Why Is DarioHealth Falling After Earnings?

DarioHealth Corp DRIO reported second-quarter FY21 revenue growth of 194% year-on-year to $5.26 million, beating the analyst consensus of $5.11 million.
The non-GAAP billings rose 186% Y/Y to $5.13 million from higher sales and the consolidation of Upright revenues.
Margin: The gross margin contracted 690 bps to 28.7% as the costs jumped 131.2% Y/Y.
Loss per share of ($0.99) missed the analyst consensus loss of $(0.85).
DarioHealth held $63.9 million in cash and equivalents.
The company used $22.8 million in operating cash flow during the six months ended Jun. 30.
DarioHealth grew patients on the platform to 197,000 and B2B2C sales pipeline to over $900 million.
DarioHealth saw increasing demand for its integrated multi-condition digital therapeutics solution, partly driven by expanding its metabolic offering into musculoskeletal and pain conditions through the February 2021 acquisition of Upright Technologies and into behavioral health through the June 2021 acquisition of wayForward.
Gross margin is likely to improve with scale due to its SaaS business model and Business-to-Business-to-Consumer (B2B2C) transformation.
Price Action: DRIO shares traded lower by 5.28% at $11.31 on the last check Monday.

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