BOSTON, Aug. 11, 2016 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), developer of the Dario Blood Glucose Monitoring System, today reported financial and operational results for the three and six month period ended June 30, 2016.
Second Quarter 2016 Highlights
- Record high revenues of $669,000 in the second quarter.
- Successful U.S. direct-to-consumer launch with 4,900 registered users and 2,300 monthly active users at June 30, 2016
- Company rebrands as DarioHealth to reflect expansion of comprehensive digital health and lifestyle offering
- Cash balance of $6.4 million as of June 30, 2016
- Subsequent to quarter end, secured first U.S. distribution partnership with GEMCO Medical
- Subsequent to quarter end, launched direct-to-consumer model in Australia
"During the second quarter, we materially advanced the launch of Dario in the United States, with a direct-to-consumer model and delivered significant monthly user growth which will position us to increase sales and recurring subscription revenues beginning in the second half of 2016," said Erez Raphael, DarioHealth's Chief Executive Officer. "We are encouraged by the preliminary traction we have made in the U.S. following our soft launch in March. Device sales ramped nicely during the second quarter, and particularly in June when we sold more than 3,000 devices representing 200% growth over the soft launch period. We expect to generate additional market penetration moving forward and this progress has validated our near-term confidence in the U.S. market as a growth driver for DarioHealth."
"Users have been receptive to our digital marketing strategy, and we are reaching consumers in an efficient manner, acquiring users on a ROI positive basis and have seen strong preliminary results converting users into subscribers," Mr. Raphael continued. "Growing our customer base is an important step towards bringing positive changes to people with diabetes, and bringing more attention to our innovative and user centric approach which is disrupting the digital, mHealth and lifestyle market."
Mr. Raphael concluded, "Looking forward we are working to build momentum in the U.S. and around the world. We believe we have the right product and the right strategy to succeed in these efforts and look forward to the opportunities ahead of us. We expect sales in the second half of 2016 to accelerate as a result of increased recurring subscription revenues. The predictable nature of these subscription revenues will also provide us greater visibility into 2017 and serve as the foundation for our long-term growth."
Subsequent to the end of the second quarter, in July, DarioHealth signed an agreement with GEMCO Medical, an established healthcare distributor and a pioneer in the diabetes supply industry, to become the first authorized U.S. distributor of Dario. This partnership will complement the company's direct-to-consumer model to further expand and strengthen its presence in the United States.
Also in July, DarioHealth began offering the Dario Blood Glucose Monitoring System through the direct to the consumer model also in Australia, via its local sponsor IBD Consulting. The company is offering consumers the ability to purchase the Dario All-in-One meter directly online at the website: http://mydario.net.au. In Australia the device can be used either on iPhone and / or common Android devices and the free App also supports special features such as estimated HbA1C levels which the company believes may enable diabetes management in more proactive way and enable faster and wider penetration in this $200M market.
Financial Results:
Second Quarter Results
For the second quarter ended June 30, 2016, revenues were $669,000, a 282% increase from $175,000 for the quarter ended June 30, 2015 and an 18% increase when compared to $568,000 in the first quarter of 2016. Revenues for the second quarter of 2016 includes product sales to distributors in the United Kingdom, Italy, Australia and Canada and the first full quarter of direct-to-consumer sales in the United States, as well as services provided with respect to DarioHealth's patient management software platform.
GAAP gross margin loss improved by $78,000 to a loss of $157,000 in the second quarter 2016, as compared to a $235,000 gross margin loss in the second quarter of 2015. The reasons behind the negative gross margin are the level of sales and the fact that the Company is initially selling the Dario device at a slight loss to gain market penetration to be able to sell its high-margin recurring revenue strips.
Operating loss for the second quarter ended June 30, 2016 increased by $1.1 million to $2.6 million, as compared to a $1.5 million operating loss in the second quarter ended June 30, 2015. The reason behind the increase is mainly due to commencement of our sales and marketing efforts in the United States.
GAAP net loss attributable to holders of common stock increased by $561,000 to $2.7 million in the second quarter of 2016, as compared to $2.2 million in the second quarter of 2015.
As of June 30, 2016 cash and cash equivalents totaled $6.4 million, compared to $2.7 million at the end of 2015 and $8.3 million at March 31, 2016
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