DarioHealth (NASDAQ:DRIO) reported third-quarter revenue growth and a narrower loss as its consumer business expanded, while executives said newly signed accounts and channel partnerships could drive faster growth in 2027.
Revenue rose 6% year over year to $5.3 million for the quarter ended September 30, 2026, and increased 3% from the second quarter. Net loss narrowed to $8.8 million from $10.5 million a year earlier.
Chief Executive Officer Erez Raphael said the company expects a gradual revenue ramp beginning toward the end of 2026, with more of its contracted and late-stage opportunities converting during 2027 and into 2028. He also said DarioHealth remained on a trajectory to reach break-even in 2028.
Consumer Growth and Narrower Losses
Consumer revenue grew approximately 48% from a year earlier and accounted for 53% of total revenue, up from 38%, Chairman John Palumbo said. DarioHealth sells directly to consumers as well as through employers, health plans and other organizations that make its services available to members.
Gross margin was 59%, compared with 60% a year earlier and 62% in the preceding quarter. Chief Financial Officer Chen Franco-Yehuda attributed the sequential and year-over-year comparison primarily to a smaller tariff refund benefit and a greater direct-to-consumer mix, partially offset by lower hosting costs.
Operating expenses fell 10% year over year to $11.2 million, and operating loss improved 15% to $8 million. Non-GAAP operating loss narrowed to $5.3 million from $6 million. The company ended September with $31.2 million in cash equivalents and short-term deposits, following a registered direct offering in July.
Health Plan Wins and Revenue Conversion
Chief Operating Officer Lara Dodo said DarioHealth ended the quarter with approximately $13.1 million in contracted and late-stage annual recurring revenue, about 40% of which was associated with health plan administrative services-only, or ASO, agreements.
Under those agreements, revenue builds as individual self-insured employers activate the service and their members enroll. Dodo said conversion generally takes longer than with direct employer contracts, although the agreements can provide access to larger populations.
During the quarter, DarioHealth was selected by a New Jersey health plan representing about 1.5 million covered lives through its Amwell channel partnership. Dodo said it was the company’s third state health plan signed through Amwell in the past 12 months, following Arizona and Florida.
Raphael said the New Jersey opportunity was not included in the $13.1 million figure because it was an ASO agreement and the company wanted to be conservative. Dodo cautioned against predicting its revenue contribution, saying the company expected more activity in the back half of 2027 because outreach to employers had not yet fully begun.
Dodo said channel partners account for about 75% of new accounts and that channel revenue was on track to double year over year, with the potential to repeat that performance in 2027. DarioHealth had 184 enterprise customers as of September 30, Palumbo said.
New Programs and AI
DarioHealth is seeking to expand revenue within existing accounts by adding services for more conditions. More than 80% of its contracted and late-stage recurring revenue is multi-condition, according to Raphael.
The company launched Dario Women and Dario Sleep in the second quarter as add-ons to its cardiometabolic platform. Dodo said an existing regional grocery retailer expanded its contract to include Dario Women, which supports people navigating perimenopause and menopause. She also said two early adopters of the newer offerings were scheduled to go live on January 1, 2027.
DarioHealth is also offering programs that connect eligible members with clinical providers and medication access alongside behavioral support for GLP-1 therapies. Dodo said employers are considering different approaches, including traditional pharmacy benefit structures, alternative subsidies and direct-to-consumer options.
On artificial intelligence, Dodo said DarioIQ now predicts which members are at risk of disengaging. Members reached early in a lapse returned within a week at 1.7 times the rate of those not reached, she said. Dodo added that measured results supported an opportunity for up to approximately 14% in engagement-based annual recurring revenue; the company did not describe that amount as already recognized revenue.
Leadership and Outlook
Palumbo, who joined the board in April 2026, recently became chairman, succeeding Yoav Shaked, who remains a director. Palumbo said the board is focused on converting signed contracts, scaling through channel partners and developing services that connect consumer choice with payer-funded care.
Raphael said analysts’ 2027 revenue consensus was aligned with management’s expectations, without providing a specific revenue forecast on the call. The company cautioned that its forward-looking statements are subject to risks and uncertainties and that actual results could differ materially.
About DarioHealth (NASDAQ:DRIO)
DarioHealth Corp. is a digital health company that develops technology-enabled solutions for managing chronic conditions. Its platform combines connected medical devices, mobile applications, data analytics and personalized coaching to help individuals monitor and improve their health. The company’s offerings have focused on conditions including diabetes, hypertension, musculoskeletal disorders and behavioral health. Products and services may include connected blood glucose and blood pressure monitoring, digital programs for pain and mobility management, health coaching, educational content and tools that support healthier daily habits.
