David Grossman: Rick, is metabolic — is the utilization rate of metabolic in the Medicaid base, is it different than the corporate average? Or is it similar?
Rick Anderson: There’s actually a wide variation in the customers that we have. But I would say, on average, if you average both of them together, it’s a little bit below. One of them is entirely consistent, maybe even a little higher than our commercial book of business and the other one is lower. I believe that relates to the population that we started in with the one that’s lower and I believe that will come up. We started in a more challenging segment of that population.
David Grossman: Got it. And just last, Erez, just thinking about the cash burn in 2024, can you give us a sense of just how you’re planning on the cadence of the cash burn? Given that we’re closing the acquisition and I’m sure there’s some work that has to be done in conjunction with that, how would you like us to think about again the cadence of the cash burn over the course of the year?
Erez Raphael: So first of all, I’ll try with on a stand-alone base. Dario on a stand-alone base reduced the OpEx by more than 30% year-over-year. And if you look into the OpEx of Q4, we had another 11% reduction comparing to the previous quarter. So Dario is clearly in a path to keep the OpEx down and the OpEx on a stand-alone basis between 2023 to 2024 is going to go down just for Dario by 10% to 15%. That’s number one. Twill, we’re going through a similar kind of path in 2022, 2023. So we are getting into this 2024 in an OpEx that is already reduced. On top of that, on a combined basis, because the 2 companies operate in a very, very similar way, practically, we are winning clients, enrolling members, retaining members and making them healthier.
That’s the objective of the businesses and everything is being done in a digital way. So if you look on the org structure and the operation, it’s very, very, very similar. And a lot of the analysis that we did prior to the acquisition and also in the last 4 weeks after the acquisition, we are very, very, very positive that we are having tons of synergies that will create additional efficiency of 30% in the next couple of years, from which we think we can get at least 20% in the first year which means that on an integrated basis, we’re going to see an OpEx that is lower by at least 20% for this year of 2024. If you apply the revenues, the potential growth and the improved gross margins and we think that for the core business, it’s going to be above 80% because the Twill revenue provide more than 90% gross margins, I think that the overall loss of the company on the operations side is going to be down by at least 30% comparing to the Dario on a stand-alone base in 2023.
So you’re looking into somewhere like $22 million, $24 million a year loss and that’s something that we are having as an objective. And the year after, as I said, we believe that with reduced OpEx and growth in the revenues, we’re going to go to cash flow positive or very close to cash flow positive, that’s the objective. From a cash perspective, we ended the year with $37 million, we raised $22.4 million that we announced alongside with the deal. We paid $10 million cash on the acquisition of Twill and we ended up with, call it, $50 million — approximately $50 million cash. So we think that we are in a good spot. And we think that we are designing the right financial profile in order to manage the risk of cash burn and the ability to grow in a very responsible way.
Operator: And our next question comes from the line of Charles Padala at Lifesci Advisors.
Charles Padala: Thank you, operator. Can you tell us more about the main benefits of Twill care navigation technology?
Erez Raphael: Yes, we’ll hand this question to Ofer Leidner, the founder of Twill, that is part of our team.
Ofer Leidner: Thanks, Chuck, for the question. So I think the main benefit of our care navigation solution is mostly that it shifts the relationship with the user on the very fundamental basis from a transactional relationship, what do you need and how can you find into something we’d like to call a longitudinal relationship. We’re creating a top of funnel engagement that’s really helping users feel confident and safe in that environment and knowing that they can manage their health journey with us during episodes and in between those episodes. What we’ve built into that layer of engagement is several proven modalities such as peer-to-peer support, intelligent personalized content feed, doctors that are supporting users and helping them with answering questions and helping them navigate deeper into the care.
And from there, we simply take them into the self-care solution, coaches or any other care that they need deeper into their journey. What we’ve done in this care navigation kind of environment is essentially we removed all barriers to access, you don’t need to log into your benefit portal. You can log in and access it for free which by the way for employers, it’s a huge challenge when it comes to families and dependents. As a matter of fact, this platform is an open platform. So what we created though, ultimately, the total population solution that engages people, top of funnel, understand very uniquely their journey, where they are and what they need to drive them deeper into the support that they need. What we’re doing ultimately is driving people from engaging top of funnel and further pushing them downstream.
