During its Q3 earnings call, Israel-based announced a growing US install base for its smartphone-connected glucometer and increased revenues supported by increasing sales of the platform’s accompanying consumable test strips. While the company expects each of these to take an even larger bite from its cash burn in the coming months, CEO and Chairman Erez Raphael also highlighted increased efforts in the Android ecosystem, a German market launch, and the recently announced B2B platform, , as noteworthy sources of future growth.
“We managed to grow sales [this quarter] while reducing the burn rate,” Raphael said during the call. “Investors should expect that we can continue the growth and even accelerate it in more territories because we are getting more clearances for more devices [and] because we are getting into B2B and working with partners to help them digitalize their services."
CFO Zvi Ben-David announced an additional 10,500 glucometers sold in the US during the quarter, bringing cumulative sales of the devices to 43,500. Sales of the device and its components made up the majority of the company’s revenue, with sales of consumable test strips increasing 40 percent over the previous quarter. A record revenue of $1,375,000 represented an 89 percent increase over 2016’s Q3, and a 14 percent growth over Q2 2017.
“We have continued to make our meaningful progress against our long-term growth strategy, and we are encouraged by the overall results,” Raphael said. “We've seen a significant growth in the overall user base and in our subscription. This is something that gives us comfort – that we have some significant revenue also secured there to continue into Q4 and into next year.”
Raphael said that DarioHealth expects additional sales to come from September’s launch of an Android device-compatible glucometer and corresponding app rollout. He also noted October’s entry into the sizable German market as an opportunity for substantial growth, alongside the company’s recent CE Mark for iPhone 7 and iPhone 8-compatible versions of its glucometer.
With the company’s consumer sales projections in an upward slope, Raphael explained that DarioHealth can now begin moving forward with larger-scale B2B plans. First announced in late October, the Dario Engage platform will be marketed directly to healthcare providers and promises improved member enrollment and ongoing communication. The company also expects upcoming partnerships that will lead to relationships with payers and the US self-insured market. Responding to an investor, Raphael said that early reception to the B2B platform has been “very good,” especially in regard to its potential use as virtual coaching service.
“We are very positive that the business is mature enough to move to the next level, and to the next level in its cycle into the B2B," Raphael said. "It's going to be mainly in the US. We are going to talk with employers, with other health provider partners, and overall we think that investors would be able to see how numbers are being impacted by this additional strategy. So, we are going to have two main channels: direct-to-consumer and also B2B, and this is something that will intensively contribute to our sales in the next few quarters.”