The digital health firm narrowed its adjusted loss by nearly $10 million in 2025 as it deployed AI tools, refinanced its debt, and launched a strategic review process.

March 20, 2026

DarioHealth Corp., a digital health company trading on Nasdaq under the ticker DRIO, reported fiscal year 2025 results showing a notable decline in revenue alongside aggressive cost reductions and significant growth in its enterprise customer base. The company, which provides a whole-person health platform addressing conditions from diabetes to depression, posted annual revenue of approximately $22.4 million, down from $27 million in the prior year.

The revenue drop was primarily attributed to the non-renewal of a single large customer inherited through the company’s 2024 acquisition of Twill, a clinical-grade digital therapeutics firm. Despite that setback, DarioHealth pointed to meaningful commercial momentum, expanding its employer client roster from 53 accounts in 2024 to 167 by year-end 2025 — far exceeding its internal target of 40 new accounts for the year.

Deepening Enterprise Relationships

The company’s business-to-business segment drove much of this expansion. DarioHealth added 85 new employer accounts during 2025, including what it described as the largest employer client in its history. These contracts collectively represented approximately 107,000 covered lives and spanned its full cardiometabolic suite for diabetes, hypertension, and prediabetes management. Several agreements incorporated milestone-based and value-based pricing frameworks that tie payments to clinical outcomes and member engagement.

DarioHealth also maintained partnerships with five of the nation’s largest health plan organizations and continued serving a dozen global pharmaceutical companies. Its pharmaceutical offering focuses on patient education, medication adherence support, and patient journey data analytics.

Cutting Costs and Narrowing Losses

While top-line revenue fell, DarioHealth made substantial progress in reducing its cost structure. Total operating expenses dropped to approximately $49.3 million from $71 million in 2024, a reduction of more than $21 million. Research and development expenses were nearly halved, falling from $24.2 million to $13.8 million, driven by post-merger integration efficiencies and reduced headcount following the Twill acquisition. Sales and marketing costs declined by roughly $6 million, and general and administrative expenses fell by about $5.3 million.

Gross profit margin improved to 56.6 percent from 49.1 percent in the prior year, reflecting lower technology amortization costs and reduced hosting expenses. On a non-GAAP adjusted basis, the company narrowed its loss to $24.2 million from $33.8 million in 2024.

Net loss for the year came in at $41.7 million, slightly improved from $42.7 million in 2024, though net loss attributable to common shareholders increased to $61.7 million from $41 million due to deemed dividend charges related to preferred stock conversions and modifications.

AI Integration and New Product Capabilities

A significant theme in the company’s 2025 strategy was the rollout of artificial intelligence capabilities. DarioHealth introduced DarioIQ, a proprietary AI layer designed to deliver more personalized member experiences across its platform. The system includes three core components: an advisor for personalized guidance, a sentinel for engagement optimization, and a strategist for customer-facing analytics and decision support.

The company initially deployed DarioIQ within its direct-to-consumer offerings to evaluate safety and performance before broader enterprise deployment. Looking ahead to 2026, DarioHealth plans to expand DarioIQ availability and initiate targeted deployments with select employer and health plan customers.

Additionally, the company launched DarioSHIFT, an internal operations initiative using AI agents to improve efficiency across sales development, member services, software development, and proposal response workflows. Early deployments have included an AI-enabled scrum master agent that evaluates development tasks against quality criteria.

Refinancing and Liquidity Position

DarioHealth undertook a significant refinancing during 2025, replacing its Avenue Ventures credit facility with a new five-year, up to $50 million loan from Callodine Commercial Finance. The company drew $32.5 million at closing, with an additional $17.5 million potentially available subject to revenue milestones and lender discretion. Principal repayments are deferred until May 2028.

However, the company disclosed that it failed to meet a financial covenant under the Callodine agreement in August 2025. A subsequent amendment in November reset financial covenants, waived testing for the second and third quarters of 2025, and modified liquidity requirements to include a $10 million minimum consolidated unencumbered liquid assets covenant.

As of year-end, DarioHealth held approximately $26 million in cash and short-term deposits, down from $28.5 million at the close of 2024. The company’s accumulated deficit since inception reached approximately $452 million. Management stated it believes current resources are sufficient to fund operations for at least twelve months.

Strategic Review Underway

In September 2025, DarioHealth’s board initiated a comprehensive strategic review following multiple unsolicited inbound expressions of interest. An independent special committee was formed and Perella Weinberg Partners was engaged as financial advisor. The review is considering a full range of options including a potential sale, merger, strategic combination, or continued independent execution.

The company cautioned that the review may not result in any transaction and could create operational distractions, and that uncertainty surrounding the process could affect relationships with customers, partners, and employees.

Reverse Stock Split and Market Challenges

DarioHealth executed a 20-for-1 reverse stock split in August 2025 to regain compliance with Nasdaq’s minimum bid price requirement. The company’s stock price during 2025 ranged from a high of $30.60 to a low of $6.17 per share. As of March 2026, the company had approximately 7.3 million shares outstanding and 160 full-time employees.

The company faces intense competition from both broad-based digital health platforms like Teladoc Health and specialized players across cardiometabolic and behavioral health markets. DarioHealth has positioned its competitive advantage around its integrated hardware-software platform, proprietary clinical data spanning over five million users and more than a decade, and its ability to offer bundled multi-condition solutions that address growing employer demand for point-solution consolidation.