DarioHealth Corp. Q4 FY2024 Earnings Call

Good morning, ladies and gentlemen, and welcome to the DarioHealth Fourth Quarter 2024 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Monday, March 10, 2025. I would now like to turn the conference over to Kat Parrella, Investor Relations Manager at Dario. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining us today for a discussion of DarioHealth's fourth quarter and full year 2024 financial results. Leading the call today will be Erez Raphael, Chief Executive Officer of DarioHealth. He'll be joined by Steven Nelson, Chief Commercial Officer. 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 on Monday, March 10, 2025. This morning we issued a press release announcing our financial results for the fourth quarter of 2024. The copy of the 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 fourth quarter 2024 quarterly report on Form 10-K. Additional information concerning factors that could cause results to differ materially from our forward-looking statements is 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 this morning's press release. With that, I'll hand it over to Erez Raphael, CEO of DarioHealth.

Thank you, Kat. Good morning, everyone, and thank you for joining our call this morning. Over the past year, DarioHealth has undergone a transformational shift, evolving into a leading healthcare technology company operating under a satellite model. This evolution has solidified Dario's position as a premier platform in the B2B2C market, expanding sales to employers, health plans, and strategic partners, while continuously enhancing our technology, product offering, and AI-powered capabilities. The acquisition and seamless integration of Twill, which is most significant today, has strengthened our leadership in the industry, creating one of the most comprehensive clinically integrated digital health platforms. Now supporting five chronic conditions under a single unified brand, we are uniquely positioned to meet the growing demand for consumer-centric, whole-person care, in an increasingly value-driven healthcare environment. The healthcare industry is experiencing major shifts. Two key trends are driving our growth. First, the move toward whole-person digital health and vendor consolidation. Employers and health plans are demanding fewer, more integrated solutions that address multiple chronic conditions in a single platform. Dario seeks a platform that delivers multi-condition care, proven ROI, and seamless integration with existing systems. Dario is well-positioned ahead of this shift. The Twill acquisition has created one of the most comprehensive product portfolios in the industry, enabling us to deliver multi-condition solutions across metabolic, behavioral, and musculoskeletal health. Our AI-powered platform now supports five chronic conditions making Dario a leader in whole-person care. One of the growing behavioral health and cardiometabolic offerings, including partnerships with virtual provider organizations like MediOrbis and Rula, allows us to serve a broader population while delivering scalable, cost-effective care solutions. The second major shift is the rise of GLP-1 therapies and the need for long-term behavioral and lifestyle support. The rapid adoption of GLP-1 medications has transformed the healthcare landscape, and our clients recognize that the medication alone is not enough. Employers and health plans are prioritizing comprehensive solutions that ensure sustainable metabolic health and cost control. Dario has emerged as a leader in the GLP-1 companion space, supporting members before, during, and after treatment. Our integrated behavioral, metabolic, and digital coaching approach is a key differentiator helping employers manage the significant costs associated with GLP-1 treatments, ensuring long-term health improvements. The demand is directly reflected in our commercial success. Ten of our new client wins in 2024 were directly tied to GLP-1 solutions. Our GLP-1 companion model, which now includes prescription capabilities, has been instrumental in securing employer contracts. AI is a major driver of our competitive advantage. AI is revolutionizing healthcare, and Dario is uniquely positioned to lead this transformation. Our approach called AI cubed, meaning AI the third power, leverages artificial intelligence in three key ways: operational efficiency, member engagement, and customer value. These 25 years of user data collected by Dario and the companies we acquired, containing records for 5 million patients and billions of data points, is a game changer that drives engagement, operational efficiency, and improves clinical and financial outcomes. We also reported a strong financial and business performance for 2024. Our full year 2024 results highlight the success of our strategy. The total revenue reached in 2024 is $27 million, a 32.9% increase from $20.4 million in 2023. The total revenue grew by more than 110% compared to Q4 2023 and 2.4% sequentially compared to Q3 2024, reflecting continuous business expansion. B2B2C employers and health plans recurring revenue grew by approximately 400% year-over-year, with 35% of that growth coming from organic expansion. Our pro-forma gross profit has increased from 51% to 72%. Gross margins for our B2B2C business were about 80% for the last three quarters, reinforcing our trajectory toward sustainable profitability. We reduced our pro forma operating expenses by 35% from Q1 2024 to Q4 2024 and anticipate a further 20% reduction in our operating expenses by Q4 2025, aiming for cash flow breakeven by the end of 2025. The successful $25.6 million capital raise in January 2025, combined with our pro forma cash balance of $34.5 million as of December 31, 2024, provides us with a strong financial position to continue executing on our strategy. Looking ahead, our plan to grow in 2025 involves aiming for a 50% net client growth, significantly expanding our footprint across employers, health plans, and pharmaceutical partnerships. With a financial profile, a market-leading AI-powered platform, and a clear strategy for expansion, we are well-positioned to drive sustainable long-term growth in the next few years. With that, I'll turn over the call to Steven Nelson, who will walk you through the commercial execution and client growth in more detail.

Thank you, Erez. And good morning, everyone. I am thrilled to share our Q4 and full year 2024 results, marking one of the most transformational years in DarioHealth's history. Over the past months, we have accelerated client growth, expanded our partnerships, enhanced our product offering, and strengthened our financial foundation. We have continued to execute our vision of delivering a fully integrated, AI-powered digital health platform, and we're seeing the impact of this strategy in both our commercial momentum and our financial performance. As we enter 2025, we are well-positioned for continued success. And I'm looking forward to walking you through the key highlights from our past year and the opportunities ahead. Our client growth and expansion in 2024 was a record-breaking year with 36 new contracts signed, bringing our total book of business to 83 clients across employers, health plans, and pharma. Among these, 10 wins were directly tied to GLP-1 solutions, reinforcing our growing demand for behavioral and lifestyle support for GLP-1 users. Our solution supports people at every stage of their GLP-1 treatment, from onboarding and staying engaged to offboarding successfully. This approach helps prevent weight regain and ensures long-term health improvements. By combining personalized digital health interventions with behavioral health coaching, we help clients optimize treatment effectiveness while reducing unnecessary cycles, ultimately driving better health outcomes and lowering long-term costs. Additionally, our client renewal rate remained above 90%, underscoring the strong value and impact of our platform. This high retention rate reflects the effectiveness of our SaaS-like model in delivering measurable ROI, driving sustained engagement, and ensuring long-term revenue predictability. These key factors position Dario for scalable, profitable growth in the evolving digital health landscape. 2025 is already showing strong momentum with nine new client wins in just the first two months through both direct deals and strategic partnerships. This rapid start underscores our confidence in sustained, accelerating revenue growth. Now let's discuss our business channel updates, starting with the employer segment. The employer channel remains a key growth engine for Dario as midsize and large employers increasingly consolidate digital health vendors in favor of integrated multi-conditioned platforms that drive better health outcomes and cost savings. Our GLP-1 companion solution has been a major entry point as employers rank GLP-1 medications as their number one healthcare expense. Dario's comprehensive approach supports the full consumer journey: onboarding, active engagement during treatment, and structured offboarding, ensuring sustained clinical outcomes while reducing unnecessary treatment cycles. Our new product packaging is already paying off, helping us win more deals and tailor solutions to different employers' needs. Employers want solutions that improve health and save money. Dario makes this easy by tying our pricing to real results and simplifying how they pay. Employers demand ROI-driven digital health solutions, and Dario is delivering by integrating clinical outcomes-based payment models and seamless claims-based billing, making adoption even easier. Our strategy for employers in 2025 is direct and focused. We will expand employer adoption by leading with cardiometabolic and GLP-1 solutions addressing both the cost and long-term health management challenges employers face. We will scale behavioral health services by integrating one of the largest virtual therapy networks in the U.S., ensuring employers can provide comprehensive support to their employees. Recently, we announced our new strategic collaboration with Rula, a leader in high-quality behavioral health services. This partnership gives Dario members direct access to Rula's extensive network of over 15,000 providers, covering 120 million commercial lives. By combining Rula's provider network with our AI-driven digital behavioral health solutions, we are making it easier than ever for employers to offer seamless, high-quality mental health care. This marks a significant advancement in expanding Dario's behavioral health solutions and accelerating adoption across the employer market. We are simplifying how employers adopt Dario's solutions by using claims data for smarter employee targeting, seamless billing, and clear proof of impact. We will drive sales execution through a refined go-to-market approach focused on targeting employer segments, accelerating pipeline conversion, and deepening existing client relationships. The opportunity in the employer market is massive. With a growing client base, an expanding product portfolio, and a commercial model built for scalability, Dario is positioned to lead the next phase of digital health adoption, driving sustainable revenue growth and long-term employer partnerships in 2025 and beyond. Shifting now to our health plan strategy. The health plan channel is a critical growth driver for Dario as payers increasingly seek scalable multi-conditioned digital health solutions that drive better outcomes, reduce costs, and improve member engagement. We are approaching health plans in two key ways: first, by supporting their existing lines of business with multi-condition digital health bundles, allowing payers to seamlessly integrate Dario solutions into their care models and provide comprehensive chronic disease management to their members; second, by leveraging our platform to solve payer-specific challenges within their infrastructure and product offerings, providing a platform as a service model that enhances operational efficiencies, engagement, and clinical outcomes. Our dual approach is gaining strong traction with active engagement from all our partners. One major payer has already committed to transitioning to Dario Mind this year, which will enhance our revenue for the second half of 2025. Additionally, we expect to add a full suite offering with one of the largest insurance companies in the U.S. market by midyear, which will also contribute to revenue this year. Medicare Advantage and Medicaid are rapidly shifting to digital-first care, especially in areas where Dario already excels, such as cardiometabolic and behavioral health. This creates a major growth opportunity for Dario as we strengthen partnerships with national payers and expand our presence in government-sponsored programs. By integrating our solutions more deeply into existing health plans, we align with the increased focus on managing chronic conditions through digital health. Expanding behavioral health access is a critical component of this transformation, and our recently announced partnership with Rula strengthens our ability to support payers by combining Dario's AI-driven engagement with one of the most extensive behavioral health provider networks in the country. Because Rula is an in-network provider for most major health plans, this integration makes it even easier for payers to adopt Dario's behavioral health solutions, streamlining access to ensure members receive the care they need. Moving forward, we will continue embedding our multi-conditioned digital health solutions into payer products and benefits. We are rapidly scaling our platform as a service model, giving payers the AI-driven tools they need to tackle key challenges, making Dario's technology even more essential to their business. Dario is at the forefront of the digital health revolution for payers, setting new industry standards for innovation and impact. With a strong foundation, expanding partnerships, and measurable impact, we are set to drive deeper adoption and long-term revenue growth. Now let's dive into another exciting area of growth, our pharmaceutical and medical devices segment. This channel continues to evolve into a high-value, recurring revenue stream for Dario, reinforcing our position as a trusted digital health partner for leading pharmaceutical companies. As pharma increasingly prioritizes digital engagement and patient-centered care, we are seeing two primary ways they are leveraging Dario's platform to drive impact. First, pharma companies are engaging with Dario through our platform as a service model, which has been further enhanced through our partnership with MediOrbis. This allows pharma to integrate virtual care, prescribing capabilities, and remote patient monitoring into their own therapeutic programs, creating a more seamless and comprehensive approach to patient management. As pharma moves toward more direct models of patient support, Dario's scalable digital infrastructure provides customized solutions that improve real-world patient support, streamline access to care, and enhance long-term adherence. This platform as a service model is gaining traction, with several leading pharma companies already exploring how Dario's expanded capabilities can deliver end-to-end digital health solutions, further strengthening our position in this high-value market. Our collaboration with Sanofi has already transitioned into a commercial, recurring revenue model, providing a blueprint for how pharma can leverage Dario's platform to create sustainable digital-first patient support solutions. Five major pharma and medical device companies, including Sanofi, are already using this model, indicating strong and growing demand for digital health tools that support their treatments. Second, pharma and medical device companies are increasingly turning to Dario Mind as a digital therapeutic solution to support patients before, during, and after treatment. This approach ensures that patients receive the mental health and lifestyle interventions needed to improve adherence, enhance outcomes, and create a more holistic care experience. With our new partnership with Rula, we're further strengthening the behavioral health ecosystem available to patients, giving them access to a broad provider network alongside Dario's digital interventions. With virtual care prescribing and digital therapeutics now part of our platform, Dario is transforming how pharma and medical device companies connect with and support patients. As we close out 2024, it's clear that Dario has entered a new phase of growth, execution, and market leadership. We have expanded our reach, strengthened our financial foundation, and positioned ourselves at the forefront of digital health innovation. Our strategy is working, and we are just getting started. The increasing demand for whole-person, multi-conditioned care, combined with our ability to drive meaningful health and financial outcomes, puts us in a strong position to accelerate growth in 2025 and beyond. Looking ahead, we remain focused on scaling our commercial success, deepening client relationships, and continuing to innovate with AI-driven solutions that maximize engagement and efficiency. With strong revenue streams, expanding partnerships, and a clear path to long-term profitability, Dario is ready to deliver sustained value for our customers, members, and shareholders. With that, I will turn it back to you, Erez.

Thank you, Steven. As we conclude today's discussion, it's clear that 2024 was a transformational year for DarioHealth. We are entering 2025 with strong momentum and a solid financial foundation and a clear strategic vision that sets us apart in the healthcare technology space. We have successfully executed our strategy, expanding our B2B2C business, integrating Twill, deepening our relationships with employers and health plans, and strengthening our position in the GLP-1 market. We have built a comprehensive AI-powered whole-person digital health platform that delivers real value to our clients by improving health outcomes and reducing costs. At the same time, we have strengthened our financial profile and business model, making Dario a more efficient, scalable, and sustainable company. Revenue growth combined with disciplined expense management has positioned us for long-term profitability, and our ability to drive recurring revenue across all channels, including pharma, provides greater financial predictability and stability. Looking ahead, our strategy for 2025 will focus on three key priorities. Firstly, accelerating commercial growth. We aim to expand our employer and health plans adoption, deepen existing partnerships, and increase penetration in the payer and pharma markets. Our goal is to increase our total number of accounts by 50%, with GLP-1 solutions remaining a key driver, as employers and health plans recognize the need for cost management and long-term behavioral and lifestyle support beyond the medication alone. Secondly, leading the market shift to whole-person digital health. The market is moving away from fragmented point solutions toward integrated multi-condition platforms that deliver better outcomes and cost efficiencies. This shift has only been reinforced by GLP-1 adoption, which underscores the importance of holistic whole-person care. Dario is uniquely positioned to capitalize on this transition with our AI-powered multi-condition approach. Finally, we aim to drive operational efficiencies and profitability. We'll continue to optimize our cost structure and take operating expenses down by another 20% by Q4 of this year, scale our SaaS-like model, and remain on track for operational cash flow breakeven by the end of 2025. With continued operational discipline and AI-driven efficiencies, we believe we can drive long-term sustainable profitability. We have the right strategy, the right team, and the right momentum to continue delivering profitable, scalable growth in the years ahead. I want to take a moment to thank our employees, partners, and investors for your continued support. We're incredibly excited about what lies ahead, and I look forward to sharing our progress throughout 2025.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from Charles Rhyee with TD Cowen. Your line is now open.

Thanks for taking the questions. Erez, I just wanted to ask about the GLP-1 support programs. You talked about being able to help onboard as well as support through treatment and then the offboarding part. I'm curious about the extent to which you have seen a number of patients or members successfully off-board, given that for most people this could end up being a lifetime treatment. And perhaps what percentage of existing customers have elected to add the GLP-1 support solution.

Yes. Thanks, Charles, for the question. Last year, we won 10 accounts that have the GLP-1 solution. For the B2C segment, we had a few hundred users that already utilized it. With the B2C users that were launched even before, we have seen a few hundred that we have data about. We conducted a specific study that will be presented at the ADA, which will provide the exact numbers, and that data will be published in June of this year. We have already obtained some results on off-boarding, with more results on onboarding, our ability to help users navigate the onboarding process with side effects, and retain them on the drug. We also have the capability to predict those who will be able to successfully onboard and get the desired effect based on data that we have collected over time. So we have some data, and that data will be published through a well-organized study in June of this year.

And I know you're not giving 2025 guidance, but is there any way to give us some rough sense on what to expect, maybe broad strokes for your expectations for growth this year? And in that context, how big of a percentage do you think the GLP-1 program will represent of total revenue?

Yes, so last week, as we mentioned on the call, we won 36 accounts, and this year we aim to grow by more than 50 accounts. This will certainly impact our revenue more notably in 2026, as in 70% of cases, the wins will generate revenue the year after. We believe that a third of what we signed last year was related to GLP-1. We think the GLP-1 segment alone is set to double this year in terms of the number of accounts and our market penetration. So we anticipate it will play a significant role in our revenues. Steven, would you like to add anything?

Yes, I'll add. In the GLP-1 space, one of the key announcements we made in January was our prescribing partner MediOrbis. This allows the employer the option to prescribe according to their benefit design or add controls, among other factors. I believe that's an important reference to consider, and I could expand further if you’d like, but I won’t unless you request it. Another relevant point about GLP-1 is related to clinical information that will be released by the end of the year, and as more data comes out on its impacts and uses, it could shift its perception from being solely associated with weight loss. I'm not a medical professional, but I believe there's a significant amount of data coming throughout the year that will enhance our offerings.

Yes, one more on GLP-1 just quickly, how many employers are choosing to have MediOrbis prescribe it? My understanding is that, if you have a dedicated prescribing network, that could impact rebate calculations on the pharmacy benefit side. I'm curious if that's being implemented.

It's challenging to provide an exact number right now, as we just launched it in January. We're currently discussing it with all of our clients. It was a key aspect of our evaluations during last year when we assessed business wins and losses. We identified this capability as a necessary component of our offering. As discussed today, our focus is on execution and identifying what we precisely need for our market offering. We need to enhance our GLP-1 offering programmatically. Time will tell how many will adopt this option, as well as how the product evolves in terms of clinical care.

Got it. Maybe just a couple of questions on the health plan side. It seems that the primary focus has been behavioral health. Can you discuss the opportunities to expand offerings through the health plan side, including weight loss or other cardiometabolic conditions? Have any of those discussions occurred with existing health plan partners?

Yes, I did announce earlier today that we are expecting to sign a large health plan in the back half of the year. I believe that will be a significant development when we reveal what we're doing with them and its market implications. It will encompass full suite services, which is very encouraging. There are opportunities for us to expand in cardiometabolic conditions through our existing health plan partnerships.

Thanks. One last question regarding expectations you outlined previously about health plan revenue growth of 35% in 2025. Is that still the target to consider?

We are not guiding for how 2025 or 2026 will unfold. The growth rate you mentioned is a target we expect across all channels and is generally what we aim for. However, I want to clarify that you mentioned an assumption regarding behavioral health being a larger revenue contributor compared to cardiometabolic health. From a revenue and win rate viewpoint, I don't believe behavioral health will surpass cardiometabolic health. Dario has been developing the cardiometabolic solution for several years, and we possess one of the most advanced offerings in that area. Twill has built a strong behavioral health solution, and both are being marketed as standalone products as well as a full suite. We don't anticipate significant large accounts crossing over into behavioral health exceeding metabolic health. When breaking down average revenue per user, the metabolic health segment will yield a larger revenue stream.

Understood. Lastly, could you remind us of your expectations for reaching breakeven? Is maintaining the end of this year as your goal?

Yes, the goal is to achieve an operational breakeven run rate by the end of this year. Concerning the earlier point about 35%, during the previous call, we discussed a 35% growth target in the total accounts we are securing. This year, we updated that number to aim for 50% growth in total new accounts. We aim to acquire at least another 50 accounts this year.

Got it. Appreciate the clarification.

Yes, absolutely. Thank you.

Thank you, Erez and Steven. Just big picture questions—please elaborate on any sub-topics that would interest investors. First question: How significant do you see the role of GLP-1 treatments in your strategy and growth opportunities? Second, as digital health continues to evolve, what distinguishes your business model and financial profile? How do these factors position the company for long-term profitability?

Thank you so much. Maybe I'll start with the second question. We have seen digital health companies evolving, but when examining the market and valuations, there has been general disappointment regarding the financial profiles of these companies and their ability to build a viable business. The design of our product offering and organization is focused on building for profitability. The differentiator is, firstly, our capacity to drive outcomes per patient, and secondly, by helping employers with 3,000, 5,000, or 10,000 employees to enroll in a full suite, which is cost-effective for both them and us. This results in generating four to five times more revenue for every account we sign. When combining this capability with a strong engagement strategy, we project high revenue and ROI for each account. Our effective cost management has seen operational costs decrease by 35% between Q1 and Q4. This trend will continue into 2025, aiming for another 20% reduction by Q4. So, effective cost management, a highly engaging product, and robust unit economics position us to possibly create one of the first sustainable businesses in digital health. Now, regarding GLP-1, we can identify two major trends that will drive revenue and increase our market share. Firstly, clients are focusing on seeking whole-person solutions like multi-condition care, and secondly, the continued adoption of GLP-1 treatments. According to surveys among employers, GLP-1 drugs represent the largest expenses and need to be managed effectively to ensure ROI.

To add some context, our direct-to-consumer approach helps us understand our business model and navigate the market. We learn from this data, enhancing our B2B2C offerings. It's a strategic advantage. Additionally, the multi-condition platform is pivotal. We must capitalize on its potential responsibly while pushing toward profitability. We can leverage our multi-condition offerings to effectively meet market demands. We’re also integrating partners rather than solely building; this approach validates our role in the market.

Thank you, Erez and Steven. Best of luck.

Thank you.

Thank you, Ashok.

Good morning. Erez, you mentioned vendor validation. Could you share some statistics on the trends in customers taking multiple solutions, be it metabolic, behavioral health, etc.?

Yes, when we talk about multi-condition, it isn't limited to just metabolic and behavioral health. Clients are often using solutions for diabetes, hypertension, and weight loss. Currently, we see that over 50% of the accounts we are signing are leveraging more than one condition. This is a robust trend primarily in metabolic health. Clients combine treatments for diabetes, hypertension, and weight management. As for the full suite offering, we currently don't have any accounts that have purchased this integrated solution. We integrated the product only in 2024, and everything is unified under the same brand from Q4 2024. However, we are actively working with clients who are transitioning from behavioral health to metabolic solutions and vice versa. We anticipate that this year will see multiple accounts adopting the full suite, especially from mid-sized to larger offices that can cater to 2,500 to 10,000 employees. We're seeing RFPs and demand in that regard. We expect at least a third of our 50 target wins this year to be full suite offerings. Additionally, one exceptionally large client, a National Health Plan, is in discussions to take the entire suite.

Thank you for the clarification. Regarding the strategic relationships with large pharmaceutical partners, can you update us on Sanofi and others in the pipeline? Are these primarily centered around GLP-1 or do they encompass broader initiatives?

Regarding Sanofi, our previous relationship, which involved primarily clinical data, has shifted to a more commercial focus. The account did not generate significant revenue last year, but we expect it will start contributing this year under a new commercial agreement. Regarding our Dario Connect solution, which we sell to pharmaceutical companies for top-of-funnel engagement, this has been launched and will begin generating revenue from Q1. This transformed strategy provides insight into how the pharmaceutical channel will generate recurring revenue this year. We aim to diversify revenue streams, expecting more predictable earnings from a broader range of accounts over time. We are working on a few significant partnerships and think we will sign two or three this year. This includes the full suite for a major National Health Plan. However, the majority of the revenues will come from small to medium employers, with many accounts estimated between $300,000 and $1.5 million in contributions.

Just one last thing. You mentioned tying pricing to results and claim-based billing. Could you elaborate on that?

Two points: First, Dario currently processes only a portion of our services through claims. We want to ramp up the ability for our clients—employers or health plans—to pay through claims. Most programming costs are currently covered from administrative budgets, while we're transitioning to enhance our billing options that engage claims data. This ensures we can better target, engage, and report outcomes. Secondly, we're looking to align our programming with key clinical milestones to establish payment models tied to those performance indicators. This approach supports our partnerships and demonstrates the tangible impact of our offerings. We've already initiated one of these models with a health plan and will explore further implementations with other health plans and employers, allowing us an opportunity to open up a broader revenue pool and offer distinct pricing options.

Thank you very much. Good luck.

Thank you.

Thank you.

There are no further questions at this time. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.