Q2 2023 DarioHealth Corp Earnings Call
Greetings and welcome to this that you all have second quarter 2022 results conference call.
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A lot of it.
Please go ahead.
Okay.
Thank you operator, and good morning, everybody. Thank.
Thank you for joining us today for a discussion of Dario health second quarter 2023 financial results.
Leading the call today will be a restaurant be all C E O of Dario helps.
They'll be joined by Rick Anderson President.
After their prepared remarks, we will open the call for Q&A.
The audio recording and webcast replay of today's call will be available online as detailed in the press release invite for this call.
The benefit of those who may be listening to the replay or archived webcast. This call is being held on August 10 2023.
This morning, we issued a press release announcing our financial results for the second quarter of 2023.
Copy of the release can be found on the Investor Relations page of <unk> website.
Actual events or results may differ materially from those projected as a result of changing market trends reduced demand or the competitive nature of Dario house industry.
Such forward looking statements and their implications.
Involve known and unknown risks uncertainties and other factors that may cause actual results or performance to differ materially from those projected.
Forward looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factors section and elsewhere in the company's second quarter 2023 quarterly report on Form 10-Q filed this morning.
Additional information concerning factors that could cause results to differ materially from our forward looking statements are described in greater detail in the company's press release issued this morning, and then as the company's other filings with the SEC.
In addition, certain non-GAAP financial measures may be discussed during this call.
These non-GAAP measures are used by management to make strategic decisions forecast.
<unk> future results and evaluate the company's current performance.
How does she believes the presentation of these non-GAAP financial measures is useful for investors understanding and assessment of the company's ongoing core operations and prospects for the future.
Reconcile reconciliation of these non-GAAP measures.
And the most comparable GAAP measures is included in the mornings press release.
With that I'd like to introduce our restaurants, they all chief Executive officer of Dario help arrest.
Thank you Chuck and thanks to all of you for joining our call. This morning.
Q2 financial results continue to demonstrate the advancement of our multi year strategy.
Bauxite continuously both towards multi tenant software as a service technology solution for health care industry.
I'm not aware of any other digital health platform that could gain a level of consumer traction proven and backed by real world data every day.
Especially studies that are done by third parties, such as Sky for North Sea is conducted on values outcome.
We continue to see the alignment of the state to do without financial result in the marketplace.
While we are a bit lagging on the top line scan they'll stay.
Confident that.
And the market is totally bill let's examine.
First I know conformation from direct to consumer to be to be.
We generated sequential b to B to C. L. All growth for the 10th consecutive quarter.
We are showing that the fundamentals of the b to B business.
And selling into the self insured employer and health plan market.
Positive impact on demonstrating value as a true software as a service that digital health business with high gross margins and stable year over year recurring revenue.
The combination of significant reduction in the cost of member acquisition, the ability to scale and more revenue per member per month on the platform is already showing in the results.
In terms of penetration strategy. We believe we are on the right path to accelerate our velocity as you put a lot of focus on the partnerships that we have executed in the last few quarters.
Including significant and meaningful relationships with partners such as <unk>, who we just now allowed to regional Blues plan.
They didn't pass along.
I am.
Many can well not see right now.
While it is still early we have already seen you ask them they'll pull school football strategic partnerships, including most recently made the one with Sanofi and regional Blues plan whatsoever.
We also see top relationships getting stronger.
When Sanofi I would like to disclose here two weeks ago, we signed an enticement to build regional agreement that we signed 14 months ago with main objective of strengthening the strategic alignment between the company and accelerate thank fun speed up feature as well.
Paul joined developing programs I know that you show.
Also seems significant financial and people resources dedicated to Dario by Sanofi in marketing the solution and conducting and disseminating the recent clinical study.
And that's now despite a delay in the launch of the platform. We believe that the partnership is only getting stronger.
The size of the opportunity is getting larger.
They dissipated.
Anyway that was announced Q2 represents a huge opportunity with 19 million people, having access to the platform into which our solution is integrated.
Both companies' teams sell only be engaged in selling the value solution to.
The estimate is complete.
For Protiviti.
Pivoting now to the product market fit with unique integrated consumer first multi chronic condition platform that is clinically validated.
Hey, David.
Our strategy is not only aligned with what the head of the macro digital health like a train.
Nation condition.
One platform with consumer first approach and.
Third about the real World studies, validating clinical and cost reduction outcomes.
In fact, I was calling modem for transforming health care into more consumer centric Boston, Ken approach is better suited to the current macro financial environment.
Looking for really proven cost saving solution to cross the 20 condition.
We have seen and will continue to see a tam.
The market to build and launch digital therapeutic solutions.
Into market penetration and macroeconomic challenges.
I'll leave that to consume more physical approach with real world evidence is the only way to successfully penetrate the market.
Given the capital.
The time the sustained effort it took to build consumer first proven solution. We believe we have created the real differentiator in these boats.
The unique market Street.
We have proven again and again the platform is performing really well we're going to use is some real world evidence.
As opposed to a pre designed controlled clinical study environment, the traditional health care companies, including digital Therapeutics company.
The two really won't highly vigilant I do the Sanofi recently presented demonstrated the value of the solution has the acoustically significant and highly relevant improvement in clinical outcomes.
The action and close well very excited about that study.
What day, the present, not only explore downhill, but to the whole did the telehealth industry.
Let's take a deeper dive into the financial results.
Q2 shows continued improvement of the company's financial reports.
Our results continue to demonstrate that our model is working even though we need to continue to scale up all of that.
Let's start by looking into the revenue company.
As we pre announced they've been used for the second quarter was $6, one 5 million compared to $6 8 million in the second quarter of 2022.
These slides go.
From timing.
We anticipate the strategic revenue, resulting from delay with one of their strategic partner.
Partnership started you continue to mature and yield significant opportunities for long term.
Are they counting b to b to C like venue.
Now increased for 10 consecutive quarters in a row.
Which we believe speaks to the value of the member place, although highly engaging digital health books.
We believe we will see it hasn't been used the acceleration as we continue to get the sign to come from.
Another important metric is gross margin.
Here, we continue to show that we develop with cool software driven business with SaaS oriented characteristics.
Well for my gross margin was 51, 5% for the second quarter of 2020.
Up from 36, 1% of revenues in the second quarter of 2022.
Primarily resulted from a shift in revenues from beat it seem to be the peak.
As mentioned in the last few calls we are targeting a never Nike golf balls in 70% by 2024.
Looking at the operating loss, we are seeing in operating leverage on the infrastructure that we have been.
Economy could bang Wednesday condition coach.
non-GAAP operating loss, excluding stock based compensation.
Nation of acquisition related expenses and depreciation for the second quarter of 2023 to $7 5 million compared to $11 1 million for the SEC.
Quote of 2022 at $6 3 million all in.
The first quarter of 2020.
Looking into the balance sheet.
We're also having a strong cash position of $52 6 million.
By one full point.
25.
With that I want to hand over the call. It two weeks to elaborate on the commerciality.
Hey, two quick.
Thanks Harris.
Our revenue comes from two segments.
C and B to B.
Within the <unk> segment, we have two components first annual recurring revenue from self insured employers and health plans or a R. R and second revenue from our large strategic partners in the second quarter. Our BTB revenue represented approximately 63% of our total revenue this mix reflects.
Our strategic move to the <unk> market and as Eric pointed out resulted in the higher gross margins in the quarter versus the same quarter last year.
The decrease in revenue in the second quarter was due to a reduction in our strategic partner revenue, which is milestone driven we expected to recognize revenue from work with Sanofi that was delayed due to internal organizational shifts by Sanofi.
Unrelated to Daurio I want to be clear that none of this has impacted our partnership or agreement with Sanofi in fact, the amended agreement referenced by Erez further aligns the two companies' interests and provides mechanisms for accelerating some of the contemplated collaboration.
He continues to invest in sales marketing and studies in support of the Daria solution. We believe that the disruption from these internal changes is now largely behind us.
On schedule, we delivered the private label behavioral health platform to Aetna and recognize strategic revenue based on this milestone in the second quarter.
This is new digital platform that they are selling through to their self insured customers. We had anticipated that they would begin enrolling members to the platform in the third quarter. However, due to a change in strategy by Aetna, We now anticipate that they will not begin enrolling members on our platform until the first quarter of 'twenty 'twenty four with.
The change in strategy. The platform is moving to the behavioral health population, which actually increases the total opportunity to approximately 30 million lives from the current 10 million lives.
We continue to anticipate that the rollout will happen over several quarters once launched.
And we have better visibility on platform additions in 2020 core than we previously did we.
We maintain a strong relationship with Aetna and believe we may have additional strategic and other opportunities with them in the second half of 2023 and beyond.
In the second quarter, we continued to maintain b to C revenues at levels consistent with the last two quarters, which allows us to maintain a self funded innovation platform. For example, the last year's Sanofi development work was launched into this market for users response and testing prior to launching it into the <unk>.
In the second quarter, we saw our 10th quarter of sequential B to B to C revenue growth.
And we launched med won our first customer obtained through our Santa Fe collaborations.
In July we launched a large regional blues plan with approximately 3 million members, which is our first health plan through our partner Solera.
As we discussed on our first quarter call. This health plan saw several delays our celerity in the health plan finalized their agreement and launch plan easterly.
These delays are especially frustrating because we have a limited ability to impact them.
However, pleased that the plan is launched in the timeframe that we communicated on our first quarter call.
Excitingly almost concurrent with the launch of this health plan, we expanded our contract to include Daiichi further validating the value of our multi condition strategy.
We expect that this regional blues plan and med one will both ramp up over the next several quarters, adding to our AOR growth in the back half of 2023 and into 'twenty 'twenty four.
As we have discussed partners are a major part of our strategy in both the self insured employer and health plan markets. In addition to what we have announced we continued to see traction in the pipelines of our partners, including the <unk>, well, which we recently signed.
Well solera, Sanofi vitality, Alliant and Virgin pulse, all have significant installed customer bases.
Our pre integrated and require little customer lift access Daria. We believe that this is especially attractive to customers in this macroeconomic environment, where there is an increasing focus on the cost of evaluating and managing vendors such as Daria, we remain especially excited about our ammo relationship where we are the one.
<unk> cardio metabolic solution integrated into their platform with an installed base of approximately 2000 customers, including 55 health plans. We believe this represents an extremely large opportunity their health plan customers include several blues plans, including the largest blues plan in the country.
They are actively selling to their customer base and we anticipate we may see customers through this partnership as early as the fourth quarter of this year or early 2024. In addition, we believe there is potential to see additional health plan through solera and our other partners late this year.
We added a handful of contracts in the second quarter, most of which will contribute to revenue beginning in the fourth quarter of 2023, we remain in the normal annual sales cycle for self insured employers. The majority of which are on a January to December benefits cycle with most employer contracts signed in the late third and fourth quarters.
Based on our current pipeline, we anticipate announcing a larger number of contracts towards the end of this year and realizing significant growth in our b to B to C. A R. R revenue starting in 2024 from new customers.
In the current macroeconomic environment and with the health care cost trends at levels not seen in many years customers are showing increasing focus on cost and ROI. We believe we are well positioned to benefit from this trend given the depth of our data and pricing to.
Sanofi recently presented their second study that demonstrated a statistically significant clinical improvement in delray users as compared to our matched control group and released additional data from this health care utilization study that they presented in the first quarter.
This additional cost data showed that daria as users costs were reduced by approximately $5000 more per year than our Mac group that did not used are here given that the full suite solution cost less than 1100 dollar a year you can see the significant potential rois. It is important to note that these studies were.
Conducted independently of Dario, which is unusual for digital health companies and they are some of the most rigorous studies that have been conducted in this space. This high level of rigor is another differentiating factor for the Dario platform that we believe will have the most value in the health plan market as the demand for high quality studies continues to increase.
As we look towards the rest of 2023, we expect the b to B to C revenue to grow throughout the rest of the year, although at a slower rate than originally anticipated with yatra platform enrollment pushed back to the beginning of 2024, we expect that the D to C revenue will remain relatively constant with past levels.
With the Aetna platform deliver and due to the delays with Sanofi, we expect to continue to see volatility in our strategic milestone driven revenue through the end of this year.
We do believe that our multi condition strategy partner focus and demonstrated ability to churn contracts into revenue.
Positioned us to experience significant growth throughout 2024, a few things to consider.
We have created a growing base of B to B to C revenue that will carry into 2024 with strong retention.
As noted above we are seeing expansion opportunities in both the self insured employer and health plan segments of our business.
Expansions of additional population and customers expanding the number of conditions are both happen.
We expect the platform to launch in the first quarter of 2024, we have a growing pipeline of additional b to b to C. Self insured employers, we anticipate adding in Q1 of 2024 based on our current sales efforts. We also have a significant pipeline of health plans with the potential to contribute to revenue late this year.
And in 2024, and finally, we have established several quality partnerships and those partners are starting to generate daurio customers from their growing pipeline that we anticipate will contribute significantly to revenue in 2024.
With that I would like to turn it back over to Eric.
Thanks Julie.
Despite slower than anticipated loans by Aetna in the Big picture. We believe we have all company and we are showing all the evidence to be successful and shows significant growth from 2024. We also believe that we have ever done the call B to B to C model is working as we generated a sequential beta.
See annualized they come and go.
Thank you both for that.
10 consecutive quarters.
We have created a growing base of beta bdcs like when you get tweaked carrying into 2024 with strong retention.
We see existing clients, mainly health plans expanding platform to larger population and adopting additional clinical studies.
Well growing pipeline for both health plans and employers towards 124.
Our relationship we stopped players like Sanofi and Aetna was getting stronger the last two weeks in hand, the existing agreement with Sanofi to reflect tighter alignment.
The slides with you between the two companies.
Also believed that relationship with Santa Fe will expand in the future.
And should he beyond the $30 million of content that we already signed with.
Believe we have unique opportunity as well as a product market fit with real competitive moat that real world the fallacy Buddy.
Got it then.
The San Jose studies demonstrate really win win.
Improved member health and lower cost for sale.
Exceptionally we did a real world study.
The Holy Grail of digital health and health care in general as well.
We are seeing a trend of big traditional health care players, including allows pharma such as the North sea and not the big medical devices company.
To tap into the digital health space by partnering with companies like Valeo. So they can to be part of the food footprint in health care transformation.
We expect to make more loud and strategic partnerships.
Based on the foundation, we have built we believe we are positioned to accelerate our multiyear strategy to drive revenue and profitability.
Substantially higher without a partner.
Playing unemployed.
With that I will.
I now hand, the call over to the operator for a Q&A session.
Thank you.
We will now be conducting a question and answer session I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line isn't that question Lucas.
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One moment, please why we pull for questions.
Yeah.
And our first question comes from.
Rocky with lifestyle capital. Please go ahead.
Hey, guys. Thanks for taking the questions I was just wondering if you could help kind of quantify you know the potential.
Impact on top line from the expanded partnership with the large regional health plan I mean, I guess, how how should we think about where.
Substantial revenue opportunity was and what it could be now.
Excuse me, ladies and gentlemen.
So does that connection.
Thank you.
Okay.
Ladies and gentlemen.
So the Brooklyn excellent.
Ladies and gentlemen, please continue to standby the event will continue momentarily again. Please continue to standby of event will continue momentarily.
[music].
Excuse me.
Please you May proceed.
Thank you.
Though directly. Please proceed with your question please.
Sure.
I was just wondering if you could help us understand a the increase in potential revenue from a large regional health plan neither gather expanding.
Beyond hypertension.
Oh, so you're talking about the expansion of the membership beyond the the three well, it's 3 million members and you're talking about the expansion of going from hypertension to hypertension diabetes.
Yes.
So it's probably I mean, it's the same population that we're talking about but it probably will increase the revenue opportunity by about 20% give or take a bit.
Got it okay.
There's obviously the smallest prevalence of the conditions that we're covering its usually about 8% of our commercial population versus hypertension is going to be in that 30% to 35%.
Got it okay that makes sense I appreciate that color, maybe kiosk Brad just some detail on the process that led to client decision to expand the partnership I mean, how actively are you guys pursuing expansion.
Come organically and I guess on that and how should we think about potential for expansion for other existing plans are as we look to the back end of the year.
I think your expansion it takes like generally two forms let's say so you know one of those is expanding conditions like we saw without health plan. The other is expanding especially in the health plan from one population to another so we have active opportunities in our pipeline right now for existing customers expanding in both ways.
Yeah, both population lines of business. So you know, where we may be in Medicaid thinking about commercial or Medicare populations with with plans things of that nature. So we're having conversations like that ongoing obviously, we're pursuing them.
Frankly, though this one we were a little bit surprised by the timing.
We're always having conversations that I think really what this one shows is the value of the multi condition platform. Because this was an opportunity where the customer said look we like what we're doing even though we haven't launched yet.
Yeah, we like what we're doing with you guys as it relates to hypertension, we wanted to expand that and we like the fact that we can expand it on the same platform. So you know I think that's you know what youre seeing is is that ability to access a broader population through having a multi condition strategy.
Yeah.
Got it Okay. That's helpful. I appreciate the insights there and then Erez just kind of wondering as we think about the back half of the year should we expect any more changes to the opex.
Yes, so we.
We will keep optimizing.
Our opex spend.
Objective is to build a viable business in digital health that is getting to cash flow positive.
Around $80 million in revenue so we.
We keep consolidate activities, we did some more showing and we believe that in the second half of the year, we're going to see a number of 3% to 5% reduction in yoga with Opex then.
Overall 2024 despite.
Revenue growth are we going to see an opex that is probably low L by 5% to 7% to what we see in the overall 2023.
So way Sam.
It's multiple activities that we are aligning in between some of showing activities optimization of the acquisitions that we did in 2021 and consolidation of activities and also.
Post few use between invested into integrating the platform and now we have multiple health plans that are in production in two weeks point, we have does that already in production and seeing the results in opening the platform and asking to open the platform for additional population. We believe that we can optimize that investment so we see overall.
Things that these declining a bit not something that is too big but there is some kind of decline.
Got it yes, no great to see the improvements based off of those activities.
Thanks for taking the questions guys.
Thank you.
Our next question comes from Charles <unk> with TD Colin. Please go ahead.
Hi, This is Lucas on for Charles I wanted to ask about the Aetna partnership I understand that you guys now are going to have a one one start in 2024.
And that you're now selling into a larger population compared to the original EAP population of 10 million odd.
In your press release, you guys noted that it could present, a larger revenue opportunity obviously selling into a large population is there anything else that was.
Should think about in terms of selling into the behavioral health side of this of Aetna compared to the EAP population that would also kind of warrants.
Higher revenue opportunity is there.
And then also are there any differences in terms of how this will be sold within aetna other than obviously being a different side of the business.
Yes, and so the.
They're related sides of the business, but there are different populations and their sole differently behavioral health can can sell independently, but they also sell a lot alongside their medical.
Benefit counterparts. So that is one difference theres a different group of people essentially in the way it gets packaged.
Is a bit different and just for clarity there selling this solution through to their customers this isn't because they've.
Purchased our platform, which is their new behavioral health platform their digital platform that they're selling through to their end customers. So is their sales force that is selling it.
It's going to be a different sales force it's doing it.
Is already in process. So we as I noted during.
During the call we have a little bit more visibility than we had previously in terms of.
What the status is of that is but they are selling into bigger opportunities in a bigger context, I guess is what I would say as it relates to it but the primary.
No increase in opportunities due just to largely due to the different size of.
The population that they currently have.
Okay cool.
And then thinking about the employer markets looking over the past few announcements you guys have made most of your recent wins have been with health plans.
Can you give us an update on what youre seeing in the employer markets have you gotten any sense if theres any pressure on him unemployed currently do you think you could.
I see that turnaround.
Yeah.
So I mean, I think that we're definitely seeing.
So I guess I would this is what I would say is the economy is not the same for all companies.
So we're seeing a lot of differences between organizations that are still struggling for talent versus those that are.
Maybe under more pressure based on results.
Results et cetera in in this current economic environment and they are responding differently. The other big trend that we're seeing we're starting to see in the market is medical renewals, meaning what.
Customers are paying for their cost of delivering basic medical care is the trend rates are much higher than they've been in a decade.
And so that's impacting people as they try and find ways to reduce that I mean, some people are talking about trend rates that are as high as 20%.
Which is extremely high in context.
And I think that's impacting some people's decisions and pushing some things back in the year, that's what we hear from the benefit consultants continuously.
All of that said I mean, we continue to get traction.
In terms of selling into the marketing and some of that has to do with the fact that daria with a newer player relatively so our increases are.
You know may be differential to what the overall market experience is if you're if you're looking at that through that lens, but I think the other thing that's really important that that drives as we're seeing more and more focus on.
Less vendor yeah, less vendors are more conditions for vendor trying to reduce their cost of administering these kinds of plans as well as looking for solutions that lower their overall cost and this is where we lean into the snow feed studies, where I believe the Sanofi studies will be most valuable in the health plan market, but.
But they definitely are validating I mean these are third party studies, which are almost unheard of and the results from very rigorous studies are showing that we're getting significant cost reductions and that's the kinds of things that self insured employers are looking at in this kind of environment as well. So I think we've got a very strong rois.
Sorry, as it relates to that and I think we're benefiting from the trends.
In the marketplace as it relates to that and I think by the way that we will continue to benefit from that as we go into next year.
Yeah.
Okay great.
And then my last question is around artificial intelligence at a recent conference you guys noted that you have been utilizing gen. AI for some elements in the business around personalized personalization and making recommendations to members on the platform could.
Could you give us more details on.
How you've seen users take to this.
Sort of capability and feature and then is it something that is becoming an attractive feature for health plans and employers and.
Can you I guess I'd be curious to hear what sort of success you've had in terms of driving business through these features if that's a factor or not.
Yes, absolutely.
So.
I think that's one of the unique.
About <unk> is the fact that we will we are consumer first so the idea of collecting data and learning from data.
People behave this is one of the biggest differentiator that we have so we heal all damn old and noise in the market around positive noise in the market around AI.
From our perspective. This is something that we are doing for years and collecting a lot of data and based on the data we learn about the behavior of the users and then we are reinforcing this learning into embedded engagement. So I think that the best way to think about it then too.
And to and to understand whether we are achieving a goal or not is by looking into real world.
Studies data that we have and the two San Jose studies, showing that we have the ability to engage with users send to save and to save their money I think that with the AI and Janet I T V I a.
Ability to eat to rate.
And keep improving because every month.
Platform is becoming better and better because the platform is learning better and better and today. They are tools in the market and capabilities in data that we have and that is that can make all the eternity pulses toward improvement much faster than what we used to see like four five years ago. So.
I think that.
When we think about digital health and we think about.
How come.
Companies can create platform, sometimes are being asked by investors Hey, a wide known this company and the other company can create this platform over the night by investing $200 million I think that the big point here is time and data and the time that we are operating as a consumer centric solution.
The data that we collected.
<unk> that eventually helps us either a faster and get better results because we have a lot of data.
Specifically for health plans and employers that are getting the benefit of de I by having users that are more engaged in improving outcomes and the the Bottomline is the is the study that we will be presenting.
We Sanofi that shows that it's performing and philosophy, it's a it's a big big Big differentiator that helps us sell into these two China's.
Yeah.
Thanks, that's really helpful I'll jump back in queue.
Thank you Lucas.
Yeah.
Our next question comes from Ben Hayner with Alex Global Partners. Please go ahead.
Good morning, guys. Thanks for taking the question.
A.
All items on the.
The recurrent beta B C revenue.
Obviously, congrats on 10 consecutive quarters of growth there, but can you give us a sense of what that sequential growth look like in the quarter I mean is it.
Is it 5% is it 50% what kind of growth that you have there.
Yes. So overall if you look on the overall revenues that we have the beat the total <unk> to be the 163%.
From the total revenues and break it out between strategic two.
To the member shape I don't want to call it out and I will explain in a second why.
Okay. So you are looking into pure membership it's around a 50 50 out of the BTB Miss is the ballpark number.
And when we think about the strategic just to re emphasize in the strategic some of it is also consider than a L O.
Because as part of the strategic we are getting paid for data and things that are also recalling that milestone milestone driven on a yearly ban.
And in terms of revenue recognition, but on a yearly basis. It's also recalling so I just wanted to make sure that invest those the when they think about gross margins and recurring revenue that we are counting both the members that are on the platform is L. O. But also the portion of the strategic which is D.
The related it is also calling in I think that this is very important because eventually the objective.
To create.
A business that is very SaaS oriented model with very high <unk>.
Margins and now a lot of existing business that is all in year over year of at least eight.
80% of the today's revenue should all into next year because of.
Because of the user retention and and because of that.
The ability to generate revenue also from the date, though in other words data monetization.
Okay, So basically data costs.
The.
Continuing.
<unk> retained customers make up the recurring b to B to C on on the B to B side.
If I'm hearing you right.
Okay, Yes.
And just to be just to be accurate in this way is that you have seen along I think that the number is 62% beat of being the lefties B to C. N inside the B to B you have around 50% of it is membership and then on top of that you have additional debt. These data and so on so I would consider like 75% of what you are.
C as part of the beta bees gangloff, recalling that you can count on oiling into next year.
Yes.
Okay. Okay. That's helpful.
Okay.
Okay.
But do you have a sense of what sort of growth. There was there I mean, I would imagine sequentially I mean I imagine.
Probably more on the order of <unk>.
10% then.
30% just sue with.
Doing the math.
It's in the hands of software of more than 10% than 30% overall year over year, well somewhere around between 70% to 100% growth at the moment. So the P O L O.
Okay. One thing one thing to keep in mind about gross.
All of this sort is it's not linear because of the fact that you have is impacted significantly by when we add new customers on the platform and the and a few quarters. After that so if you think about health plans can happen throughout the year, but they tend to be large so they can impact that growth rate and.
Also because most employers come on the platform in the first quarter that impacts it earlier in the year right. So you have you'll tend to have higher growth rates.
If you exclude the health plans for moment you'd have higher growth rates at the beginning of the year those growth rates would slow down in the back half of the year before you added the new customers in the in the first quarter what impacts that is like when we bring out a health plan like we did this quarter that obviously.
You know accelerates the growth in those in those periods. So it's not you shouldn't think about it as being linear.
Yes.
Kind of more stair step.
Yes.
Got it Okay makes sense and then on.
The beta see you benchmark in awhile.
Thats kind of been at a constant level, but it actually has ticked up a little bit the past couple of quarters.
Why is that is that.
More people finding you're getting on the BDC platform, it's taken a little bit of price what goes into that.
Largely it's there's a couple of things that go into it some of it is going.
Going to be cyclic.
Cyclical in terms of you know what quarter that you're in because the way that people tend to spend.
On those types of devices. It's also we've seen a reduction.
In the acquisition costs, so as we balance what we're doing and depending on what the demand is and the market conditions as it relates to digital advertising for that kind of revenue we may.
Put some more additional money behind that if we think we can generate additional profit, but what youre seeing is really just what I would call a kind of between the hedges optimization.
Okay.
Got it.
Excellent well, that's all I had guys. Thanks for taking the questions.
Thank you. Thank you so much.
Ladies and gentlemen.
If you would like to pose a question. Please press star one.
There are no further questions at this time I would like to turn the floor back over.
Erez Raphael for closing comments. Please go ahead.
Thank you so much so I'd like to say to thank all of you for joining our call.
This morning, they are looking for.
Forward to keep following the story thank you.
This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation and have a good day.
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