Dariohealth Corp. · NASDAQ:DRIO
Dariohealth — Investor Day (October 2023)
65 slides from Dariohealth's investor day presentation, Oct 17, 2023
Slide 1: Investors Day DarioHealth Corp.
Investors Day DarioHealth Corp. Nasdaq | DRIO | October 17th, 2023
Slide 2: Forward-looking statement
01 This presentation of DarioHealth Corp. (“Dario”, the “Company”, “we” and “our”) and statements of our management or agents related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements which are
Slide 3: About Dario Digital Health Solutions
About Dario Digital Health Solutions
Slide 4: Agenda
DRIO | Nasdaq listed Agenda 01 The Acceleration of Digital Health 02 Clinical Excellence – Sanofi Studies 03 Client Story – Colorado Access 04 Technology 05 Go-to-Market Strategy 06 Clients and Partners 07 Financials & Long-Term View 08 Q&A
Slide 5: Dario – building product for consumers powered by data
DRIO | Nasdaq listed | Best User Experience Member Engagement RWD Publication Improve Patients Outcomes CONSUMERS DATA Pharma B2C B2B2C Channels Dario – building product for consumers powered by data Online marketing MSK, diabetes and hypertension Recurring Monthly Revenue Development services and c
Slide 6: DarioHealth investment thesis
DRIO | Nasdaq listed | DarioHealth investment thesis Above 10 world-class clients & partners Aetna, Sanofi, Blues Plan, and others Expected greater than 70% growth on the core business with expanding margins expected over the next 3 years. 70% Gross margins Strong balance sheet $52.6M* in cash Opera
Slide 7: The Acceleration of Digital Health
The Acceleration of Digital Health Arnaud Robert, Strategic Advisor
Slide 8: My background
DRIO | Nasdaq listed | My background
Slide 9: Healthcare must shift to a value for money paradigm
DRIO | Nasdaq listed | 1 Healthcare must shift to a "value for money" paradigm Source: Trilliant Health report 2023
Slide 10: Digital health directly supports healthcare's trends
DRIO | Nasdaq listed | Consumer centricity Tech, Data & AI Value-based care 2 Digital health directly supports healthcare's trends ... with some challenges still Awareness & Fragmentation (Consumers must manage complexity) (Consumers engage less) Clunky experiences (Payers don’t buy) Unclear outcome
Slide 11: Digital health funding and M&A are showing signs of rebounding
DRIO | Nasdaq listed | Sources: State of Digital Health Q2’23 Report, CBInsights H1 2023 digital health funding: A Brave New (lower funding) World, Rock Health Avg deal size = $185M ($188M in 2021) 3 Digital health funding and M&A are showing signs of rebounding The valuations and funding amounts li
Slide 12: Strategic partnerships advantage: $30M Sanofi agreement
DRIO | Nasdaq listed | Strategic partnerships advantage: $30M Multi-year, $30 million agreement, will help accelerate the commercial adoption of Dario's full suite of digital therapeutics and drive the expansion of digital health solutions on the Dario platform. Sanofi selected Dario to leverage its
Slide 13: Clinical Excellence – Sanofi Studies
Clinical Excellence – Sanofi Studies Felix Lee, U.S. Digital Healthcare Medical Head, Sanofi U.S
Slide 14: Significant value of Dario solutions
DRIO | Nasdaq listed | Well-controlled; -13% poorly controlled2 +9% Reduction in overall medical use, including 36% reduction in 30- day readmission rate3 9% Medical cost savings for Dario users4 compared to non-Dario users per year $5,077 Significant value of Dario solutions Improvement in glucose
Slide 15: Client Success Story Colorado Access
Client Success Story Colorado Access
Slide 16: Client Testimonial: Colorado Access
DRIO | Nasdaq listed | Client Testimonial: Colorado Access
Slide 17: Product Innovation
Product Innovation Eitan Shay, Chief Product Officer
Slide 18: Product
DRIO | Nasdaq listed | Product Whole person care We offer true multi-condition integrated solution. Consumer obsessed The only company with deep roots in the direct-to-consumer space. AI: Personalized, Data-Driven Millions of Data Points: the key to unparalleled member engagement & clinical success.
Slide 19: Dario's Digital Health Solutions
DRIO | Nasdaq listed | Dario’s Digital Health Solutions
Slide 20: Consumer obsessed
DRIO | Nasdaq listed | Consumer obsessed rating on the Apple app store 4.9/5 reviews 20K+ NPS 77
Slide 21: We have cracked the engagement problem
DRIO | Nasdaq listed | We have cracked the "engagement problem" ~5 minutes per month >2 hours per month 24X higher* Standard of care Dario * Based on internal Company engagement data of Dario users
Slide 22: Whole person care
DRIO | Nasdaq listed | Whole person care of people with diabetes also have high blood pressure 69% U.S. adults live with two or more chronic conditions 40% is the average of managed chronic conditions on the Dario platform. 2.4 Plus: We are relevant to more people. American adults (more than 1 in 3)
Slide 23: Whole person care
DRIO | Nasdaq listed | Whole person care Interdisciplinary team Consistent coaching experience One consolidated experience
Slide 24: Personalization
DRIO | Nasdaq listed | Personalization
Slide 25: Dynamic personalization for each individual
DRIO | Nasdaq listed | Dynamic personalization for each individual AI insights continuously applied to six domains of personalization, engaging members throughout their journey Dario’s adaptive approach flexes to members’ changing needs and circumstances, supporting them through challenges and helpi
Slide 26: Personalization and data-driven results
DRIO | Nasdaq listed | Personalization and data-driven in blood glucose levels after engagement with “Healthy Moments” 13% reduction of coach interaction significantly moderated the reduction in depression symptoms 1-6 weeks of breathing exercises significantly moderated the reduction in anxiety sym
Slide 27: GLP-1 behavior change program
DRIO | Nasdaq listed | • Onboarding with a clinical coach sets members up for success. • Dedicated specialty health coaches support members on their health journey. • Tailored weight loss program to help members achieve weight loss goals and develop healthy habits. GLP-1 behavior change program Achi
Slide 28: Dario Member Testimonials
DRIO | Nasdaq listed | Dario Member Testimonials
Slide 29: Go-to-Market Strategy
Go-to-Market Strategy Rick Anderson, President
Slide 30: $171B opportunity in the U.S. alone
DRIO | Nasdaq listed | $171B opportunity in the U.S. alone of which less than 2% is already penetrated. TAM – exceptional and untapped 22.8M Comorbidities - People with Diabetes and Hypertension 34.2M Diabetes 51M Behavioral health Comorbidities: 22.8M People with Diabetes and Hypertension 126.6M Mu
Slide 31: Health and well-being are more critical to employer strategy
DRIO | Nasdaq listed | Market demand Health and well-being are more critical to employer strategy than ever The Role of Health and Well-being in Workforce Strategy, 2019-2023 2019 2020 2021 2022 2023 3% 6% 13% 6% 15% 36% 45% 42% 65% 66% 36% 49% 45% 32% 28% Our health and well-being strategy is an in
Slide 32: Top conditions driving cost according to employers
DRIO | Nasdaq listed | Source: 2024 Large Employer Healthcare Strategy Survey, Business Group On Health Top conditions driving cost according to employers
Slide 33: Choosing between digital health solution vendors
DRIO | Nasdaq listed | Choosing between digital health solution vendors What factors do you take into consideration, when deciding between digital health solution vendors? Select all that apply. 0% 10% 20% 30% 40% 50% 60% Employee Satisfaction Health Related Outcomes Integration with other digital h
Slide 34: Employers prefer to manage fewer digital tools
DRIO | Nasdaq listed | Employers Prefer to Manage Fewer Digital Tools of benefits leaders want to manage 5 or less digital tools 95% 46% Three to five 4% 1% Six to nine Ten or more 49% One or two Source: The State of Digital Health, Employee Benefit News, 2023.
Slide 35: Dario is well positioned to win
DRIO | Nasdaq listed | Dario is well positioned to win Provider-led Consumer-led No. of conditions 1 5
Slide 36: Business model
Business model Monthly recurring driven Membership-driven business model Channels Employer Direct to employer Consultants/Brokers Through health plans Through PBMs Through partners Behavioral health and mid-market multi-condition customers Paid per every member that has access to the platform. Price
Slide 37: Dario's multi-condition compounding economics
DRIO | Nasdaq listed | Dario’s multi-condition compounding economics 75% Retention rate Example: Employer with 10,000 employees: 1,400 employees enrolled, $900K in yearly revenue (post churn) 30% Enrollment Rate Employer Client $89 Per Engaged Member Per Month (Full suite) Up to 40% eligible More Me
Slide 38: High customer satisfaction enables rapid growth
DRIO | Nasdaq listed | High customer satisfaction enables rapid growth Revenue growth – customer satisfaction Customer Satisfaction Rating 89% Reference Customers 5 10 15 20 2021 25 2022 2023 Based on surveys conducted by the Company with its customers on a quarterly basis
Slide 39: Enabling a larger customer profile
Enabling a larger customer profile Average employees Current 2024 Average number of conditions 0.5 1 1.5 2 3 Current Customer Base 2024 2.5 2,000 11,000 2024 employees and conditions numbers are estimated according to signed contracts that will be activated in 2024
Slide 40: Clients and Partners
Clients and Partners Matt Alberico, SVP Growth
Slide 41: High customer satisfaction with rapid growth
DRIO | Nasdaq listed | High customer satisfaction with rapid growth Revenue growth through three dimensions B 2 B 2 C Existing Contract Engagement Land & Expand New Contracts Customers adding new conditions and additional eligible populations Continuous improvement in engagement strategies and consu
Slide 42: Customer example – Financial Services Industry
DRIO | Nasdaq listed | Customer example – Financial Services Industry Legacy The client utilized Livongo and Omada to address multiple chronic conditions before selecting Dario. The client chose Dario to integrate multiple conditions under one vendor. Dario was initially launched on a 6-month basis
Slide 43: Mature Partners Select Dario to Accelerate Digitalization
DRIO | Nasdaq listed | Mature Partners Select Dario to Accelerate Digitalization Strategic approach to partnership accelerates commercial adoption and enhances competitiveness
Slide 44: Dario targets partners that accelerate sales cycle
DRIO | Nasdaq listed | Dario targets partners that accelerate sales cycle and give access to large scalable TAM A closer look at our largest partnerships Gaining 1% market share is ~$17M in ARR Amwell Aetna Plansource Solera Alliant Vitality Member lives: 87 Million Members* Amwell Aetna Plansource
Slide 45: Rapidly growing pipeline through partners
DRIO | Nasdaq listed | Rapidly growing pipeline through partners Near term growth Amwell, Solera, and Aetna customers use existing contracts to shorten sales cycle with access to: 14M members with access to: 20M+ members January 2024 Launch available to: 21M commercial and BH members with access to:
Slide 46: Financials Long Term View
Financials Long Term View Erez Raphael, CEO
Slide 47: Financial profile improvement – revenue streams
Financial profile improvement – revenue streams Pharma B2B2C Channels B2C Best User Experience Member Engagement RWD Publication Improve Patients Outcomes PATIENTS DATA Commercial - Strategic Special Projects with Pharma or other strategic clients (e.g. Sanofi & Aetna) B2C / Consumer Online marketin
Slide 48: Financial profile improvement – revenue breakdown
DRIO | Nasdaq listed | Financial profile improvement – revenue breakdown Q1/22 Q2/22 Q3/22 Consumer B2B2C – Employers / Health Plans B2B – Strategic/Data Q4/22 $2M $8M $5M B2C - Consumer Revenues per channel - Q • $8M - Annual run rate • Generating cash Commercial – B2B2C • Recurring revenues at an
Slide 49: Growth potential – employers, health plans, and strategic
DRIO | Nasdaq listed | Growth potential – employers, health plans, and strategic Retain Users Ramp Up Signed Contracts Land & expand Partnership Access – New contracts 2021 $0.8M 2022 $3.6M H1/23 $2.6M Early stage Growth stage B 2 B 2C – ARR B2B2C: Employers, Health plans B2B: Strategic / Data Acces
Slide 50: Financial profile improvement – Gross Profit (GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Gross Profit (GAAP) 33.2% 19.3% 34.9% 39.7% 2020 2021 2022 H1/2023
Slide 51: Financial profile improvement – Gross Margins (Non-GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Gross Margins (Non-GAAP) Gross Margins Trend (Non-GAAP) Continuous improvement of gross margins due to larger B2B2C business. B2B2C business already achieved 70% gross margins Business expected to reach 70% gross margin at scale 2020 35% 2021 40
Slide 52: Financial profile improvement – Operating expenses (GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Operating expenses (GAAP) $80.5M $66.5M $31.7M 2021 2022 H1/2023
Slide 53: Financial profile improvement – Operating expenses (Non-GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Operating expenses (Non-GAAP) $50M 2022 H1/2023 $21.4M 2021 $55M Continuous Reduction in OPEX trending also into 2024 Reasons for reduction: • B2C ramp down • M&A consolidation • Scale, Automation, offshore Reconciliation between operating expen
Slide 54: Financial profile improvement – Operating Loss (GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Operating Loss (GAAP) 2021 2022 H1/2023 -$76.5M -$56.8M -$26.4M
Slide 55: Financial profile improvement – Operating Loss (Non-GAAP)
DRIO | Nasdaq listed | Financial profile improvement – Operating Loss (Non-GAAP) Reduction in operating loss due to improvement in all parameters: • Commercial revenues, OPEX, Gross margins • Reduction trend is expected into 2024 Operating Loss (Non-GAAP) 2021 2022 H1/2023 -$35.5M -$46.7M -$13.9M Re
Slide 56: DarioHealth fly wheel
DRIO | Nasdaq listed | Best User Experience Member Engagement RWD Publication Improve Patients Outcomes PATIENTS DATA Pharma B2C B2B2C Channels DarioHealth fly wheel Target - to keep at $8M-$9M per year and cash flow positive 80%-140% - annual growth target Long term target – 30% in revenue on top o
Slide 57: Q&A
| Q&A
Slide 58: Thank You!
Thank You!
Slide 59: Appendix
DRIO | Nasdaq listed | Appendix
Slide 60: Experienced Executive Management Team
Zvi Ben-David CFO Rick Anderson President Omar Manejwala, M.D. Chief Medical Officer Katy Guilfoile VP Client Success Josh Fischer SVP Operations and Compliance Matt Alberico SVP Growth Mary Mooney VP Marketing Eitan Shay Chief Product Officer Experienced Executive Management Team Erez Raphael CEO,
Slide 61: Board of Directors and Advisors
Yoav Shaked Chairman of the Board Allen Kamer Advisory Board Dennis Matheis Board Member Eric Milledge Chairman of the Scientific Advisory Board Board of Directors and Advisors Dennis M. McGrath Chair of Audit - Board Member Adam Stern Board Member Hila Karah Board Member Arnaud Robert Strategic Adv
Slide 62: Non-GAAP Financial Measures
DRIO | Nasdaq listed | Non-GAAP Financial Measures We have provided in this presentation financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are not based on any standardized methodology prescribed by
Slide 63: Reconciliation between Gross Profit and Gross Margin
DRIO | Nasdaq listed | Reconciliation between Gross Profit and Gross Margin In USD 000 Six months ended 2020 2021 2022 June 30. 2023 Revenues: Services $2,085 $17,859 $9,406 Hardware and consumable products $18,428 $9,797 $3,812 Total revenues $7,576 $20,513 $27,656 $13,218 Cost of revenues: Service
Slide 64: Reconciliation between Operating Expenses and Operating Expenses (non-GAAP)
DRIO | Nasdaq listed | Reconciliation between Operating Expenses and Operating Expenses (non-GAAP) In USD 000 Six months ended 2021 2022 June 30. 2023 Operating expenses: Research and development $17,219 $19,649 $10,387 Sales and marketing $39,706 $30,323 $12,800 General and administrative $23,532 $
Slide 65: Reconciliation between Operating Loss and Operating Loss (non-GAAP)
DRIO | Nasdaq listed | Reconciliation between Operating Loss and Operating Loss (non-GAAP) In USD 000 Six months ended 2021 2022 June 30. 2023 Operating loss $76,494 $56,810 $26,428 Less Gross profit adjustments: Amortization of acquired intangible assets $4,106 $4,357 $2,175 Depreciation and Stock-