 gross margin 57% (B2B2C non‑GAAP gross margin ~80% for the ninth consecutive quarter), total OpEx $10.5M (down 21% YoY), non‑GAAP OpEx $8.7M (down 18% YoY), GAAP operating loss $7.3M (improved 22% YoY), non‑GAAP operating loss $5.3M (improved 8% YoY), $20M cash and short‑term deposits, and $6M net cash used in operations in Q1 (10% YoY improvement); they also reiterated a move toward outcomes‑ and claims‑based care supported by >13 billion proprietary data points, 100+ peer‑reviewed studies and DarioIQ (driving up to 40% better retention and up to 55% more active sessions).
Strong Commercial Pipeline and Account Wins
Total commercial pipeline of approximately $127M across 241 open opportunities; added 85 new accounts in 2025 (vs. 40 target) and 10 new accounts in Q1 2026 (mostly via channel partners).
Expanded Distribution Reach via Channel Partnerships
Channel ecosystem growth: current partner-driven access cited at over 116M covered lives and, with a new largest-ever channel contracting (major Northeastern hospital network), expected distribution reach expands to over 175M covered lives; new partner alone expected to add ~65M covered lives and ~3,500 employer relationships.
High-Margin B2B2C Economics and Improved Gross Margins
Company-reported gross margin of 57% in Q1 2026 (stable year-over-year, up from 54% in Q4 2025). B2B2C non-GAAP gross margin remains ~80% for the ninth consecutive quarter, highlighting favorable unit economics as channel revenue scales.
Operating Expense Reductions and Improving Loss Profile
Total OpEx for Q1 2026 was $10.5M, down 21% year-over-year and down 8% sequentially. Non-GAAP OpEx was $8.7M, down 18% year-over-year and down 3% sequentially. GAAP operating loss improved to $7.3M (22% improvement YoY, 15% sequential), and non-GAAP operating loss was $5.3M (8% improvement YoY, 11% sequential).
Improved Cash Dynamics
As of March 2026, combined cash and short-term deposits were $20M. Net cash used in operations was $6.0M in Q1 2026 vs. $6.7M in Q1 2025 (a 10% reduction year-over-year). Company remains in compliance with debt covenants and principal payments under the Callodine facility do not begin until May 2028.
Contracted / Late-Stage Revenue and ARR
Management highlighted nearly $13M in contracted and late-stage business closed out in 2025 and referenced ~$30M of contracted ARR in late-stage agreements expected to contribute to revenue later in 2026 and in 2027.
DarioIQ AI Early Engagement Lift
DarioIQ deployment driving behavioral-triggered engagement programs with reported improvements of up to 40% in member retention and up to 55% lift in active sessions versus control groups, indicating meaningful early AI-driven engagement gains.
Proprietary Data and Clinical Evidence
Company claims >13 billion proprietary real-world data points tied to clinical outcomes and more than 100 peer‑reviewed clinical studies — used to support AI personalization, regulatory positioning and expansion into outcomes/claims-based models.
Expansion Toward Care Delivery and Strategic Partnerships
Strategic shift to move closer to care delivery via partnerships (e.g., deepening integration with GreenKey Health for sleep apnea pathway), enabling potential participation in claims- and outcomes-based revenue models without building full care-delivery infrastructure in-house.
Direct-to-Consumer (B2C) Momentum
Consumer revenue showing strong growth: up 42% year-over-year and 24% quarter-over-quarter, driven primarily by demand for the MSK product (also seeing international demand and interest from clinics).
Operator
Good morning, ladies and gentlemen, and welcome to the DarioHealth First Quarter 2026 Results Conference Call. [Operator Instructions] This call is being recorded on Wednesday, May 13, 2026. I would now like to turn the conference over to Zoe Harrison, VP, Accounting and Corporate Development at DarioHealth. Zoe, please go ahead.
Zoe Harrison
Thank you, operator, and good morning, everyone. Thank you for joining us today for a discussion of DarioHealth's First Quarter 2026 Financial Results. Leading the call today will be Erez Raphael, Chief Executive Officer of DarioHealth. He'll be joined by our President and Chief Commercial Officer, Steven Nelson; and Chen Franco, our Chief Financial Officer. An audio recording and webcast replay for today's call will also be available online as detailed in the press release invite for this call. For the benefit of those who may be listening to the replay or archived webcast, this call is being held on Wednesday, May 13, 2026. This morning, we issued a press release announcing our financial results for the first quarter of 2026. A copy of the release can be found on the Investor Relations page of DarioHealth's website.
I'd like to remind you that on this call, management will make forward-looking statements within the meaning of the federal securities laws. For example, the company is using forward-looking statements when it discusses expected revenue growth and contribution from 2025 signed accounts, its path to profitability and cash flow breakeven, the continued reduction in operating expenses and losses, its expansion of channel partnerships and...
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