DarioHealth Reports Q2 Revenue, with 62% Gross Margin as AI Platform Expands

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

AI-based life sciences investors are watching DarioHealth Corp. (DRIO:NASDAQ) after a Q2 update.

Key Takeaways

• Dario reported US$5.2 million in Q2 2026 revenue, down slightly from US$5.4 million a year earlier.
• Gross margin rose to 62%, up from 55% in Q2 2025.
• Operating expenses fell 21% year over year, helping reduce the operating loss by 30%.
• Contracted and late-stage annual recurring revenue reached US$13.1 million, with more than 80% from multi-condition offerings.
• DarioHealth added new major customers, including a fifth Fortune 50 company and a health insurer through Amwell.
• Pro forma cash increased to US$36.8 million after a July financing raised US$23.5 million in gross proceeds.

DarioHealth Expands Customer Base and AI Healthcare Platform

On August 11, 2026, Dario released Q2 2026 financial and commercial results for its AI-powered healthcare tech pipeline base. Erez Raphael, CEO of Dario, opened the press release by saying: "We believe that Dario has reached an important stage where the investments made in our technology, product, and distribution infrastructure are compounding positive momentum. Over the past decade, we have built a comprehensive multi-condition platform supported by robust clinical evidence, enterprise distribution generating ARR and, more recently, AI-powered capabilities that have the potential to increase the recurring revenue we generate from customers we have already won. Our strategy is translating into execution as new customers are increasingly adopting our multi-condition solutions and existing customers expand into additional conditions."

Regarding the company's current mission, Raphael said: "Today, we believe provider-backed care is the natural extension of our platform, positioning us to capture a larger share of the healthcare value chain. We believe we have built an end-to-end chronic care platform that is unique in the market and positions us to accelerate revenue growth by the end of 2026 and into 2027."

Financial highlights from Q2 2026 are presented as follows:

• Revenue was US$5.2 million, compared with US$5.6 million in Q1 2026 and US$5.4 million in Q2 2025. The year-over-year comparison primarily reflected the company's strategic decision to discontinue certain pharmaceutical-related business, partially offset by continued growth from channel partners and direct-to-consumer programs.
• Gross profit increased to US$3.2 million, up approximately 8% year-over-year and substantially consistent quarter-over-quarter
• Gross margin increased to 62%, compared with 57% Q1 2026 and 55% in Q2 2025; Non-GAAP B2B2C gross margins remain at approximately 80% for the 10^th consecutive quarter
• Operating expenses declined to US$9.7 million, down 8% quarter-over-quarter and 21% year-over-year, while operating loss improved 11% quarter-over-quarter and 30% year-over-year
• Balance sheet strengthened with US$36.8 million pro forma cash, cash equivalents, and short-term deposits; US$14.0 million as of June 30, 2026, plus US$22.8 million, raised through registered direct financing in July 2026, net of offering expenses.

Chen Franco Yehuda, Dario's CFO, commented on the financial results, saying: "Our second quarter results reflect continued progress in improving the efficiency of our business, with improvements in gross margin, operating expenses and net loss, year-over-year. Following quarter end, we strengthened our balance sheet through a successful US$23.5 million registered direct financing priced at-the-market, with participation from both existing long-term shareholders and new fundamental institutional investors. This financing enhances our financial flexibility as we continue executing on commercial opportunities created by our AI-powered integrated care platform."

The company's commercial highlights stretch further than the past quarter, with Dario serving more than a dozen health plans over the past year, including three national carriers, across more than six chronic condition solutions, five Fortune 50 clients, and with 25% of B2B2C clients being part of the Fortune 500.

The company expanded its customer base, creating relationships with new companies as well as deepening partnerships with existing clients. Dario signed its fifth Fortune 50 client, with a base of more than 100,000 eligible employees, and expects ARR contribution to begin at the end of 2026 and ramp up into 2027. The company also signed a major health insurer with a prominent presence in Arizona and a reach of hundreds of thousands of people via its Amwell channel partnership. An existing top 5 national health plan customer extended its behavioral health agreement and added Dario's hypertension solution, and this move has the potential to triple Dario's revenue from this account. Contribution from this deal is expected in 2026, with higher impact in 2027 and onward. Earlier in Q2, Solera has expanded its hypertension solution with Dario, adding an additional 500,000 or more people to its addressable population base.  

Dario has extended its platform, partnering with Beluga Health to enter the provider-backed care space, adding 50-state embedded clinical delivery and expanding Dario's platform beyond digital engagement. Dario Women is a product extension that supports members ". . . navigating perimenopause and menopause, life stages frequently associated with weight changes, sleep disruption, metabolic changes and increased cardiometabolic risk." Dario Sleep is another product extension that addresses sleep apnea, a contributing factor of cardiometabolic disease.

COO of Dario, Lara Dodo, commented: "Commercial execution remained strong during the second quarter of 2026 as we continued advancing enterprise customer implementations, expanding relationships with channel partners and broadening adoption of our integrated multi-condition platform. We swiftly advanced our provider-backed care strategy and implementation, expanding our ability to increase long-term customer value."

DarioIQ is the proprietary AI engine supporting Dario's multi-condition platform and is being broadly deployed across its existing B2B2C customer base. The company's press release states:

• More than 13 billion proprietary longitudinal data points from FDA-cleared connected devices power a vertically integrated device-to-data-to-AI stack, and support delivery of integrated multi-condition care
• Broad deployment of DarioIQ, which the Company believes could contribute an increase of 10-15% in B2B2C ARR from existing customers through higher engagement, retention and clinical outcomes
• Applied within Dario's own operations, AI has helped expand operational capability while holding the cost base, contributing to the reduction in operating expenses and operating loss this quarter

DarioHealth Corp. is an American digital health company headquartered in New York City. The company is focused on helping people manage health during chronic illness via its digital health platform. In partnerships with other companies, DarioHealth also works in the GLP-1, fall prevention, sleep apnea, maternal health, and direct care sectors.

Workplace Health Creates Demand for Digital Care Solutions

"A growing occupational epidemiology literature, including many prospective cohort studies, has investigated the role of psychosocial work stressors on mental health problems and chronic physical illnesses (e.g., CVD and CVD-related risks) in working populations. Work stressors have also been shown to affect chronic illnesses indirectly by influencing health behaviors, including leisure time physical activity, smoking, and alcohol consumption, all of which are considered risk factors for obesity, diabetes, and heart disease," according to a report by Marnie Dobson, Peter Snall, Ellen Rosskam, and Paul Landsbergis. The authors went on to say that ". . . 5-8% of health-care costs in the USA could be attributed to workplace stressors" and that ". . . around 20–40% of all sickness absence can be explained by psychosocial factors."

A report by Bruce Y. Lee, MD and MBA, Professor of Health Policy and Management at CUNY Graduate School of Public Health and Health Policy asserted that, "Employee disengagement, overextension, ineffectiveness, and burnout over the course of one year costs an employer an average of US$3,999 (95% range: US$3,958-US$4,299) for an average U.S. non-managerial hourly employee, an average of US$4,257 (95% range: US$4,215-US$4,299) for an average non-managerial salaried employee, US$10,824 (95% range: US$10,700-US$10,948) for 67 average manager, and US$20,683 (95% range: US$20,451-US$20,915) for an average executive."

According to Dario, "For employers, the stakes [of behavioral issues in the work place] are significant: illness-related lost productivity — including absenteeism and reduced on-the-job performance (i.e., presenteeism) — costs U.S. employers an estimated US$575 billion annually. This highlights the need for scalable solutions like Dario that help employees manage health challenges while maintaining daily functioning at work."  

ThinkEquity Raises DarioHealth Price Target

Prior to the latest press release, Ashok Kumar, Ph.D., of ThinkEquity released a new research report about Dario on July 27, 2026. Kumar reiterated a "Buy" rating but raised the price target to US$12. Kumar wrote: "Our "Buy" rating and US$12 target are supported by sequential B2B2C growth, timely Fortune 50 activation, execution of the channel agreement, at least one payer extension, and adjusted consolidated gross margin improving toward the mid-60% range. Liquidity would ideally remain above the covenant floor with limited ATM use. Visible commercial conversion and improving cash use through the third-quarter report would strengthen the base case and support confidence in the rating and target."

New Contracts and Market Expansion Could Drive Growth

Dario's investor presentation lists new contracts and expanding market access as catalysts for investment. The company states that 70% of new contracts are multi-condition, which allows vendors to consolidate programs for better ROI and savings. The company also claims a pipeline of commercial opportunities, which it says is accelerating sales and enabling rapid onboarding of large employers and health plans.

Ownership & Share Information¹

DarioHealth Corp. has a market cap of US$75.02 million, with 9.79 million shares outstanding. The company's 52-week range is US$5.84-US$17.74. Institutions own 9.18% of shares, while Strategic Investors own 7.37%. Management & Insiders own 8.52% of shares, and the remaining 74.93% are Retail.

Frequently Asked Questions

Q: What is annual recurring revenue (ARR)?
A: Annual recurring revenue, or ARR, is an estimate of the recurring revenue a company expects to generate from its ongoing customer contracts over a 12-month period. DarioHealth reported US$13.1 million in contracted and late-stage ARR in Q2 2026.

Q: What is B2B2C healthcare?
A: B2B2C, or business-to-business-to-consumer, is a model in which a company provides its products or services to consumers through another business. DarioHealth uses this model to work with employers, health plans, and other partners that provide access to its digital health programs.

Q: What is a multi-condition healthcare platform?
A: A multi-condition healthcare platform provides tools or programs for managing more than one health condition through a shared technology system. DarioHealth's platform supports more than six chronic condition solutions and allows customers to adopt multiple programs.

Q: What is gross margin?
A: Gross margin is the percentage of revenue a company keeps after accounting for the direct costs of providing its products or services. DarioHealth's gross margin increased to 62% in Q2 2026, compared with 55% in the same quarter of 2025.

Q: What is provider-backed care?
A: Provider-backed care combines digital health technology with clinical services delivered or supported by healthcare providers. DarioHealth expanded into this area through a partnership with Beluga Health, adding clinical delivery across all 50 U.S. states