DarioHealth Corp.

And welcome to the Dario Health Second Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chuck Pallada.

Please go ahead.

Thank you, Operator, and good morning, everybody. Thank you for joining us today for a discussion of Dario Health's second quarter 2023 financial results. Meeting the call today will be Arez Rafael, CEO of Dario Health. He'll be joined by Rick Anderson, President. After the prepared remarks, we will open the call for Q&A. An audio recording and webcast replay for today's call will be available online as detailed in the press release invite for this call. For the benefit of those who may be listening to the replay or archived webcast, this call is being held on August 10, 2023. This morning, we issued a press release announcing our financial results for the second quarter of 2023. A copy of the release can be found on the investor relations page of Dario Health's website, The actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, or the competitive nature of Dario Health'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. Forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factors section and elsewhere in the company's second quarter 2023 quarterly report on Form 10Q filed this morning. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's press release issued this morning and 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. 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. Reconciliation of these non-GAAP measures to the most comparable gap measures is included in the morning's press release. With that, I'd like to introduce Arez Rafael, Chief Executive Officer at Dario Health. Arez?

Thank you, Chuck, and thanks to all of you for joining our call this morning. Q2 financial results continue to demonstrate the advancement of our multi-year strategy. Our financial profile continues to evolve toward a multi-tenant software-as-a-service technology solution for healthcare industry. I'm not aware of any other digital health platform that has gained our level of consumer traction proven and backed by real-world data evidence, especially studies that are done by third parties, such as the studies Sanofi has conducted on Dario's outcome. We continue to see the alignment of the strategy with our financial results and the market trend. While we are a bit lagging on the top-line scale, we are still confident that the model, and the market fit is totally there. Let's examine. First, on our transformation from direct-to-consumer to B2B. We generated sequential B2B2C ARR growth for the 10th consecutive quarter. We are showing that the fundamentals of the B2B business and selling into the self-insured employer and health plan market have a positive impact on demonstrating Dario as a true software-as-a-service type digital health business with high gross margins and stable year-over-year recurring revenues. A combination of significant reduction in the cost of member acquisition, the ability to scale and more revenue per member per month on the platform is already shown in the results. In terms of penetration strategy, we believe we are on the right path to accelerate our velocity as we put a lot of focus on the partnerships that we have executed in the last few quarters, including significant and meaningful relationships with partners such as Solera, who we just announced allowed regional blues plan, Virgin Pulse, Alliant, American Well, Sanofi, and Aetna. While it is still early, we have already seen new customer pull through from our strategic partnerships, including most recently MedOne for Sanofi and our regional Blues plan for Solera. We also see top relationships getting stronger. On Sanofi, I would like to disclose here that two weeks ago we signed an enhancement to the original agreement that we signed 14 months ago with main objective of strengthening the strategic alignment between the companies and accelerating funds to speed up features of our joint development program and revenue share. We also see significant financial and people resources dedicated to Dario by Sanofi in marketing the solution and conducting and disseminating the recent clinical studies. On Aetna, despite a delay in the launch of the platform, we believe that the partnership is only getting stronger. And the size of the opportunity is getting larger than what we originally anticipated. M-Well, that was announced Q2, represents a huge opportunity with 90 million people having access to the platform into which our solution is integrated. Both companies' teams are already engaged in selling the Dario solution to the customers with concrete health plans opportunities. Pivoting now to the product market fit with unique, integrated, consumer-first, multi-chronic condition platform that is clinically validated with the real-world data evidence. The strategy is not only aligned with, but ahead of the macro-digital health market trends of consolidation of conditions under one platform with consumer-first approach and third-party real-world studies validating clinical and cost-reduction outcomes. In fact, our current model for transforming healthcare into more consumer-centric whole-person care approach is better suited to the current macrofinancial environment that is looking for real proven cost-saving solutions to costly chronic conditions. We have seen and will continue to see attempts in the market to build and launch digital therapeutic solutions that have run into market penetration and macroeconomic challenges. We believe that the true consumer first approach with real world evidence is the only way to successfully penetrate the market. Given the capital, the time, the sustained effort it took to build our consumer first proven solution, we believe we have created a real differentiator and a real boat that has a unique market fit. We have proven again and again that the platform is performing in a real world with real users and real world evidence as opposed to a pre-designed, controlled clinical study environment that traditional healthcare companies, including digital therapeutics companies, have used. The two real-world, highly rigorous studies that Sanofi recently presented demonstrated that Dario's solution has statistically significant and highly relevant improvement in clinical outcomes and reduction in cost. We are very excited about the studies and what they represent, not only for Dario,

but to the whole digital health industry. Let's take a deep dive into the financial results.

Q2 shows continued improvement of the company financial profile. Our results continue to demonstrate that our model is working even though we need to continue to scale up our revenues. Let's start by looking into the revenues and its components. As we pre-announced, revenues for the second quarter were $6.15 million compared to $6.18 million in the second quarter of 2022. This flat growth is resulted from timing of anticipated strategic revenue resulting from delay with one of the strategic partners. Our partnership strategy continue to mature and yield significant opportunities for long-term growth. Our recurring B2B2C revenue has now increased for 10 consecutive quarters in a row, which we believe speaks to the value that members place on our highly engaging digital health offerings. We believe we will see revenues acceleration as we continue to get the signed accounts launched. Another important metric is growth margin. Here we continue to show that we develop a true software-driven business with SAS-oriented characteristics. The former gross margin was 51.5% for the second quarter of 2023, up from 36.1% of revenues in the second quarter of 2022, which primarily resulted from shifts in revenues from B2C to B2B. As mentioned in the last few calls, we are targeting an average gross margin of 70% by 2024. Looking at the operating loss, we are seeing an operating leverage on the infrastructure that we have built in real economic advantage of multi-condition approach. Further reduced non-GAAP operating loss excluding stock-based compensation, amortization of acquisition, related expenses, and depreciation for the second quarter of 2023 to $7.5 million compared to $11.1 million for the second quarter of 2022, and $6.3 million in the third quarter of 2023. Looking into the balance sheet, we are also having a strong cash position of $52.6 million for wide runway through 2025. With that, I want to hand over the call to Rick to elaborate on the commercial status. Rick?

Thanks, Aris. Our revenue comes from two segments.

B2C and B2B. Within the B2B segment, we have two components. First, annual recurring revenue from self-insured employers and health plans, or ARR. And second, revenue from our large strategic partners. In the second quarter, our B2B revenue represented approximately 63% of our total revenue. This mix reflects our strategic move to the B2B market and, as Eris pointed out, resulted in the higher gross margins in the quarter versus the same quarter last year. The decrease in revenue in the second quarter was due to a reduction in our strategic partner revenue, which is milestone driven. We expected to recognize revenue from work with Sanofi that was delayed due to internal organizational shifts by Sanofi that were unrelated to Dario. I want to be clear that none of this has impacted our partnership or agreement with Sanofi. In fact, the amended agreement referenced by Erez further aligns the two companies' interests and provides mechanisms for accelerating some of the contemplated collaboration. Sanofi continues to invest in sales, marketing, and studies in support of the Dario solution. We believe that the disruption from these internal changes is now largely behind us. On schedule, we delivered the private labeled behavioral health platform to Aetna and recognized strategic revenue based on this milestone in the second quarter. This is new digital platform that they are selling through to their self-insured customers. We had anticipated that they would begin enrolling members to the platform in the third quarter. However, due to a change in strategy by Aetna, we now anticipate that they will not begin enrolling members on the platform until the first quarter of 2024. With the change in strategy, the platform is moving to the behavioral health population, which actually increases the total opportunity to approximately 30 million lives from the current 10 million lives. We continue to anticipate that the rollout will happen over several quarters once launched, and we have better visibility on platform additions in 2024 than we previously did. We maintain a strong relationship with Aetna. and believe we may have additional strategic and other opportunities with them in the second half of 2023 and beyond. In the second quarter, we continue to maintain B2C revenues at levels consistent with the last two quarters, which allows us to maintain a self-funded innovation platform. For example, the last year's Sanofi development work was launched into this market for users' response and testing prior to launching it into the B2B market. In the second quarter, we saw our 10th quarter of sequential B2B2C revenue growth, and we launched MedOne, our first customer obtained through our Santa Fe collaboration. In July, we launched a large regional Blues plan with approximately 3 million members, which is our first health plan through our partner, Solera. As we discussed on our first quarter call, this health plan saw several delays as Celera and the health plan finalized their agreement and launch plan. These delays are especially frustrating because we have a limited ability to impact them. We are, however, pleased that the plan is launched in the timeframe that we communicated on the first quarter call. Excitingly, almost concurrent with the launch of this health plan, we expanded our contract to include diabetes, further validating the value of our multi-condition strategy. We expect that this regional blues plan and Med One will both ramp up over the next several quarters, adding to our ARR growth in the back half of 2023 and into 2024. As we have discussed, partners are a major part of our strategy in both the self-insured employer and health plan markets. In addition to what we have announced, we continue to see traction in the pipelines of our partners, including Amwell, which we recently signed. Amwell, Solera, Sanofi, Vitality, Alliant, and Virgin Pulse all have significant installed customer bases that are pre-integrated and require little customer lift to access Dario. We believe that this is especially attractive to customers in this macroeconomic environment where there is an increasing focus on the cost of evaluating and managing vendors such as Dario. We remain especially excited about our Amwell relationship where we are the only cardiometabolic solution integrated into their platform. With an installed base of approximately 2,000 customers, including 55 health plans, we believe this represents an extremely large opportunity. Their health plan customers include several Blues plans, including the largest Blues plan in the country. They are actively selling to their customer base, and we anticipate we may see customers through this partnership as early as the fourth quarter of this year or early 2024. In addition, we believe there is the potential to see additional health plans through Solera and our other partners late this year. We added a handful of contracts in the second quarter, most of which will contribute to revenue beginning in the fourth quarter of 2023. We remain in the normal annual sales cycle for self-insured employers, the majority of which are on a January to December benefit cycle, with most employer contracts signed in the late third and fourth quarters. Based on our current pipeline, we anticipate announcing a larger number of contracts towards the end of this year and realizing significant growth in our B2B2C ARR revenue starting in 2024 from new customers. In the current macroeconomic environment and with the healthcare cost trends at levels not seen in many years, customers are showing increasing focus on cost and ROI. We believe we are well positioned to benefit from this trend given the depth of our data and pricing. Sanofi recently presented their second study that demonstrated a statistically significant clinical improvement in Dario users as compared to a matched control group and released additional data from this healthcare utilization study that they presented in the first quarter. This additional cost data showed that Dario's users' costs were reduced by approximately $5,000 more per year than a matched group that did not use Dario. Given that the full suite solution costs less than $1,100 a year, you can see the significant potential ROI. It is important to note that these studies were conducted independently of Dario, which is unusual for digital health companies, and they are some of the most rigorous studies that have been conducted in the space. This high level of rigor is another differentiating factor for the Dario platform that we believe will have the most value in the health plan market as the demand for high-quality studies continues to increase. As we look towards the rest of 2023, we expect the B2B2C revenue to grow throughout the rest of the year, although at a slower rate than originally anticipated with the Aetna platform enrollment pushed back to the beginning of 2024. We expect that the B2C revenue will remain relatively constant with past levels. With the Aetna platform delivered and due to the delays with Sanofi, we expect to continue to see volatility in our strategic milestone driven revenue through the end of this year. We do believe that our multi-condition strategy, partner focus, and demonstrated ability to turn contracts into revenue have positioned us to experience significant growth throughout 2024. a few things to consider. We have created a growing base of B2B2C revenue that will carry into 2024 with strong retention. As noted above, we are seeing expansion opportunities in both the self-insured employer and the health plan segments of our business. Expansions of additional population and customers expanding the number of conditions are both happening. We expect the Aetna platform to launch in the first quarter of 2024. We have a growing pipeline of additional B2B2C self-insured employers we anticipate adding in Q1 of 2024 based on our current sales efforts. We also have a significant pipeline of health plans with the potential to contribute to revenue late this year and in 2024. And finally, we have established several quality partnerships, and those partners are starting to generate Dario customers from their growing pipeline that we anticipate will contribute significantly to revenue in 2024. With that, I would like to turn it back over to Aaron.

Thank you, Rick. Despite slower than anticipated loans by Aetna, in the big picture, we believe we have all components and we are showing all the evidence to be successful and show significant growth in 2024. We also believe that we have evidence that the core B2B2C model is working as we generated a sequential B2B2C analyzed recurring revenue growth for the 10 consecutive quarters. We have created a growing base of B2B2C revenue that we carry into 2024 with strong retention. We see existing clients, mainly health plans, expanding platforms to larger population and or adopting additional chronic conditions. We are growing pipelines for both health plans and employers through 2024. Our relationship with top players like Sanofi and Aetna are getting stronger. In the last two weeks, we enhanced the existing agreement with Sanofi to reflect tighter alignment of the strategy between the two companies. We also believe that relationship with Sanofi will expand in the future and should be beyond the $30 million contract that we already signed. We believe we have unique opportunity as well as the product market fit with real competitive modes and real-world third-party validated scientific evidence, the Sanofi studies demonstrate real win-win through improved member health and lower cost for payers in exceptionally rigorous real-world studies, the holy grail of digital health and healthcare in general. We are seeing a trend of big traditional healthcare players, including large pharma such as Sanofi, and other big medical devices companies looking to tap into the digital health space by partnering with companies like Dario so they can too be part of the footprint in healthcare transformation. We expect to make more large and strategic partnerships. Based on the foundation we have built, we believe we are positioned to accelerate our multi-year strategy to drive revenue and profitability substantially higher with our partners, houseplants, and employers.

With that, I want to hand the call over to the operator for a Q&A session.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question and answer session. You may press Start 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the Start key. One moment, please, while we pull for questions.

And our first question comes from

Raul Raqui with Lifetime Capital. Please go ahead.

Hey, guys. Thanks for taking the question. I was just wondering if you could help kind of quantify, you know, the potential impact on top line from the expanded partnership with the large regional health plan. I mean, I guess how should we think about where the potential revenue opportunity was and what it could be now?

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Raul Ragny, please proceed with your question, please.

Sure. I was just wondering if you could help us understand the increase in potential revenue from the large regional health plan, now that you guys are expanding beyond hypertension.

So you're talking about the expansion of the membership beyond the 3 million, well, it's 3 million members and you're talking about the expansion of going from hypertension to hypertension and diabetes? Yes. So it's probably, I mean, it's the same population that we're talking about, but it probably will increase the revenue opportunity by about 20%, give or take a bit.

Got it. Okay.

Diabetes is obviously the smallest prevalence of the conditions that we're covering. It's usually about 8% of a commercial population versus hypertension is going to be in the 30, 35%. Got it.

Okay. That makes sense. I appreciate that color. Maybe could you also provide just some detail on the process that led to plant's decision to expand the partnership? I mean, how actively were you guys pursuing expansion or, you know, did it kind of come organically? And I guess, you know, On that end, how should we think about potential for expansion for other existing plans as we look to the back end of the year?

I think expansion takes, like, generally two forms, let's say. So, you know, one of those is expanding conditions like we saw with that health plan. The other is expanding, you know, especially in a health plan from one population to another. So we have active opportunities in our pipeline right now for existing customers expanding in both ways. you know, both population, you know, lines of business. So, you know, where we may be in Medicaid, thinking about commercial or Medicare populations with plans, things of that nature. So we're having conversations like that ongoing. Obviously, we're pursuing them. Frankly, though, this one, we were a little bit surprised by the timing. You know, we're always having conversations. And I think really What this one shows is the value of the multi-condition platform because this was an opportunity where the customer said, look, you know, we like what we're doing. Even though we haven't launched yet, you know, we like what we're doing with you guys as it relates to hypertension. We want to expand that, and we like the fact we can expand it on the same platform. So, you know, I think that's, you know, what you're seeing is that ability to access a broader population through having a multi-condition strategy.

Got it. Okay, that's helpful. I appreciate the insight there. And then, Erez, just kind of wondering, as we think about the back half of the year, should we expect any more changes to OPEX?

Yes. So we will keep optimizing our OPEX, and, you know, our objective is to build viable business and digital health that is getting to cash flow-positive levels around $80 million in revenue. So we keep consolidate activities. We did some more offshoring. And we believe that in the second half of the year, we're going to see another 3% to 5% reduction in the overall OPEX. And overall 2024, despite revenue growth, we're going to see an OPEX that is probably lower by five to seven percent to what we see in the overall 2023 um so it's it's multiple activities that we are running in between some of showing activities optimization of the acquisitions that we did in 2021 and consolidation of activities and also post few years that we invested into integrating the platform and now we have multiple health plans that are in production and to rick's point We have those that are already in production seeing the results and opening the platform and asking to open the platform for additional population. We believe that we can optimize our investment, so we see overall OPEX that is declining a bit. Not something that is too big, but there is some kind of decline.

Got it. Yeah, no, great to see the improvements based off of those activities.

Thanks for taking the questions, guys. Thank you.

Our next question comes from Charles Ray with TD Call-In. Please go ahead.

Hi, this is Lucas on for Charles. I wanted to ask about the Aetna partnership. I understand that you guys now are going to have a 1-1 start in 2024 and that you're now selling into a larger population compared to the original EAP population of 10 million. In your press release, you guys noted that it could present a larger revenue opportunity, obviously selling into a larger population. Is there anything else that we should think about in terms of selling into the behavioral health side of this, of Aetna, compared to the EAP population that would also kind of warrant higher revenue opportunity? And then also, are there any differences in terms of how this will be sold within Aetna, other than obviously being a different side of the business?

Yeah, and so they're related sides of the business, but they're different populations and they're sold differently. Behavioral health can sell independently, but they also sell a lot alongside their medical benefit counterparts. So, you know, that is one difference. There's a different group of people essentially in the way it gets packaged is a bit different. And, you know, just for clarity, they're selling this solution through to their customers. This isn't, you know, because they've purchased the platform, which is their new behavioral health platform, their digital platform that they're selling through to their end customers. So it's their sales force that is selling it. It's going to be a different sales force that's doing it. It's already in process. So we, as I noted during the call, we have a little bit more visibility than we had previously in terms of what the status of that is. But, you know, they're selling it to bigger opportunities in a bigger context, I guess is what I would say, as it relates to it. But the primary, you know, increase in opportunity is due just largely due to the different size of the population that they currently have. Okay, cool.

And then thinking about the employer market, looking over the past few announcements you guys have made, most of your recent wins have been with health plans. Can you give us an update on what you're seeing in the employer market? Have you gotten any sense that there's any pressure on employers currently? Do you think you could see that turn around? Yeah.

So, I mean, I think that we're definitely seeing – so I guess this is what I would say is the economy is not the same for all companies. So we're seeing a lot of differences between organizations that are still struggling for talent versus those that are – you know, maybe under more pressure based on results, et cetera, in this current economic environment, and they are responding differently. The other big trend that we're seeing or starting to see in the market is medical renewals, meaning what customers are paying for their cost of delivering, you know, basic medical care. The trend rates are much higher than they've been in a decade. And so that's impacting people as they try and, you know, find ways to reduce that. I mean, some people are talking about trend rates that are as high as 20%, you know, which is extremely high in context. And, you know, I think that's impacting some people's decisions and pushing some things back in the year. That's what we hear from the benefit consultants continuously. All of that said, I mean, we continue to get traction in terms of, you know, selling into the market. I mean, some of that has to do with the fact that Dario is a newer player relatively. So, you know, our increases are, you know, maybe differential to what the overall market experience is if you're looking at that through that lens. But I think the other thing that's really important that that drives is we're seeing more and more focus on, you know, less vendors and more conditions per vendor, trying to reduce their cost of administering these kinds of plans, as well as looking for solutions that lower their overall costs. And, you know, this is where we lean into the snow fee studies where, you know, I believe the snow fee studies will be most valuable in the health plan market, but they definitely are validating. I mean, these are third-party studies, which are almost unheard of. And, you know, the results from very rigorous studies are showing that we're getting significant cost reductions. And that's the kinds of things that, you know, self-insured employers are looking at in this kind of environment as well. So I think we've got a very strong ROI story as it relates to that. And I think we're benefiting from the trends, you know, in the marketplace as it relates to that. And I think, by the way, that we will continue to benefit from that as we go into next year.

Okay, great. And then my last question is around artificial intelligence. At a recent conference, you guys noted that you have been utilizing Gen AI for some elements in the business around personalization and making recommendations to members on the platform. Could you give us more details on how you've seen users take to this sort of capability and feature? And then is it something that has become an attractive feature for health plans and employers in general? I guess I'd be curious to hear what sort of success you've had in terms of driving business through these features, if that's a factor or not.

Yes, absolutely. So I think that one of the unique parts about Dario is the fact that we are consumer first. So the idea of collecting data and learning from data how people behave This is one of the biggest differentiator that we have. So we hear all the noise in the market around, positive noise in the market around AI. From our perspective, this is something that we are doing for years and collecting a lot of data. And based on the data, we learn about the behavior of the users. And then we are reinforcing this learning into a better engagement. So I think that the best way to think about it and to understand whether we are achieving a goal or not is by looking into real world studies, data that we have, and the two Sanofi studies showing that we have the ability to engage with users and to save money. I think that with AI and generative AI, our ability to iterate and keep improving because every month the platform is becoming better and better because the platform is learning better and better. And today there are tools in the market and capabilities and data that we have that can make our iterative process toward improvement much faster than what we used to see like four or five years ago. So I think that when we think about digital health, And we think about how companies can create platforms, sometimes of being asked by investors, hey, why not this company and the other company can create this platform overnight by investing $200 million? I think that the big point here is time and data. And the time that we are operating as a consumer-centric solution and the data that we collected is something that eventually helps us iterate faster and get better results because we have a lot of data. Specifically for health plans and employers, they're getting the benefit of the AI by having users that are more engaged and improving outcomes. And the bottom line is the studies that we were presenting with Sanofi that shows that it's performing. And for us, it's a big, big, big differentiator that helps us sell into these two channels.

Thanks. That's really helpful. I'll jump back in queue.

Thank you, Lucas.

Our next question comes from Ben Hanger with LS Global Partners. Please go ahead.

Good morning, guys. Thanks for taking the questions. I just wanted to hit on a couple items. On the recurring B2B C revenue, you know, obviously congrats on 10 consecutive quarters of growth there, but can you give us a sense of, you know, what that sequential growth looks like in the quarter? I mean, is it You know, is it 5%? Is it 50%? What kind of growth did you have there?

Yes, overall, if you look on the overall revenues that we have, the total B2B is around 63% from the total revenues. And the breakdown between strategic to the membership, I don't want to call it ARR, and I will explain in a second why. But if you are looking into pure membership, it's around 50-50 out of the B2B. This is the ballpark number. When we think about the strategic, just to reemphasize in the strategic, some of it is also considered an ARR. because as part of the strategic, we are getting paid for data and things that are also recurring. They are milestone-driven in terms of revenue recognition, but on a yearly basis, it's also recurring. So I just want to make sure that investors, when they think about gross margins and recurring revenue, we are counting both the members that are on the platform as ARR, but also the portion of the strategic, which is data related, it is also recurring. And I think that this is very important because eventually the objective is to create a business that is very SaaS-oriented model with very high gross margins. an ARR of existing business that is rolling year over year of at least 80% of today's revenue should roll into next year because of user retention and because of the ability to generate revenue also from the data, or in other words, data monetization.

Okay, so basically data plus revenue You know, continuing retained customers make up the recurring B2B to C on the B2B side, if I'm hearing you right. Yes. Got it.

And just to be accurate, in these results you have seen around, I think that the number is 63%. B2B and the rest is B2C. And inside the B2B, you have around 50% of it is membership. And then on top of that, you have additional that is data and so on. So I would consider like 75% of what you see as part of the B2B is kind of recurring that you can count on rolling into next year. Okay. Okay.

That's helpful. Yeah.

Okay, so, but do you have a sense of, you know, what sort of growth there was there? I mean, I would imagine sequentially, I mean, I imagine, you know, it's probably more on the order of, you know, 10% than 30%, just with the, you know, doing the math.

It's in the ranges of more than 10% and 30% overall year over year. We're somewhere around between 70% to 100% growth at the moment for the pure ARR.

Okay. One thing to keep in mind about growth of this sort is it's not linear because of the fact that you have – it's impacted significantly by when we add new customers on the platform and a few quarters after that. So if you think about health plans – can happen throughout the year, but, you know, they tend to be large, so they can impact that growth rate. And also, because most employers come on the platform in the first quarter, that impacts it earlier in the year, right? So, you have, you'll tend to have higher growth rates, you know, if you exclude the health plans for a moment, you'd have higher growth rates at the beginning of the year. Those growth rates would slow down in the back half of the year before you added the new customers in the first quarter. what impacts that is like when we bring on a health plan like we did this quarter that obviously um you know accelerates the growth in those in those periods so it's not you shouldn't think about it as being linear yeah this is kind of more stair step yes got it okay makes sense and then on the b2c you know you've been talking a while

about that kind of being at a constant level, but it actually has ticked up a little bit the past couple quarters. Why is that? Is that, you know, more people finding you and getting on the B2C platform? Is it taking a little bit of price? What goes into that?

You know, largely, there's a couple things that go into it. You know, some of it is – going to be, you know, cyclical in terms of, you know, what quarter that you're in because the way that people tend to spend on those types of devices. It's also we've seen a reduction in the acquisition costs. So, as we balance what we're doing and, you know, depending on what the demand is in the market conditions, As it relates to, you know, digital advertising for that kind of revenue, we may, you know, put some more additional money behind that if we think we can generate, you know, additional profit. But it's what you're seeing is really just what I would call like kind of between the hedges optimization.

Okay.

Got it.

Excellent. Well, that's all I had, guys. Thanks for taking the questions. Thank you. Thank you so much, Ben.

Excuse me, ladies and gentlemen. If you would like to pose a question, please press star one.

There are no further questions at this time.

I would like to turn the floor back over to Aris Raphael for closing comments. Please go ahead.

Thank you so much. I'd like to thank all of you for joining our call this morning and looking forward to keep following the story.

Thank you.

This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation and have a good day.