Israel-based DarioHealth, which makes a smartphone-connected blood glucose monitor, has made significant headway in the US, Australian and Canadian markets, seling 5,500 devices in the US this quarter and 8,500 worldwide.
The company launched in the US in March, and quickly built up a customer base with more than 100 percent increase in growth by the second quarter. Coasting on that wave of new customers, increased profit and subscriptions, DarioHealth launched its DTC offerings in Australia in Canada in the third quarter.
“During the third quarter, we continued to advance our direct-to-consumer strategy in the US, increased device sales, delivered significant monthly user growth and established a predictable stream of high margin recurring subscriptions from new customers,” DarioHealth CEO Erez Raphael said in a statement.
DarioHealth’s revenues reached $728,000, up 166 percent since last year’s third quarter, and the company saw a gross profit of $76,000. Around 70 percent of test strip sales were sold under a subscription plan, which DarioHealth has focused on getting more of its users on.
The company’s strategy in Australia marked a change in business model. DarioHealth expanded its DTC strategy via its local sponsor, IBD consulting, which resulted in “minimal revenue contribution from Australia during the third quarter,” the company said.
In addition to building out their Australia channel and opening an online store in Canada, DarioHealth also included sales from the UK, Italy, Canada, New Zealand and Israel in the third quarter. As of the end of the quarter, cash and cash equivalents totaled $3.3 million, up from $2.7 million at the end of 2015.
Now, the company is focused on increasing recurring subscriptions.
"Our active community of users and subscribers is growing every day which is bringing positive changes to people with diabetes, and disrupting the digital, mHealth and lifestyle market," Raphael said in a statement. "We have the right product and the right strategy to succeed in these efforts and look forward to the opportunities ahead of us. The predictable nature of these subscription revenues will provide us greater visibility in 2017 and serve as the foundation for our long-term growth."
While sales, subscriptions and users were higher, so too were DarioHealth’s operating losses. In the third quarter alone, it increased by $174,00, bringing the total operating loss to date at $2.7 million and nudging the company past 2015’s loss of $2.5 million