Q4 2023 DarioHealth Corp Earnings Call

Operator: Greetings and welcome to the DarioHealth fourth quarter 2023 results conference call. At this time, all lines are in listen-only mode.

Greetings and welcome to <unk>, how fourth quarter of 2020 free results conference call. At this time all lines are in listen only mode. Following the presentation. We will conduct a question and answer session. If it'll be stronger in the school year.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kat Perella, Investor Relations Manager. Thank you, operator. And good morning, everybody.

Quiet immediate assistance. Please press star zero for the operator as a reminder, this conference is being recorded it is now my pleasure to introduce your host cut Perella Investor Relations manager.

Unknown Executive: Thank you operator, and good morning, everybody. Thank you for joining us today for a discussion of Barrio health fourth quarter and full year 2023 financial results.

Kat Perella: Thank you for joining us today for a discussion of DarioHealth's fourth quarter and full year 2023 financial results. Leading the call today will be Erez Raphael, CEO of DarioHealth. He'll be joined by Rick Anderson, President.

Unknown Executive: The call today will be Erez Raphael CEO with Cardinal health there'll be joined by Rick Anderson President.

Kat Perella: After the prepared remarks, we will open the call for Q&A, where we will be joined by TWIL co-founders Tomer Ben-Tiki and Ofer Leidner. An audio recording and webcast replay for this call will also be available online, as detailed in the press release invitation for this call. For the benefit of those who may be listening to the replay or archived webcast, this call is being held on Thursday, March 28, 2024. This morning, we issued a press release announcing our financial results for the fourth quarter and full year 2023. A copy of the release can be found on the investor relations page of DarioHealth's website. However, actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, or the competitive nature of DarioHealth's industry. Such forward-looking statements and their implications may involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected.

Unknown Executive: After the prepared remarks, we will open the call for Q&A, where we will be joined by <unk> co founders Timur Kiki and Ofer right there.

Unknown Executive: An audio recording and webcast replay for this call will also be available online as detailed in the press release invite for this call.

Unknown Executive: For the benefit of those who may be listening to the replay or archived webcast. This call is being held on Thursday March 28 2024.

Unknown Executive: This morning, we issued a press release announcing our financial results for the fourth quarter and full year 2023.

Unknown Executive: Copy of the release can be found on the Investor Relations page of <unk> website.

Unknown Executive: 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 trying to help the industry such forward looking statements and their implications may involve known and unknown risks uncertainties and other factors that may cause actual results or performance to differ materially from those projected.

Kat Perella: The 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 full year 2023 annual report on Form 10-K. Additional information concerning factors that could cause results to differ materially from our forward-looking statements is described in greater detail in the company's press release issued this morning and in 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 future results, and evaluate the company's current performance.

Unknown Executive: The 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 Companys full year 2023 annual report on Form 10-K.

Unknown Executive: Additional information concerning factors that could cause results to differ materially from our forward looking statements are described in greater detail on the company's press release issued this morning and in the Companys other filings with the SEC.

Unknown Executive: 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 future results and evaluate the companys current performance.

Erez Raphael: Management 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. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in this morning's press release. With that, I'd like to introduce Erez Raphael, Chief Executive Officer of DarioHealth.

Unknown Executive: Management will be the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operation and prospects for the future. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in this morning's press release.

Unknown Executive: With that I'd like to introduce Erez Raphael Chief Executive Officer of Darling.

Unknown Executive: Yes.

Erez Raphael: Thank you, Cass, and thanks to all of you for joining our call this morning. The 2023 financial results are a continuation of our multi-year strategy and the evolution of our financial profile that is now being accelerated with a Q1 account that is launching and accelerated further with the 20quisition. Before analyzing the potential contribution of Aetna and other accounts that we launched in Q1 and that will continue to launch in Q2, I would first remind you of the three revenue streams, which remain the same post-prerequisition, as we operate in the same channel. First, is our historical direct-to-consumer or B2C business.

Erez Raphael: Thank you Scott and thanks to all of you for joining our call. This morning.

Erez Raphael: <unk> thousand three financial results are a continuation of a multiyear strategy and the evolution of our financial profile that is now being accelerated with a Q1 accounts that are launching and accelerated further with the equity position.

Erez Raphael: Analyzing the potential contribution of Aetna and other accounts that we launched in Q1 and that will continue to launch in Q2 I would like to first remind you of the three revenue streams, which remains the same post the <unk> acquisition as we operate in the same channels.

Erez Raphael: First is our historical direct to consumer or DTC business second is our coal business the recurring revenue from health plans and employers.

Erez Raphael: Second is our core business, the recurring revenue from health plans and employers, or what we call commercial B2B2C with clients like Blue Shield of California, Aetna TVS; in this case, it's clients like Cigna, Elevance, Amazon, Google, and others. The third revenue stream that we call commercial strategy, which is milestone-based rather than, and in full case, clients like Merck, Eli Lilly, and In the fourth quarter, our B2C business generated approximately $2 million, which is consistent with the channel's expected $8-9 million annual revenue run rate.

Erez Raphael: Well, what we call commercial video view to see with clients like Blue Shield, California April Cvs when case, he said clients like <unk>, Amazon, Google and others.

Erez Raphael: The third revenue stream that recall commercial strategy, which is milestone based rather than mine.

Fanning Quinn case.

Erez Raphael: Clients like marriage, Eli Lilly and others.

Erez Raphael: In the fourth quarter, our <unk> business generated approximately $2 million, which is consistent with the China exited eight to 9 million.

Erez Raphael: Annual revenue run rate. This number has been managed down to <unk>.

Erez Raphael: This number has been managed down to a cash flow natural or slightly positive run rate, which has proved attritive to our strategy of allocating resources to growing our B2B2C channel, reducing opex, and improving gross margins. On the commercial strategic side, our commercial strategic revenue remains on track for an annual run rate of approximately 6 to 8 million dollars a year. In the fourth quarter, we recorded $582,000 in revenue, which is less than the average quarterly strategic revenue for the first half of the year.

Erez Raphael: Cash flow neutral or slightly positive.

Erez Raphael: <unk> <unk> accretive to our strategy of allocating resources to growing that need a b to C channel.

Erez Raphael: Reducing opex and improving gross margins.

Erez Raphael: On the commercial strategic side, but our commercial strategic revenue remains on track Melania along rate of approximately $6 million to $8 million a year.

Erez Raphael: Fourth quarter, we recorded high rather than $82000.

Erez Raphael: And revenue, which is less than the average quarterly strategic revenue.

Erez Raphael: For the first half of the year.

Erez Raphael: This is due to simply the milestone-based timing of revenues from our strategic channel. We want to reiterate that this partnership's revenues should be viewed on a yearly basis and not on a quarterly basis, and the economic value for us on a yearly basis has not changed. I expect our commercial strategic revenue to continue at an annual run rate of 6 to 8 million dollars on a value stand-alone basis. Due to the demand we have already seen from pharma for the integrated dietary offering since the acquisition was announced, we expect to be able to grow this commercial strategic revenue stream in 2024 and 2025. The fundamentals of our core B2B2C ARR business with employers and health plans continue to grow and are also accelerating in Q1 2024 with the launch of Aetna and multiple employer accounts. For year 2023, D2B2C channel revenue grew by 39% year over year. This Dario standalone B2B2C revenue stream shows an adjusted growth margin of above 70%. Going forward, with three historic B2B2C margins that are above 90%, we anticipate the combined gross margin for the company to hit above 80%.

Erez Raphael: This is due to simply the milestone based timing of revenues.

Erez Raphael: Our strategic Charlie.

Erez Raphael: They activate the debt. These partnerships revenues should be viewed on a yearly basis and not on a quarterly basis and the economic value for us on a yearly basis has not changed.

Erez Raphael: Expect our commercial strategic revenue to continue at an annualized rate of six to 8 million rollout.

Erez Raphael: That is a stand alone basis.

Erez Raphael: Due to the demand we have already seen from Palma for the integrated value of fulfilling since the acquisition was announced.

Erez Raphael: We expect to be able to grow this commercial strategic revenue stream, along 2024 and 2025.

The fundamentals of our core via the D to C business with employers and health plans continues to grow and he is also accelerating in Q1 2020 full is the launch of ethanol and multiple employer accounts.

Erez Raphael: We'll use 202023 beta beta see China revenue grew by 39% year over year.

Erez Raphael: This value of Standalone b to B to C revenue screen shows an adjusted gross margin of above 70% going forward with truly historic beta beta see margins that are above 90%. We anticipate the combined gross margin for the company rohit above 80%.

Erez Raphael: The vast majority of both the immediate and expected future revenues from the twill acquisition will appear in the B2B2C channel, pushing us much further ahead in our objective to grow our core business. We anticipate that with the launch of Aetna and other employers' accounts in 2024 and combined with the full B2B2C revenues, the B2B2C retiring revenue channel will be a majority of the total revenue for the full year of 2024 amongst the three revenue streams that we have. We also saw significant interest in multiple employers' adoption of the Dario GLP-1 behavioral change program, as well as the expansions of current customer relationships on the metabolic side.

Erez Raphael: The vast majority of both the immediate and expected future revenues from the <unk> acquisition will appear in the <unk> to see China pushes us much further ahead in our objective to grow our core business, we anticipate that with the launch of Aetna and other employers to currency in 2024.

Erez Raphael: And combined with the three b to B to C revenues <unk> revenues channel will be a major <unk>.

Erez Raphael: Of the total revenue for the full year of 2020 full among the three revenue streams that we have.

We also saw significant interest in multiple employers to adoption of the value of <unk> behavioral change program.

Erez Raphael: As well as expansions of current customer relationships on the metabolic side.

Erez Raphael: Our product is already fundamentally... compliments of the new GLP-1 market opportunity. We have seen solid growth in our whole B2B2C business in 2023 and see that accelerating in 2024 on a stand-alone basis. We anticipate larger growth and scale with the transformational acquisition of Twill that we announced last month, an acquisition that we believe will accelerate the timeline to cash deposits. This acquisition creates the most disruptive digital health platform, the space to think. It provides the ability to leverage real innovative approaches to engagement and navigation and breadth of offering to increase sales opportunities, revenue for the customer, our enrollment rate, and the lifetime value of our members. The combined company will cover six areas. Diabetes, hypertension, pre-diabetes, musculoskeletal, MSK.

Our product is already fundamentally.

Erez Raphael: Complement of the new GNC, one market opportunity.

Erez Raphael: We have seen solid growth in our core <unk> business in 2023, and see that accelerating in 2024 on a standalone basis, we anticipate browser growth in scale with the transformational acquisition of Wil, which we announced last month.

Erez Raphael: An acquisition that we believe will accelerate the timeline potential positive <unk>.

Erez Raphael: This acquisition creates the most disruptive digital health platform the space of thing.

Erez Raphael: Why is the ability to lever a swale innovative approach to engagement and navigation and breadth of offering to increase sales opportunities revenue.

Erez Raphael: <unk>.

Erez Raphael: Our enrollment rate and the lifetime value of a member of the combined company, we have a fixed conditions diabetes hypertension.

Erez Raphael: Diabetes fastest capital.

Erez Raphael: MSA.

Erez Raphael: General Health, Mental Wellbeing, and Pregnancy Support, as well as redesigning the top of the funnel to increase enrollment rates for Innovative Member Navigation. The acquisition nearly doubles our performer revenues. It creates immediate scale across big-name clients in the health plan and pharmaceutical space with clients like Cigna, Elevance, Amazon, Google, Microsoft, Merck, Eli Lilly, and others. Both companies are very synergetic. Also, on the operational side, we expect to achieve 30% annualized cost synergies within two years.

Erez Raphael: The agile health mental wellbeing and click and support.

As well as redesigning the top of the funnel to increase enrollment rate through innovative mendell litigation.

Acquisition nearly doubled our.

Erez Raphael: Our pro forma revenues.

Erez Raphael: <unk> immediate scan it causes big named clients in the health plan.

Erez Raphael: My space.

Clients like Sigma Elevon summers on Google, Microsoft Merck, Eli Lilly and others.

Erez Raphael: First the company's organic objectives.

Erez Raphael: So on the operational side, we expect to achieve 30% annualized cost synergies within three years. Most importantly, we expect an accelerated path to profitability in 2025 revenue scale increased gross margins and cost synergies.

Richard A. Anderson: Most importantly, we expect an accelerated path to profitability in 2025 through revenue scale, increased cost margins, and cost synergies. We believe our new cash flow positive point is at approximately $62 million in revenue. We ended the year with $37 million in cash, and on top of that, we raised an additional $22.4 million alongside the acquisition. This has put us in a great position to execute on our strategy. With that, I would like to hand the call over to Rick to elaborate on the commercial. Rick, thanks, Erez.

Erez Raphael: We believe our new cash flow positive point.

Erez Raphael: Is it approximately $62 million in revenue.

Erez Raphael: We ended the year with $37 million in cash.

Erez Raphael: A lot of debt, we raised an additional $22 $4 million alongside the acquisition.

Erez Raphael: This puts us in a great position to execute on our strategy.

Erez Raphael: With that I would like to hand, the call over to week to elaborate on the commercial side.

Erez Raphael: <unk>.

Week: Thanks, Terence we were pleased to complete the 2023 employer sales cycle last quarter and have launched or will launch more than 15, new customers on the platform in the first quarter of 2020 core or within the next couple of months. In addition, we launched the first members on private label and our platform.

Richard A. Anderson: We were pleased to complete the 2023 employer sales cycle last quarter and have launched or will launch more than 15 new customers on the platform in the first quarter of 2024 or within the next couple of months. In addition, we launched the first members on the previously labeled Aetna platform in January and have seen Aetna continue to add customers throughout the first quarter. We expect that our revenue from Aetna will continue to grow over the next several quarters as they continue to sell the solution to their customers. Last quarter, we announced that we had been selected by Aetna to replace one of their existing vendors. Digital Cognitive Behavioral Therapy

Week: January and has seen a continuing to add customers throughout the first quarter. We expected our revenue from Aetna will continue to grow over the next several quarters as they continue to sell the solution to their customers.

Week: Last quarter, we announced that we have been selected by at night to replace one of their existing vendors.

Week: Digital cognitive behavioral therapy. This separate piece of business, we anticipate will launch with more than 5 million members within the second quarter. Please keep in mind that our behavioral health business is priced on a per employee per month basis at a much lower price than our whole suite product.

Richard A. Anderson: This separate piece of business, we anticipate, will launch with more than 5 million members within the second quarter. Please keep in mind that our behavioral health business is priced on a per-employee, per-month basis at a much lower price than our full suite product. In aggregate, these launches are expected to significantly increase our revenue in the first quarter of 2024 with further increases into the second quarter. As Erez noted, our core B2B2C revenue increased 39% in 2023 compared to 2024, which reflects our investments in building the Dario brand and reputation in the self-insured employer and health plan space over the last several years. As I have discussed in the past, the B2B2C market yields step growth in a reinforcing cycle that requires a significant amount of work at the beginning to build a reputation, benefit consultant relationships, and reference customers. When successful, this cycle builds on itself each year.

Week: Aggregate. These launches are expected to significantly increase our revenue in the first quarter of 2024 with further increases into the second quarter.

Week: As Eric noted our core B to B to C revenue increased 39% in 2023 over 2024, which reflects our investments in building the Dario brand and reputation in the self insured employer and health plan space over the last several years.

Week: As I have discussed in the past the b to B to C market yield step growth reinforcing cycle that requires a significant amount of work at the beginning to build reputation.

Week: The consultant relationships and reference customers when successful this cycle builds on itself that each year. We are seeing the continued fruits of our efforts in early 2020 core which is off to a best start ever as measured by number and size of opportunities in the pipeline at this point of the year.

Richard A. Anderson: We are seeing the continued fruits of our efforts in early 2024, which is off to our best start ever as measured by the number and size of opportunities in the pipeline at this point in the year. Currently, our average size of employer in the pipeline is more than 200% larger this year than the average in our current book, and this does not reflect the TWIL standalone type. The building of reference customers is also reflected in existing customers expanding, including a self-insured financial services customer that expanded in the first quarter, and both of our Medicaid customers being in the process of expanding, which is anticipated to impact 2024 and 2025 revenue. We have further expanded our relationship with Blue Shield of California through our partner Solera, and we expect to launch a second condition within a month.

Week: Currently our average size one quarter and the pipeline is more than 200% larger this year than the average in our current book of business and this does not reflect the <unk> standalone pipeline.

Week: The building of reference customers is also reflected in existing customers expanding including our self insured financial services customer that expanded in the first quarter and both of our Medicaid customers being in the process of expanding which is anticipated to impact 2024, and 2025 revenues. We have further expanded our relation.

Week: Ship with Blue Shield of California through our partner Solera, and we expect to launch a second condition within amongst in addition, we expect to add to our list of health plan customers during 2024, including at least one additional large health plan.

Richard A. Anderson: In addition, we expect to add to our list of health plan customers during 2024, including at least one additional large health plan. Of course, the most significant recent development commercially is the acquisition of TwillHealth. We believe this will enable us to provide a comprehensive and differentiated platform to our customers that will increase our win rate, revenue per customer, lifetime value per member, and gross margin. It gives us significantly more B2B2C scale by approximately tripling our B2B2C revenue, adding marquee employer customers, including three of the largest technology companies and two additional health insurance. The fact that both companies are selling into the same channels with no customer overlap provides significant opportunities for cross-selling, especially since school customers have historically expressed interest in chronic conditions. This has been validated in the last month through discussions with our largest customers and partners, who have expressed an interest in understanding how they can access a larger array of our services from the combined edge. We are very pleased to have such affirmation so soon after the acquisition.

Week: Of course, the most significant recent development commercially is the acquisition of <unk>. We believe this will enable us to provide a comprehensive and differentiated platform to our customers that will increase our win rate revenue per customer lifetime value per member and gross margins.

Week: It gives us significantly more b to b to C scale by approximately tripling, our b to B to C revenue, adding mark key employer customers, including three of the largest technology companies and two additional health plans. The fact that both companies are selling into the same channels with no customer overlap provide.

Week: Significant opportunities for cross sell.

Week: Specially since world customers have historically expressed interest in chronic condition.

Week: This has been validated in the last month through discussions with our largest customers and partners who have expressed an interest in understanding how they can access a larger array of our services from the combined entity. We are very pleased to have such affirmation. So soon after the acquisition and <unk>, which will have several large opportunities in the pipeline for 2012.

Erez Raphael: And like Dario, Twill has several large opportunities in the pipeline for 2024 and 2025. Twill also has significant relationships with pharmaceutical companies that we believe will enhance the strategies that we have been pursuing with B2B strategic partners as well as platform licensing opportunities. We expect this to result in more opportunities to leverage our combined platform, including relationships already in the pipeline that we expect to come to fruition in 2024. In summary, between the stand-alone and combined opportunities, we expect to increase B2B2C revenues in the first quarter of 2024, and we see the ability to dramatically accelerate our revenue growth in 2024 and 2025 across our B2B2C and strategic B2B channels. With that, I would like to turn it back over to you. Thank you.

Week: <unk> core in 2025.

Week: We will also have significant relationships with pharmaceutical companies that we believe will enhance the strategies that we've been pursuing with fee to be strategic as well as platform licensing opportunities. We expect this to result in more opportunities to leverage our combined platform, including relationships already in the pipeline that we expect to come to fruition in <unk>.

Week: 2024 in summary between our Standalone and combined opportunities, we expect to increase the to be to see revenues in the first quarter of 2024, and we see the ability to dramatically accelerate our revenue in 2024 and 2025 across our beta beta see strategic key E channels with that.

Week: I would like to turn it back over to Ara.

Ara: Thank you rich as we look back on the strategic changes we have made to the company in the past few years, such as moving from single to multi condition and computer seem to be the BTC, we see how impactful the well on the financial profile and path to growth.

Operator: As we look back on the strategic changes we have made to the company in the past few years, such as moving from single to multi-condition and from B2C to B2B2C, we see how impactful they were on the financial profile and the path to goals and to profitability. The expansion of our product offering, especially post-wheel, has delivered the most comprehensive platform in the industry, validated by clinical results among members, as well as billions of deeply analyzed data. Our plan of expanding our B2B2C core business has been progressing at a good pace and will accelerate more in 2024. We feel this channel of this recurring revenue becomes even larger and will be larger than the other two channels combined when we are looking at the full 2024 revenues.

Ara: Profitability the expansion of our product offering, especially post will deliver the most comprehensive platform, namely validated by chemical results among members as well as millions of deeply analyzed data points are.

Ara: Our plan of expanding our <unk> business has been focusing with a good pace.

Ara: And will accelerate more in 2020 full with twin disc Shannon.

Ara: This recurring revenue becomes even larger and will you be larger than the other two China combined.

We are looking on the full 2024 revenues. This will be the main driver for the acceleration of the profitability of $62 million in revenue.

Operator: This will be the main driver for the acceleration to profitability at $62 million in. Today, Dario has a massive client base and book of business, including three out of the top eight national health brands, such as Cigna, Elevance, and Aetna, as well as big-name national employers, such as Amazon, Google, Microsoft, and key pharma companies, such as Novo, Merck, and Eli Lilly. And we are very encouraged by the interest of Dario and Twill clients to expand the contract into the full offering of the acquisition. The domestic jumpstart we are starting 2024 with. We believe that our path to profitability is clear and direct, and we plan to continue our upward trajectory toward this goal on a quarterly basis. With that, I want to hand over the call to the operator for a Q&A session. Thank you. If you wish to ask a question, please dial star 1 on your telephone keypad now to enter the queue. Once your name has been announced, you can ask your question.

Ara: <unk> has a massive client base and book of business, including three out of the top eight national health plans, such as Cigna, Elevens and Aetna as well as a big name National employers, such as Amazon, Google, Microsoft and key pharma companies, such as the North Sea and the Lady.

And we are very encouraged by the interest of value and krill clients to expand the complex into the food offering with the acquisition the domestics Jumpstart, where starting point 24 ways.

Ara: Believes that our path to profitability is clear and direct and we plan to continue our upward trajectory for this goal on a quarterly basis.

None: With that I want.

Handover the call to the operator for a Q&A session.

None: Thank you if you wish to ask a question. Please dial star one on your telephone keypad smelter entered the queue. Once your name has been announced you can ask a question. If you find your question has also had before it's you'll tend to speak you can dull start sue to counsel. So once again Thats star one to ask a question will.

Charles Rhyee: If you find your question has been answered before it's your turn to speak, you can dial star 2 to cancel. So once again, that's star one to ask a question, or star two if you need to count. Our first question comes from the line of Charles Rhyee of TD Kerman. Please go ahead with your line.

None: <unk>, if you need to cancel.

None: Our first question comes from the line of Charles <unk> of TD Cowen. Please go ahead. Your line is open.

Richard A. Anderson: Hi, this is Adam on behalf of Charles. Thanks for taking our questions. It's great to see many new customers have launched on the platform already in 2024, both on the White Label Net in a Solution and the Core Dario platform. At investor day, you talked about how the average customer in 2024 could be meaningfully larger in terms of employees versus the average customer size in 2023. So it's good to hear your prepared remarks that the average size employer in the pipeline is 200% larger versus the existing bucket business. Can you talk about the new customers that have launched so far in 2024, what the average customer is like that Dario is winning, both in terms of a number of employees and so their size and prior experience with digital health?

Hi, This is Adam on for Charles Thanks for taking my questions. It's great to see many new customers of loss and the platform already in twice for both on the White label that no solution on the court ARIA platform at the Investor Day, you talked about how the average customer transfer could be meaningfully larger in terms of employees versus the average customer size in 2023.

None: So it's good to hear.

None: The prepared remarks that the average size of employer pipeline is 200% larger versus the existing book of business can you talk about from the new customers that lost so far twice once for what the average customer.

None: Is like the Doritos, winning poster in terms of the number of employees and so the size and quality of our prior.

Prior experience with digital how are they suggested links.

Richard A. Anderson: Yeah, so thanks for the question on that. I think that, you know, really what I mentioned in the remarks as well, the fact that what you see in the business is really a step function of that. So, you know, I would say that the average size of the customer is, you know, what we would call the large middle market to, you know, smaller enterprise-size customers would be the average, although there are some that are sprinkling in there that are bigger in 2023. And we see, as I mentioned, a big step up from that in 2024. And most of those are employers. I don't think there's really a standard in terms of, you know, type of business, etc.

None: Yes. So thanks for the question on that I think that really what.

None: I mentioned in the remarks as well the fact that.

None: What you see in the business is really a step function of that so I would say that the average size of customer is what we would call.

None: Large middle market too.

None: Smaller enterprise sized customers would be the average although there are some.

That are sprinkling in there that are bigger in 2023, and we see that as I mentioned to you how big step up from that in 2020 core.

None: And most of those are employers.

None: I don't think Theres really as a standard in terms of.

None: Type of business et cetera, we have had good traction actually in labor.

Richard A. Anderson: We have actually had good traction in labor as well as in transportation companies. So, you know, what one may think of not necessarily as traditional, high technology, adopting companies, we're actually seeing good traction. I think that that really speaks to the fact that, you know, diabetes, hypertension, and, you know, pre-diabetes are sort of universal concepts and that those are challenging employers across the spectrum. Geographically, they're also fairly well distributed across the US.

None: As well as in transportation company. So what one may think of not necessarily as traditional.

None: Hi technology adopt.

None: Adopting companies, we're actually seeing good traction I think that that really speaks to the fact that diabetes.

None: Hypertension, and pre diabetes or sort of universal concepts.

None: And that those are challenging employers across the spectrum geographically, they're also fairly well distributed across the U S. So there's not really.

Erez Raphael: So there's not really a typical industry or type of customer, I think from that perspective. That's very helpful. Thank you. And another question on adjusted OPEX, it looked like a decrease sequentially in the fourth quarter, driven by what looks like a lower digital marketing expense. Can you talk about what drove this lower digital marketing expense, whether it was the function of CAC Trends or something else in the quarter? And a follow-up to that would be with Twill.

None: Typical industry or type of customer I think from that perspective.

None: That's very helpful. Thank you.

None: Other question on adjusted Opex, It looks like a decrease sequentially in the fourth quarter driven by what looks like lower digital marketing expense can you talk about what drove this larger market special that are a function of tac trends or something else in the quarter and a follow up to that would be with twill can you remind us how you're thinking about opex trending as a $5 four for the combined entity.

Erez Raphael: Can you remind us how you're thinking about OPEX trending in 2024 for the combined entity? Yes, so the strategy that we had in the transformation from B2C to B2B, we deliberately or intentionally decided to slow down B2C to improve our financial profile. So you can clearly see in the last six quarters that we are quarter by quarter reducing the OPEX, improving the gross margins while taking the B2C down. And the way that we think about the B2C is that it's on an average of $2 million a quarter, $8 million a year, and that's the cash flow positive point, and I think that, relatively, between Q3 to Q4, we have seen more or less the same Regarding Twill, generally speaking, Twill is not generating B2C revenue. So this is only a Dario channel.

None: Yeah, so the the.

None: The strategy that we had in the transformation from from B to C to B to B.

None: We deliberately and intentionally.

None: Decided to slowdown the BDC to improve our financial profile. So you clearly can see in the last six quarters that we are a quarterly by quarterly reduce the opex improve the gross margins, while taking the BDC down.

None: And the way that we think about the bdcs that it's on.

None: On an average of $2 million.

None: $8 million, a year and thats the cash flow positive point anything that relatively between Q.

None: Three to Q4, we have seen mall has the same number of site, we don't see a real decline on the BDC, that's they're stable.

None: Looking into.

None: Into this say kind of chime in.

Regarding twill.

None: Generally speaking twilla not generating a PTC revenue. So this is only a value China.

Erez Raphael: Twill does generate what we are calling B2C, which means employers and health plans, and which is our second channel. And the third channel that Dario has is strategic, that is coming mainly from pharma. And on that channel, Twill is also active.

None: Twill do generate what we are calling <unk> b to b to C, which means employers and health plans.

None: Which is our second channel in the third channel that value have as strategic that is coming mainly from pharma.

None: That China clearly is also active so the way to look into.

Erez Raphael: So the way to look into the evolution into 2024-2025 with Twill, I think that the second channel, which is the B2B2C, hence Employers and Health Plans, that drives ARR, annual recurring revenue, and monthly recurring revenue, that's going to be the majority of the revenue of the company in 2024 and is going to account for more than 50% of the revenues of the company, which is something that will also contribute to the continuous improvement And this channel is going to be the main driver that will help us push the company to the cash flow positive point that we are targeting for the second half of 2025, according to our plans. It's very helpful. Thank you.

None: The evolution into 2020 for 2025 with twin.

None: We think that the second China, which is the beta BDC handsome playoffs in health plans the drives allo.

None: Annual recurring revenue and monthly recurring revenue that's going to be the majority of the revenue of the company in 2020 flow and going to account for more than 50% of the revenues of the company, which is something that will also contribute to the continuous improvement in the gross margins that will improve.

None: <unk> to more than 80% on an integrated basis. In this channel is going to be the main driver that will help us push the company to cash flow positive point.

None: That we are targeting for the second half of 2025, according to our plans.

Erez Raphael: And the last question for us is, how should we think about growth expectations for 2024? Is it still right to think about 100%, 170% B2B2C revenue growth for standalone businesses? And for the integrated business with Twill, what's the right way to think about the outlook for potential growth for B2B2C in 2024? So on B2C, we disclosed that we're going to keep it stable in the range of $8 million. On a standalone basis, Dario was talking about 100% for the second channel.

None: That's very helpful. Thank you and then last question for US is how should we think about growth expectations for 2020 for weather to the stand alone businesses install right to think about 100% to 170% B to b to C revenue growth and for the integrated business with 12, what's the right way to think about the outlook for potential growth for Pwc on 2024.

None: So on the on the BTC, we we disclosed that we were going to keep it stable in the ranges of 8 million dollar on a standalone base Dio was talking about kind of a percent for the second channel on an integrated basis, given the revenue is much a loud Joe.

None: We are not going to see this level of growth on the <unk> is going to be less than 100% on an integrated basically now youre in twill.

Erez Raphael: On an integrated basis, given the revenue is much larger, we're not going to see this level of growth on B2B2C. It's going to be less than 100% on an integrated basis for Dario and Twill. And for the third channel, which is strategic, we expect that the company will be able to close more deals because we already see interest in the integrated platform, and we have had very concrete discussions with a few clients. So the average of six to $8 million has the potential to grow between 2024 and 2025. So overall, we do think that we're going to see growth for the second and the third for China's B2B2C and the strategic on an integrated way of value and twin. That's very helpful. Thank you, guys. Thank you, guys.

None: And so the third channel which is.

Which is the strategic we expect that the company will be able to close more deals.

None: Because we already see.

None: Interest on the integrated platform and.

None: And we got a very concrete discussions with a few clients. So the average of $6 million to $8 million have the potential to grow between 2024 to 2025.

None: So overall, we do think that we're going to see.

Growth for the second and the third.

None: China's b to B to C and the strategic on an integrated way with <unk>.

None: Burial and swim.

None: That's very helpful. Thank you guys.

None: Thank you guys.

David Michael Grossman: Thank you. Once again, if there are any further questions, please dial star 1 on your telephone keypad. And we had another question come through from the line of David Grossman at Stiefel. Please go ahead with your line. Thank you.

None: Thank you once again is that already further questions. Please dial star one on your telephone keypad now.

And we have another question comfort that is from the line of David Grossman Stifel. Please go ahead. Your line is open.

Richard A. Anderson: You know, Erez, maybe first just to follow up on that last comment about the strategic piece of business. So $6 to $8 million run rate, is that a good number to use for 2024 and then growth in 25 or were you expecting? Get Grossed in 2024 as well?

David Michael Grossman: Thank you.

David Michael Grossman: Okay.

David Michael Grossman: Eric.

David Michael Grossman: Maybe first just to follow up on that last comment.

David Michael Grossman: About the.

David Michael Grossman: The strategic piece of business.

David Michael Grossman: No.

David Michael Grossman: Six to 8 million dollar run rate is that a good number to use for 2024, and then growth in 'twenty five or would you expect.

David Michael Grossman: Good growth.

David Michael Grossman: In 2024 as well.

Erez Raphael: I think that in 2024, there is some potential for growth, but I think that the majority of the growth is going to come in 2025. We're in concrete discussions that started even before some of them started even before the acquisition was announced with a few clients that were over the wall. But I think that these are things that will take time in terms of getting signed, and I would anticipate that the majority of the impact will happen in 2025 and not in 2024. Although the chances to have something in 2024 exist, I've got it.

None: I think that in the 'twenty 'twenty four there is some potential to grow.

None: I think that the majority of the growth is going to come in 2025.

None: We're in the concrete discussions.

None: That started.

None: Even before some of them started even before the acquisition was announced with few clients that will over the wall.

None: But I think that this is things that will take time in terms of getting to.

None: To get signed and I would anticipate that the majority of the impact will happen in 2025 and not in 2024.

None: Although the chances to have something in 2020 full exists.

None: Got it.

Richard A. Anderson: And in terms of, you know, and I assume that the ramp, the new piece of business that you want, as well as the new clients that you're onboarding, will show up in the enterprise segment, right, the second segment of your business. Is that accurate? And if so, you know, can you give us a sense of what kind of visibility you have right now based on the business in hand with Aetna? Yes, you are correct. First of all, it's counted into the second channel, the B2B2C channel, hence employers and health plans. Specifically, Aetna is enrolling new... Employers into the platform. And the more employers they enroll, the more revenue we have. At the moment, we have, in the range of, 10 employers that have gone on the platform.

None: In terms of.

None: I assume that the ramp.

None: The new piece of business that you won as well as the new clients that you're Onboarding will show up.

None: In the enterprise segment right. The second segment of your business.

None: Is that accurate and if so can.

None: Can you give us a sense of what kind of visibility you have right now based on the business in hand with that.

None: Yes, you're correct. The first of all it's it's it's counted into the second challenge the beta B to C has employers and health plans specifically.

None: Now the in Oiling Nu and.

None: Employers seem to the platform and the more employers they know all the more revenue we have.

None: At the moment, we have like.

None: In the ranges of like 10 employers that weren't on the platform and this is something that is keep moving forward into Q2 and Q3.

Richard A. Anderson: And this is something that is keeping moving forward into Q2 and Q3. So this is something that will gradually go up. And the visibility that we have is ongoing, activities that we are having between our sales team and Aetna in order to introduce the platform to more and more employers. It's not like a full sales cycle, like when we are selling directly to employers. This is something that is relatively faster, and the platform is getting adopted.

None: So this is something that will gradually go up.

None: And the visibility that we have is.

None: Ongoing.

None: The activities that we are having between our sales team and ethane or between took us the platform to more and more employers.

None: It's not like a full set of cycle like when we are selling directly to employers. This is something that is a relatively fast too and the platform is getting adopted.

Richard A. Anderson: But we don't have visibility like a specific target of 40 or 50 or 60 employers by this quarter or another quarter. This is why we are thinking about the growth in a relatively conservative way, although the network that Aetna has is very, very wide, and the win rate and the ability to get more clients is much faster than Dario on a standalone basis, and so we are very positive about the potential growth. Right? And for that one,

But we don't have the visibility like a specific target those 40 or 50 or 60 employers by this quarter or went out of the quarter and this is why we are relatively thinking about the growth in a conservative way, although the network that Aetna have is very very wide.

None: And then the win rate and the ability to get more clients.

None: Is much faster than value on a standalone basis.

None: Doyle vary.

None: Positive about the potential goldfield.

None: Right.

None: One.

Erez Raphael: So sorry, just to add one thing, the new piece of business that we want to launch in the second quarter is an existing business. So all 5 million of those members will come in the second quarter. And 2Q, Rick, is that what you said? Yes, beginning of Q2.

None: Sorry, just to add one thing the new piece of business that we won that'll launch in the second quarter is an existing piece of business. So all 5 million of those members will come in the second quarter.

None: Took you Rick is that what you said.

Richard A. Anderson: Yes, beginning in Q2.

None: Got it.

Richard A. Anderson: And then. Sorry if I missed this or it was in the release, but did you mention just how large TWIL was in the quarter and for the year in 2023 in terms of revenue? Yes, this is something that we disclosed in the press release. I think that, between Dario and Twill together, the performer for 2023 is $37 to $38 million, not audited yet. And that's the disclaimer that we put. We are working on the audits of Twill, and in the next quarter, they're going to be published. But in a non-audited way, we are looking into 17 to $18 million that is coming from TWIL, of which between 14 to 15 is related to the second channel, Employers and Health Plans, and another three to four that come from Pharma. All the numbers are for 2023, obviously. Right. Chowdhury, and just on Twill.

None: And then.

None: Yes.

None: Sorry, if I missed this or within the release, but did you mention just how large <unk> was in the quarter.

None: And for the year in 2023 in terms of revenue.

None: Yes. This is something that we disclose them the in the press release so.

None: You bet.

None: Between <unk> and <unk> together, the pro forma for 2020 threes.

None: $37 million to $38 million.

None: Not only did yet and that's the disclaimer that we put we are working on the audits of squarely in the next quarter, which is going to be published.

None: But on the non audited way, we are looking into <unk>.

None: $17 million to $18 million that is coming from Twitter.

Which.

None: Between 14 to 15 is related to the second channel employers and health plans and another three to four.

Paloma: I'm from Paloma.

Paloma: Of the number of Suffolk, 'twenty two 'twenty three obviously.

Right.

None: Got it.

None: And just on.

None: Will.

Richard A. Anderson: Maybe you could just help us understand. You know, as you look at their existing book of business, you know, they do obviously have a really strategic presence in the Medicaid, you know, kind of segment of the market. But I don't actually think of the sales cycle in terms of selling metabolic products into that base. Sorry, David.

Maybe you could just help us understand.

None: As you look at their existing book of business. They do obviously have a really strategic presence in the Medicaid segment of the market.

None: And how should we think of sales cycle in terms of selling metabolic into that base.

None: Sorry.

Richard A. Anderson: Selling metabolic into which space? It just cuts out, into the Medicaid base? Like, how should we think about the timing of your ability to do that?

None: David selling metabolic into which base it just Andrew on that for me.

Into the Medicaid base like how should we think about the timing of your ability to do that is it more given Medicaid awards happen more on an annual basis is that something that can be added before that or is it really.

Richard A. Anderson: Is it more, you know, given Medicaid awards happen more on an annual basis? Is that something that can be added before that? Or is it really, you know, getting into that particular segment?

None: Getting into that particular segment is that something that's more of a 'twenty five.

Richard A. Anderson: Is that something that's more of a 25, you know, kind of outcome than a 24 outcome? No, I mean, one of the, you know, the good news and the bad news about getting people into health plans when they bear the risk, which would be, you know, managed Medicaid, managed Medicare, or Medicare Advantage, or even on the commercial side, when they are, when it's their fully insured book of business, is that they can launch whenever they want to launch. So, you know, it's not really, I mean, to some extent, right, you know, they have to have the business.

None: Kind of outcome that are 24 outcome.

None: No I mean, one of the.

None: The good news bad news without telling him to help claims when they bear the risk which would be managed Medicaid.

None: Managed Medicare or Medicare advantage or even on the commercial side when they are when it's their fully insured book of business is they can launch whenever they may want to launch and so it's not really I mean to some extent right. They have to have the business. So.

Richard A. Anderson: So, you know, if they're looking to add new business, that won't, you know, we won't be able to start until they add that business. Or, you know, if they need renewals, et cetera, that may impact the timing of it. But, you know, what we've seen so far is our Medicaid business is all launched, you know, if you will, sort of mid cycle on those kinds of things. We do have one of our current Medicaid customers that is in a rebid process at the moment. But even in that particular case, that relates to part of their Medicaid business, and they are in the process of expanding even in light of that. So, it can happen essentially anytime.

If they're looking to add new business that while we won't be able to start until they add that business.

None: Or if they need renewals et cetera that may impact the timing of it but what we've seen so far is our Medicaid business is all launch if you will sort of mid cycle on those kinds of things. We do have one of our Medicaid current customers that is in a in a rebid process at the moment.

None: But even in that particular case it.

None: Relates to part of their Medicaid business and they are in the process of expanding even in light of that so it can happen essentially any time, it's just not what we're expecting is that we're going to see expansion of Medicaid that will increase our 2024.

Richard A. Anderson: It's just what we're expecting is that we're going to see expansions of Medicaid that will increase our 2024 population under management and, therefore, our revenue. But we also have, with one of those plans, they're looking at 2025 expansion into other lines of business as well. So, that was the comment about 2025. Does metabolic, is the utilization rate of metabolic in the Medicaid base, is it different than the corporate average, or is it similar? There's actually a wide variation in the customers that we have, but I would say, you know, on average, if you average both of them together, it's a little bit below. One of them is entirely consistent, maybe even a little higher than our commercial book of business, and the other one is lower.

None: Population arrangement and therefore, our revenue, but we also have.

None: With one of those plans are looking at 2025 expansion into other lines of business as well. So that was the comment about 2021 2025.

None: This is Rick as metabolic disease station right metabolic and the Medicaid basis. It is it different than the corporate average or is it similar.

None: Theres actually wide variation in the in the customers that we have but I would say on average if you average both of them together, it's a little bit below one of them is entirely consistent maybe even a little higher than our commercial book of business and the other one is lower.

Richard A. Anderson: You know, I believe that relates to the population that we started in with the one that's lower, and I believe that will come up. We started in a more challenging segment of that population. Transcription by ESO.

None: I believe that relates to the population that we started in with the one that's lower and I believe that will come up we started in a more challenging.

Erez Raphael: And just, you know, last, Erez, if you're just thinking about the cash burn in 2024, can you give us a sense of just how you're planning on the cadence of the cash burn, given that we're closing the acquisition, and I'm sure there's, you know, some work that has to be done in conjunction with that, you know? How would you like us to think about, again, the cad Yes, sure. So first of all, I'll try it on a standalone basis. Dario, on a standalone basis, reduces OPEX by more than 30% year over year. And if you look into the optics of Q4, we had another 11% reduction compared to the previous quarter. So Dario is clearly on a path to keep the OPEX down, and the OPEX on a standalone basis between 2023 and 2024 is gonna go down just for Dario by 10 to 15%. That's number one.

None: Segment of that population.

None: Got it.

And just.

None: Erez.

Erez Raphael: Yes, just thinking about the cash burn in 2024 can you give us a sense of just.

Erez Raphael: How youre planning on the cadence of the cash burn.

Erez Raphael: Even that were closing the acquisition and I'm sure there's.

Erez Raphael: Some work that has to be done in conjunction with that how.

Erez Raphael: Or would you like us to think about.

Erez Raphael: Again, the cadence of the cash burn over the year.

None: Yes so.

None: So first of all I'll try with on a standalone base value on a standalone basis reduced the opex.

None: By more than 30% year over year, and if you look into the Opex of Q4, we had another 11% reduction compared to the previous quarter.

None: So value is clearly in a path to keep the opex down and the Opex on a standalone base between 2020 three to 'twenty 'twenty four is going to go down just to go downhill.

None: By 10% to 15%.

None: Number one.

Erez Raphael: Twill were going for a similar kind of path in 2022, 2023. So we are getting into this 2024 with an OPEX that is already reduced. On top of that, on a combined base.

None: The twin we're going through a similar kind of.

None: Vaseline 2022 2023 so.

None: We are getting into this said 'twenty 'twenty four.

None: In an opex that is already reduced on top of that when a combined base.

Erez Raphael: Because the two companies are operating in a very, very similar way, practically, we are winning clients, enrolling members, retaining members, and making them healthier. That's the objective of the businesses, and everything is being done in a digital way. So if you look at the organizational structure and the operation, it's very, very, very similar.

None: Because the two companies that operate in a very very similar way.

None: Practically we are winning clients in oiling members retaining members.

None: And making them.

None: Healthier that's the objective of the businesses and everything is being done in a digital way. So if you look on the org structure and the operation is very very very similar in a lot of the analysis that we did file due to the acquisition and also in the not in the last four weeks. After the acquisition we are very very very positive.

Erez Raphael: And a lot of the analysis that we did prior to the acquisition and also in the last four weeks after the acquisition, we are very, very, very positive that we have tons of synergies that will create additional efficiency of 30% in the next couple of years, from which we think we can get at least 20% in the first year. Which means that on an integrated basis, we're going to see an OPEX that is lower by at least 20% for this year of 2024. If you apply the revenues, the potential growth, and the improved gross margins, and we think that for the core business, it's going to be above 80% because that will revenue provide more than 90% gross margins.

With that we are having tons of synergies if we create additional efficiency of 30% in the next couple of years from which we think we can get at least 20% in the first year.

None: Which means that on an integrated base, we're going to see an opex that is.

None: Low L by at least 20% for the for this year 2024.

None: If you apply the the revenues the potential growth and the improved gross margins and.

None: And we think that for the core business, it's going to be above 80% because the quill.

None: Revenue.

None: Provide more than 90% gross margins I think that the overall.

Erez Raphael: I think that the overall loss of the company on the operations side is going to be down by at least 30% compared to the value on a stand-alone basis in 2025. So you're looking into somewhere like $22, $24 million a year loss, and that's something that we are having as an objective. And the year after, as I said, we believe that with reduced outputs and growth in revenues, we're going to go to cash flow positive or very close to cash flow positive. That's the objective. From a cash perspective, we ended the year with $37 million, we raised $22.4 million that we announced alongside the deal, we paid $10 million cash on the acquisition of Twill, and we ended up with, call it $50 million, approximately $50 million in cash

None: Loss of the company.

None: The operation side is going to be down by at least 30% comparing to the value on a standalone basis in 2023.

None: So you are looking into somewhere like $22 million to $24 million a year.

None: The loss and that's something that we are having in his own as an objective.

None: And the year after as I said, we believe that.

None: With a reduced opex in growth in the revenues, we're going to go to cash flow positive or very close to cash flow positive. That's the objective.

From a cash perspective, we ended the year with $37 million, we raised $22 $4 million that we announced alongside with the deal we paid $10 million cash here on the acquisition of <unk> and we ended up with.

None: Call it.

None: The $50 million of approximately $50 million of cash.

Erez Raphael: So we think that we are in a good spot, and we think that we are designing the right financial profile in order to manage the risk of cash burn and the ability to grow in a very responsible way. All right, that's very helpful. Thank you very much. Thanks, David. And our next question comes from Chuck Padala at Lifesign Advisors. Please go ahead.

None: So we think that we are in a good spot and we think that we are designing the right financial profile in order to manage the risk of cash burn and the ability to grow in a very responsible way.

None: Alright, Thats very helpful. Thank you very much.

None: Thanks, David.

None: Yeah.

None: Thank you and our next question comes from the line of Chuck <unk> at Life Science Advisors. Please go ahead. Your line is open.

Charles Padala: Thank you, operator, and good morning. Can you tell us more about the main benefits of the TwillCare navigation technology? Yes, we'll hand this question to Ofer Leidner, the founder of Twill, who is part of our team. Yeah, thanks, Chuck, for the question.

Thank you operator and good morning.

Chuck: Can you tell us more about the main benefits of it spill cared navigation technology.

None: Yes, we'll handle this question to two.

The offer of lighten up the founder of claim that is part of our.

None: Yes.

Lighten: Thanks, Chuck for the question, So I think the main benefit.

Ofer Leidner: So I think the main benefit of our care navigation solution is mostly that it shifts the relationship with the user on a very fundamental basis from a transactional relationship, what do you need and how can you find it, into something we like to call a longitudinal relationship. We're creating a top-of-the-fin engagement that's really helping users feel confident and safe in that environment and knowing that they can manage their health journey with us during episodes and in between those episodes. What we've built into that layer of engagement is several proven modalities, such as peer-to-peer support, an intelligent personalized content feed, and doctors that are supporting users and helping them with answering questions and helping them navigate deeper into care. And from there, we simply take them into the self-care solution, coaches, or any other care that they need deeper into their journey. What we've done in this care navigation kind of environment is essentially removed all barriers to access. You don't need to log into your benefit portal. You can log in and access it for free, which, by the way, is a huge challenge for employers when it comes to families and dependents.

Lighten: Our care navigation solution is mostly that it shifts the.

None: Our relationship with the user on the very fundamental way basis from transactional relationship what do you need and how can you find it.

None: Do something we'd like to call a longitudinal relationship we're creating at top of final engagement.

None: Really helping users feel confidant and safe in that environment.

None: And knowing that they can manage their health journey with us during episodes and in between those episodes, what we build into that layer of engagement.

None: Is.

None: Several proven modalities, such as peer to peer support intelligent personalized content feed.

None: Doctors that are supporting users and helping them with answering the question then helping them navigate deeper into the care and from.

None: And from there, we would simply take him into the self care.

None: Solution coaches or any other care that they need deeper into into their journey. What we've done in this current litigation kind of environment is essentially removed all barriers to access you don't need to log into your benefit for call you can log in and access it for free which by the way for employers.

None: The huge.

None: Challenge when it comes to <unk>.

None: Families independence.

Ofer Leidner: As a matter of fact, this platform is an open platform. So, what we created, though, ultimately, is a total population solution that engages people at the top of the funnel, understands very uniquely their journey, where they are and what they need, and drives them deeper into the support that they need. What we're doing, ultimately, is driving people from engaging TopoFunnel and further pushing them downstream. And we know that more people when you engage more people on TopoFunnel, you can actually engage more people that need support in chronic conditions. As we mentioned before, in our database, about 36% of the users that have touched our platform, TopoFunnel, have chronic conditions, many of which have metabolic conditions.

None: As a matter of fact.

None: Platform is an open platform so what it created the ultimately the total population solution that engages people couple final understand very uniquely there Jeremy where they are and what.

None: They need to drive them deeper into.

None: The support that they need what we.

None: We're doing ultimately driving.

None: People form engaging.

None: Top of funnel and further pushing them downstream and we know that more people.

None: When you engage with more people on the top of funnel you can actually engage more people that need support in chronic conditions that we mentioned before.

None: In our database about 36% of the users that have touched our platform couple final have chronic conditions, many of which have metabolic conditions. So ultimately to summarize we are moving with the solution from lung casino.

Ofer Leidner: So ultimately, to summarize, we're moving with this solution from a longitudinal relationship. We're moving to a longitudinal versus transactional approach. We're using better data and engagement to lead more people towards activation into the condition. All right. Thank you. Very, very helpful.

None: Relationship.

None: We movie removing two lumpy qunar versus transactional, we using better data and engagement to lead more people towards.

None: Activation leads to the conditions.

None: Alright, Thank you very very helpful.

Ofer Leidner: And I know it's still very early, but can you speak more to any feedback or progress you've made on the Twill cross-selling efforts? Yeah, so I'm happy to address that. As you heard from Rick, we are practically integrated into the commercial side of the house. We went to all of our large clients and introduced the new capabilities. And I would say we have received very positive feedback, with concrete discussions about how we can bring more services. For me, I would summarize this to say the thesis behind the combined entity and the multi-platform condition is moving from theory to execution right now. And that's where our focus is and what we're going to be focusing on over the next few quarters. Thank you. And lastly, what are some of the integration milestones that you're looking for in the short and medium term with 12th? Yeah, this is Tomer Ben Kiki.

I know, it's still very early but can you speak to any feedback or progress you've made on the cross selling efforts.

None: Yes, so I'm happy to address that.

None: You heard from Rick we are practically.

None: Integrated on the commercial side of the house, we went to all of our large clients and the <unk>.

None: Introduce the new capabilities and I would say.

None: We have received very positive feedback and with concrete discussions about how we can bring more services.

None: For me I would summarize it to say that thesis behind the combined entity and the multi platform condition moving from.

None: Theory to execution right now and that's where our focus is.

None: And what we're going to be focusing on.

None: The next few quarters.

None: Okay. Thank you and lastly.

None:

None: What are some of the integration milestones that youre looking for in the short and medium term with 12.

Don: Yes. This is Don I'm Gonna Kicky, maybe I'll take this so we've been working diligently on the integration on multiple levels since the announcement of the acquisition and obviously earlier than that.

Tomer Ben: Maybe I'll take this. So we've been working diligently on the integration on multiple levels since the announcement of the acquisition, and obviously earlier than that. As Ofer mentioned, the first milestone that we targeted and achieved was the commercial team of Dario that took over the entire set of products from Twill in the market on multiple levels. They're selling the entire portfolio of products. And as we said, the vision is a comprehensive set of services in digital health that allows an employer or health plan or a company to get access to all these digital tools with one relationship. The second component is selling the BeAverHealth standalone product suite of 12, which is in beta right now. And thirdly, we are going to, I would say, launch this combined vision that was outlined by both Erez and Ofer to allow the TwillCare platform to optimize the flow of members and reduce the cost of acquisition when it comes to conditions that are covered by Dario, but there's a high prevalence of them in the mental health level at TwillCare that we'll provide.

Don: As <unk> mentioned, the first milestone that we targeted and have achieved as the commercial team.

Don: That took over the entire suite of products from twill in markets on multiple levels.

They are studying the entire.

Don: Portfolio of products and as we said the division is a comprehensive set of services and digital health that allows an employer or health plan.

Don: A company who.

Don: We get access to all these digital tools with one relationship.

Don: The second component is selling at the Viva health Standalone product suite of <unk>, which is undergoing right now.

Don: Thirdly, we are going to.

Don: Let's see launched the combined vision that have been outlined by both or Erez and offer to allow this will care platform to optimize the flow of members and reduce the cost of acquisition. When it comes to conditions that are covered by <unk>.

Don: There's a high prevalence of them in the meta health level. It will care that that will provide so that synergy would be available in the middle of the second half, but we're actively selling into already.

Tomer Ben: So that synergy will be available in the middle of the second half, but we're actively selling it already. Secondly, at the organizational level, we have integrated our executive leadership teams, the senior leadership teams, and are now executing on delivering on the financial profile and the cost optimizations that we've been presenting to the market. And lastly, there's a couple of data, AI, and ML achievements that we're not announcing yet, but we're deeply believing, obviously, in digital solutions and the ability of state-of-the-art technologies to drive our KPIs up. Double-up gives you a bit more color.

Don: Secondly on the organizational level, we have integrated our executive leadership teams. The senior leadership teams and are now executing on delivering on our financial profile and the cost optimizations that we have been.

Don: Presenting to the market. This is a couple of milestones ahead of us in order to extract those are.

Don: And the best possible way.

Don: And lastly, there is a couple of data AI and ml.

Don: I would say achievements that we're not announcing yet, but we are with deeply delivering obviously in digital solutions and the ability of the state of the Arctic apologies to drive our Kpis up.

Don: So that gives a bit more color.

Operator: And there are currently no further questions in the queue, so I'll hand the floor back to Erez Raphael, CEO of DarioHealth, for the closing. Thank you. I would like to thank everyone for joining our call today and for their interest in DarioHealth. Have a good day. Thank you. And that concludes the conference. Thank you all very much for attending. You may now...

Okay.

Don: Yes.

Don: Okay.

Don: Thank you and there are currently no further questions in the queue. So I'll hand, the floor back to Erez Raphael CEO Darius will be closing comments.

Erez Raphael: Thank you I would like to thank everyone for joining our call today and the interesting value health.

Erez Raphael: Have a good day. Thank you.

None: This now concludes the conference. Thank you all very much for attending you may now disconnect your lines.