DarioHealth (DRIO) Reports Q4 Revenues Miss

DarioHealth (NASDAQ: DRIO) reported Q4 revenue for the quarter came in at $1.71 million versus the consensus estimate of $2.05 million.

Fourth Quarter 2019 Results Summary

• Revenues for the fourth quarter ended December 31, 2019 were $1.8 million, a 3.7% sequential decrease from third quarter ended September 30, 2019, and a 5.8% increase from the $1.7 million in the fourth quarter ended December 31, 2018.
• Revenues generated during the fourth quarter and year ended December 31, 2019 were derived mainly from the sales of DarioHealth\'s components and from the offering of our membership plans to our customers in the U.S.
• Gross profit in the fourth quarter of 2019 was $840,000, an increase of $617,000, or 277%, compared to gross profit of $223,000 in the fourth quarter of 2018. Gross profit as a percentage of revenues increased from 13.1% in the fourth quarter of 2018 to 46.7% in the fourth quarter of 2019. The increase was mainly due to the increase in revenues generated from our membership plans.
• Total operating expenses for the fourth quarter of 2019 were $5 million compared with $5.15 million for the fourth quarter of 2018.
• Operating loss for the fourth quarter of 2019 was $4.2 million, a decrease of $745,000 compared to the $4.9 million operating loss in the fourth quarter of 2018. This decrease was mainly due to the increase in our gross profit.
• Net loss attributable to holders of common stock was $4.17 million in the fourth quarter of 2019, a decrease of $810,000 to compared to the $5.0 million net loss in the fourth quarter of 2018.
• Cash and cash equivalents totaled $20.4 million at December 31, 2019.
• Non-GAAP billings for the three months ended December 31, 2019 were $1.71 million, a 16.6% decrease from $2.05 million reported in the three months ended December 31, 2018. The decrease is a result of the decrease in our digital marketing expenses in the three months ended December 31, 2019 compared to the three months ended December 31, 2018.

"2019 was a productive and successful year for Dario on multiple fronts, as we lay the foundation for operational and financial execution in 2020 and beyond. The Dario platform continued to produce meaningful clinical data that we believe highlights its ability to positively modify user behavior with the goal of better managing chronic conditions for improved health outcomes," said Erez Raphael, DarioHealth's Chief Executive Officer. "While we are early in our commercial launch, we believe our strong user engagement and clinical data position Dario to be a market leading product. With clinical data and capital in hand, and our belief that we are a novel and innovative company in the DTx industry, our primary focus shifts to making the necessary investments to expand our SAAS based membership model into our B2B2C service offering. We believe that this approach is already reflected in the improved gross profits in the second half of 2019, and is expected to provide broader patient adoption, more predictable revenue streams, lower customer acquisition costs and higher gross margins. We are assembling a best in class management team to support these initiatives and have attracted executive commercial talent with relevant experience to take our platform to the next level. We are excited about our prospects in 2020, where we intend to continue implementing our disruptive DTx capabilities and working with additional healthcare providers and payers, and look forward to sharing additional, positive developments in the coming weeks."

Zvi Ben-David, Dario's Chief Financial Officer, Secretary and Treasurer added, "Although this transformation of Dario is still ongoing, the most recent financial results show encouraging signs of a positive impact. Revenues derived from membership (SaaS sales) increased from $562,000 in 2018 to $2.9 million in 2019. Gross profit improved from 13% in Q4 2018 to 46.7% in Q4 2019. We also strengthened our balance sheet with a successful financing in 2019, supplying us with what we believe to be the necessary capital to execute on our strategy and providing cash runway into 2021."

For earnings history and earnings-related data on DarioHealth (DRIO) click here.

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