Q3 2025 DarioHealth Corp Earnings Call
Shouldn't they shouldn't and we will conduct a question and answer session. If you require immediate assistance. During this call. Please press star zero at any time before the operator. This call is being recorded on Thursday November 13th of 2025.
I would now like to turn the conference over to Zoe Harrison VP of accounting and corporate development at all or your house Zoe. Please go ahead.
Thank you operator, and good morning, everyone. Thank you for joining us today for a discussion of darker health third quarter 2025 financial results.
Speaker #1: Good morning,
Speaker #1: ladies and gentlemen, and welcome to the DarioHealth 3rd quarter. 2025 results conference you. call. At this time, all lines are in a listen-only mode.
Leading the call today will be Erez Raphael Chief Executive officer of dire health he'll be joined by our President and Chief Commercial Officer, Stephen Nelson and Hen, Frank <unk>, Our Chief Financial Officer.
Speaker #1: Following the presentation, we will conduct a question-and-answer session. If you require immediate assistance during this call, please press *0 at any time for the operator.
Speaker #1: This call is being recorded on Thursday, November 13th of 2025. I would now like to turn the conference over to Zoe Harrison, VP Accounting and Corporate Development at DarioHealth.
An audio recording and webcast replay for today's call will also be available online as detailed in our press release invite for this call.
For the benefit of those who may be listening to the replay or archived webcast.
This call is being held on Thursday November 13 2025.
Speaker #1: Zoe, please go ahead.
Speaker #2: Thank you, operator, and good morning, everyone. Thank you for joining us today for a discussion of DarioHealth's Q3 2025 financial results. Leading the call today will be Erez Raphael, Chief Executive Officer of DarioHealth.
This morning, we issued a press release announcing our financial results for the third quarter of 2025.
The copy of the release can be found on the Investor Relations page of Daria Health website.
I'd like to remind you that on this call management will make forward looking statements within the meaning of the federal Securities laws.
Speaker #2: He'll be joined by our President and Chief Commercial Officer, Steven Nelson, and Chen Franco, our Chief Financial Officer. An audio recording and webcast replay for today's call will also be available online as detailed in the press release invite for this call.
For example, the company he's using forward looking statements. When it is discussing amount of its targeted new business is 2026 pipeline and expected strong revenue acceleration in 2026 that it expects to reach cash flow breakeven by late 2026 to early twenties 27 that he expects to transition to a high margin.
Speaker #2: For the benefit of those who may be listening to the replay or archived webcast, this call is being held on Thursday, November 13th, , 2025.
Speaker #2: For the benefit of those who may be listening to the replay or archived webcast, this call is being held on Thursday, November 13th, , 2025. announcing our financial results for the 3rd quarter of 2025.
<unk> revenue model that.
That is on a solid path toward profitability the number of new accounts it expects to sign in 2025, its potential future business opportunities and that it expects to further cut its operating expenses over the next 12 to 15 months.
Speaker #2: the investor relations page of This morning, we issued a press release The copy of the release can be found on DarioHealth website. I'd like to remind you that on this call, management will make forward-looking statements within the meaning of the Federal Securities is using forward-looking statements when it Laws.
Forward looking statements are subject to numerous risks and uncertainties many of which are beyond the company's control, including the risks described from time to time in its SEC filings.
Speaker #2: is discussing the amount of its targeted new business, its 2026 pipeline, and expected strong revenue acceleration in For example, the company That it expects to reach cash flow breakeven by late 2026 to early 2027, that it expects to transition to a high margin recurring revenue model, that it is on a solid path to profitability, the number of new accounts it expects to sign in 2025, its potential future business opportunities, and that it expects to further cut its operating expenses over the next 12 to 15 months.
The company's results may differ materially from those projections. These statements involve material risks and uncertainties that could cause actual results or events to materially differ.
Accordingly, you should not place undue reliance on these statements.
Encourage you to review the company's filings with the SEC, including without limitation. The company's annual report on Form 10-K, which identifies specific factors that may cause cause actual results or events could differ materially from those described in the forward looking statements.
Speaker #2: Forward-looking statements are subject to numerous risks and uncertainties. Many of which are beyond the company's control, including the risk described from time to time in its SEC filings.
With that I'll hand, it over to Erez Raphael Chief Executive Officer of door Your health.
Good day, everyone and thank you for joining our third quarter results with you.
Speaker #2: The company's results may differ materially from those projections. These statements involve material risks and uncertainties that could cause actual results or events to materially differ.
Before getting into the numbers I want to start by highlighting what makes <unk> truly unique and why we are seeing a growing strategic interest in our business.
Speaker #2: Accordingly, you should not place undue reliance on these statements. I encourage you to review the company's filings with the SEC, including without limitation, the company's annual report on Form 10-K.
Good day.
L. A is a digital companion for whole person health.
Tom Unifies, physical mental and behavioral care into one connected experience.
Speaker #2: Which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. With that, I'll hand it over to Erez Raphael, Chief Executive Officer of DarioHealth.
Listing diabetes hypertension.
Waste management, Moscow skeletal pain mental health and more all within a single data driven framework.
We believe this multi condition hold Brooklyn model is where the market is headed.
Speaker #3: Good day, everyone, and thanks for joining our 3rd quarter result review. Before getting into the numbers, I want to start by truly unique and why we are seeing a growing strategic interest in our business.
Speaker #3: Good day, everyone, and thanks for joining our 3rd quarter result review. Before getting into the numbers, I want to start by truly unique and why we are seeing a growing strategic interest in our highlighting what makes Dario Today, Dario is a digital physical, mental, and behavioral companion for whole person health.
These all movies.
More than 50% of all new clients. This you have chosen a multi condition solution.
Artificial intelligence or AI powered personalized engine combines biometrics.
Reported and behavioral data to deliver measurable outcomes.
Speaker #3: care into one connected experience. Addressing diabetes, hypertension, weight management, musculoskeletal Our platform unifies more. All within a single data-driven framework. We believe this multi-condition whole person model is where the market is it.
So first model drive 60.
60%, yes.
Over 80% non-GAAP gross margins was expanding profitability.
We now serve over 125 clients, including full national and seven major regional health plans and nonetheless fortune level employers.
Speaker #3: More than 50% heading. And our result prove of our new clients this year have chosen our multi-condition solution, artificial intelligence or AI-powered personalized engine combines biometric, self-reported, and behavioral data to deliver measurable outcomes.
Supported by channel partners, reaching more than 116 million covered lives.
Together this assets of engagement engine scalable infrastructure.
Data and expanding client base, making <unk> one of the most advanced and scalable digital health platform in the industry.
Speaker #3: And our software-first model drives 80% non-GAAP gross, 60% GAAP, and over margins, with expanding now serving over 125 clients, including regional health plans and numerous Fortune-level 4 national and 7 major employers.
Okay.
Now, let's jump into the numbers.
In the third quarter of 2025 top line and gross margin results reflected the ongoing transition to a high margin annual recurring revenue model.
While revenue came in at $5 million.
And was lower on a year over year and quarter over quarter basis key metrics driving future revenues combined with reductions in operating costs and growing our margins so Daniel on the track.
Speaker #3: Supported by channel 116 million covered profitability. partners reaching more than lives. Together, this We assets are engagement engines, scalable infrastructure, deep data, and expanding client base, make Dario one of the most advanced and scalable digital health platforms in the industry.
1026, including reaching cash flow breakeven by late 2026 to early 2027.
Speaker #3: Now let's jump into the numbers. In the 3rd quarter of 2025, our top line and gross margin results reflected the ongoing transition to our high margin annual recurring revenue model.
We are targeting one 4 million in new business for implementation in 2026, including committed annual recurring revenues and a portion of our late stage pipeline that is in the final stages of contracting.
Speaker #3: While revenue came in at $5 million and was lower on a quarter-over-quarter basis, key year-over-year metrics driving future revenues, combined with growing margins, set Dario on a track for a strong 2026, including reaching cash flow breakeven by late 2026 to early 2027.
With 45, new assigned accounts year to date in 2025 contributing to revenue momentum for 2026.
We have already surpassed our 2025 goal of 40 new accounts.
This brings our client base to over <unk>, 25, and counting which includes over 110 employers.
Speaker #3: We are targeting $12.4 reductions in operating costs million in new business for implementation in 2026, including committed annual recurring revenues and a portion of our late-stage pipeline that is in a final stages of contracting.
Full national Health plan and.
And seven major regional health plans.
Our new accounts and large portion of our $69 million pipeline.
Customers that are two to 10 times larger than our clients has been in the past.
Speaker #3: With 45 new signed accounts year-to-date in 2025 contributing to revenue 2026, we have already surpassed our 2025 goal momentum for of 40 new accounts.
<unk>, a multiplier effect when new business coming in for the balance of 2025 and 26.
Value of business economics are healthy and stronger than ever in the third quarter of 2025, we achieved a GAAP gross margins to 60% and we achieved seven consecutive quarters to 80% plus non-GAAP gross margins on our core <unk> business.
Speaker #3: This brings our client base to over 125 and counting, which includes over 110 employers, four national health plans, and seven major regional health plans.
Speaker #3: Our new accounts and large portion of our 69 million dollars pipeline are customers that are too to 10 times larger than our clients have been in the past.
With the help of AI and our commitment to optimizing efficiency, we reduced operating expenses by an impressive <unk>.
$17 2 million or 31% in the first nine months of 2025 and reduced by $3 4 million.
Speaker #3: Creating a multiplier effect for new business coming in for the balance of 2025 and 2026. Dario business economics are healthy and stronger than ever.
With 21% during the third quarter compared to the year ago period.
Speaker #3: In the 3rd quarter of 2025, we achieved a gap gross margins to 60%, and we achieved our 7 consecutive quarters of 80% plus non-gap gross margins on our core B2B2C business.
Several new accounts are now on boarding and beginning to contribute to revenue with fully expected in 2026.
Oh, yes.
To a large health plan.
Speaker #3: With the help of AI and our commitment to optimizing efficiency, we reduced operating expenses by an impressive 17.2 million dollars or 31% in the first nine months of 2025 and reduced by 3.4 million dollars or 21% during the 3rd quarter compared to the year-ago period.
In other months, the most sizable and strategic clients in the Navios history.
90% of new elevate underscores the value we deliver to our clients.
As an early leader in digital health, we aim to continue to drive the industry wide shift.
<unk> made the point solution to integrated multi condition platforms that deliver measurable outcomes and cost savings.
Speaker #3: Several new accounts are now onboarding and beginning to contribute to revenue, with full impact expected in 2026. Of this, two are large health plans and are among the clients in Dario's most sizable and strategic history.
With healthcare costs continue to rise.
<unk> approach to pauling lasting behavioral changes, who personalized digital solution within a high demand.
I will now turn the call over to Steven.
Thank you Erez and Hello, everyone.
Speaker #3: Our 90% renewal rate underscores the value we deliver to our clients. As an early leader in digital health, we aim to continue to drive the industry-wide shift from fragmented point solution to integrated multi-condition platforms that deliver measurable outcomes and cost savings.
We are seeing stronger demand than at any point in <unk> history, especially from Blue chip employers and national insurers are.
Our multi condition platform remains the most comprehensive and digital health covering work conditions and backed by more clinical evidence than anyone else in the market.
Commercial traction is accelerating we've adjusted our product market fit to better serve health plans, the government sector and off cycle employers and it's paying off our 2026 pipeline has grown to $69 million with more than 50% of our new clients choosing our multi condition solution.
Speaker #3: With healthcare costs continuing to rise, Dario's approach to powering lasting behavioral changes through personalized digital solutions is in a high demand. I will now turn the call over to
Speaker #3: Steven. Thank
Speaker #4: you, Erez, and hello everyone. We are seeing stronger demand than at any point in Dario's history. Especially from blue-chip employers and national insurers. Our multi-condition platform remains the most comprehensive in digital health.
We're meeting payers and employers where they are delivering personalized data driven care across five or more conditions, all at equal or lower cost than most single condition competitors.
Our core business employers and health plans is performing exceptionally well.
Speaker #4: Covering more conditions and backed by more clinical evidence than anyone else in the market. Commercial traction is accelerating. We've adjusted our product-market fit to better serve health plans, the government employers.
The average employer account size that we have won and still remains in our pipeline has almost doubled versus last year, which is a clear validation of the platform and the expanding confidence were seeing from the market.
Speaker #4: And it's paying off. sector, and off-cycle Our 2026 pipeline has grown to 69 million. With more than 50% of our new clients choosing our multi-condition solution.
It's driving real revenue momentum as these clients begin to implement and scale with us.
We are targeting $12 4 million in new business for implementation in 2026, reflecting both committed annual recurring revenue and late stage opportunities nearing completion.
Speaker #4: We're meeting payers and employers where they are, delivering personalized data-driven care across five or more conditions. All at equal or lower cost than most single-condition competitors.
Our pipeline includes several opportunities in late stage development still remaining in 2025.
Speaker #4: Our core business, employers, and health plans is performing exceptionally well. The average employer account size that we have won and still remains in our pipeline has almost doubled versus last year.
Year to date, we've added 45, new clients contributing to that growth.
These are high quality reoccurring revenue relationships not onetime contracts.
Speaker #4: Clear validation of the platform and the expanding confidence we are seeing from the market is driving real revenue momentum as these clients begin to implement and scale with us.
Since the last earnings call, we signed 24, new employer agreements, including one of the largest in our history.
Most of them onboard in 2026.
These wins span multiple industries and validate the market's growing preference for Darius multi condition solution and our new value based pricing model, which aligns our success directly with measurable outcomes for our clients and their members.
Speaker #4: We are targeting $12.4 million in new business for implementation in 2026, reflecting both committed annual recurring revenue and late-stage opportunities nearing completion. Our pipeline includes several opportunities in late-stage development still remaining in 2025.
This is why we now have more than 125 clients, including Fortune 100 employers in national and regional health plans are diversified mix across employers health plans and pharma insurers multiple revenue streams and low customer concentration client retention remains strong at 90%.
Speaker #4: Year-to-date, we've added 45 new clients contributing to that growth. These are high-quality, reoccurring revenue relationships, not one-time contracts. Since the last earnings call, we've signed 24 new employer agreements, including one of the largest in our history.
Speaker #4: Most of them will onboard in 2026. These wins span multiple industries and validate the market's growing preference for Dario's multi-condition solution and our new value-based pricing model, which aligns our success directly with measurable outcomes for our clients and their members.
We expect our win rate velocity will only accelerate driven by our effective go to market strategy and the strength of our channel partners, which account for more than 80% of our new logo wins this year.
Through our top tier channel partners, we now reach over 116 million covered lives expanding our market access and helping deals move faster through contracting.
Speaker #4: This is why we now have more than 125 clients, including Fortune 100 employers and national and regional health plans. Our diversified mix across employers, health plans, and pharma ensures multiple revenue streams and low customer concentration.
Many of these partners for newly contracted or re contracted this year under win win agreements that strengthen alignment and create even greater momentum going into 2026.
Speaker #4: Client retention remains strong at 90%. We expect our win rate velocity will only accelerate. Driven by our effective go-to-market strategy and the strength of our channel partners.
We've made major progress with several top tier health insurers some of the most meaningful launches in <unk> history.
United Healthcare Losch Daurio on its digital marketplace and a soft launch during the third quarter of 2025, which is a full suite offering.
Speaker #4: Which account for more than 80% of our new logo wins this year. Through our top-tier channel partners, we now reach over 116 million covered lives.
A full national rollout will be coming in January 2026, we're proud to be a part of this innovative go to market approach with the largest health insurer in the U S serving more than 50 million people.
Speaker #4: Market access and helping deals. Expanding our move faster through contracting. Many of these partners were newly contracted or re-contracted this year, under win-win agreements that strengthen alignment and create even greater momentum going into 2026.
In partnership with our valuable channel partner Solera Health Primera Blue Cross one of the largest not for profit health plans in the Pacific Northwest has also launched Oreo Solera health has built a powerful digital network, where <unk> as a preferred partner in.
Speaker #4: We've made major progress with several top-tier health insurers, some of the most meaningful launches in Dario's history. UnitedHealthcare launched Dario on its digital marketplace in a soft launch during the third quarter of 2025, which is a full-suite offering.
And for Merit Blue Cross deserves credit for leading with vision and executing an innovative rollout.
Additionally, solera and their partner Aetna has selected <unk> to work with one of our largest employers in our company's history, representing a 126000 lives.
Speaker #4: A full national rollout will be coming in January 2026. We're proud to be a part of this innovative go-to-market approach, with the largest health insurer in the US serving more than 50 million people.
This is our biggest channel partner launched to date offering daurio to aetna's employer network, reaching millions of covered lives.
Speaker #4: In partnership with our valuable channel partner SoleraHealth, Primera Blue Cross, one of the largest Northwest, has also launched Dario. SoleraHealth has built a powerful digital network where not-for-profit health plans in the Pacific Dario is a preferred partner.
And most recently, we announced another large health plan launch with another key channel partner and well.
As shared on <unk> recent earnings call. They were selected by Florida Blue and Daria was chosen as a part of that new business through this partnership Florida Blue's self insured employers will have access to our multi condition solution for cardio metabolic health, while the fully insured line of business will offer <unk> diabetes program.
Speaker #4: And Primera Blue Cross deserves credit for leading with vision in executing an innovative rollout. Additionally, Solera and their partner Aetna have selected Dario to work with one of our largest employers in our company's history, representing 126,000 lives.
This is a major strategic win and a tremendous validation of our platform, we're proud to partner with Florida Blue for 2026 and beyond.
Speaker #4: This is our biggest channel partner launch to date, offering Dario to Aetna's employer network, reaching millions of covered lives. Most recently, we announced another large health plan launch with another key channel partner, Amwell.
Taken together, we believe these launches mark a turning point for Daurio, expanding our reach validating our leadership and setting the stage for accelerated growth in 2026.
Speaker #4: As shared on Amwell's recent earnings call, they were selected by Florida Blue. Dario is chosen as a part of that new business. Through this partnership, Florida Blue's self-insured employers will have access to our multi-condition solution for cardiometabolic health.
While we are well established with commercial partners in the private sector. We are also seeing opportunities opening in the public sector.
Policy tail wins are driving the adoption of digital health solutions for federal and state funded health programs.
Speaker #4: While the fully insured line of business will offer Dario's diabetes program. This is a major strategic win and a tremendous validation of our platform.
<unk> with our attractive pricing proven clinical benefits and return on investment or <unk>.
Roy is very well positioned to be competitive in this space.
Speaker #4: We're proud to partner with Florida Blue for 2026 and beyond. Taken together, we believe these launches mark a turning point for Dario, expanding our reach, validating our leadership, and setting the stage for accelerated growth in 2026.
We previously announced our partnership with Green key health and we're now seeing that come to life through Temple University Health systems announcement last week at the Becker's health care CEO and CFO Roundtable.
<unk> Executive Vice President and hospital CEO <unk> Rysavy shared on the advanced stage that temple is collaborating.
Speaker #4: well-established with commercial partners in the private sector, we are also seeing opportunities opening in the public sector. Policy tailwinds are driving the adoption of digital health solutions for federal and state-funded health programs.
With Dario House, and Green key health to manage the cost and clinical utilization of G. L. P. One medications and obstructive sleep apnea therapies.
Speaker #4: Dario, with our attractive pricing, proven clinical benefits, and return on investment, or ROI, is very well-positioned to be While we are competitive in this space.
Two of the fastest growing and most expensive areas in health care.
<unk> is also in final stages of executing a similar G. L. P. One digital utilization management program for a national account employer launching early in 2026.
Speaker #4: We previously announced our partnership with Green Key Health, and we're now seeing that come to life through Temple University Health Systems' announcement last week at the Becker's Healthcare CEO and CFO roundtable.
We are excited about the product market fit both opportunities afford daurio for the future in 2026 and 2027 sales.
Speaker #4: Temple's executive vice president and hospital CEO, Avi Rustavi, shared on the main stage that with DarioHealth and Green Key Temple is collaborating Health to manage the cost and clinical utilization of GLP-1 medications and obstructive sleep apnea therapies.
This collaboration was achieved through product partnership model, requiring minimal R&D investment from Daurio, demonstrating our ability to scale innovation efficiently and drive meaningful impact without significant internal spend.
We believe that this also reinforces <unk> expanding leadership in helping major health systems achieved measurable ROI through digital data driven engagement and outcomes and represents another step forward in our growth across employers payers and now integrated delivery networks.
Speaker #4: Expensive areas in healthcare. Dario is also in the final stages of executing a similar GLP-1 digital utilization management program for two of the national account employers, launching early in 2026.
Speaker #4: We are excited about the product-market fit, both opportunities afford 2026 and 2027 Dario for the future in collaboration was achieved through product partnership model requiring minimal R&D investment from Dario, demonstrating our ability to scale innovation efficiently and drive meaningful impact without significant internal spend.
We're also continuing to expand our capabilities through other strategic collaborations and alignment with doritos whole person condition management strategy.
One recent example is our partnership with one steps, which integrates its AI powered fall risk assessment and prevention technology directly into Doris platform.
Falls represent more than 50 billion in annual medical cost and this integration further enhances our ability to deliver measurable ROI for health plans by improving safety, reducing avoidable claims and broadening the overall clinical and economic value of Doritos platform.
Speaker #4: We believe that this also reinforces Dario's expanding leadership in helping major health systems achieve measurable ROI through digital data-driven engagement and outcomes. And represents another step forward in our growth across employers, payers, and now integrated delivery networks.
Another important growth driver is our pharma business about a year ago, we began transitioning Darius pharma services for milestone based projects to reoccurring revenue model and we've made some strong progress in that effort.
Speaker #4: We are also continuing to expand our capabilities through other strategic collaborations, in alignment with Dario's whole person, condition, management strategy. One recent example is our partnership with OneStep, which integrates its AI-powered fall risk assessment and prevention technology directly into Dario's platform.
We've now launched the business with a sharper more targeted focus on therapeutic areas, where we can deliver the greatest impact.
Speaker #4: Falls represent more costs, and this is more than $50 billion in annual medical integration. This further enhances our ability to deliver measurable ROI for health plans by improving safety, reducing avoidable claims, and broadening the overall clinical and economic value of Dario's platform.
Jorio pharma services remains a smaller part of our broader business today, but momentum is clearly building.
We bring deep experience, helping pharma companies find onboard and keep patients engaged across their treatment journey.
Our platform consistently delivers between five X and Tenex ROI through 30% to 60% lower recruiting cost, 32% higher engagement four times, better prescription conversions and more than 20% improved adherence compared to traditional approaches.
Speaker #4: Another important growth driver is our pharma business. About a year ago, we began transitioning Dario's pharma services from milestone-based projects to reoccurring revenue model, and we've made some strong progress in that effort.
Speaker #4: We've now launched the business with a sharper, more targeted focus on therapeutic areas where we can deliver the greatest impact. Dario Pharma Services remains a smaller part of our broader business today, but momentum is clearly building.
This is how we're positioning <unk> as a long term strategic partner in pharma, one that drives both clinical and commercial value through digital precision and reoccurring relationships.
Speaker #4: We bring deep experience helping pharma companies find, onboard, and keep patients engaged across their treatment journey. Our platform consistently delivers between 5x and 10x ROI through 30 to 60% lower recruiting costs.
Our latest pharma services initiative focuses on mash, formerly known as Nash, a fast emerging $10 billion market driven by the first drugs for fatty liver disease.
Most patients remain undiagnosed and need support beyond the pill.
Speaker #4: 32% higher engagement, four times better prescription conversion, and more than 20% improved adherence compared to traditional approaches. This is how we're positioning Dario as a long-term strategic partner in pharma.
Which is where daurio adds value.
Through our fair a framework find assess initiate retain and augment we help pharma deliver whole person digital engagement and behavioral support.
Speaker #4: One that drives both clinical and commercial value through digital precision and reoccurring relationships. Our latest pharma services initiative focuses on MASH, formerly known as NASH, a fast-emerging $10 billion market driven by the first drugs for fatty liver disease.
Our new 12 week thought leadership campaign launched this week.
Highlighting how this model not only unlocks the mash opportunity, but can be replicated across cardio metabolic mental health and other high burden therapeutic areas.
As we approach January renewal cycle, our commercial teams are fully engaged and finalizing contracts and onboarding new clients. This is one of the busiest and most important times of the year for us and the team is working hard to ensure a smooth transition into 2026.
Speaker #4: Most patients remain undiagnosed and need support beyond the pill, which is where Dario adds value. Through our fair A framework, find, assess, initiate, retain, and augment, we help pharma deliver whole person digital engagement and behavioral support.
We've established an internal benchmark to retain roughly 85% of our clients on a year over year basis, a standard consistent with leading health SaaS companies and we feel very good about achieving that target based on the renewal conversations underway.
Speaker #4: Our new 12-week thought leadership campaign launched this week. Highlighting how this model not only unlocks the MASH opportunity but can be replicated across cardiometabolic, mental health, and other high-burden therapeutic areas.
With the rapidly expanding pipeline proven outcomes and a strong renewal foundation, we're seeing continued acceleration in our business as we move into 2026.
Speaker #4: As we approach the January renewal cycle, our commercial teams are fully engaged in finalizing contracts and onboarding new clients. This is one of the busiest and most important times of the year for us, and the team is working hard to ensure a smooth transition into 2026.
Combination of new growth reoccurring revenue and disciplined client retention gives us real confidence in the year ahead with that I'll turn the call over to Ken.
Yeah.
Thank you Steven and good morning, everyone.
Speaker #4: We've established an internal benchmark to retain roughly 85% of our clients on a year-over-year basis, a standard consistent with leading health SaaS companies. And we feel very good about achieving that target based on the renewal conversations underway.
In the third quarter, we continued the secondhand values financial position and advance our transition to a business model centered on high quality recurring revenues.
<unk> margins and operating leverage.
Speaker #4: With the rapidly expanding pipeline, proven outcomes, and a strong renewal foundation, we're seeing continued acceleration in our business as we move into 2026. The combination of new growth, reoccurring revenue, and disciplined client retention gives us real confidence in the year ahead.
Executing this strategy with discipline.
You can see the progress clearly reflected this quarter.
As of September 32025, we had $31 9 million.
Cash and equivalents.
Speaker #4: With that, I'll turn the call over to
Reflects the successful completion of an oversubscribed $17 5 million private placement of common stock or equivalent.
Speaker #4: Ken. Thank you,
Speaker #2: Stephen. And good morning, everyone. In the third quarter, we continued to strengthen Dario's financial position and advance our transition to a business model centered on high-quality recurring revenues, strong margins, and operating leverage.
Which we view as a meaningful signal of investors' confidence in the business and the market opportunity.
And in our ability to execute.
In Thailand.
Took several steps to simplify and strengthen our capital structure.
Speaker #2: We're executing this strategy with discipline. And you can see the progress clearly reflected in this quarter. As of September 30, 2025, we had 31.9 million in cash and equivalents.
The conversion of preferred shares into common stock and equivalents.
And in a clear and more transparent cost data.
We also amended our current credit agreement.
Speaker #2: This reflects the successful completion of an oversubscribed 17.5 million private placement of common stock or equivalents only, which we view as a meaningful signal of investors' confidence in the business, in the market opportunity, and in our ability to execute.
To provide greater flexibility on covenant testing, which enhances our financial resilience, while we continue to scale.
Let me now turn to the financial results.
Revenues for the third quarter of 2025 with $5 million compared to $5 4 million in second quarter of 2025, and $7 4 million.
Speaker #2: In parallel, we took several steps to simplify and strengthen our capital structure. We completed the conversion of preferred shares into common stock and equivalents resulting in a clearer and more transparent cap table.
What is 2024.
As we've discussed in previous quarters.
The decline reflects the non renewal of a large scope of work with a national health plan in early 2025.
Speaker #2: We also amended our current credit agreement to provide greater flexibility on cover and testing, which enhances our financial resilience while we continue to scale.
The deliberate shift from a one time revenue streams toward long term annual recurring revenue.
This transition emphasizes quality predictability and scalability of revenue and we believe it positions value offer stronger mark durable growth.
Speaker #2: Let me now turn to the financial results. Revenues for the third quarter of 2025 was 5 million, compared to 5.4 million in second quarter of 2025 and 7.4 million in the third quarter of 2024.
Gross margin performance continued to reinforce the strength of our unit economics.
Speaker #2: As we've discussed in previous quarters, the year-over-year decline reflects the non-renewal of a large scope of work with a national health plan in early 2025, as well as the deliberate shift from a one-time revenue stream towards long-term annual recurring revenue.
GAAP gross margin expanded to 60% up from 55% in the second quarter of 2025 and 52% in the third.
Third quarter of 2024.
non-GAAP gross margin in our core data BTC remains above 80% since the beginning of 2024.
Speaker #2: This transition emphasizes quality, predictability, and scalability of revenue, and we believe it positions Dario for a stronger and more durable growth. Gross margin performance continued to reinforce the strength of our unit economics.
Collecting the benefits on a software led model and disciplined cost management.
Turning to operating expenses, we continued to execute on efficiency and scale.
For the first nine months of 2025 operating expenses declined by $17 2 million or 31% year over year.
Speaker #2: GAAP gross margin expanded to 60% up from 55% in the second quarter of 2025 and 52% in the third quarter of 2024. Non-GAAP gross margin in our core B2B2C remains above 80% since the beginning of 2024.
For the third quarter operating expenses declined by $3 4 million or 21% reduction from prior year period.
This improvement was driven by post merger integration of 12 process automation organizational streamlining and expanded use of AI best wealth portal across all operation.
Speaker #2: Reflecting the benefits of a softer-led model and a disciplined cost management. Turning to operating expenses, we continue to execute on efficiency and scale. For the first nine months of 2025, operating expenses declined by 17.2 million, or 31% year-over-year.
As a result operating loss improved by $18 million or 39% for the nine month period compared to last year.
Looking ahead, we expect an additional 10% to 15% improvement in operating expenses over the next 12 to 15 months and we continue to automate our processes and improve efficiency.
Speaker #2: For the third quarter, operating expenses declined by 3.4 million, a 21% reduction from prior year period. This improvement was driven by cost measure integration of 12, process automation, organizational streamlining, and expanded use of AI-based workflow across all operations.
To summarize I suppose.
At the end of the third quarter, we have a strong balance sheet and a simplified capital structure.
Our operating expenses continued to decline.
And we're building a durable base of recurring revenue supported by high retention within existing customer base and accelerating momentum signing and Onboarding new clients.
Speaker #2: As a result, operating loss improved by 18 million or 39% for the nine-month period compared to last year. Looking ahead, we expect an additional 10 to 15% improvement in operating expenses over the next 12 to 15 months as we continue to automate core processes and improve efficiency.
This includes a target of $12 4 million in new business for implementation in 2026.
Collecting both committed.
And late stage opportunities nearing completion.
Speaker #2: To summarize, as of the end of Q3, we have a strong balance sheet and a simplified capital structure. Our operating expenses continue to decline, and we are building a durable base of recurring revenue, supported by high retention within our existing customer base and accelerating momentum in signing and onboarding new clients.
Given the committed they allow.
Our housing and expanding pipeline and continued progress on operational efficiency.
We reiterate our expectation to reach a run rate cash flow breakeven.
Late 2026 to early 2027.
I'll now turn the call back over to Eric before we go to Q&A session.
Speaker #2: This includes a target of 12.4 million in new business for implementation in 2026, reflecting both committed ARR and late-stage opportunities needing completion. Given the committed ARR, a housing and expanding pipeline, and continued progress on operational efficiencies, we reiterate our expectations to reach run-rate cash flow breakeven by late 2026 to early 2027.
Thank you.
We've made that as a stance of the Connecticut, an exciting inflection point.
Our differentiated offering is exactly what is looking for.
Our team is executing with focus and discipline.
<unk> is in place and we are fully in line with the market dynamics that favorable integrated outcomes <unk> solutions.
We are committed to growing our business by improving health outcomes for you.
<unk> and creating savings for payers.
Energy platform, we have invested in and built including integration of several acquired platforms over the last decade.
Speaker #2: I'll now turn the call back over to Erez before we go to Q&A session.
Speaker #3: Thank you, Ken. Today, Dario stands at a critical and exciting inflection point. Throughout differentiated offering is exactly what pairs are looking for. Our team is executing with focus and discipline the groundwork is in place and we are fully aligned with the market dynamics that favor integrated outcomes-driven solutions.
Highly valued strategic asset in addition to and beyond its ability to generate high margin recurring revenues.
As a reminder in September of 2025.
As opposed to multiple unsolicited inbound expressions of interest.
<unk> engaged perella Weinberg partners and established a special committee of its board of directors.
Speaker #3: We are committed to growing our business by improving health The technology platform we have invested in and built savings for payers. including integration of several acquired outcomes for users and creating platforms over the last decade is highly valued strategic asset in addition to and beyond its ability to generate high margins recurring revenues.
We will not comment further on this matter unless there is a material uptick.
With that I want to hand over the call to the operator for Q&A session.
Thank you, ladies and gentlemen, well now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys so enjoy your.
Speaker #3: As a reminder, in September of 2025, in response to multiple unsolicited inbound expressions of interest, Dario engaged Parella Weinberg Partners and established a special committee of its board of directors.
Question. Please press Star then two we will pause for a moment to compile the Q&A roster.
Speaker #3: We will not comment further on this matter unless or until there is a material update. With that, I want to hand over the call to the operator for Q&A session.
Our first question comes from the line of David Crossman from Stifel. Your line is open.
Speaker #4: Thank you. Ladies and gentlemen, we will now begin the question and answer session. To join the question queue, you may press start and one on your telephone keypad.
Speaker #4: You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset. Before pressing any keys, we draw your question.
Again, David Cosman Your line is open.
Speaker #4: Please press start and two. We will pause for a moment. To compile the Q&A roster. Our first question comes from the line of David Grossman from Stifel.
Speaker #4: Your line is open. Again, David Grossman, your line is open. Our next question comes from the line of Charles Rai from TD Cowan. Your line is open.
Okay.
Our next question comes from the line of Charles <unk> from Keybanc Cowen Your line is open.
Hi, This is Lucas on for Charles Thanks for taking the questions.
Wanted to ask about your guidance, United Health National rollout starting in.
One 126 can you help us understand how much of the 12 million and new business expected to be implemented in 2006 is.
It's coming from this client and then can you I guess just speak to the overall opportunity you see with this client in 2026 and beyond.
Yeah, Hi, this is Stephen Austin, Yeah, I'll answer that question.
Two things.
One is they have launched a digital marketplace.
For all of their book of business, they're rolling it out in chunks.
Speaker #5: Hi. This is Lucas on for Charles. Thanks for taking the questions. I wanted to ask about your guys' UnitedHealth national rollout starting in 11/26.
The software the soft announced that in Q3, we've been active in that pilot rollout and now they're doing it was scale against our entire book, we don't get specific in terms of client segments and revenue by client by the book.
Speaker #5: Can you help us understand how much of the 12 million in new business expected to be implemented in '26 is coming from this client?
But we're really encouraged by what they're doing we were one of the few selected in terms of that digital marketplace and as they roll that out they're rolling it out in chunks I believe in and membership books as they go quarter by quarter with a formal rollout. So it's more of what they've done before to have a marketplace they've done a little bit of this in the past.
Speaker #5: And then can you I guess just speak to the overall opportunity you see with this client in 2026 and beyond?
Speaker #6: Yeah. Hi, this is Stephen Nelson. Yeah, I'll answer that question. Two things. One is they have launched a digital marketplace for all their book of business.
This is kind of a newer launch for them I'd say quite innovative to say the least and this is a group sponsored business, where the group benefits people members consumers can go on and use their benefits to then purchase within a digital portfolio of products. So <unk>.
Speaker #6: They're rolling it out in chunks. They soft announced that in Q3. We've been active in that pilot rollout, and now they're doing it with scale against their entire book.
Speaker #6: We don't get specific in terms of client segments and revenue by client by the book. But we're really encouraged by what they're doing. We were one of the few selected in terms of that digital marketplace.
Not necessarily built within their product.
Indirect form more through a group type of plan and so it's a pretty innovative launch we're excited to be a part of it and now I'll kick off.
Speaker #6: And as they roll that out, they're rolling it out in chunks, I believe, in membership books. As they go quarter by quarter, with a formal rollout.
In a formal way in Jan one.
Okay I appreciate that and then still wonder if okay.
Speaker #6: So it's more of what they've done before, to have a marketplace. They've done a little bit of this in the past, but this is kind of a newer launch for them.
Focus on the $12 million in new business expected to be implemented in 2006 can you help us understand what sort of pacing, we should be modeling and expecting for this new business.
Speaker #6: I'd say quite innovative to say the least. And this is a group-sponsored business where the group benefits people, members, consumers can go on and use their benefits to then purchase within a digital portfolio of products.
Yes. So some of it's already started we've been in Q4, the time period as we kind of launched a lot of these accounts as we noted on the call. Our expectation was to have 40 that would be signed this year that would impact this year or start in next year. We've achieved 45, specifically already to date and we still have some.
Speaker #6: So not necessarily built within their product, in direct form, more through a group type of plan. And so it's a pretty innovative launch. We're excited to be a part of it, and now we'll all kick off in a formal way in Jan 1.
<unk> left assigned some others. So it's kind of rolling in now as open enrollment kind of kicked in now some of those accounts did start earlier the majority of those counts will start in January and normal benefits timeframe.
Speaker #3: Okay. Appreciate that. And then still want to focus want to focus on the 12 million in new business expected to be implemented in '26.
Speaker #3: Can you help us understand what sort of pacing we should be modeling in and expecting for this new
Speaker #3: Can you help us understand what sort of pacing we should be modeling in and expecting for this new business? Yeah.
Some of them will roll in in January as normal benefits from open enrollment some of them may start in terms of February just delayed slightly after through open enrollment we have seen a lot of employers that are starting things in an off cycle, but still within the benefit stack. So a lot of them are starting things within the timeframe of their benefits, but not necessarily at the start of the benefits.
Speaker #6: So some of it's already started. We've been in Q4 the time period as we kind of launched a lot of these accounts. As we noted on the call, our expectation was to have 40 that would be signed this year, that would impact this year or start in next year.
<unk>.
So it's kind of role and I'd say over the course of Q1, we do have some off cycle things that we're still engaged in some of the health plan business is off cycle.
Speaker #6: We've achieved 45 specifically already to date. And we still have some time left to sign some others. So it's kind of rolling in now as open enrollment kind of kicked in now.
Obviously some of the things we've done in the government sector is just waiting for the government to kind of finish their budgets and move forward and that's we're pretty encouraged about a couple of those as well in maternal health and some digital health initiatives that have already been spoken about and then lastly, we also have a little bit of other new business from employers that are off cycle. So we've done things.
Speaker #6: Some of those accounts did start earlier. The majority of those accounts will start in January, and normal benefits timeframe. Some of them will roll in in January, as normal benefits from open enrollment.
Speaker #6: Some of them may start in terms of February. Just delayed slightly after their open enrollment. We've seen a lot of employers that are starting things in an off-cycle but still within the benefit stack.
<unk>, some different sectors of business and employer business with our specific channel partners that are also off cycle. So it's kind of a little bit of a role in I'd say the majority of that was in Q1, but some of that has already started and some of that also will be a tail. After Q1, we'll start with the majority of it would definitely be in Q1 timing.
Speaker #6: So a lot of them are starting things within the timeframe of their benefits, but not necessarily at the start of the benefits year. So it's going to roll in, I'd say, over the course of Q1.
Speaker #6: We do have some off-cycle things that we're still engaged in. Some of the health plan business is off-cycle. Obviously, some of the things we've done in the government sector is just waiting for the government to kind of finish their budgets and move forward.
Okay I appreciate that.
Okay.
And then I mean, you guys are saying the commercial pipeline grow you talked about 90% renewal rates.
Speaker #6: And that's we're pretty encouraged about a couple of those as well in maternal health and some digital health initiatives that have already been spoken about.
When we look at the B to B to C revenue, we're still seeing sequential declines can you help us understand what's driving this you spoke to a non renewal that took place in early 2025, just a primary driver for continued sequential declines here can you kind of Peel back layers on what the underlying trends are in this business in Turkey.
Speaker #6: And then lastly, we also have a little bit of other new business from employers that are off-cycle. So we've done things around some different sectors of business and employer business with our specific channel partners that are also off-cycle.
Speaker #6: So it's kind of a little bit of a roll-in, in, I'd say, the majority of that was in Q1. But some of that is already started, and some of that also will be a tail after Q1 will start.
Hey, I'm going to take it so Lucas the.
Speaker #6: definitely be in Q1 But the majority will
Hey.
Speaker #6: timing. Okay.
And you mentioned in the previous quarter as we had this one.
Speaker #3: Appreciate that. And then I mean, you guys are saying the commercial pipeline grow, you talked about 90% renewal rates. When we look at the B2B2C revenue, we're still seeing sequential declines.
Mission on the health plan that didn't continue to D. C. I think that this is what created the decline the other element that I was showing a decline between this quarter to the previous quarter is the transition of the of the pharma business.
Speaker #3: Can you help us understand what's driving this? You spoke to a non-renewal that took place in early 2025. Is this the primary driver for continued sequential declines here?
For milestone driven into recurring revenue driven so if we're looking into the book of business.
That is purely employers and health plans.
Speaker #3: Can you kind of peel back the layers on what the underlying trends are in this business in 3Q?
It's stable between Q2 to Q3, and we believe that it is going to be stable and even growing a bit between Q3 to Q4.
Speaker #6: Yeah. I'm going to take you there. So Lucas, the as we mentioned in the previous quarters, we had this one national health plan that didn't continue to this year, and I think that this is what created the decline.
I want to also find some numbers to your previous question you asked specifically about United Healthcare.
We are not exposing exactly how we are modeling of this thing every opportunity and has declined but if I'm looking into the numbers.
Speaker #6: The other elements that are showing a decline between this quarter to the previous quarter is the transition of the pharma business from milestone-driven into recurring revenue-driven.
From 30000 feet you have 45, new accounts that have been signed this June nine.
Speaker #6: So if we are looking into the book of business that is purely employers and health plans, it's stable between Q2 to Q3, and we believe that it's going to be stable and even going a bit up between Q3 to Q4.
90% of them were launched only in Q1, so you're going to see the ramp up in Q1.
And the way that we model.
On the accounts is that we don't have a single opportunity that is contributing more than 1 million out of the $12 4 million. So I think that we have here a very diversified approach, where we are not putting all the.
Speaker #6: I want to also assign some numbers to your previous questions. You asked specifically about UnitedHealthcare. We are not exposing exactly how we are modeling everything every opportunity and every client.
Of the weight on one client in order to get us the goals for 2026.
Speaker #6: But if I'm going to look into the numbers from 30,000 feet, you have 45 new accounts that have been signed this year. 90% of them will launch only in Q1.
It's helpful.
Got you that's helpful.
And then the last question I have and I'll jump back in the queue is.
Just speaking can you give us an update on the pharma services pipeline and you know what.
Speaker #6: So you're going to see the ramp-up only in Q1. And the way that we model all the accounts is that we don't have a single opportunity that is contributing more than a million dollars out of the 12.4 million dollars.
Demand youre seeing following a sharper focus on therapeutic areas and just be curious to hear how.
Prospective clients in that side of the business are responding to this approach.
Speaker #6: So I think that we have here a very diversified approach where we are not putting all the weight on one client in order to get us the growth for 2026.
Yes so.
The way that we're looking into there.
Few BTB Charmless employers health plans and pharma is that all our priorities first of first of all employers and health plans. This is where we are focusing all of the efforts and also the defense of marketing budget perspective.
Speaker #6: Hope it's
Speaker #6: helpful.
Speaker #3: Gotcha. That's
Speaker #3: Helpful. And then the last question I have, and I'll jump back in the queue, is just speaking, can you give us an update on the pharma services pipeline and what kind of demand you're seeing following your sharper focus on therapeutic areas? I'd just be curious to hear how prospective clients in that side of the business are responding to this approach.
We do.
We do.
Believe that we have a very impressive portfolio of product that is helping and helped pharma in the past I mean, if we're looking into the previous business that we had.
We had.
Lot of business with all the big names.
Speaker #6: So the way that we are looking into the few B2B channels employers, health plans, and pharma is that our priority is, first of all, employers and health plans.
From Sanofi to Eli Lilly and Novo Nordisk all of them were clients of valuable twill.
The issue that we had was the businesses that we wanted to make sure that we all hope it I think is a SaaS oriented business and we're aligning recounting revenue only which means that we transformed the business and literally shut down.
Speaker #6: This is where we are focusing all the efforts and also the sales and marketing budget perspective. We do believe that we have a very impressive portfolio of products that is helping and helps pharma in the past.
With really only one time revenues the way that we view it in the future is that we're going to be extremely selective when what are the accounts that we're going to sign up for and I believe that for next year, we're going to have between two two full accounts that they are going to contribute to the revenue and I believe that the numbers are going to be a relatively small amount of comparing to.
Speaker #6: I mean, if we're looking into the previous business that we had, we had a lot of business with all the big names. From Sanofi to Eli Lilly to Novo Nordisk, all of them were clients of Dario or Twill.
The employers from the health plan in China.
Okay, Great I appreciate the color. Thanks.
Speaker #6: The issue that we had with the business is that we wanted to make sure that we are operating as a SaaS-oriented business, and we are running recurring revenue only, which means that we transform the business and literally shut down accounts that were only one-time revenues.
Our next question comes from the line of David Grossman from Stifel. Your line is open.
Speaker #6: The way that we view it in the future is that we're going to be extremely selective on what are the accounts that we're going to sign up for.
Our next question is from Theodore O'neill from Litchfield Hills Research Your line is open.
Speaker #6: And I believe that for next year, we're going to have between two to four accounts that are going to contribute to the revenue. I believe that the numbers are going to be relatively smaller compared to the employers and the health plan channel.
Thank you very much.
Stephen you talked about.
And product market fit and in the press release it also highlights the.
New performance based pricing model and I'm wondering.
Between those two things what are you finding is is working for you better now than say 12 months ago.
Speaker #3: Okay. Great. Appreciate the color. Thanks.
Yeah two.
Speaker #1: Our next question comes from the line of David Grossman from Stifel. Your line is open. Our next question is from Theodore O'Neill from Litchfield Hills Research.
Two things one is that we're really focused on which multi condition offerings. We're taking in the market for clients, who are doing more around claims base analytics, we're doing more around claims based engagement trying to make sure that our product fits kind of what theyre looking for and our solution first of all.
Speaker #1: Your line is
Speaker #1: open.
Speaker #3: Thank you very
Speaker #3: much. Steven, you talked about adjusted product-market fit. And in the press release, it also highlights the new performance-based pricing model. And I'm wondering between those two things, what do you find is working for you better now than, say, 12 months ago?
That's from the marketing to the presentation to the sales process to closing it and then reporting on it engaging it.
Et cetera, with the clients I think that's one big broad thing I think the second thing is we didn't do it all ourselves I noted in the.
Earnings release, specifically in my script that we talked about how we added in a couple of key partners to round out our product solution, where we didn't have to necessarily develop the R&D, but they are presenting with market opportunities for us specifically, most recently green key around sleep again partnering with what we have in cardio metabolic offering.
Speaker #6: Yeah. Two things. One is that we're really focused on which multi-condition offerings we're taking in the market for clients. So we're doing more around claims-based analytics; we're doing more around claims-based engagement, trying to make sure that our product fits kind of what they're looking for in a solution, first of all.
Tying that into sleep gets us into a different category doesn't increase our R&D expenditures and allows us to go to market with a new offering again product market fit finding ways to reduce cost of care for payers specifically in the sleep category. We're looking at the same thing with one step recently announced around false prevention Medicare advantage one step.
Speaker #6: That's from the marketing to the presentation to the sales process to closing it and then reporting on it, engaging it, etc., with the clients.
Speaker #6: I think that's one big broad thing. I think the second thing is we didn't do it all ourselves. I noted in the earnings release specifically in my script that we talked about how we added in a couple of key partners to round out our product solution.
So again, we're trying to think differently about how our product and how the market need is your partners or our core bread and butter product really goes towards certain segments strategically.
Speaker #6: Where we didn't have to necessarily develop the R&D, but they are presenting market opportunities for us, specifically most recently Green Key around sleep. Again, partnering with what we have in cardiometabolic offering tying that into sleep gets us into a different category.
Strategically we also went after some different accounts. So we went at certain accounts that were a certain size tight.
Where they operate a certain way manufacturing production et cetera. So we tried to really make sure that our product digital health being kind of how we engage people remotely would fit with people and how they are segments, where their employer segments were et cetera. So one was really a detailed approach about the clients. We are targeting two was the partners that we brought on our product.
Speaker #6: Doesn't increase our R&D expenditures and allows us to go to market with a new offering. Again, product-market fit, finding ways to reduce cost of care for payers, specifically in a sleep category.
Speaker #6: We're looking at the same thing with one-step recently announced around false prevention, Medicare Advantage, one-step, so again, we're trying to think differently about how our product and how the market and either through partners or our core bread and butter product really goes towards certain segments.
And three is how we actually went to market to win.
Okay and then.
I'm talking about federal and state interest in.
Antero health.
Is that as a customer is that.
Speaker #6: Strategically, we also went after some different accounts. So we went at certain accounts that were a certain size, type, where they operate a certain way, manufacturing, production, etc.
Does that present, some more unique challenges compared to your successes here in the commercial side.
Yeah, not necessarily if you if you the details the details of the what the government is actually released.
Speaker #6: So we tried to really make sure that our product digital health being kind of how we engage people remotely would fit with people and how their segments were, their employer segments were, etc.
Fits with what we're doing so one of the things actually I didn't cover. Your first question was how we went to market with really a value based light offering.
Speaker #6: So one was really a detailed approach about the clients we were targeting. Two was the partners that we brought onto our product. And three is how we actually went to market to
We have a milestone based payment now model that we went out regarding clinical milestones being met in order for us to get paid and that really kind of proves that we're getting after clinical metrics clinical data claims data to kind of get paid with the clients. So it's a better ROI model, that's more appealing to government sponsored plans, which also fits well with Medicaid.
Speaker #6: win. Okay.
Speaker #3: And then talking about federal and state Health, is that as a interests in Dario customer, is that does that present some more unique challenges compared to your successes here in the commercial
Medicare plans et cetera, and for us doesn't necessarily present, a challenge as long as they can get out of each other's way inappropriate budgets effectively we feel pretty good with where we sit right now with a couple of initiatives that went out maternal health initiatives.
Speaker #6: Yeah. Not necessarily.
Speaker #6: If you know the side? details, the details of what the government is actually released fits with what we're doing. So one of the things actually I didn't cover in your first question was how we went to market with really a value-based light offering.
Some rural health initiatives as well so there's some things that occurred that allow us to kind of get back out into the market differently. We worked with those offices on those proposals. So now we're just really waiting on how the government is going to fund them from the federal down into the states and I think that youre going to see some health care funding I think once they get out of their own way, obviously health care is a.
Speaker #6: We have a milestone-based payment now model that we went out regarding clinical milestones being met in order for us to get paid. And that really kind of proves that we're getting after clinical metrics, clinical data, claims data to kind of get paid with the client.
Speaker #6: So it's a better ROI model. That's more appealing to government-sponsored plans, which also fits well with Medicaid, Medicare plans, etc. And for us, doesn't necessarily present a challenge as long as they can get out of each other's way in appropriate budgets effectively.
A hot topic right now on no matter, which side of the house you're on no pun intended and I think that for at the end of the day, we will have some offerings that we're a good product fit for them.
Not really <unk> in terms of their budget offering just more around how we can meet the needs of our members in those states specifically.
Speaker #6: We feel pretty good with where we sit right now with a couple of initiatives that went out, maternal health initiatives, some rural health initiatives as well.
Okay. Thanks very much.
You bet.
Okay.
Speaker #6: So there's some things that occurred that allow us to kind of get back out into the market differently. We worked with those offices on those proposals.
You have a question from David Grossman from Stifel. Your line is open.
Speaker #6: So now we're just really waiting on how the government's going to fund them from the federal down into the states. And I think that you're going to see some healthcare funding.
Hi, guys. This is a non for David are you able to hear me.
Yes, yes, we can hear you.
Speaker #6: I think once they get out of their own way, obviously healthcare is a hot topic right now on no matter which side of the house you're on.
Sorry about that had some technical difficulties, but I wanted to ask on the new client wins.
Speaker #6: No pun intended. And I think that at the end of the day, we'll have some offerings that were a good product fit for them not really kludgy in terms of their budget offering, just more around how we can meet the needs of members in those states
45 already for the year exceeding the target.
Has anything changed in your approach for go to market and and what's resonating with these new clients.
Speaker #6: specifically. Okay.
Yes, I mean, our first biggest thing that I noted on the scripts in an obviously important for the market to notice we doubled down with some of our key channel partners.
Speaker #3: Thanks very
Speaker #3: much. You
Speaker #1: We have a question You bet. from David Grossman from Stifel. Your line is open.
And our channel partners were.
Really delivered in terms of the market that we're going after the accounts, we are going after et cetera. So one would be our channel partners were a big difference than what we had from wins of last year at the same time.
Speaker #7: AidanHunt for David. Are you able to hear Hi, guys. This is me?
Speaker #7: Yes, we can hear you. Yes.
Speaker #6: Okay. Great. Sorry about that. Had some technical difficulties. But I wanted to ask on the new client wins 45 already for the year exceeding the target.
Two is our fit with them I mean, I know theres, a product market fit to the clients, but theres also one with our distribution partners as well and that also has went well from how we're contracted with them to creating win win agreements to making sure that we meet the needs on how they're reporting how we engage et cetera. So one big one would be our distribution channel partners for sure and then I'd say.
Speaker #6: Has anything changed in your approach for go-to-market and what's resonating with these new clients? Yeah. I mean, our first biggest thing that I noted on the script and obviously important for the market to note is we doubled down with some of our key channel partners.
Secondarily, just how we targeted.
We were we are targeting without getting into the specific strategy and the detail. The strategy. I mean, we were going out at a certain way, we kind of pivoted to make sure that we could win a differentiated way again I don't want to get into all the details of that competitively, but I would say that we really thought about it differently approached it differently in one and our channel partners are a big part of that.
Speaker #6: And our channel partners were really delivered in terms of the market that we were going after, the accounts we were going after, etc. So one would be our channel partners were a big difference than what we had from wins of last year at the same time.
Speaker #6: Two is our fit with them. I mean, I know there's a product-market fit to the clients, but there's also one with our distribution partners as well.
However, we had some other partnerships as well that work channel specific that were just kind of at the table. Our consultant relationships that came through a couple of new ones that have been really favorable for us as well and I'd say also a couple of different segments that we dipped into.
Speaker #6: And that also has went well from how we're contracted with them, to creating win-win agreements, to making sure that we meet the needs on how they're reporting, how we engage, etc.
Speaker #6: So one big one would be our distribution channel partners for sure. And then I'd say secondarily just how we targeted. We were our targeting without getting into the specific strategy and the detail of the strategy.
We were dipping into the Tpa segment for the first time in a while we now have a PVM relationship for the first time. So we have some other different market segments that arent channel partners that are good partners to grow the business with and we're seeing some uptick in those as well.
Speaker #6: I mean, we were going at it a certain way. We kind of pivoted to make sure that we could win a differentiated way. Again, I don't want to get into all the details of that competitively but I would say that we really thought about it differently, approached it differently and won.
Okay.
Great. Thanks for that and then just a follow up on the 45 new clients.
It said that 50% are taking multi condition offerings I think last quarter that number was around 80%. So is that just client mix anything changed there with with clients taking less of a multi condition approach.
Speaker #6: And our channel partners were a big part of that. However, we had some other partnerships as well that weren't channel-specific, that were just kind of at the table.
Speaker #6: Our consultant relationships have developed through a couple of new ones that have been really favorable for us as well. I'd say also that we dipped into a couple of different segments.
I mean, most of that was driven specifically off of our channel partners. Some of our channel partners have more then you don't have one condition right now they gave us a chance to have one condition in the market not necessarily too we've proven out that we can win now with them and so they're giving us a chance to have more products through their channel partnership and so some of that.
Speaker #6: We were dipping into the TPA segment for the first time in a while. We now have a PBM relationship for the first time. So we have some other different market segments that aren't channel partners but are good partners to go to business with.
Speaker #6: And we're seeing some uptake in those as well.
Speaker #7: Great. Thanks for that. And then just to follow up on the 45 new clients, you guys had said that 50% are taking multi-conditional offerings.
Channel partners were multi condition a couple of the larger ones that drove care through their channel partnership only had one condition. So the uptake just watered down our 80 to 50, but.
Speaker #7: I think last quarter that number was around 80%. So is that just client mix? Anything changed there with clients taking less of a multi-condition
Candidly I think if we get.
Get in the in these clients and see what we can do to grow them and up sell them and cross sell them into what we have I feel pretty confident about that so I know that it come down in terms of 50, I'd say 50 is a multi condition platform is still pretty substantial again, our value proposition is really relevant here I'd be remiss not to cover it which is no matter what condition.
Speaker #7: approach? No.
Speaker #6: I mean, most of that was driven specifically off of our channel partners. Some of our channel partners have more than have one condition right now.
Speaker #6: They gave us a chance to have one condition in the market, not necessarily two. We've proven that we can win now with them.
Speaker #6: And so they're giving us a chance to have more products through their channel partnership. And so some of their channel partners were multi-condition. A couple of the larger ones that drove care through their channel partnership only had one condition.
You're engaged into in our platform. It's the same price. So the investment of the ROI return on investment the investment side for clients is the same and that gives us a chance to go to market and win differently and so we've been able to capture that and really stand out in the market and our product market fit and wins, so while that's come down in terms of <unk>.
Speaker #6: So the uptake just watered down our 80 to 50. But candidly, I think if we get in with these clients and see what we can do to grow them and upsell them and cross-sell them into what we have, I feel pretty confident about that.
More than one we're still really happy that we have 50 plus or more.
Finally, our Greenville.
Speaker #6: So I know that it comes down in terms of 50. I'd say 50 is a multi-condition platform, which is still pretty substantial. Again, our value proposition is really relevant here.
Good morning.
Just just one reminder, when we reported last time I think that we will end point of 325 accounts.
Speaker #6: I'd be remiss not to cover it, which is no matter what condition you're engaged into in our platform, it's the same price. So the investment of the ROI, return on investment, the investment side for clients is the same.
So the sand, but it was relatively low and now we are looking into 45 and M 45, and the number of announced percentage wise is 50%.
So I think that given where the market is and one of the market is growing 50% clients that are signing for market condition shows.
Speaker #6: And that gives us a chance to go to market and win differently. And so we've been able to capture that and really spend that in the market and our product-market fit and win.
Very good.
Consistent trend that the market is consolidating for sure.
Speaker #6: So while that's come down in terms of more than one, we're still really happy that we have 50-plus or more. Thank
Great. Thanks, guys.
You bet.
Speaker #7: Just one point, though.
Speaker #6: you.
Speaker #7: Yeah. Just one reminder, when we reported last time, I think that we were in 23 or 25 accounts. So the sample was relatively low.
There are no questions. At this time. This concludes today's conference call. You may disconnect. Your lines. Thank you for participating and have a wonderful day.
Speaker #7: And now we are looking into 45. And in 45, the number now, percentage-wise, is 50%. So I think that given where the market is and where the market is going, 50% clients that are signing for multi-condition shows a very consistent trend that the market is consolidating for
Speaker #7: sure.
Speaker #6: Great. Thanks,
Speaker #7: You guys.
Speaker #7: You bet. Is there no