DarioHealth Corp. (DRIO) Bundle
Understanding DarioHealth Corp. (DRIO) Revenue Streams
Understanding DarioHealth Corp.’s Revenue Streams
The total revenues for DarioHealth Corp. for the three and nine months ended September 30, 2024, amounted to $7,423,000 and $19,436,000, respectively. This represents an increase from $3,518,000 and $16,736,000 during the same periods in 2023, indicating a year-over-year growth rate of 111% for the three months and 16.1% for the nine months.
Revenue Breakdown by Source
The revenue sources for the company can be categorized into several segments. The following table summarizes the revenues by source for the three and nine months ended September 30, 2024, and 2023:
| Revenue Source | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Commercial - B2B2C | $5,435,000 | $1,284,000 | $14,448,000 | $3,877,000 |
| Commercial - Strategic Partnerships | $0 | $209,000 | ($599,000) | $6,481,000 |
| Consumers | $1,988,000 | $2,025,000 | $5,587,000 | $6,378,000 |
| Total Revenues | $7,423,000 | $3,518,000 | $19,436,000 | $16,736,000 |
Contribution of Different Business Segments to Overall Revenue
The significant increase in revenues can be attributed primarily to the growth in the commercial channel, particularly from the B2B2C model. The acquisition of Twill Inc. in early 2024 has also contributed to the revenue stream, with pro forma revenues for the nine months ended September 30, 2024, estimated at $21,399,000 if the acquisition had been completed at the start of the year.
Year-over-Year Revenue Growth Rate
Analyzing the year-over-year growth, the company has shown a strong upward trend in revenue. The increase from $3,518,000 in Q3 2023 to $7,423,000 in Q3 2024 demonstrates a robust growth trajectory. For the nine-month period, revenues rose from $16,736,000 in 2023 to $19,436,000 in 2024.
Significant Changes in Revenue Streams
One of the most critical changes in the revenue streams is the consolidation of Twill Inc.’s revenues into DarioHealth Corp.'s financials. This acquisition is expected to enhance revenue capabilities and broaden the service offerings, particularly in the digital health space.
Overall, the company has made substantial strides in diversifying its revenue streams and enhancing its market position through strategic acquisitions and partnerships.
A Deep Dive into DarioHealth Corp. (DRIO) Profitability
A Deep Dive into DarioHealth Corp.'s Profitability
Gross Profit Margin:
For the three months ended September 30, 2024, the gross profit amounted to $3,877, representing 52.2% of revenues. In comparison, for the same period in 2023, the gross profit was $610, or 17.3% of revenues. For the nine months ended September 30, 2024, the gross profit was $9,065 (46.6% of revenues), up from $5,852 (35% of revenues) for the same period in 2023.
Operating Profit Margin:
The operating loss for the three months ended September 30, 2024, was $12,030, compared to $15,546 for the same period in 2023. For the nine months ended September 30, 2024, the operating loss was $46,076, which is higher than $41,974 for the same period in 2023. This indicates a trend of improving operational efficiency despite ongoing losses.
Net Profit Margin:
The net loss for the three months ended September 30, 2024, was $12,330, a decrease from $15,732 in the same timeframe in 2023. For the nine months ended September 30, 2024, the net loss was $33,115, down from $45,142 for the same period in 2023.
Profitability Trends Over Time:
The following table summarizes the profitability metrics over the past two years:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit | $3,877 (52.2%) | $610 (17.3%) | $9,065 (46.6%) | $5,852 (35%) |
| Operating Loss | ($12,030) | ($15,546) | ($46,076) | ($41,974) |
| Net Loss | ($12,330) | ($15,732) | ($33,115) | ($45,142) |
Comparison with Industry Averages:
As of 2024, the average gross profit margin in the healthcare technology sector is around 60%, while the average operating margin is approximately 10%. DarioHealth Corp. is currently underperforming in gross profit margin but is showing improvements in operating and net losses.
Operational Efficiency Analysis:
For the three months ended September 30, 2024, total operating expenses were $15,907, slightly down from $16,156 in the same period in 2023. This includes:
- Research and Development: $5,446
- Sales and Marketing: $6,733
- General and Administrative: $3,728
The decrease in operating expenses suggests improved cost management, which is crucial for enhancing profitability.
Debt vs. Equity: How DarioHealth Corp. (DRIO) Finances Its Growth
Debt vs. Equity: How DarioHealth Corp. Finances Its Growth
As of September 30, 2024, DarioHealth Corp. reported total liabilities of approximately $25.6 million. This includes both long-term and short-term debt. The breakdown of debt shows long-term debt at $10.0 million and short-term debt at $15.6 million.
The company's debt-to-equity ratio stands at 0.44, which is below the industry average of approximately 0.5. This indicates a relatively conservative approach to leveraging debt for growth compared to its peers in the healthcare technology sector.
In terms of recent debt issuances, DarioHealth entered into securities purchase agreements in May 2023, raising approximately $15.4 million through the sale of Series B Preferred Stock. Furthermore, the company has a credit facility totaling $25.6 million. As of September 30, 2024, the company had a cash balance of approximately $15.5 million.
To assess the company's balance between debt financing and equity funding, DarioHealth has primarily financed its operations through private placements and public offerings, with aggregate net proceeds totaling $264.6 million since inception. The company’s strategy involves utilizing a mix of equity and debt to optimize its capital structure while minimizing financial risk.
| Financial Metric | Amount (in millions) |
|---|---|
| Total Liabilities | $25.6 |
| Long-term Debt | $10.0 |
| Short-term Debt | $15.6 |
| Debt-to-Equity Ratio | 0.44 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
| Cash Balance | $15.5 |
| Aggregate Net Proceeds from Offerings | $264.6 |
Assessing DarioHealth Corp. (DRIO) Liquidity
Assessing DarioHealth Corp's Liquidity
Current and Quick Ratios
The current ratio for DarioHealth Corp. as of September 30, 2024, stands at 1.29, indicating that the company has sufficient current assets to cover its current liabilities. The quick ratio, which excludes inventory from current assets, is 1.15, suggesting that the company can meet its short-term obligations without relying on the sale of inventory.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital is approximately $8,891 (current assets of $24,001 minus current liabilities of $15,110). This marks an increase from prior periods, reflecting improved operational efficiency and liquidity management.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, reveals the following trends:
| Cash Flow Type | Amount (in thousands) |
|---|---|
| Cash used in operating activities | $(31,830) |
| Cash used in investing activities | $(8,913) |
| Cash provided by financing activities | $20,206 |
| Net cash flow | $(20,537) |
In the nine months ended September 30, 2024, cash used in operating activities increased by 38.2%, primarily due to heightened operational expenses. The cash used in investing activities reflects the acquisition of Twill, resulting in a significant outflow of $8,796. Conversely, financing activities generated $20,206, attributed to preferred stock issuances.
Potential Liquidity Concerns or Strengths
DarioHealth Corp. has demonstrated a significant decline in cash reserves, with cash and cash equivalents dropping to $15,547 as of September 30, 2024, compared to $36,797 at the end of 2023. This decline raises potential liquidity concerns as the company continues to post cumulative losses of $378,082 since inception, emphasizing the need for ongoing capital raises to sustain operations.
Is DarioHealth Corp. (DRIO) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company's financial performance indicators reveal a complex valuation landscape. Below are key ratios and metrics that aid in assessing whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The P/E ratio is not directly applicable due to the company’s net losses. For the nine months ended September 30, 2024, the net loss was $33,115,000.
Price-to-Book (P/B) Ratio
The book value per share can be derived from the total stockholders' equity, which stood at $58,511,000 as of September 30, 2024. With approximately 31,323,906 shares outstanding, the book value per share is approximately $1.87.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
For the nine months ended September 30, 2024, the EBITDA was reported as ($40,784,000). Given that EBITDA is negative, calculating an EV/EBITDA ratio is not meaningful at this time.
Stock Price Trends
Over the last 12 months, the stock price has shown significant fluctuations. The stock closed at approximately $0.75 on September 30, 2024, compared to a high of about $3.50 earlier in the year.
Dividend Yield and Payout Ratios
The company does not currently pay dividends, and thus the dividend yield is 0%.
Analyst Consensus
According to recent analyst reports, the consensus rating for the stock is a Hold. Analysts are cautious, reflecting the company's ongoing losses and market volatility.
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 1.87 |
| EV/EBITDA | N/A (Negative EBITDA) |
| Stock Price (Sept 30, 2024) | $0.75 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
These valuation metrics provide a snapshot of the company's current financial health and market perception as of 2024.
Key Risks Facing DarioHealth Corp. (DRIO)
Key Risks Facing DarioHealth Corp.
Overview of Internal and External Risks
DarioHealth Corp. operates in a competitive healthcare technology market, which exposes it to various risks that could impact its financial health. Key external risks include:
- Industry Competition: The company faces significant competition from both established players and new entrants in the digital health space, which may affect market share and pricing strategies.
- Regulatory Changes: Changes in healthcare regulations and policies can impose additional operational burdens and affect product approvals.
- Market Conditions: Economic downturns and shifts in consumer behavior can adversely affect demand for its products and services.
Operational, Financial, and Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Net Losses: The company reported a net loss of $12,330,000 for the three months ended September 30, 2024, compared to a loss of $15,732,000 for the same period in 2023, indicating ongoing financial challenges.
- Cumulative Losses: Cumulative losses since inception amount to $378,082,000 as of September 30, 2024.
- Cash Flow Issues: The company used approximately $31,830,000 in cash for operating activities during the nine months ended September 30, 2024, an increase of 38.2% compared to $23,038,000 in the same period of 2023.
Mitigation Strategies
The company has outlined several strategies to mitigate these risks:
- Acquisition of Twill: The acquisition completed in February 2024 aims to enhance product offerings and create synergies.
- Funding Efforts: The company has raised funds through public offerings, with net proceeds of approximately $40,000,000 from a direct offering in February 2022.
- Cost Management: The firm has seen a decrease in stock-based compensation expenses from $5,159,000 in Q3 2023 to $2,786,000 in Q3 2024.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Loss | $12,330,000 | $15,732,000 | $33,115,000 | $45,142,000 |
| Cumulative Losses | $378,082,000 | |||
| Cash Used in Operations | $31,830,000 | $23,038,000 |
Liquidity and Capital Resources
As of September 30, 2024, the company reported cash and cash equivalents of approximately $15,547,000, down from $36,797,000 at the end of 2023.
Future Growth Prospects for DarioHealth Corp. (DRIO)
Future Growth Prospects for DarioHealth Corp. (DRIO)
Key Growth Drivers:
- Product Innovations: The company continues to enhance its product offerings, integrating advanced behavioral health capabilities into its cardiometabolic health solutions.
- Market Expansions: The recent acquisition of Twill Inc. in February 2024 is expected to broaden the company's market reach and enhance its service capabilities.
- Strategic Partnerships: A new benefit for AARP members, set to launch in January 2025, will provide access to proven digital behavioral health solutions, strengthening market presence.
Future Revenue Growth Projections:
For the three months ended September 30, 2024, revenues reached $7,423,000, representing an increase of 111% compared to $3,518,000 in the same period in 2023. For the nine months ended September 30, 2024, total revenues amounted to $19,436,000, up 16.1% from $16,736,000 year-over-year.
Proforma revenues for the nine months, accounting for the Twill acquisition as if it had occurred at the beginning of the year, would have totaled $21,399,000.
Strategic Initiatives and Partnerships:
- The partnership with AARP will offer digital health solutions to a large demographic, potentially increasing user adoption and revenue streams.
- Integration of Twill’s capabilities aims to create a comprehensive digital health solution, enhancing user engagement and retention.
Competitive Advantages:
The company has established a competitive edge through:
- A robust patent portfolio that protects its unique technologies.
- A diversified revenue model that includes direct consumer offerings and business-to-business contracts.
- Strong brand recognition in digital health management, particularly in chronic condition management.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenues | $7,423,000 | $3,518,000 | +111% |
| Cost of Revenues | $3,546,000 | $2,908,000 | +21.9% |
| Gross Profit | $3,877,000 | $610,000 | +535% |
| Net Loss | $12,330,000 | $15,732,000 | -21.6% |
| Stockholders' Equity | $58,511,000 | $68,035,000 | -14.0% |
As of September 30, 2024, the company reported approximately $15,547,000 in cash and cash equivalents, a decrease from $36,797,000 at the end of 2023.
In terms of R&D expenses, the company reported $5,446,000 for the three months ended September 30, 2024, down from $5,665,000 in the prior year.
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Resources:
- DarioHealth Corp. (DRIO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of DarioHealth Corp. (DRIO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View DarioHealth Corp. (DRIO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.