DarioHealth Corp.

Good morning, ladies and gentlemen, and welcome to the Dario Health first quarter 2025 results conference call. At this time, all lines are in need and only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 14th, 2025. I would now like to turn the conference over to Kat Perala, Investor Relations Manager at Dario. Kat, please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining us today for a discussion of Dario Health's first quarter 2025 financial results. Leading the call today will be Erez Rafael, Chief Executive Officer of Dario Health. He'll be joined by Lara Dodo, our Acting Chief Operating Officer. Lara's remarks have been prepared by our Chief Commercial Officer, Stephen Nelson, who is unable to attend today due to an injury requiring medical attention. Fortunately, he's expected to recover quickly and we're grateful to Lara for joining us today on his behalf. 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 the benefit of those who may be listening to the replay or archived webcast, this call is being held on Wednesday, May 14th, 2025. This morning, we issued a press release announcing our financial results for the first quarter of 2025. A copy of the release can be found on the investor relations page of Dario Health's website. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, or the competitive nature of Dario 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. The forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factors section and elsewhere in the company's first quarter 2025 quarterly report on Form 10-K. 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. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in this morning's press release. With that, I'll hand it over to Erez Rafael, CEO of Dario Health.

Good morning, everyone, and thanks for joining our call today. Over the past few years, Dario Health has undergone a transformational shift. evolving into a leading healthcare technology company operating under a SAS-like model. This evolution has solidified Dario's position as a premier platform in the B2B2C market, expanding sales to employers, health plans, and strategic partners while continuously enhancing our technology, product offering, and AI-powered capabilities. In the first quarter of 2025, we signed 14 new clients. We achieved 17.5% non-GAAP gross margins and maintained over 81% gross margins in our core B2B2C business. Our operating expenses declined 35% year-over-year, demonstrating our continued progress toward a linear, more scalable model. The acquisition And the seamless integration of Twill, Dario's most significant to date, has strengthened our leadership in the industry, creating one of the most comprehensive clinically integrated digital health platforms. Now supporting five chronic conditions under a single unified brand, we are uniquely positioned to meet the growing demand for consumer-centric full-person care in increasingly value-driven healthcare environments. We are focused on execution, turning this vision into measurable results. In Q1, we continue to build momentum across client acquisition, operational efficiency, platform integration, and strategic realignment. I would like to elaborate on the broader market context for person multi-condition leadership. The market continues to shift assistively cured whole person digital health and platform consolidation. Employers and health plans are moving away from styled point solutions and looking for trusted partners that can deliver multi-condition care at scale with proven outcomes, seamless integrations, and measurable ROI. Dario is positioned ahead of this shift. With the integration of TWIL, we now offer one of the most comprehensive and clinically integrated product portfolios in the industry, enabling a unified platform that supports metabolic, behavioral, and musculoskeletal health. Our AI-powered platform now manages five different chronic conditions under a single brand, making Zario a true leader in the multi-condition whole-person care. The brief is more than just clinical. It's commercial. It allows us to engage multiple populations, expand within accounts, and deliver value across diverse benefit structures and risk-sharing models. And we are not doing it alone. Our strategic partnership with leading virtual providers like RULA in behavioral health and Medi-OBIS in GLP-1 prescribing and chronic care allows us to deliver deeper, more personalized care while enabling scalability and cost effectiveness.