Good morning, and welcome to the DarioHealth first quarter of 2022 results call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Now I'd like to turn the call over to Mr. Glenn Garmont, Investor Relations. Please go ahead. Thank you, Nick. Good morning, everybody, and thank you for joining us today for a discussion of DarioHealth's first quarter 2022 financial results. Leading the call today will be Erez Raphael, CEO of DarioHealth, who'll be joined by Rick Anderson, President and General Manager of North America at DarioHealth. After prepared remarks, we'll open the call for Q&A. An audio recording and webcast replay for today's call will also be available online as detailed in the press release invite for this call. For the benefit of those who may be listening to the replay or archived webcast, this call is being held and recorded on May 12, 2022. This morning, we issued a press release announcing our financial results for the first quarter of 2022. A copy of the press release can be found on the Investor Relations page of DarioHealth's website. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, or the competitive nature of DarioHealth's industry. Such forward-looking statements and their implications may involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected. The forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the Risk Factors section and elsewhere in the company's 2021 annual report on Form 10-K, as well as the first quarter 2022 Form 10-Q filed this morning. Additional information concerning factors that could cause results to differ materially from the company's forward-looking statements are described in greater detail in the company's press release issued this morning and in the company's other filings with the SEC. In addition, certain non-GAAP financial measures may 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 the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in today's press release regarding our quarterly results. With that, I'd like to introduce Erez Raphael, Chief Executive Officer. Erez? Thank you, Glenn, and thanks, everyone for joining us, this morning. For all of you that know the story, you know that we are very, very consistent with the story for the last few years. We always talked about few pillars, the multi-condition direction with the acquisitions that we did in order to develop the best, digital therapeutics company in the world that support multiple conditions. We talked about moving from direct to consumer to B2B, and we talked also about a super user-centric business model with a SaaS kind of revenue, recurring revenue, that end up with high gross margins, for which is something that super relevant for software company like Dario. I think that in Q1, we are starting to show how all these strategic decisions are reflecting in the way that we operate and also in our financial profile. I think that as management, we knew how the market is gonna evolve. We knew that healthcare will be super consumer-centric, and we knew that it would have to be more digital. We made all these decisions, and we start to see in this quarter where it's gonna take us to. I think that if you're gonna look on all the financial profile of this quarter, you can see that we improved almost all the parameters. Starting from the top line, the merger between direct to consumer to B2B, the profitability and the gross margins, we have seen a significant improvement. We have seen reduction in the operating expenses mainly because we are shifting the business from direct to consumer to B2B, so we spend less money on digital ads. The most important thing is also the loss in this environment. We showed a significant reduction in the loss for the quarter, and I'm gonna get into the numbers shortly. Before that, I wanna talk about a few fundamental developments that we had this quarter. We signed overall 14 new accounts, including two health plans. Health plans are super important for our business. Usually they are providing much higher revenue per account. Overall, we have 61 accounts so far. 80% of them have started launch. Overall, we have a total ARR of $40 million in a full implementation of these accounts. If we are looking at another very strategic activity that we had in this quarter was the Sanofi agreement. We started the relationship a couple of months ago. We are making progress very well, and we have here two elements that we need to consider. One is the offering. We think that with the capabilities of Sanofi and digital therapeutics platform that we have, we can create a offering that is gonna be first in class in the market, also moving forward. The R&D teams are already working together, and we're gonna get the best platform in the world. Also on the commercial side, in addition to a $30 million that will be paid by Sanofi to Dario, from which $8 million are gonna be paid this year, we're also working together with the commercial team in order to push the solution into the market. We started in the U.S. with health plans. Zvi is gonna elaborate about it. Another important point is the strategy of multi-condition that we have, and this is something that proved to be a very smart decision, not only from a financial profile, but also from a go-to-market perspective. We are gaining more and more demand to the multi-condition, and we think that a significant portion of the accounts that we're gonna sign this year and next year are gonna be for the full suite. Also, on the implementation side, we are making nice traction and keeping above 35% enrollment rate for the accounts that we are launching. Few highlights on our financials. We ended the quarter with above $8 million in revenue, which is 124% higher than what we showed in Q1 of 2021, and it's also approximately 34% higher than what we showed in Q4 of 2021. It was a nice jump quarter-over-quarter sequentially. Think that the merge between B2C to B2B is also interesting. For the first time, B2B is exceeding B2C in revenue. Sanofi is gonna contribute $8 million for the year. It had also contribution for this quarter. Just as a reminder, this is a multiyear contract that will contribute revenue also in the next quarters and also next year and the year after. This is also something that is gonna strengthen our financial profile. In terms of expenses, if we are looking at the overall expenses, excluding the stock-based compensation, acquisition expenses, and depreciation, on the first quarter of 2022, we managed to reduce the overall expenses to $14.8. If we compare it to Q4 of 2021, it was $16.4. This is a good reduction, and I think that we're gonna see this trend moving on to the next quarter because one of the things that we are starting to stop doing is investing a significant budget into the direct to consumer. We are moving budget to the B2B, which is something that is more cost effective in terms of cost per acquisition, and that's something that will also help improve the financial profile. On the gross margins on the non-GAAP, we showed 61%. We talked about it in the last quarter. Eventually, the goal of the business is to be above 70%-75%. That's the goal of the business. We talked about it a couple of months ago when we guided somewhere between 50%-60%, and now we see that it's around 61% on a non-GAAP basis. We're gonna continue this trend. Overall, it's not gonna be super stable in the next few quarters, but overall, it's gonna be in these ranges, and we're gonna keep improving it. We are confident with the goal of 70%-75% moving forward. We are very, very positive about the gross margins as well. On the operating loss, this one we showed a significant reduction. We had a $14.9 million loss, if you're looking in Q4, when we exclude the stock-based compensation, acquisition expenses, and depreciation, and we were down from $14.9 million - $9.72 million. This is a significant reduction, and we are always looking on our losses and how we can operate in this environment and be super effective. This is something that we are very proud in this 35% reduction. Overall, if we are looking on the burn rate, we had a burn that showed up a bit high. This is something that is not a run rate. It's temporary. We built a significant size of inventory. We are operating in a very challenging environment from a supply chain standpoint, and with so many accounts that we have signed and we need to launch, we felt that in order to put the business in the right situation, we need to have a higher than usual inventory. We built more inventory in Q4 and in Q1, so we paid for that. That's one thing. Another thing is payments that we should get or already got from Sanofi and others showed up only in Q2. This is something that was showing a bit higher than the usual run rate. I wouldn't be too worried about the burn. It's temporary for Q1. Looking on the overall balance sheet, we raised additional $40 million in Q1, which is something that was in addition to $36 million that we ended the year. From a cash position, we feel super confident that we have the cash to execute on our plans, and we have cash to get into 2024. I wanna hand over the call to Rick to give you additional insights on what's going on on the commercial side. Rick? Thanks, Erez. Q1 represented a milestone quarter for Dario. We saw substantial increases in revenue, both sequentially from last quarter and up over 100% from last year, as Erez mentioned. This is being driven by the launch of accounts signed in 2021 and early 2022, and we're seeing the expected increase in B2B revenues at higher gross margins. For the first time, B2B revenues in the quarter exceeded B2C revenues, which is a watershed event for us. We signed two health plan accounts in the quarter, one of which recently launched, and the other is expected to launch in the second quarter. Both are expected to contribute to revenue in the second quarter and beyond of this year. We also entered into the $30 million strategic agreement with Sanofi in the quarter. We believe these milestones are substantial validation of our strategy to focus on the B2B market. With the additional contracts we have signed in 2022, we now have 61 contracts on our path to our goal of 100 total contracts for 2022. The majority of the agreements announced in this first quarter are what we call off-cycle employer health plan and provider agreements, and as such, are expected to generate revenue in 2022. Generally, it takes us about 60-90 days to implement these types of customers. The exception to that, as I've discussed in the past, is when a customer has a different targeted launch date. In some cases, that will be, but we'll see more of those types of agreements as we get towards the end of the year. With the addition of these new agreements, our contract value is now approximately $42 million. As Erez mentioned, we continue to see good operational metrics in the launched accounts with enrollment of approximately 40%, which is translating the launched accounts into increasing revenue, and we expect that to continue throughout the year. Our integrated multi-condition platform strategy continues to generate interest in the employer and health plan markets, with customers recognizing the value of both less vendors and one member journey for their employees and/or members versus our competitors that generally have modules rather than one integrated platform. Consistent with the past quarters, approximately three-quarters of our pipeline is now multi-condition, so either full suite or more than one condition that we have, where the multi-condition offering provides more value to both our customers and approximately 4-5 times more revenue to Dario than a single condition solution. We continue to make progress in all three of our B2B sales channels and with strategic partners. For employers, we remain in the early part of the sales cycle for self-insured employers that are on a January 1 to December 31 cycle, which represents approximately 70% of all employers. Consistent with this cycle, we will see RFPs or request for proposals peaking during the second and third quarters and contracting in late third and fourth quarter, and for those accounts that will launch in the first quarter of 2023. This is the normal employer cycle, and we would expect that we will see those employer contracts, as I said, in the third and fourth quarter. What we're seeing in the first and second quarter are primarily off-cycle health plan and provider accounts. Outside of the main employer cycle, we continue to see strong demand for our standalone BH offering and other off-cycle customers, which we expect will generate additional contracts and revenue throughout 2022. All of our recent contract announcements have been these types of off-cycle customers. With regards to health plans, during our year-end call a short time ago, we said we expect an additional 1-2 plans in the coming quarters. Since then, we have announced an additional plan, and we still expect additional plans in the coming quarters of 2022. In addition, we anticipate completing an expanded agreement with our existing national plan in the second quarter, which represents an acceleration of our originally anticipated timing. This expanded agreement has the potential to bring more than 10 million members onto the platform over the next couple years. In 2022, we anticipate multiple millions in revenue from this agreement. The implementation of the Sanofi agreement is well underway. Sanofi began promoting the entire Dario suite to health plans in the second quarter, immediately increasing our health plan sales resources by more than 10 times and bringing additional data and targeting resources to the Dario sales team. Revenue earned under this co-promotion is in addition to the $30 million overall Sanofi contract value we have discussed. Over the last couple of months, we have been collaborating with Sanofi to define new and enhanced solutions that will be built on the Dario platform beginning in the second quarter of 2022, and we're very pleased with the speed at which we've gotten off to the launch of the Sanofi agreement. Sanofi is leveraging its internal data and real-world evidence teams to create studies around the Dario solutions, and we believe that these will have increasing value as the market moves to demanding increasing levels of evidence from digital health providers in the coming years. With Sanofi well underway, we are continuing additional strategic relationship discussions that we believe could add substantially to revenue at the end of 2022 and into 2023. With regard to our remote patient monitoring or our provider offering, we've continued to see contracts with providers in the first quarter and expect that we will continue to see additional contracts and expanding revenue in the second quarter. Given the traction that we've achieved in the health plan employer and strategic markets, we have made a strategic decision to rotate sales resources away from the provider market and into markets with higher near-term revenue opportunities, which we believe will increase the efficiency and improve our operating margin. Back to you, Erez. Thank you, Rick. In light of the recent macro environment, I must say that we are super excited about our positioning as a chronic management company that is changing one of the big industries in the world. We see that other healthcare players are trying to rotate toward our business model that is super user-centric, recurring revenue driven from tech. We do see and are aware to the challenges of companies on the telemedicine part. I just wanna remind again and emphasize that Dario is a user-centric company that try to drive a change from the consumer as opposed to just working with the physicians in a kind of episodic relationships between patient to physicians. Here we are scaling up chronic condition management from the users, and I think that it makes a very, very big difference. We see that the rest of the market is trying to go there. We do believe that, moving forward, we're gonna see more strategic agreements with companies that are coming from the healthcare, more traditional players, that are also becoming more and more believers that digital health and digital therapeutics is something that will create a lot of value and will change healthcare. Therefore, they are looking to have deals with companies like Dario. I expect to see more of those moving forward also this year. Other than that, we believe that we're gonna show continuous improvement in our financial profile, including growth. We super believers in this SaaS model and hitting our objective of 70%-75% growth margins with 50%-60% growth margins on a non-GAAP basis for this year. We're gonna be super cautious in terms of how we are spending our capital. We're gonna keep lower the investment into the direct to consumer, and we're gonna grow the business from the B2B and not from the direct to consumer. This is something that will continuously improve our financial profile and reduce our overall expenses. Other than that, again, on the cash position, we feel comfortable with where we are and with the run rate to 2024. We do believe that in case capital will be needed, we will be able to find sources that are non-dilutive for the company. The environment is something that we understand, and we look into what's happening in the environment. Especially in this environment, we believe that a very successful business that have a future is something that will thrive and create value to investors. And so we're gonna keep execute on the fundamentals. With that, I wanna open the session for Q&A. Thank you. Well, I'll begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time we'll pause momentarily to assemble the roster. First question comes from Alex Nowak. Craig-Hallum, please go ahead. Morning, everyone. This is Chase on for Alex. You know, first of all, congrats on the quarter. Thanks for the questions. First from me, you know, revenue in the quarter from B2B now exceeding consumer is great to see. You know, any additional granularity you can give as far as the breakdown you saw this quarter, maybe how it compares to, you know, sequentially or year-over-year? Maybe what kind of growth rates you are seeing from the two franchises would be helpful for us. Thanks. Appreciate the question. You know, I would say that a lot of what we're seeing is the culmination of the efforts that have been taking place over the last year and two years, associated with that. We had a significant number of launches in the first quarter, as we expected. We're not doing a breakdown in terms of on an individual customer basis, but I would say that we saw growth across all of our, you know, market channels in terms of revenue, and we expect that we will see that continuing. I would say that probably the smallest contribution relative to the other markets would have been health plans in the current quarter as that continues to ramp up. We expect that will catch up rapidly in the second and third quarters with the new health plans coming online. As I mentioned, one of the new ones has already launched and the other one we expect to launch in the near term. With that, we expect that will add to the first one that we have in the current year, and we'll see acceleration of that catching up to the other segments. That's helpful. Thanks. You know, you had previously mentioned, and you mentioned on the call today the additional phases you expect with your large national plan customer. You know, previous comments was expecting, you know, those additional phases to come maybe as early as Q2. You know, any further clarity if that's still the case? You know, what these add-ons might add to your ARR? Yes, we expect that will happen in Q2 from an agreement point of view. Once that's concluded, we'll add it to the ARR. You know, it's from a potential ARR value once fully implemented, you know, we'll approach eight figures. That's great to hear. You know, concerning gross margins, you gave that 50%-60% guide, you know, last quarter and certainly on track there. Can you talk a little bit more about what your expectations are maybe the rest of the year? You know, do you expect that it's up sequentially from here, or do you expect some noise, or should we think things pretty constant through the year? That's helpful. Thanks. Yeah. I think that we might see some noises because it's ramping up and because the revenues that are coming from different channels, it's something that we're gonna see fluctuations. Overall, that's gonna be the kind of baseline. I wouldn't be worried if it's gonna go 2% down or 3% up. When we are launching an account, usually the first three months, we are shipping a lot of hardware and devices, and this is something that show up as a very low gross margin of the first couple of months of the account. After four or five months that the account is in production, we are starting to generate revenue that is much more from software. Overall, a single account will get to 75%-80% overall gross margin, and the average 75%-80% might happen after six or seven or eight months once we are finishing all the enrollment and we are playing only the software kind of game. It depends a lot on how many accounts we are launching in every quarter and what is the intensity of the accounts. The more accounts we have in production, the higher is gonna be the gross margin. One of the things that it's very hard to anticipate is the intensity of the launch per every month and every quarter, and then this is something that creates the fluctuation. Overall, the business should be in this 60% figures for the next few quarters until it's gonna go to the next level and achieve the 70%+. That's how you should look at it. Got it. I see what you're saying there directionally. If I could sneak one more in. You know, as far as how the ramp is looking compared to your guys' internal model would be helpful. I mean, it certainly seems like, you know, these accounts are ramping, you know, nicely in Q1. Is it kind of progressing what you guys were expecting or maybe a little bit ahead of expectations and then maybe how you're thinking about it the rest of the year? I would say generally speaking, they're ramping as we would have anticipated maybe a little bit better. You know, as you know, I'm reluctant to move numbers upward until we have more proof points around that. I mean, I would say it's been a little faster than what we anticipated, but internally, we're keeping our ramps where we've had them historically. Got it. That's helpful. Congrats again, guys. I'll hop back in queue. Yeah. One more thing, just that I wanna emphasize on the gross margins is that you need to remember that we have also the strategic agreement with Sanofi, which is also something that is adding an ARR component to the gross margins that are generally improving the gross margins. This is why I think that in the next few quarters, we're gonna see fluctuations between the traditional B2B, Sanofi and potential other strategic deals, plus the B2C that is getting a smaller portion in the overall revenue. All these components have a different contribution, and that's something that will impact on the fluctuation. Overall, it's gonna be higher than what we have seen in the last two years. Thank you. Next question. Thank you. Our next question comes from Charles Rhyee of Cowen. Please go ahead, sir. Yeah. Hey, thanks for taking the questions, guys. Congrats on the quarter. Just to follow up, for Sanofi, it sounds like you're saying that first $8 million payment comes in the second quarter. What is the accounting for that? Does that show up as revenue and drops to the bottom line? Can you just give us a sense for how we should account for that in our models first? Hi, Charles. It's Rick. In the second quarter, we would not expect $8 million. We would expect a portion of the $8 million that in the current year. The revenue recognition for Sanofi is, you know, dependent on when the elements are delivered. Some of that is in the second quarter. As the development is ongoing in the second, third, and fourth quarters, we would expect that the remainder of that revenue would be recognized. We're gonna see revenue recognition across, you know, across the year as it relates to that. Okay. We'll see an increase in receivables and then, or is there a separate asset created for that? But then we'll see revenue recognition across the rest of the year. That's the right way? We'll see. Depending on the timing, you'll either see receivables or deferred revenue. Yes. Okay, perfect. Just something to emphasize, we did recognize Sanofi revenue also in Q1. We had a nice portion of that in Q1 as well. It's gonna go along the whole year. We're gonna see it every quarter, and we're gonna see it also in the next few years. There are multiple portions of this revenue. Some of it is going to development services, some of it is kind of license related and market access related and data related. There are few portions there. Each of them have a different gross margins. Overall, this is something that I wouldn't call it recurring, but this is something that is happening every quarter and also every year for the next few years. I think this is something that should be modeled as well. When you talked earlier about the fact that B2B revenues were greater than B2C revenues this quarter, the Sanofi revenue you count as part of B2B, that would then correspond to the other comment that health plan contribution still was relatively small. Is that right? Just in terms of the ramp on health plans, it was less of a ramp than, say, the employers, because employers were you know, we launched basically all of the January to December cycle customers we launched that we'd announced in 2021, and some of the stuff that was announced, you know, really in early 2022 launched in the first quarter. So that's got your most significant ramp to it. But yes, we did recognize revenue related to Sanofi as well in the first quarter and some health plan too. My comment was with more- Yeah. Health plans coming on, you're gonna see that ramp happen, continue to happen in the second, third, and fourth quarter. You treat Sanofi as B2B, right? Correct. Okay. You talked about $42 million in contract value. You know, does that suggest that as we exit the year, you know, we should be looking at sort of a run rate on a quarterly basis, you know, including the Sanofi, you know, call it $12-ish million? Is that sort of the right range? Should we ramp up to that kind of level? Does that sound about right? Yeah. When we started to show this model at the beginning of the year, we talked about the time for implementation. We call it like 2-6 quarters time for implementation. The idea is, yes, I mean, we need to get toward the end of the year, beginning of next year, once the accounts are fully implemented under the metrics of the objective of 35%-40% enrollment rate, and we are on track with this number. We think that more or less should be the run rate getting there. Just to clarify one thing in terms of that, is that there's two pieces to that when Erez says that number of course. It usually takes us, you know, 30 to 60 days to launch an account unless it's a account that is, you know, the customer says, "We wanna launch on a specific date," like January one, for example. That could take longer in those cases from contract signing to launch. It takes us a couple of quarters to ramp up the revenue. It doesn't take us that long to implement it. It's just to get to full run rate on those kinds of contracts. It takes a few more quarters. Okay. That's helpful. And then just to clarify, the large national health plan, I think you said that, you know, it's not the phase, the second phase is not in the AR, but if it was, that would be an eight-figure type of deal. That is that just for sort of the second phase, or is that in total? The easiest way to think about it is in the second phase. Okay. That's really what the numbers I was speaking to were coming from. Okay. Perfect. Great. I'll stop there. Thanks for the questions and congrats again. Thank you. Thanks. Thank you. Our next question comes from Rahul Rakhit, LifeSci Capital. Please go ahead. Hey, guys. Thanks for taking the questions. Rick, I know you commented on the sales cycle for the employer market and provided some guidance on how we should think about the rate, which you guys kinda add those employers throughout the year. I was wondering if you could provide some color on the other two segments as well. I guess, broadly speaking, how should we think about the number of customers that you guys be adding in Q2 and Q3 versus Q4? Thanks for the question. You know, when we think about health plans, the health plan sales cycles are, you know, 12-18 months. Obviously, now we've had the opportunity to get to that sales cycle, and that's why we're starting to see accounts come in. You know, I would expect we'll probably see another 1-2 health plans in 2022 based on where we currently sit. Maybe we'll do a bit better. It's a little hard sometimes to predict their exact timing on when they're gonna do things. Providers, you know, I would expect that we'll see, you know, a small handful of providers in the second and third quarter coming through. As I said, in during the presentation is that we're rotating sales resources out of that segment. You know, I think we'll see a little slower growth as that goes forward. We're doing that because of the fact that we believe that we'll be more efficient on top line and bottom line by doing that, and that that'll give us the best growth rate around that. But that's the kinda rate that I would expect. All of those are, you know, I call it off-cycle just because the employer, you know, January 1 to December 31st cycle is such a defined cycle, and none of the other market segments are on any kind of cycle like that. Got it. Okay. I really appreciate that. I guess, you know, kind of based on prior guidance, you know, I guess we're expecting 35 or so more customers there. I guess just for clarification, you're kind of still expecting the majority of those to come in, you know, late Q3, Q4, but, you know, we could expect, I guess, a handful or so in Q2 or early Q3? Yeah. I mean, I think we'll continue to see the types of numbers that we saw in the first quarter. We'll see in the second, third quarter probably a bit acceleration. Then I would say the third and fourth quarter is where you're going to see more accounts because of the fact there, you know, more contracts because that's when we'll start to see the employers that are on a January to December cycle, which is 70% of employers, that's when they'll come in is fourth quarter. It's just by defined cycle. Got it. Okay. No, that makes sense. And then, yeah, I guess, you know, you kinda touched on the health plan market. I know, you know, on its most recent earnings call, Teladoc management team kind of commented on the elongated sales cycle and greater competition in the health plan market. You know, I guess would love to hear, you know, whether you guys are kinda seeing the same thing. You know, if not, I guess could you comment on what's kinda contributing to that disconnect between what they're seeing and what you guys are seeing in this market? Sure. I mean, I don't think we are seeing anything that is different than what we would have expected in the health plan market. Obviously, I don't have visibility to, you know, their internal expectations versus what is happening. I would guess that there's their product mix in terms of what they're selling into health plans has changed, and historically, they haven't really sold into fully insured health plan business. It's mostly been ASO, meaning that it's really for their downstream employer customers, not for their fully insured book of business where they hold the risk. You know, maybe there's some adjustment there because there's certainly a difference in timeframe. You know, we're still seeing things happen in that 12-18-month sales cycle that, you know, we've talked about for many quarters, not seeing a slowdown in terms of health plans interest. If anything, I would say we're seeing more interest in digital health solutions and health plans than we did, you know, a year ago, let's say, just to pick a timeframe. Got it. Okay. No, that's good to know. Last one from me was just kind of hoping you could touch on the broader M&A strategy for 2022. I know we already have, you know, Physimax locked in, but I guess, you know, what kind of companies are you guys looking for, if you are looking for any at this point, to kind of strengthen that platform? Yeah. The blueprint that we see forward is, you know, to have the most comprehensive user-centric platform in the market. We are super interested in other areas. In light of what's happening in the market and the current valuation, it's a bit challenging, but we, you know, we think strategically also with our partners, with Sanofi, and on how we can get things moving forward in a way that we can dominate the market in the next few years. This is something that we are still very active about. I don't know that we can pull the trigger in this environment, but we'll see what's happening. We have a very well-defined strategy on how we wanna go there. Understood. Well, appreciate it, guys. Thanks for taking the questions. Thank you. Thank you. The next question comes from Nathan Weinstein at Aegis Capital. Please go ahead. Hey, good morning, Erez, Rick, and DarioHealth team. Thanks for taking my question. Congrats on another strong quarter with revenue exceeding my expectations. Actually just one follow-up from me, and that would be on the behavioral health platform. You know, what are you seeing with wayForward in terms of customer engagement, use patterns, interest? Any insights there would be appreciated. Do you mean on the customer side or on the member side? I'm curious about. Are you referring to? Yeah, I'm curious about the interest you're seeing from, on the B2B side in terms of. Gotcha kind of customers being interested in using it. Also for their you know, for their individual users, what kind of use patterns are you seeing in terms of engagement? Just any insights on how that's going would be appreciated. Sure. I mean, the behavioral health offering comes in in two flavors, if you will. One is as part of our integrated solution. As I mentioned, most of our current accounts that are in the pipeline are multi-condition, and behavioral health is a popular one among our customers to include in the bundle. Definitely it's in the full suite. On the standalone basis, the majority of the you know what I would say are off-cycle sales include behavioral health, either as a standalone or as part of a broader offering. I think that behavioral health is and continues to be in strong demand in the current marketplace. I think, you know, if you think about the marketplace in general, there's starting to be some considerations for, you know, some of the other solutions for digital behavioral health that are out there in the marketplace in terms of cost effectiveness, and how that really works. The Dario solution that is built out of the wayForward acquisition, as you mentioned, is really focused on navigation and management of the, what I would call, you know, low to moderately severe patients with referral out for the higher severity patients. That model is definitely remains getting traction from that perspective. You know, engagement on the platform, as you would anticipate for the types of acuity that I'm talking about, is episodic. You know, we're still seeing good engagement of members on the platform, good screening of members on the platform. You know, I would say in 95% of the cases, the utilization as we measure it and do it in our contracts, and the way we measure it for our customers is consistent with expectations and historical results. Okay, fair enough. Thanks for the color there, Rick. Sure. Thank you. Next question comes from John Vandermosten of Zacks. Please go ahead. John? Gain access to other state Medicaid plans. I'm sorry, I think we missed the beginning of that. Could you repeat it? Yeah, no problem, Rick. Regarding the Colorado Medicaid plan, are there any specific considerations for this type of business? Broaching into this, does it enable you to gain access to other Medicaid plans? We've actually seen fairly strong interest from Medicaid plans in general. I mean, let me just start there. You know, I think if you think about where is the biggest demand for chronic condition management, you know, from a health plan sector, you know, commercial, Medicare, Medicaid, there's obviously a significant number of people with chronic conditions in Medicare and Medicaid. We would always expect that there would be, you know, a level of interest in that area. Yes, Medicaid has, you know, different considerations, and I think that, you know, the fact that, you know, we have, Medicaid plans does open the market to additional Medicaid plans. Medicaid in general is driven, you know, on a state by state rather than a federal or overall level, so there are, you know, variations in terms of what's covered, how it's covered, how that works. You know, that's some of the complicating factor in that marketplace. You know, there's also considerations around, you know, as we do outreach, you know, what are the communication pathways and, you know, implementation timelines because state involvement in Medicaid tends to be a little bit longer than commercial plans. Okay. You know, having this one under your belt, does that help in future negotiations? I mean, I guess I'm wondering if other states like to see you have experience with it 'cause it is a little bit different type of business. Yeah, absolutely. I mean, you know, taking into account the fact that every state has a little different implementation of it, yes. I mean, when you can say, "Hey, look, we solved for, you know, X," when they ask a question, and here's how we solve for it in a real client that has, you know, that has real weight. Okay, great. Yeah, that's all for me. Thank you, Rick. Mm-hmm. Thank you. Again, if you have a question, please press star then one. Next question comes from David Grossman of Stifel. Please go ahead. Good morning. Thank you. I'm sorry, I joined a few minutes late, but I'm wondering if you could go back to the ARR comment. I just wanna make sure that I fully understand what's embedded in that $42 million. How much of Sanofi is in there relative to full run rates and similarly per the National Health Plan? Sanofi is currently outside of that, the numbers that we're talking about there. You know, obviously all of the other agreements that we have are in that and, you know, health plans are significant, you know, it makes up a good portion of that number. Okay. The first phase of the national health plan would be in that number and the second phase would not. Yes. Is that it? Okay. I think you, Rick, I think you actually dimensioned, you know, what the total would be, or maybe it was Erez at, eight-figure, you know, kind of number at full run rates. Can you give us any better sense of the cadence of how Sanofi and the National Health Plan will impact that number as the year progresses? I mean, I think as we've talked about, we're, you know, anticipating approximately $8 million in revenue in total throughout 2022 from Sanofi. Yeah, that's the current expected amount. In terms of what the final ARR is on the agreement and the contract value on an overall basis with the agreement with the health plan that we're negotiating, you know, that'll be dependent on what the final contract is. I mean, I think we're close, but until that's done, that's a lot harder to comment on other than the comments that I made. Got it. Okay, thanks for that. Just, you know, you guys have talked about, you know, gross margin going up and, you know, redeploying, you know, kind of the OpEx, et cetera. Any comments at all about how we should think of cadence of cash burn again as the year progresses? Should we expect some kind of decline as the year progresses? Yeah, I think that, we're gonna definitely see a decline. I'm not sure if you joined when I talked at the beginning. I mean, I talked about all the improvement of the parameters in the financial profile, top line, reduction in expenses, mainly because of less investing into the B2C, improvement of gross margins. The bottom line, the loss in a non-GAAP, if we exclude stock-based compensations and other non-cash elements, was down from around $14.5 or 9 to $9.7 in Q1. We haven't seen this reduction in the burn rate. Something that I stated very clearly is that what we have seen on the burn rate is one time for this quarter. Because of inventory buildup, we are launching a lot of accounts. Plus, we are in a world kind of challenging environment from a supply chain standpoint, so we spent more money on building the inventory. This is one reason why we had this relatively high burn rate. Reason number two is that payments that we are getting from some of the parties, including Sanofi, showed up in Q2, so this is something and not Q1, and that's something that added to a higher burn. Moving forward, the loss and the burn should show up, you know, as the same numbers. To your question, yes, the burn rate is gonna go down, definitely go down from Q1 to Q2 and moving forward. We're gonna also optimize our spend on the direct to consumer. We're gonna spend less money there, so that's another reason why the burn rate should go down. When it comes to investing into our what becomes the core business, which is implementing B2B accounts, we're not gonna spend less, we're gonna spend a bit more, but overall, the expenses are gonna be down because the portion of the B2C is significant and this one is whopping. Overall, that's the way that we are kind of call it rebuilding the business from B2C to B2B. Got it. Great. Thanks for that. Why don't we just take the rest offline? Thanks again. Thank you so much, David. This concludes our question and answer session. Now I'd like to turn the call back over to Mr. Erez Raphael for closing remarks. Please go ahead, sir. Yeah. Thank you so much. Thanks everyone for joining us today. We are looking forward to keep building the company and execute. As always, feel free to approach us, Rick, myself, Zvi over email. Thank you and have a good day. Bye-bye. Conference is now concluded. Thank you for attending it, today's presentation. You may now disconnect.