Omada Health (OMDA) Earnings

Management highlights

### Leadership Transition - After 15 years as CEO, co-founder Sean Duffy will move to the role of Executive Chair on January 1, 2027, focusing on long-term strategy and partnership development - Current President Wei-Li Shao will succeed Duffy as CEO; Shao has 7 years of tenure at Omada, previously serving as Chief Commercial Officer, and has driven consistent performance and innovation ### Core Operational Milestones - Record Q2 performance: first quarter ever with $88 million in revenue, 73% GAAP gross margin, and $5 million GAAP net income, marking the second GAAP profitable quarter in company history - Over 2 million lifetime members served, with commercial partnerships in place with the three largest PBMs in the U.S ### Commercial Progress - As of December 2025, Omada has over 25 million total eligible covered lives, building this base for the 2027 annual benefit cycle - Added new customers across food service, national retail, public education, and industrial employers in Q2, with particular strength in the GLP-1 suite and new cholesterol program - Expanded long-time partner HCSC (a large Blue Cross Blue Shield plan) into three additional states for its fully insured book of business, adding 1.5 million covered lives launching in 2027; this expansion embeds Omada directly at the benefit level, streamlining member enrollment and enabling faster conversion - Newer PBM channels are progressing ahead of plan: one channel in its second year has a stronger-than-expected pipeline for H2 2026, and the second PBM partner (the first to include Omada's prescribing program) is in early sales with encouraging initial results ### Enrollment & Engagement - Growth is broad-based across the entire cardiometabolic suite, not limited to GLP-1 programs - Email enrollment conversion is 20% higher year-over-year, reflecting improved targeting, personalization, and messaging - Strong Q1 2026 enrollment pulled some activity earlier in the year, consistent with historical seasonality where Q1 is typically the strongest enrollment period aligned with new employer benefit launches - Average member tenure increased nearly 10% year-over-year, driven by growth in longer-tenure GLP-1, diabetes, and hypertension programs; longer tenure directly increases billable months per member and improves unit economics ### Operational Efficiency & Margin Expansion - Trailing 12-month cost to serve per member declined over 10% year-over-year, driven by AI-enabled efficiency gains for care teams: smarter coaching tools, improved member demand forecasting, and standardized workflows that increased capacity per care team member - Non-GAAP operating expenses fell from 68% of revenue a year ago to 62% in Q2 2026, delivering 41% incremental adjusted EBITDA margin while still investing in new program and channel expansion - GAAP gross margin expanded 700 basis points year-over-year to 73% (74% non-GAAP, up 600 basis points), already exceeding Omada's previous long-term target of 70% annual gross margin

Guidance

- Omada raised full-year 2026 revenue guidance to $334 million to $340 million, up from the prior range of $322 million to $330 million; the midpoint represents ~30% year-over-year revenue growth from 2025 - Full-year 2026 adjusted EBITDA guidance was raised to $21 million to $27 million, up from the prior range of $14 million to $20 million; the midpoint represents roughly 4x 2025 adjusted EBITDA results - Management expects year-over-year growth to moderate in H2 2026 following an exceptionally strong first half, consistent with Omada's historical seasonal pattern where Q1 is the strongest enrollment period, and new customer contracts closed in H2 launch in the following year's benefit cycle - First half 2026 enrollments are expected to continue generating revenue through the rest of 2026, sustaining healthy per-member economics and margin profile for the full year - Omada will publish an updated long-term financial framework (including growth, gross margin, and operating leverage trajectories) at its upcoming investor day on September 10, 2026

Segment performance

All reported revenue is from Omada's virtual chronic care program portfolio, broken out by program line: 1. Diabetes and Hypertension programs: These are the fastest growing segments, with year-over-year revenue growth exceeding 50% (outpacing overall 43% total revenue growth). They are higher-value, higher-priced offerings where members typically have longer program tenure, making them positive contributors to overall margin. 2. GLP-1 care suite: GLP-1 programs have maintained stable membership mix at ~17% of total members as of Q2 2026, remaining a key growth driver for the business while traction holds across the full product portfolio. 3. Prevention and Weight Health program: Revenue growth from this segment lags the higher-value diabetes, hypertension, and GLP-1 segments, contributing to a healthy mix shift toward higher-margin offerings. 4. New Cholesterol program: Launched as a standalone offering in Q2 2026, positioned within Omada's existing program pricing range (similar to the prevention product) and drives cross-sell/upsell opportunities with existing clients, adding incremental revenue and margin. Overall Q2 2026 total revenue is $88 million, up 43% year-over-year and 13% sequentially. Total active members hit 1.1 million, up 45% year-over-year.

Risks & headwinds

Management did not disclose material new operational failures or company-specific risks beyond standard forward-looking statement disclosures noting that actual results could differ materially from current expectations due to unknown uncertainties. The main market uncertainty discussed is the mixed trend of GLP-1 weight loss coverage among U.S. employers, with some expanding coverage and some reducing it, though management noted Omada is positioned to capitalize on either outcome with tailored product offerings.

Analyst Q&A

• Q: How is AI driving operating efficiency, specifically for headcount planning as the business scales?

  A: AI is a key driver of leverage across both care team support and member experience. Improvements include smarter coaching tools, more accurate member demand forecasting, and standardized workflows for member-facing teams. These gains have already delivered a 10% year-over-year drop in cost per member and a 10% increase in average member tenure, and Omada will continue expanding AI investments. /

• Q: What is resonating with customers beyond just GLP-1 demand, and why is broad cardiometabolic care gaining traction now?

  A: Cardiometabolic conditions (diabetes, hypertension, cardiovascular disease, obesity) have consistently been the top cost drivers for U.S. employers year-over-year, so this conversation is permanently top of mind. GLP-1 adoption has just amplified this discussion. Omada offers the deepest, broadest portfolio of cardiometabolic programs, complemented by wide channel penetration across the top three PBMs and dozens of health plans, making it easy for customers to adopt. GLP-1 acts as an initial conversation starter that allows Omada to sell its full product suite to customers. /

• Q: How do new programs like GLP-1 prescribing and cholesterol expand Omada's total addressable market?

  A: There is still significant white space for Omada: it currently penetrates roughly 8% of the ASO market, 10% of the fully insured market, and ~1% of the Medicare Advantage market, leaving enormous room for growth. New program expansions are customer-driven, as traditional healthcare consistently fails to meet patient and payer needs for between-visit chronic care. Omada has launched more new program capabilities in 2026 than any prior year, paired with the strongest channel sales landscape in its history, creating multiple long-term growth levers. /

• Q: How is Omada positioned amid mixed employer GLP-1 coverage decisions, and is GLP-1 growth slowing?

  A: Some employers are expanding GLP-1 weight loss coverage and others are pulling back, as the market is still in the middle of annual coverage decisions. Omada is well-positioned for either outcome: for employers that cover GLP-1s, Omada offers prescribing and wraparound lifestyle support that improves outcomes and ROI, and for employers that do not cover GLP-1s, Omada's FlexCare program offers clinical support for employees purchasing GLP-1s direct-to-consumer, still delivering ROI for employers. Omada also has a full portfolio of non-GLP-1 cardiometabolic programs that remain in high demand for all employers regardless of GLP-1 coverage decisions.