DarioHealth (DRIO) investor relations material

Executive summary

• Q2 2026 revenue was $5.2 million, reflecting a strategic shift from pharma services to recurring B2B2C and D2C revenue, with a 3.6% year-over-year decline mainly due to non-recurring pharma channel revenue in the prior year.

• Gross margin improved to 62% (up from 55% in Q2 2025 and 57% in Q1 2026), with non-GAAP B2B2C gross margin at ~80% for 10 consecutive quarters, aided by lower costs and a $369K IEEPA tariff refund.

• Operating expenses declined 8% sequentially and 21% year-over-year, with operating loss down 30% year-over-year and 11% quarter-over-quarter due to post-merger integration and AI-driven efficiencies.

• Net loss improved to $7.9 million from $13 million a year ago, a 39% reduction, with non-GAAP adjusted loss at $5.3 million.

• Commercial momentum included major wins with a top-5 national health plan, a 5th Fortune 50 client, and expanded channel partnerships.

Financial highlights

• Q2 2026 revenue: $5.2 million (down 3.6% YoY); six months: $10.8 million (down 11.2% YoY).

• Gross profit: $3.2 million (61.7% margin) in Q2 2026, up from $3.0 million (55.2%) in Q2 2025.

• Operating loss: $6.5 million in Q2 2026, improved from $9.2 million in Q2 2025 and $7.3 million in Q1 2026.

• Net loss: $7.9 million in Q2 2026 vs. $13.0 million in Q2 2025; $16.2 million for six months vs. $22.2 million prior year.

• Cash, cash equivalents, and short-term deposits: $36.8 million pro forma after July 2026 financing.

Outlook and guidance

• Over $13.1 million in contracted and late-stage ARR, more than 80% multi-condition, expected to convert to revenue over the next 4-5 quarters.

• Revenue acceleration expected in the second half of 2026, with majority of new revenue contribution in 2027 as implementations mature.

• DarioIQ AI platform and provider-backed care expected to drive a 10%-15% increase in recurring revenue and accelerate growth.

• New product launches (GLP-1, Women, Sleep) to contribute revenue starting Q4 2026.

• Management expects to incur future net losses and will require additional funding for long-term development.