The second quarter of 2018 was a strong one for the rapidly expanding DarioHealth. Touting 70 percent year-over-year revenue growth and a continued decline in its cash burn rate, CEO Erez Raphael credited his company’s increasing fortune to recent US regulatory approvals and product launches as well as the company’s wider focus on an integrated consumer experience.
“Overall, we made an improvement in several financial barometers,” Raphael said during a call with investors. “Further than that, when we are looking [at] what drives the numbers, there are specific changes in the offering moving us forward into sales that are more reliant on services and not just devices and disposables.”
DarioHealth’s record revenue of $2.06 million represented a sequential quarterly growth of 17 percent, and helped push a 45 percent increase in year-over-year gross profit to $522,000. The company’s operating loss also jumped from $4.1 million in Q2 2017 to $5.7 million in the most recent quarter, an increase which the company attributed to a $1.78 million expense following a grant of shares to its employees and board members. Of note, the company stemmed its cash burn 27 percent from Q1 2018, and now sits with $5 million in cash and cash equivalents.
The Israeli company’s growth comes as the result of a number of recent developments, Raphael went on to explain to investors. For one, it was able to begin US rollout of a recently approved update to its Blood Glucose Monitoring System that is compatible with the Lightning port featured on iPhone 7, 8, and X. Previously, DarioHealth’s flagship device relied on a 3.5mm headphone jack, meaning that an estimated 44 percent of the US iPhone market was inaccessible.
Outside of devices, the company also focused on its accompanying services such as its updated app and Dario Engage, an offering launched in the US this quarter that allows diabetes health providers easily monitor collect relevant data from the product. In addition, Rapheal highlighted the favorable results of three studies that the company presented at the American Diabetes Association’s recent annual conference that he said supports the company’s offerings.
“We were showing that our platform is not just scalable; it also improves clinical outcomes. We were submitting data for more than 17,000 users who were on the platform for more than a year,” he said. “One of the strengths of this platform is that the [hardware and services] together are synchronized in a way that users are feeling an integrated user experience. And when we are looking at our competitors, we see a lot of competitors that are either building the application, or building the cloud, or building the medical devices. We don’t see too many competitors that have one integrated solution between the service to the software, to the device, to the application.”
Overall, the company’s revenue came from sales in Australia, Germany, the UK, Italy, and the US, with more than 13,000 products shipped to the latter alone. Looking forward, Raphael said that DarioHealth is on pace with a previous forecast of 60 percent to 80 percent annual growth, and that he was confident in the company’s focus on digital health markets.
“Today, I’m convinced more than ever that we are moving in the right direction,” he said.