Executive Summary

Q4 2021 revenue was $6.03M, up 7.1% sequentially and 190% year over year; within the preannounced $5.8–$6.0M range .
Reported gross margin compressed to 9.1% (pro forma 22.1%) due to one-time expensive air shipments and B2C discounts; management expects non-GAAP gross margin to recover to 50–60% for FY 2022 .
Net loss was $21.6M as operating expenses rose with B2B scale-up and acquisitions; cash and equivalents ended at $35.8M, augmented by a $40M raise in March 2022 .
Strategic catalysts: multi-year $30M Sanofi agreement (with ~$8M to be recognized in 2022) and a national health plan expansion that could add >10M members over time and “multiple millions” of revenue in 2022 .

What Went Well and What Went Wrong

What Went Well

B2B traction: total accounts expanded to 54 in 2021 across employers, health plans, and providers, with ~40% enrollment and ~80% retention in launched accounts .
Strategic partnership: Sanofi co-promotion (multi-year $30M), development, and real-world evidence workstreams launched; ~10x increase in health plan sales reach cited by management .
Platform breadth: rapid integration of MSK (Dario Move) and behavioral health into a multi-condition suite; ~75–80% of pipeline now multi-condition, supporting higher ARPU and revenue per account .

Management quotes:

“We believe that in 2022, we’re going to show… non-GAAP gross margins… between 50% to 60%” .
“Our contract value is now in excess of $36 million… This excludes Sanofi, which represents an additional $30 million” .
“Sanofi… will promote the entire Dario suite… immediately increases our health plan sales resources by more than 10x” .

What Went Wrong

Margin compression: Q4 reported gross margin fell to 9.1% (pro forma 22.1%) on one-time high shipping costs and B2C promotions; management flagged the quarter as an atypical trough .
Elevated OpEx: Q4 operating expenses more than doubled year over year to $22.2M as Dario scaled B2B sales, R&D, and integration of acquired assets; net loss increased to $21.6M .
Services mix still early: Q4 was “the last quarter” with a high hardware/product portion; services mix shift (and margin lift) expected to begin in Q1 2022, highlighting execution yet to come .

Financial Results

Quarterly performance (oldest → newest)

Metric	Q2 2021	Q3 2021	Q4 2021
Revenue ($USD Millions)	$5.26	$5.60	$6.03
Gross Profit Margin (%)	28.7%	14.7%	9.1%
Pro Forma Gross Margin (%)	49.4%	45.0%	22.1%
Net Loss ($USD Millions)	$17.8	$22.4	$21.6

Q4 year-over-year and preannouncement comparison

Metric	Q4 2020	Q4 2021	Vs. Preannounced Range
Revenue ($USD Millions)	$2.08	$6.03	Preannounced $5.8–$6.0; Actual $6.03 (in range)
Gross Profit ($USD Thousands)	$549	$548	N/A
Gross Margin (%)	26.4%	9.1%	N/A
Pro Forma Gross Profit ($USD Millions)	N/A	$1.33	N/A
Net Loss ($USD Millions)	$9.0	$21.6	N/A

Wall Street consensus (S&P Global Capital IQ) was unavailable at time of query; we could not compare to consensus estimates.

KPIs

KPI	Value	Context
Accounts signed (2021)	54	Across employers, health plans, providers
Enrollment rate (launched accounts)	~40%	Reported in Q4 call
Retention on platform	~80%	Reported in Q4 call
Contract value (B2B book)	>$36M (ex-Sanofi)	Up from $35M reported Jan’22
Sanofi agreement value	$30M multi-year; ~$8M recognized in 2022
Health plan expansion	>10M potential members; “multiple millions” revenue in 2022

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP Gross Margin (%)	FY 2022	Not previously specified for FY 2022	50–60% target	Raised visibility (explicit range)
Long-term Gross Margin (%)	LT target	70–75% target reiterated	70–75% target reiterated	Maintained
Revenue (Sanofi contract recognition)	FY 2022	Not previously specified	~$8M in year one (calendar 2022)	New detail
Health plan revenue	FY 2022	Not previously specified	“Multiple millions” expected in 2022 from expanded national plan	New detail
Mix shift to services	FY 2022	N/A	Hardware-heavy Q4 to shift toward software/services beginning Q1	New trajectory

Earnings Call Themes & Trends

Topic	Q2 2021 (Q-2)	Q3 2021 (Q-1)	Q4 2021 (Current)	Trend
B2B transformation	Strong employer/provider traction; health plan deal “imminent”	47 contracts; first national health plan signed	54 contracts signed; >$36M contract value contributing to 2022	Accelerating
Multi-condition platform	66% of pipeline full-suite; integration underway	“Fully integrated” user journey; strong market resonance	MSK + behavioral health integrated; ~75–80% pipeline multi-condition	Broadening
Margin outlook	Pro forma GM ~49%	Pro forma GM ~45%	Reported GM 9.1% (one-time shipping/B2C promos); non-GAAP GM target 50–60% for FY 2022	Recovering from Q4 trough
RPM reimbursement	Scaling provider RPM; operational learnings	Additional provider wins; faster pipeline	Growing acceptance of RPM codes; more excitement on provider side	Improving adoption
Strategic partnerships	MediOrbis noted	Channel partners (e.g., Virgin Pulse)	Sanofi co-promotion + development + evidence program (10x sales reach)	Step-change in reach
Health plan expansion	Deal logistics delayed	Phase expansion in 2022	Terms agreed to expanded phases; >10M member potential	Pull-forward and expand
Mix: product vs services	B2C still meaningful	Services ramp in 2022	Q4 last “hardware-heavy” quarter; services mix rising from Q1	Shifting to services

Management Commentary

Strategy: “Three pillars… transformation from direct-to-consumer into B2B… single to multi-conditions… continuous improvement in financial profile, building a high-margin recurring revenue SaaS profile” .
Margin drivers: “Gross margins… will improve… because the gross margins of the B2B is higher… and B2C is going to slow down” .
Sanofi impact: “This immediately increases our health plan sales resources by more than 10x… revenue earned under co-promotion is in addition to the $30 million contract value” .
Health plan scale: “Phases have been pulled forward… potential to bring more than 10 million members… recognize multiple millions in revenue in 2022” .
One-time headwind: “Very expensive shipment… one-time event… combination of shipment and some B2C discounts” explaining Q4 gross margin dip .

Q&A Highlights

Revenue ramp/run-rate: Management emphasized run-rate could approximate aggregate contract value exiting 2022, but not a simple “35 + 21” addition for FY 2022 reported revenue; cadence depends on implementation .
Sanofi economics: 2022 revenue recognition driven by preferred partnership (time-based) and development milestones; ~$8M recognized in calendar 2022 with front-loaded cash flow .
RPM and reimbursement: Growing provider excitement about RPM codes; broader reimbursement outlook remains volatile, but trend expected to accelerate .
Mix shift and margins: Q4 was last hardware-heavy quarter; services share expected to rise beginning Q1 2022, supporting the 50–60% non-GAAP GM target for FY 2022 .
Health plan expansion timing: Additional phases agreed; expanded agreement expected in Q2, driving 2022 revenue .

Estimates Context

S&P Global consensus estimates were unavailable at the time of query; we could not provide a revenue or EPS comparison to consensus.
Company preannounced Q4 revenue of $5.8–$6.0M and delivered $6.03M, consistent with internal expectations .

Key Takeaways for Investors

Revenue trajectory: Sequential revenue growth (Q2→Q3→Q4) and strong yoy expansion reflect B2B scale and multi-condition platform adoption; 2022 should benefit from Sanofi and health plan launches .
Margin inflection: Expect non-GAAP gross margin recovery to 50–60% in FY 2022 as services mix rises and one-time shipping/promotional effects roll off .
Strategic leverage: Sanofi brings significant distribution leverage in health plans, added development resources, and real-world evidence—an accelerant to B2B sales beyond the $30M contract value .
Health plan scale: Expanded national plan phases (pulled forward) and potential >10M member exposure position Dario for multi-million-dollar 2022 revenue in payer channels .
Execution focus: Near-term priorities include converting signed contracts to revenue, scaling services mix, and sustaining 40% enrollment/80% retention metrics to drive ARR realization .
Risk monitor: Watch operating expense discipline and B2C wind-down pacing; quarterly results may reflect implementation timing and reimbursement dynamics in RPM .
Catalyst map: Evidence of margin improvement in Q1/Q2 2022 prints, Sanofi-driven deal wins, and additional health plan contracts could be stock-moving events .

Sources: Q4 2021 earnings call transcript and management remarks ; Q3 2021 and Q2 2021 transcripts for context ; DarioHealth press release (Mar 22, 2022) .

DarioHealth Corp. (DRIO)·Q4 2021 Earnings Summary