DarioHealth (NASDAQ:DRIO) executives highlighted record commercial momentum and continued cost reductions on the company’s fourth-quarter and year-end 2025 earnings call, while also addressing the revenue impact of a single legacy customer non-renewal and outlining expectations for accelerating growth through 2026.
Record new agreements, but full-year revenue declined
Chief Executive Officer Erez Raphael said 2025 was the company’s “strongest year on record for new business wins,” with 85 new agreements signed versus a target of 40. He added that average contract sizes were “2–10 times larger” than the company’s historical average and pointed to wins with Florida Blue, UnitedHealthcare, and Premera Blue Cross.
Franco-Yehuda reported fourth-quarter 2025 revenue of $5.2 million and said the quarter marked a return to sequential revenue growth. Raphael added that, on a year-over-year basis, the core B2B2C business delivered organic revenue growth excluding the headwind from the legacy client loss.
Pipeline expansion and expectations for 2026 cadence
Raphael said the company’s 2025 sales season generated $12.9 million in “contracted and late stage ARR” expected to contribute to revenue in 2026 and 2027. He also said the commercial pipeline expanded to $122 million, which management positioned as supporting near-term visibility and longer-term growth.
During Q&A, Raphael said the company was seeing growth from the fourth quarter into the first quarter of 2026, with some implementations already underway, and reiterated expectations that growth would “accelerate in the second half of the year.” He also said that while the company is not providing formal guidance, management felt comfortable with the revenue forecasts reflected in the analyst consensus at the time of the call and is planning operations accordingly.
Asked about the large jump in the pipeline figure versus the prior quarter, President and Chief Commercial Officer Steven Nelson said the company is now presenting a combined view that includes both the 2026 and 2027 planning cycles, whereas the prior period emphasized the in-year view for 2026.
Distribution partnerships and covered lives reach
Nelson emphasized a shift toward “one-to-many distribution channels,” including payer ecosystems and curated digital health networks, which he said can expand reach without proportional growth in commercial infrastructure. He said DarioHealth now has access to more than 116 million covered lives through its distribution ecosystem.
He cited continued activity and expansion across several partnerships:
- Aetna and Centene: The company is finalizing a 3-year contract extension with Aetna and a 4-year extension with Centene, which Nelson said reinforces the long-term value seen by those partners.
- Florida Blue (via Amwell): Florida Blue selected Dario as part of its digital health ecosystem; the program is in migration and implementation, with revenue expected to begin contributing in the second half of 2026 as enrollment ramps and broader expansion anticipated into the 2027 plan year.
- HCSC (via Solera Health): Solera Health announced HCSC will launch new digital health capabilities through its network beginning January 2027, and Dario has been selected as a preferred in-network partner supporting that rollout.
- Another Blue Cross Blue Shield plan (via Amwell): Nelson said Amwell is preparing to launch an additional Blue Cross Blue Shield relationship in July 2026 and that Dario has already been selected as a preferred partner, with details to come closer to launch.
Nelson also said the company was in the “final stages of contracting” with another distribution partner and expects the relationship could lead to what would be the “largest fully insured client in Dario’s history.”
In response to questions about how the Solera/HCSC opportunity works, Nelson described Dario’s status as an “in-network” preferred partner within Solera’s ecosystem. He said self-insured employers still make benefit decisions, while fully insured decisions depend on health plan structures, adding that even partial penetration of very large covered-life populations could be meaningful for a company of Dario’s size.
Multi-condition platform, AI positioning, and market consolidation
Raphael and Nelson argued that demand is shifting away from “point solutions” toward integrated, multi-condition platforms. Raphael said nearly 80% of the commercial pipeline now involves multi-condition deployments, with a common request being diabetes, hypertension, and mental health through a single platform.
Raphael also highlighted the company’s vertically integrated approach and its AI-driven engine, DarioIQ, which he said is trained on more than 13 billion real-world data points. He attributed Dario’s positioning to proprietary clinical data, clinical credibility supported by “100-plus peer-reviewed studies,” and integration with employers and the healthcare ecosystem.
Margins, expense reductions, cash, and breakeven targets
Franco-Yehuda said GAAP gross margin expanded to 57% in 2025 from 49% in 2024, “primarily reflecting the reduction in the technology amortization expenses.” She added that the company’s core B2B2C ARR business has sustained approximately 80% non-GAAP gross margin for two years, which management views as representative of underlying unit economics.
On operating expenses, she said full-year 2025 total operating expense declined 31% to $49.3 million, while full-year non-GAAP operating expenses fell 26% to $38.6 million. In the fourth quarter, GAAP operating expenses declined 28% to $11.4 million and non-GAAP operating expenses declined 28% to $9.0 million.
Management reported operating loss improvement of $21.0 million, or 37%, on a GAAP basis, and $9.6 million, or 29%, on a non-GAAP basis for the year. The company ended 2025 with $26.0 million in cash and short-term deposits. Net cash used in operating activities declined 33% to $25.9 million, which Franco-Yehuda attributed to margin expansion, AI utilization, and cost discipline.
Looking ahead, management said it expects to narrow non-GAAP operating loss by approximately 30% in 2026 and is targeting cash flow breakeven by mid-2027. In Q&A, Raphael said reaching cash flow positive would be driven “80%” by top-line growth and “20%” by continued operating expense optimization, adding that AI and “agentic AI” could contribute to additional cost reductions. He also said management believes the business becomes cash flow positive in the range of $38 million to $42 million in revenue.
Raphael also reminded listeners that the company engaged Perella Weinberg Partners and formed a special committee in September 2025 after receiving multiple unsolicited inbound expressions of interest, and that the committee continues to evaluate strategic alternatives including a sale, merger, strategic business combination, or continuation of the standalone strategy. He said the process remains active and the company will provide updates when there is a material development.
About DarioHealth (NASDAQ:DRIO)
DarioHealth (NASDAQ:DRIO) is a digital health company specializing in chronic disease management through a smartphone-based care platform. Its core solution combines connected devices—such as glucose meters, blood pressure monitors and smart scales—with real-time data analytics and personalized coaching. The platform is designed to support individuals living with diabetes, hypertension, weight management challenges and other cardiometabolic conditions, offering continuous monitoring, tailored insights and behavioral nudges aimed at improving clinical outcomes.
The Dario platform integrates artificial intelligence and machine learning to deliver personalized guidance and education.
