DarioHealth (NASDAQ:DRIO) reported sequential revenue growth for the second straight quarter while outlining plans to expand its digital health platform further into care delivery, management said on the company’s first-quarter 2026 earnings call Wednesday.
Chief Executive Officer Erez Raphael said the company entered 2026 with “continued momentum,” citing revenue growth, reduced operating expenses and progress converting 2025 commercial wins into revenue. Management also highlighted a growing channel partner strategy, new account additions and plans to use DarioHealth’s data and artificial intelligence capabilities to support more outcomes-based and claims-related models.
Revenue Rises Sequentially as Costs Decline
Gross margin was 57% in the first quarter, roughly flat from a year earlier and up from 54% in the fourth quarter. Management said DarioHealth’s B2B2C non-GAAP gross margin remained around 80% for the ninth consecutive quarter, which it described as an important driver of operating leverage as that revenue base grows.
Total operating expenses were $10.5 million, down 21% year-over-year and 8% sequentially. Non-GAAP operating expenses were $8.7 million, down 18% from the prior year and 3% from the fourth quarter of 2025. Operating loss was $7.3 million, improving 22% year-over-year and 15% sequentially. Non-GAAP operating loss was $5.3 million.
Management said DarioHealth ended March with $20 million in combined cash and short-term deposits and remained in compliance with covenants under its OrbiMed facility, where principal payments do not begin until May 2028. Net cash used in operations was $6 million, compared with $6.7 million in the prior-year quarter.
Channel Strategy Drives New Accounts and Larger Reach
Raphael said the company’s growth strategy remains focused on two “compounding layers”: channel partnerships that provide access to large populations through single commercial relationships, and a multi-condition platform designed to capture a larger portion of each account’s population.
DarioHealth added 10 new accounts in the first quarter, President and Chief Commercial Officer Steven Nelson said. Most came through channel partners, and all were added outside the normal employer benefit cycle timing. Nelson said that showed the company’s partner ecosystem is creating opportunities more continuously rather than only during traditional annual buying cycles.
Nelson said more than 80% of revenue is now generated through partner-driven channels, which provide access to more than 116 million covered lives. Raphael said DarioHealth has entered the contracting stage with what would be the largest channel partner in the company’s history, tied to a “major day 1 anchor account” that he described as one of the largest hospital networks in the Northeastern United States. He said the partnership is expected to provide access to about 65 million additional covered lives and roughly 3,500 employer relationships.
Combined with existing relationships including Solera and Amwell, Raphael said the company’s distribution reach would increase to more than 175 million covered lives.
Nelson also said DarioHealth is working toward a three-year extension with Aetna and a four-year extension with Centene. He said Solera continues to generate opportunities through existing client relationships and plan partners, while Amwell has identified a new Blue Cross Blue Shield plan opportunity expected to launch DarioHealth as part of its digital health offering.
Pipeline and 2025 Wins Expected to Support Second-Half Growth
Management said several larger accounts referenced in prior quarters are moving through onboarding, testing and client-specific implementation steps, including technical, operational, eligibility, data sharing, reporting and integration requirements.
Nelson said those implementations are “substantially on time and on track.” He said the company’s total commercial pipeline was approximately $127 million across 241 open opportunities at the end of the first quarter, spanning employers, health plans, channel partners and other B2B2C relationships.
DarioHealth is also pursuing 11 state-level opportunities through the Rural Health Transformation Program, which Nelson described as another potential path into state-sponsored, payer-aligned and population health models.
In the question-and-answer session, Nelson said management was still working through detailed enrollment and revenue projections for large accounts, but expected them to contribute more materially as the year progresses. Raphael added that some large accounts are expected to launch by July 1, supporting confidence in stronger revenue in the second half of 2026 and into 2027.
Expansion Into Care Delivery and Outcomes-Based Models
A major theme of the call was DarioHealth’s plan to move “closer to care” by working with care delivery partners. Raphael said the company has built a digital health foundation with a recurring per-engaged-member-per-month model and now intends to extend beyond engagement and support into care delivery.
Nelson said DarioHealth plans to work with partners that can add clinical and provider-enabled capabilities, including care gap closure, provider-led interventions, clinical documentation and connections to reimbursable healthcare events. He said the approach could allow DarioHealth to participate in claims-based and outcomes-based models without building all clinical capabilities internally.
During the Q&A session, Nelson said the care strategy includes referral-based relationships with care partners and proposals from health systems seeking to connect digital care with “actual care.” He said DarioHealth currently has between seven and 10 active proposals with health systems, primarily oriented toward January 2027 business. Most of that prospective business is Medicare Advantage, with some Medicaid-related opportunities, he said.
Nelson also discussed expanded work with GreenKey Health, including integration of GreenKey’s For Life clinical sleep service pathway into the DarioHealth ecosystem. He said the partnership is designed to support obstructive sleep apnea screening and physician-guided interventions, which could be relevant to cardiometabolic outcomes.
DarioIQ and Strategic Review Remain in Focus
Raphael emphasized DarioHealth’s proprietary data and artificial intelligence capabilities, saying the company has more than 13 billion proprietary real-world data points tied to clinical outcomes across multiple conditions. He said DarioIQ, the company’s AI engine, is being deployed to deliver personalized real-time clinical recommendations.
According to Raphael, early deployments of DarioIQ’s behavioral triggered engagement programs have produced up to a 40% improvement in member retention and up to a 55% lift in active sessions versus control groups.
Raphael also reminded investors that DarioHealth engaged Perella Weinberg Partners in September 2025 and established a special committee of the board to review strategic opportunities, including a sale, merger, strategic business combination or continued standalone execution. He said the process remains active and that the company will provide updates if there is a material development.
“What is increasingly clear is that Dario is positioned to succeed in any scenario we choose to pursue,” Raphael said, pointing to the company’s owned hardware, data, AI capabilities, commercial channel strategy and clinical evidence base.
About DarioHealth (NASDAQ:DRIO)
DarioHealth (NASDAQ:DRIO) is a digital health company specializing in chronic disease management through a smartphone-based care platform. Its core solution combines connected devices—such as glucose meters, blood pressure monitors and smart scales—with real-time data analytics and personalized coaching. The platform is designed to support individuals living with diabetes, hypertension, weight management challenges and other cardiometabolic conditions, offering continuous monitoring, tailored insights and behavioral nudges aimed at improving clinical outcomes.
The Dario platform integrates artificial intelligence and machine learning to deliver personalized guidance and education.
