DarioHealth Corp. (NASDAQ:DRIO) Q3 2018 Earnings Conference Call Transcript
Nov 13, 2018 • 09:00 am ET
Greetings and welcome to the DarioHealth Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). Hosting the call today are Erez Raphael, CEO; Olivier Jarry, President and Chief Commercial Officer, and Zvi Ben-David, CFO.
(Forward-Looking Cautionary Statements)
In addition, certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results, and evaluate the company's current performance. Management believes that the presentation of these non-GAAP financial measures is useful to investors' understanding and assessment of the company's ongoing core operations and prospects for the future.
And with that, I would like to now introduce Erez Raphael, CEO of DarioHealth. Thank you. You may begin.
Thank you. Good morning, everyone and welcome to the third quarter highlights. As a leading digital health company, and perhaps one of the only digital health companies out there in the public market, we were pleased to see our revenue mix shift further into recurring revenues from digital services and the sale of memberships during the third quarter. This shift into service revenues increased our deferred revenues. 82% of the DarioHealth revenues are now generated in the US market, and more than 50% of the revenues are recurring revenue. This gives us a gradually improving predictability into the future quarters.
During the third quarter, we continued growing all key parameter of the business, which is including the total number of patients that are operating on the platform, the average revenue per patient per month, what is called ARPU, the number of CDEs, the Certified Diabetes Educators that are coaching patients on the platform.
Now for the few financial highlights. Revenues in the first nine months of 2018 grew to $5.7 million, a 58% increase year-over-year. Third quarter revenues grew to $1.88 million, an increase of 37% compared to the third quarter of 2017. On top of that, we need to add additional $335,000 recorded in deferred revenues in the third quarter, mainly from services included in our membership offering compared to non-deferred revenues in the third quarter of 2017.
Third quarter gross profit increased 70% to $468,000 compared to third quarter of 2017. We fortified our balance sheet with approximately $10 million in equity fundraise. Our value Engage Suite of products is now distributed through multiple verticals and currently is in use by more than 30 clinics and by nearly 100 certified diabetes educators.
Yesterday, we were happy to announce an agreement with Giant Eagle, one of the largest food retailers in the United States, for the rollout of Digital Diabetes Education and Reward Program followed by DarioHealth, which will be offered to 4.6 million Giant Eagle customers through 240 retail locations. This marks our largest product roll-out agreement to the US retailer to date.
A few words about the launch of our membership in the plan. By June end, we launched our annual membership offering, which has