Lucas Romanski

Lucas Romanski asked about the contribution of the UnitedHealthcare national rollout to the targeted $12.4 million in new business for 2026, the overall opportunity with UnitedHealthcare, the pacing of the $12.4 million new business, the drivers behind sequential B2B2C revenue declines despite pipeline growth and high retention, and the demand and pipeline for pharma services following a sharper therapeutic focus.

Answer

Steven Nelson, President and Chief Commercial Officer, explained that DarioHealth does not disclose client-specific revenue but expressed encouragement for UnitedHealthcare's innovative digital marketplace rollout, which will formally kick off in January 2026. He noted that the $12.4 million in new business will primarily onboard in Q1 2026, with some starting in Q4 2025 and others off-cycle. Erez Raphael, CEO, clarified that the sequential B2B2C revenue decline was primarily due to a national health plan non-renewal in early 2025 and the transition of the pharma business to a recurring revenue model. He added that the core employer and health plan business is stable and expected to grow from Q3 to Q4 2025, emphasizing a diversified approach with no single client contributing more than $1 million to the $12.4 million target. For pharma services, Mr. Raphael stated a selective approach, focusing on recurring revenue, expecting 2-4 accounts next year with smaller contributions compared to other channels.

Lucas Romanski from TD Cowen, on for Charles Rhyee, sought clarification on the drivers behind the revised 2025 subscription revenue guidance and asked for details on the strategy to achieve cash flow from operations breakeven in 2026.

Answer

CFO & COO Mark Hirschhorn clarified that the guidance revision was due to the change in scope for the DHA contract extension, which excluded automated care and behavioral health programs for now. CEO Dr. Ido Schoenberg outlined the path to breakeven, emphasizing product focus, targeting key market segments, team restructuring with AI adoption, and shifting to a more efficient configurable platform model.

Lucas Romanski, on behalf of Charles Rhyee at TD Cowen, asked for an update on the business trends with ICON's two largest customers and their plans for 2025.

Answer

CEO Dr. Steve Cutler indicated that there is still some downtick and movement with these customers, but noted significant shifts across the entire top 10. He stated the company is now focusing on its broader portfolio, particularly on new strategic partnerships that are beginning to yield new work.

Lucas Romanski of BTIG inquired about the key drivers behind Owlet's 2025 revenue guidance, specifically the expected contributions from Dream Sock, BabySat, and the new Owlet360 subscription. He also asked about the U.S. versus international growth assumptions, the strategy for increasing adoption in populous states, the rationale for the 2025 gross margin outlook, and progress with insurance payors.

Answer

CFO Amanda Crawford stated that the 2025 guidance does not assume material revenue from the newer BabySat or Owlet360 offerings, with dollar growth expected to be split evenly between U.S. and international markets. CEO Kurt Workman explained that driving brand awareness is the key strategy for U.S. adoption, with Owlet360 expected to boost word-of-mouth marketing. Crawford also clarified that the full-year margin guidance represents an increase over 2024, with quarterly fluctuations due to promotions. President and CRO Jonathan Harris added that progress with payors is steady but slow, driven by their DME partnerships.