Earnings call transcript: Omada Health Q3 2025 sees revenue growth, stock dips

Omada Health Inc. (OMDA) reported its Q3 2025 earnings, showcasing significant year-over-year revenue growth and an improved financial position. Despite these positive results, the company's stock fell 6.14% in aftermarket trading, closing at $23.3, reflecting investor concerns over future earnings projections and market conditions.

Key Takeaways

• Q3 2025 revenue increased by 49% year-over-year to $68 million.
• Omada Health achieved its first quarter of positive adjusted EBITDA at $2 million.
• The company's stock price dropped by 6.14% in aftermarket trading.
• Omada Health's membership grew by 53% year-over-year to 831,000.
• The company introduced new GLP-1 medication prescribing capabilities.

Company Performance

Omada Health demonstrated robust growth in Q3 2025, driven by a substantial increase in revenue and membership numbers. The company reported a 49% rise in revenue, reaching $68 million, and a 53% increase in total members to 831,000. These figures underscore Omada Health's ability to scale its operations efficiently, with operating expenses rising only 24% over the same period. The company also achieved its first quarter of positive adjusted EBITDA, marking a significant milestone in its financial performance.

Financial Highlights

• Revenue: $68 million, up 49% year-over-year
• Total members: 831,000, up 53% year-over-year
• GAAP gross margin: 66%, up from 63% in Q3 2024
• Non-GAAP gross margin: 68%
• Adjusted EBITDA: $2 million
• Net loss: $3 million, down from $9 million in Q3 2024

Market Reaction

Despite strong financial results, Omada Health's stock fell by 6.14% in aftermarket trading, closing at $23.3. The stock movement may reflect investor concerns over the company's future earnings potential, as indicated by negative EPS forecasts for upcoming quarters. The stock's decline places it closer to its 52-week low of $14.14, contrasting with its 52-week high of $28.4.

Outlook & Guidance

Omada Health provided a revenue guidance range of $251.5 million to $254.5 million for 2025, representing 49% growth. The company aims for a break-even or slightly negative adjusted EBITDA of up to $2 million. Looking ahead to 2026, Omada Health plans to focus on expanding its GLP-1 offerings and advancing AI and GPT technologies. The company targets long-term gross margins of 70% and EBITDA margins exceeding 20%.

Executive Commentary

CEO Sean Duffy emphasized Omada Health's commitment to addressing chronic disease management, stating, "We have the privilege and the responsibility to dream big on behalf of the more than 150 million Americans living with chronic disease." He also highlighted the strategic importance of GLP-1 offerings, noting, "GLP-1s, whether they are covered or not, is a tide that will lift our multi-condition platform ships."

Risks and Challenges

• Market saturation: As the market for digital health solutions grows, competition may intensify.
• Regulatory changes: Potential changes in healthcare regulations could impact Omada Health's operations.
• Economic pressures: Broader macroeconomic challenges could affect consumer spending on health services.
• Dependence on new technologies: The success of AI and GLP-1 offerings is crucial for future growth.
• Medicare market expansion: Navigating the complexities of Medicare Advantage and Fee-for-Service markets poses challenges.

Q&A

During the earnings call, analysts inquired about Omada Health's new GLP-1 prescribing capabilities and the company's multi-condition growth strategy. Questions also focused on the potential expansion into the Medicare market and the company's marketing and member acquisition strategies. Executives addressed these queries, emphasizing their confidence in the company's strategic direction and growth prospects.

Full transcript - Omada Health Inc (OMDA) Q3 2025:

Conference Operator: Day, and thank you for standing by. Welcome to the Omada Health Third Quarter 2025 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alan Kells, Head of Investor Relations for Omada Health. Please go ahead.

Alan Kells, Head of Investor Relations, Omada Health: Thank you. Good afternoon. Welcome to Omada Health Third Quarter 2025 earnings call. Joining me today are Sean Duffy, Co-founder and CEO; Wei-Li Shao, our President; and Steve Cook, our CFO. Before we begin, I'd like to note that we will be discussing non-GAAP financial measures that we consider helpful in evaluating Omada's performance. You can find details on how these relate to our GAAP measures, along with the reconciliations, in the press release that is available on our website. We'll also make forward-looking statements based on our current expectations and assumptions, which are subject to risk and uncertainties, including factors listed in our press release and in the risk factors found in our filings with the SEC. Actual results could differ materially, and we assume no obligation to update these forward-looking statements. With that, I'll turn the call over to Sean.

Sean Duffy, Co-founder and CEO, Omada Health: Good afternoon, everyone, and thank you, Alan, for the introduction. I appreciate all of you for taking the time to join us today. Let me begin with highlights from our third quarter, which was another strong step forward for Omada. Total members climbed 53% year over year to 831,000. Revenue grew 49% year over year to $68 million. GAAP gross margin reached 66%, with non-GAAP at 68%, both up sharply from Q3 last year. We tightened the bottom line, reducing our net loss to $3 million versus $9 million in Q3 2024. For the first time, we delivered a positive adjusted EBIT quarter, with Q3 landing at $2 million compared with a $5 million loss at Q3 a year ago. These numbers are encouraging, but the real story is the impact behind them. One of our GLP-1 CareTrack members recently told us.

Having struggled with weight for most of my life, I realized there is no quick fix. GLP-1 medicines are helpful, no doubt, but I needed to develop tools and a mindset geared toward my long-term success. Omada has been very helpful in getting me thinking about what I can do to better my life now and in the future." Stories like that remind us why we're here: to deliver evidence-based care between doctors' visits, care that weaves together clinical services, wraparound support for next-generation therapeutics such as GLP-1s, and cutting-edge, AI-driven experiences. Our long-term mission at Omada is simple but bold: bend the curve for the more than 150 million Americans living with chronic conditions such as prediabetes and obesity, diabetes, hypertension, and musculoskeletal disease. We pursue this mission on behalf of employers and health plans that seek healthier populations at lower costs.

During the third quarter, I believe we demonstrated meaningful progress towards this mission. First, innovation remained front and center. Today, we announced prescribing for anti-obesity medications within our GLP-1 CareTrack as a planned option for our clients. We believe it addresses many of today's market needs and positions us to better support the next wave of oral and injectable GLP-1 therapies, which we believe will span various price points in the future. As those therapies evolve, so will questions employers face. Chief among them, in addition to lifestyle support, how do we help ensure the right member is on the right medication at the right time?

Our answer at Omada combines behavioral intelligence, which are learnings from health metrics, readiness, and engagement data from serving more than 100,000 GLP-1 users; behavioral support to drive outcomes while on the medicines and sustainability while not; and flexibility that enables employers to tailor their GLP-1 benefit strategies against their unique needs. The customer conversations we've had as we've shaped this offering have been clear. Many customers want help thoughtfully managing GLP-1 spend while preserving clinical value. They want a partner that can be configurable and flexible as they evolve their benefit strategies year over year, and they want a partner who is built for scale. Our new capability squarely targets these customer needs. Beyond product innovation, in Q3, we deepened our research. August marked our 30th peer-reviewed publication, highlighting significant savings from our joint and muscle health program.

We also published data from our weight health program, showing members in the analysis largely maintained weight on average one year after discontinuing GLP-1 therapy, evidence that challenges the narrative of inevitable rebound weight gain. We're also proud that the business has been scaling efficiently. Through the first nine months of 2025, revenue is up 51% and membership is up 53% versus the same period last year, while operating expenses rose only 24% and cost of revenue only 31%. That gap shows our ability to grow on top of strong foundations. Key drivers of that operating leverage include years of investment in technology, clinical research, and streamlined operations, plus a deliberate multi-product approach. One sales team currently sells four programs, so clients can work with a single trusted partner instead of managing different point solutions. The result is leverage for Omada and often loyalty from our customers.

As we look into 2026, we're excited about the path ahead. Our annual planning has surfaced two clear investment themes, making 2026 what I like to call the year of the Gs. The first G is GLP-1s. We plan to invest in both the prescribing offering announced today, as well as other improvements that can deepen our solutions across the GLP-1 lifecycle. The second G is GPTs and broader AI. We plan to keep weaving AI into many layers of our program, including more tools for members and the care team experience, as well as leveraging these tools to drive internal productivity amongst our teams. We believe these investment areas can add value as we seek to widen our competitive moat and fuel sustainable, responsible growth. Lastly, we were honored to welcome Dr. Tom Sang as Omada's Chief Medical Officer. Tom is a physician, innovator, and seasoned operator.

More recently, Tom was the CEO and co-founder of Valera Health. He also sits on the boards of NCQA and Blue Cross Blue Shield of Kansas City. His expertise in clinical quality, value-based care, and telehealth perfectly aligns with our next chapter. In short, I believe the stage is set for an exciting moment at Omada. We're proud of this quarter's results and even more energized by what lies ahead. We have the privilege and the responsibility to dream big on behalf of the more than 150 million Americans living with chronic disease. As we execute, we believe that one day we can truly bend the curve. With that, I'll hand things over to Wei-Li, who will walk through the quarter in more detail.

Alan Kells, Head of Investor Relations, Omada Health: Thanks, Sean. Hello, everyone. I'm pleased to share more details on our results and provide an update on our progress against our strategic pillars. Some highlights from Q3 include: we ended the quarter with 831,000 members, up 53% compared to Q3 of last year. This includes 79,000 net new members during the quarter and 259,000 year to date, which is more than any full year in our history. This number of growth reflects continued multi-condition adoption, strong demand for our GLP-1 offerings, and solid execution by our teams. During the current selling season, we have seen healthy activity and continued interest in Omada's programs, especially our GLP-1 CareTrack, which we believe can position us well for success in 2026 and beyond. This activity includes early sales traction through a large new channel partner that supports our full suite of current offerings.

In six months, we have already closed multiple planned launches through this channel with new and upsold customers representing an estimated 180,000 individuals, and closing season isn't yet over. It's also noteworthy that 75% of these customers have chosen to offer multiple Omada programs to their employees, underscoring the appeal and value of our integrated multi-condition platform. Now I'd like to share our progress in the areas we view as our strategic pillars: innovation, programs that work, and our multi-condition platform versus point solution approach. These pillars guide how we innovate, engage members, and partner with customers. Starting with our first pillar, innovation, we invest in innovation to enhance the member experience, strengthen our competitive position, and scale the impact of our care teams. Earlier this year, we introduced Omada Spark, our AI-powered agent that interacts directly with members alongside our human coaches.

We are pleased with how it's been received so far, and early observations showed that members who interacted with the nutrition assistant demonstrated higher levels of ongoing engagement and were more likely to return to the Omada app compared to those who had not yet used the tool. We've now built on that foundation with Meal Map, an AI-driven nutrition experience launched last month. Meal Map combines instant nutrient feedback with personalized guidance from our care teams to help members understand the quality of their food choices, not just the calories. It helps members move beyond restrictive dieting towards sustainable, evidence-based habits that promote energy, digestive health, and cardiometabolic benefits. Early observations include signs of higher engagement and more consistent meal tracking compared to traditional approaches, with positive feedback both from members and clinicians.

Together, Omada Spark and Meal Map show how we're using AI to deliver more personalized and actionable educational experiences. As Sean indicated, we also view our incremental investment in GLP-1 prescribing as an innovative way to address customer needs and potentially widen our moat. The next era of obesity therapeutics may be defined by a continuum of options: oral and injectable, first-line and maintenance, single and dual agonist, and multiple indications, thus creating more complexity for employers, providers, and members alike. Managing that complexity requires more than just prescribing. It demands coordination and support to help ensure people start the right therapy, stay on it, and transition smoothly as their needs evolve. Our prescribing offering will be built for that environment, with an integrated approach that considers the full journey of a patient from the time of prescription to the everyday moments.

We will leverage behavioral intelligence to support prescribing decisions and medication management, helping ensure the right members start, stay on, or safely discontinue therapy. Prescribing will be delivered through an integrated program experience that supports our members across all 50 states. For more than a decade, Omada has focused on the moments that often matter most: the time between doctors' visits, where real life happens. By integrating prescribing with our between-visit care model, we aim to close the gap that often exists between a doctor's guidance and a member's daily actions and help to ensure that every part of the care plan continues where it matters most. Increasingly, we believe our customers recognize this too. Many are asking for prescribing not because they need another vendor that can write prescriptions, but because they know what happens after prescribing.

Omada's engagement, data-driven coaching, and human connection is often where real behavior change happens. By aligning clinical care and behavior change, our approach to prescribing will bring these forces together and aim to deliver lasting metabolic improvement and help bend the curve of chronic disease. We look forward to sharing more as we approach its planned launch in the first half of next year. Our second pillar, programs that work, focuses on programs grounded in clinical evidence and behavior change science that are designed to produce measurable and lasting results. A clear example of this is our GLP-1 CareTrack, which supports members before, during, and after GLP-1 therapy. In September, we released results from a 12-month discontinuation analysis showing that members in the analysis who stopped GLP-1 medications but stayed in the Omada program largely maintained their weight one year after GLP-1 discontinuation.

Participants in the analysis experienced a mere 0.8% average weight change one year after discontinuation, with 63% maintaining or continuing to lose weight during that period. That compares to the 11%-12% average weight gain seen in key clinical trials without ongoing lifestyle support. This analysis was completed as part of the Omada Insights Lab Answers initiative, which examines and shares real-world data from Omada's behavior change weight health programs. These findings highlight the value of Omada's human-led and digitally enhanced care model and demonstrate our ability to deliver outcomes that extend beyond medication use. We also reached another important milestone this quarter: publishing our 30th peer-reviewed manuscript. The research analyzed our Omada for joint and muscle health program and found that members using Omada's virtual physical therapy on average had lower medical utilization and costs compared to in-person physical therapy, even after accounting for program costs.

In this analysis, median per member per month savings exceeded $100 in the first six months, and the total MSK-related savings topped $1,000 per member at both 6 and 12 months, delivering an approximately 1.8x ROI. This research adds to our growing body of evidence showing that virtual integrated care can drive both clinical and financial value for our customers. Our third pillar is the power of an integrated multi-condition platform. We believe customers increasingly recognize the limitations of point solutions and the advantages of a single scalable partner. We continue to see growth in multi-condition adoption. In addition to the early multi-condition success I mentioned with our new large channel partner, another good example from Q3 was our expansion with a consultant partner through which employers representing approximately 110,000 benefit-eligible employees will now have the ability to provide those employees with access to Omada's full cardiometabolic suite.

This partner expanded from offering only our MSK program to embedding our full cardiometabolic suite into the offering they make available to their clients. In summary, our performance this quarter reflects the strength of our strategy and our ability to execute. I will turn it over to Steve to discuss the financial results in more detail.

Sean Duffy, Co-founder and CEO, Omada Health: Thank you, Wei-Li. Hello, everyone. Today, I'm going to walk through our results and our updated outlook. Fundamentally, Omada makes money by demonstrating the value of our solutions to employers, health plans, PBMs, and other payers, who then pay for Omada on behalf of their employees or members. As individuals enroll in our programs, we begin charging a monthly membership fee based in part on member engagement. This model can create an enduring revenue stream with good visibility, and we saw that reflected in our Q3 performance. As Sean and Wei-Li mentioned, our members grew 53% to end Q3 at 831,000. Revenue in Q3 was $68 million, up 49% year over year. The primary factors that drove our member and revenue growth include strong adoption of our GLP-1 programs, increased penetration of multi-condition customers, and increased effectiveness of our marketing campaigns.

Moving to gross profit, our Q3 GAAP gross profit was $45 million, up 58% compared to Q3 2024, and our GAAP gross margin was 66% compared to 63% in Q3 2024. Q3 adjusted gross profit was $46 million, representing 56% growth year over year. Adjusted gross margin was 68%, an improvement of approximately 300 basis points year over year. A key driver of our gross margin progress was the efficiency gained through our self-built care team platform, which we have continued to enhance by adding capabilities such as an AI care team tool designed to help our care teams provide more efficient and effective care. Moving to operating expenses, our GAAP operating expenses were up 28% year over year to $47 million in Q3. Adjusted operating expenses were $44 million in Q3, up 26% year over year.

This growth supported 49% revenue growth, demonstrating strong operating leverage that has been driven by operating multiple conditions on one platform that can be sold by a single salesforce, scale created through our channel partners in our B2B to C go-to-market model, and spending discipline as we focus on profitability. As a result of this leverage, we have made good progress towards sustained profitability. Our GAAP net loss in Q3 was $3 million compared to a $9 million loss in Q3 2024, representing net loss margins of negative 5% and negative 20%, respectively. Our GAAP loss per share in Q3 was $0.06 compared to a loss of $1.18 in Q3 2024. Adjusted EBITDA in Q3 was $2 million, which compares to a loss of $5 million in Q3 2024. Our Q3 adjusted EBITDA margin was 4% compared to negative 11% in Q3 2024.

We are very pleased with our narrowing net loss and our first quarter of positive adjusted EBITDA in Q3, which has been achieved through our focus on building a scalable business in a disciplined manner. As Sean discussed, we are making investments heading into 2026 while remaining focused on managing spending and continuing our progress towards sustained profitability and our 20% plus long-term adjusted EBITDA target. We aim to meet an important moment in a dynamic market by investing responsibly in areas such as prescribing, additional GLP-1 support, AI, and other product enhancements that have potential to widen our moat, deepen our differentiation, and position us for durable growth in the years ahead. Moving to our balance sheet, we ended Q3 with cash and cash equivalents of $199 million compared to $223 million in Q2 2025.

The decrease was driven by us paying off our $30 million of debt, partially offset by our positive cash flow in the quarter. Moving to guidance, we expect 2025 revenue in the range of $251.5 million-$254.5 million, up from a prior range of $235 million-$241 million. The midpoint of this range reflects 49% growth over 2024. We expect 2025 adjusted EBITDA in the range of negative $2 million to break even, up from a prior range of negative $9 million to negative $5 million. The midpoint of this range reflects an improvement of approximately $28 million compared to 2024. In summary, we are pleased with our Q3 performance, which demonstrated continued momentum in our business and the scalability of our model. With that, we'll now open the call for questions.

Conference Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourselves to one question and one follow-up to allow everyone the opportunity to participate. Our first question comes from the line of Lisa Gill from JP Morgan.

Thanks very much. Good afternoon and congrats on the great results. Can you spend a few minutes just talking about prescribing of GLP-1 around, one, the fulfillment price? Will you actually be fulfilling the drug? Will it be they'll be bringing a coupon or the prescription to the pharmacy? Just if you can talk about this new initiative that you have today and how that'll play out. Thank you.

Sean Duffy, Co-founder and CEO, Omada Health: Yeah, certainly, Lisa. This is Sean. Thank you for the question. Good to hear your voice. Let me just first share, we're very excited about this. We view it as a next evolution of our GLP-1 CareTrack. Let me just describe a little bit more on the why behind prescribing, and then we can answer some of the tactical details you highlighted here. First and foremost, anytime we do something new at Omada, we listen to customers, we listen to members. At the customer level, they're seeing what we're seeing and what we highlighted in the opening remarks, which is a new era of obesity therapeutics, different medicines, different form factors, different price points. This creates a new need to support our clients and our members with managing the complexity of medication optimization alongside the lifestyle support that they know Omada to be great at.

We think this creates a new world where Omada can serve to support the right GLP for the right person to deliver additional client and member value. That is really germane to the mission to bend the curve. Specific to some of the tactics, as shared, this will be an integrated experience within the Omada Care program. These will not be compounded meds. They will be branded meds fulfilled by the pharmacy of the member's choice. It will be an enterprise model working specifically with clients and plans. I do not know if, Wei-Li, you have anything to comment on top.

Wei-Li Shao, President, Omada Health: Yeah, Sean, just to add on top of that, I believe, Lisa, you also asked a question about pricing in there too as well. As we've just only announced the capability today, there's nothing to share regarding pricing. What I can say about that is that it will be incremental pricing on top of our monthly chronic condition management fee. The strategic intent, of course, is to make this pricing not only accretive on the top line for revenue, but also accretive to margin as well.

Just as a quick follow-up there, I mean, we saw Trump making an announcement on Trump RX talking about GLP-1s in roughly the $149 range. Should I be thinking that you're going to have the opportunity to offer these at a pretty substantial discount?

Sean Duffy, Co-founder and CEO, Omada Health: Look on the announcement. We believe that today's announcement is really a neat moment and perhaps a transformational moment for the field of obesity. It is almost serendipitous that it occurred on the day that we launched a prescribing solution. Because, as shared, we've been looking toward a world with different meds, different price points, perhaps even different price points at different doses with different indications. That world creates a lot of complexity for buyers. That world creates an opportunity to simplify that for buyers and members. That is germane to the news we announced today. We're thrilled by it. I mean, at the end of the day, lower prices enable broadened access. We think that's a great thing through the world and are really heartened with seeing that news.

Great. Thank you so much.

Wei-Li Shao, President, Omada Health: Yeah, Lisa, thanks. Maybe I'll just add on to that a little bit just because all this news, of course, is just fresh off the page. As it relates to, will we be able to direct patients towards this price? It always has been, as we've been over the last year talking to customers and developing our prescribing plus behavior change lifestyle intervention program, which we, again, announced today, always has been the intent that we would help patients, or what we call members, find the best price because we know access and affordability is important. Again, all this information is fresh off the news wire. We're going to have to see exactly how the price follows through from Medicare fee for service over to Medicare Advantage, over to the commercial segment.

That's typically the flow, but we'll have to see if indeed it pans out that way. We feel incredibly fortunate that we are poised in this position to be able to leverage what we think could be a transformative moment in obesity care.

Great. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Craig Hettenbach from Morgan Stanley.

Alan Kells, Head of Investor Relations, Omada Health: Thank you. Just following up on that and understanding you said it could be accretive to revenue and margin. Can you just talk even high level about just kind of investments that maybe you need to make to kind of get this off the ground and how you think about that implications for 2026?

Sean Duffy, Co-founder and CEO, Omada Health: Hey, Craig, this is Steve. Absolutely, thank you for the question. We're not talking through specific numbers at this point. We're just at the tail end of the end of our 2026 annual planning process. Obviously, to stand this up, it's going to require some investment, namely across our engineering and our product organization, as well as our sales and marketing teams. As we think through the go-forward here, we're going to plan to provide more specific guidance once we get into the March call and to be able to stand up this functionality. This has been at the back of our health plan customers, our PBM customers asking us to stand up this functionality. We do realize that is going to be an investment that we're going to need to make in 2026.

Alan Kells, Head of Investor Relations, Omada Health: Got it. Then just separately, a question on the selling season. Last year, I think 50% of new customers started with two conditions or more. Just trying to get a sense in terms of, is that still the trend in terms of this year and anything that's standing out one year to the next in terms of what's really resonating most with customers this year?

Wei-Li Shao, President, Omada Health: Yeah. Hey, Craig, this is Wei-Li. Thanks for the question regarding the multi-product penetration. You're correct. We've said historically that we've seen quarters where closed deals for new business and upsell have far exceeded 50%. We continue to press on that, as you might imagine, and we continue to make progress on it. The results in the selling season so far, I mean, we're a little more than halfway through, but if you look at Q3, we're pleased with the progress. We continue to make traction against our multi-product sales. Maybe I'll comment too a little bit on the pipeline. Some of you probably are wondering about that too as well. In Q3, we're seeing double-digit volume deal growth Q3 to Q3 last year. We like what we see, but of course, the selling season's not over yet.

Our sales teams, you can bet, are busy closing out the year as strong as possible.

Alan Kells, Head of Investor Relations, Omada Health: Great. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Richard Close from Canaccord Genuity.

Yeah, a couple of questions here. First, congratulations on the strong results. Just maybe a follow-up on the GLP-1 and maybe, Steve, how you're thinking about those investments. Should we assume that you're able to, with some of the AI initiatives and whatnot, keep gross margins in this zip code of 68% even with rolling out this new offering or prescribing?

Sean Duffy, Co-founder and CEO, Omada Health: Yeah, no, absolutely, Richard. Thank you for the question. As we've committed to, our goal in the future is to get to 70% annualized gross margins. A lot of the investment that we intend to complete next year is actually going to hit in operating expenses across sales and marketing and R&D. On that front, we remain committed to hitting a 20% plus EBITDA margin, which we're going to stair-step into over the coming years. We do view 2026 as a key investment year for us.

Again, we're feeling a tremendous amount of demand to stand up this prescribing ability, to stand up additional functionality within our GLP-1 offering, as well as, per your comments, continue to invest in AI, which not only has the ability for our care teams to become more efficient, but also drive additional ARPU and revenue, as it has the ability to enhance product personalization and keep our members in program longer term.

Okay, that's helpful. Just on the recent large partnership or CVS launch, those clients that you talked about, are those launching January 1st? And then the consulting, would that arrangement launch January 1st as well?

Wei-Li Shao, President, Omada Health: Yeah, hi, Richard. This is Wei-Li. I won't comment specifically to the performance with CVS. We have built pipeline. We have closed deals. Yeah, because it's a closing season, as with deals that we closed this year, including ones that we may be closing with CVS. You can expect that most of them, the overwhelming dominant majority of them, will be launching in the January timeframe, consistent with what normally happens there.

Okay, thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Elizabeth Anderson from Evercore ISI.

Hi, guys. Congrats on the quarter, and thanks so much for the question. I was just wondering, maybe to piggyback on the back of that one a little bit, obviously, you're talking about these investments, and that makes a ton of sense in terms of the opportunities available to you. Can you remind us sort of, if we think about the typical seasonality, does that change with any of these new initiatives that you've been talking about and launched and are planning to launch? Because as I'm thinking about it, if I kind of flow through some of the margin outperformance year to date with some of the typical seasonality, I can get sort of well above your guidance rate. I just want to make sure I have that down. Correctly.

Wei-Li Shao, President, Omada Health: Yeah, hi, Elizabeth. Good to hear from you. This is Wei-Li. Regarding some of the new investments and the announcements, specifically, for instance, around prescribing and how we're going to integrate that with our GLP-1 CareTrack. Regarding the typical seasonality and selling, of course, again, we've only just announced it. We will begin commence selling in the early part of next year. And we anticipate that, like any other new offering that is as significant potentially as this one, it'll follow the normal selling cycle. That selling cycle in the enterprise world, B2B world, could be anywhere from 6 months, 12 months, 18 months, depending upon the client. You can expect that. As we do that, we'll follow that normal selling cycle. There unlikely to be immediate sales because we've got to move through that motion.

Sean Duffy, Co-founder and CEO, Omada Health: Hey, Elizabeth, I would just add in terms of specifically on your guidance question, seasonality, historically speaking, Q4 is a little bit slower as we get towards the holidays. While revenue is sequentially increasing up from $68 million to $69 million on an implied level, that's mostly due to just going into that back half into Q4 and getting into the holiday season. We're going to spend the rest of that Q4 really building a pipeline and make sure that we hit 2026 strong out of the gate.

Perfect. That's very helpful. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Sujit Kalia from Barclays.

Sean Duffy, Co-founder and CEO, Omada Health: Okay, great. Hey, guys. Thanks for taking my questions here and congrats on these results. Sean and Wei-Li, maybe for you folks. Specifically on going back to sort of the GLP-1 mechanics. Maybe the question is, is this really geared towards existing subscribers of your life cycle management tools, or is this something that's really meant to pull through new subscribers of those tools? Certainly understand that the economics for the new offering is still very much TBD, but I'm kind of curious what the strategy was with sort of the core business.

Wei-Li Shao, President, Omada Health: Yeah, for sure. So thank you so much for the question. This is Sean here. This will be a new capability that can be turned on and, of course, offered to existing clients. Clients that offer our current GLP-1 CareTrack solutions, obviously, this is something we're going to discuss with them. Against the value prop that we described to simplify their members, their employees' experience. Equally, it's something that we'll work to bring forward to net new clients as well. It's going to be a combination. Equally, I commented in my opening remarks on the importance of configurability, and I just want to punctuate that. What you find in the employer landscape relative to decisions around paying for or not paying for GLP-1s is a lot of diversity. You have various benefit strategies. You have various goals.

We think enabling a lot of flexibility for these clients becomes a strategic differentiator. If you want to support Omada without prescribing, you want to add prescribing, we have flexibility there, and a number of permutations within. We are excited to really meet this unique moment where there is a lot of dynamism at the client level relative to the discussions and strategies, and we expect it to continue to change and to have flexible capabilities alongside that. We feel really meets the needs of today.

Sean Duffy, Co-founder and CEO, Omada Health: Got it. Got it. That makes sense. Maybe for my follow-up for you, Steve, it was another quarter of accelerating member growth year over year. Maybe it's tough to break up, but if you can, can you just talk about sort of how that member growth looks like for the GLP-1 Care Track versus your other offerings? Maybe relatedly, I mean, I think going back to the IPO, we kind of all assume sort of a very consistent engagement rate. Maybe just to mark to market, has that engagement rate changed at all given all the new offerings that you have?

Wei-Li Shao, President, Omada Health: Hey, Sujit, this is Wei-Li. Let me take that one as it relates to kind of demand volume across the multi-condition platform. Certainly, GLP-1s in terms of our GLP-1 CareTrack has been a tailwind in our growth. We have seen significant growth year over year with that. That is part of the growth story in Q3. It is equally important, if not more important, to say that we have experienced significant growth across the entire multi-condition platform. As folks may recall, we think that's been driven by a couple of things. The first one of which is that we've always said strategically our approach to the marketplace with GLP-1s, given GLP-1s is a gateway to the broader cardiometabolic conversation, is that the discussion around GLP-1s is a tide that will lift all ships, meaning that it opens up the door to also upsell or sell the new logos.

The rest of our cardiometabolic programs in diabetes prevention, weight health, hypertension, and diabetes management. We're seeing that happen. The second one is we've been committed to a multi-condition, multi-product platform sales approach now for years. We've noted in previous disclosures the progress we've made against that strategy last year. What we're really seeing is that that selling or that multi-product penetration that we achieved last year through the selling season is really pulling through into 2025 this year. We're seeing that materialize in the healthy growth and performance that we've seen in Q3. Now, as it relates to engagement patterns and how that's changed, we've always said historically that we've got 55% engagement still at the end of year one. Then if you make it to year one, you're highly likely to stay engaged with us at year two.

50% are still engaged at year two. We are seeing that trend continue. We are quite pleased with that progress. Hopefully, it answers your question and backs into a little bit of kind of what explains the accelerated growth in Q3.

Sean Duffy, Co-founder and CEO, Omada Health: It does. Super helpful. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Ryan McDonald from Needham & Company.

Hi, thanks for taking my questions and congrats on a great quarter. Maybe this one's for Wei-Li. Completely understand. It's great to see sort of the demand across multiple conditions. I guess during the current selling season, I'm curious, we're hearing a lot of conversations around basically GLP-1 sort of starting a lot of conversations and sort of enabling broader multi-condition conversations. I guess at the starting point, are you seeing more demand or are more of the conversations focused on using Omada as a GLP-1 companion solution or perhaps an alternative solution to covering GLP-1s amongst your client base?

Wei-Li Shao, President, Omada Health: Yeah, thanks for the question. The short answer to that is we are actually seeing both. When we look at the marketplace, what we observe are different segments of buyers with different needs. Once explained, I think will be quite understandable. Certainly, there are a class of buyers or a segment of buyers who have chosen to reimburse or cover GLP-1s for obesity with their employees. Oftentimes, there is demand and interest not only in our GLP-1 CareTrack, but also to make sure that they're supporting others with cardiometabolic conditions that are not on a GLP-1, a.k.a. diabetes, hypertension, diabetes prevention, and weight health. That's where we're seeing demand and interest for a significant multi-product sale opportunity. However.

There still is a large segment of buyers out there, both small and very, very large, that are sitting on the sidelines regarding their decision to cover and reimburse GLP-1s. Some of them have said no. Some of them are still actively considering it. In those particular situations, their employees are still having demand to be supported for their weight health journey. In those particular cases, of course, they are not purchasing or buying our GLP-1 CareTrack, but they are interested to understand how the rest of our cardiometabolic suite can be helpful for them. We are seeing traction in both of those segments per se across our selling season. As I mentioned before, that has been our strategic intent and bet that GLP-1s, whether they are covered or not, is a tide that will lift our multi-condition platform ships. We are seeing that materialize.

We're seeing that in the closing season as well as our Q3 performance. Ryan, this is Sean here. This is a good moment to remind that our PBM partners, the contracts that we have with them enable the employers that work with them to deploy the broad suite of Omada solutions. That's actually true for the employers that work with those PBMs that choose to cover GLP-1s. Equally, that's true for the employers that work with those PBMs who choose not to cover GLP-1s. It really is a rising tide lifts all boats scenario. Sometimes we get asked, we are seeing some, although it's exception rather than the rule, clients choosing to stop coverage of GLPs. That's an area that we have some active conversations as well.

Because oftentimes, those clients really feel obligated to make sure that they don't leave their employees in alert here. We can come in and really shine light on our support and our capabilities to support people having stopped the meds. Again, all that stems back to the comments I made a bit earlier in that there's lots of different client demands and voices here. The configurability and the scale we have to meet a multitude of those demands, we believe, is a differentiator.

Super helpful, Collar. Maybe as a follow-up, and I recognize we only have had probably four to five hours to process sort of the Trump administration announcement here. Obviously, Omada has always been sort of very focused on the commercial side of the market. Part of the announcement today, obviously, is sort of the acceptance in terms of Medicare coverage for these drugs starting, I believe, in April of next year. I think there's about 40% of sort of the 65-plus population that would be clinically eligible for GLPs. Does that sort of size of opportunity sort of create an opportunity for Omada to sort of expand beyond commercial into potentially looking for a solution for Medicare over time? Thanks.

Yeah, Ryan, Wei-Li here. Super insightful question. You're correct in the sense that it could potentially represent an expansion opportunity for us. As a refresher to folks, we are heavily penetrated or focused on the commercially insured segment. Over the recent years, we have received significantly more interest and fast-growing interest in our Medicare Advantage book of business, which continues to grow across our multi-condition platform. Of course, then there's Medicare Fee-for-Service, which is the most pertinent for today's White House announcement regarding the price reduction for GLP-1s. It's interesting. We'll have to see how this evolves. If history is any indicator, usually when there's a policy announcement or change, in this case, we perceive to be very positive policy improvement or change with Medicare Fee-for-Service, that Medicare Advantage then takes note and follows suit.

After that, the commercially insured segment then also follows suit watching Medicare Advantage. It is early days to tell whether or not that cascade will actually occur. There are a lot of details to be worked out. Obviously, the pharmaceutical manufacturers probably will have a very clear position on this. That is just not clear yet, at least to me or to us. If that is the case, rest assured we will be ready to catalyze and capitalize upon that opportunity.

Awesome. Thanks for the color.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of David Roman from Goldman Sachs.

Thank you. I appreciate your squeezing me in here. I wanted just to go a little bit broader here. There is clearly a ton of focus on GLP-1s. Maybe you could talk about how you are seeing GLP-1s drive pull-through in the rest of the portfolio and anything you could do to help us break down the contributors to member growth this quarter. The math we are getting to is about two-thirds of the growth coming from your established franchise, about a third coming from GLP-1. Any perspective you could provide there would be helpful.

Wei-Li Shao, President, Omada Health: Yeah. Hi, David. Wei-Li here. Won't comment to the proportional or fractional split of the one-thirds, two-thirds. What I can say or will say is that GLP-1, for instance, a GLP-1 CareTrack volume still is a minority of our total new members as well as total member number. Hopefully, that gives you and others some indication. The majority of our growth and volume is still coming from our non-GLP-1 business spread across MSK, prevention and weight health, diabetes, and hypertension. Again, we don't think at least that that is by happenstance or by coincidence. It is, we believe, a result of our strategy around multi-product sales, which is, again, something we've been working on and pursuing for years now and is materializing well in the Q3 performance.

Sean Duffy, Co-founder and CEO, Omada Health: David, just one other key driver of over-performance in the quarter. Very consistent with Q2 is our efficiencies on the marketing front. This has been a tailwind for us throughout the entire course of the year. As we disclosed at the end of last year, we saw a 60% increase in marketing efficacy on the campaigns that we were sending. As we just go out to more customers and are more targeted with our enrollment campaigns, we've been able to become just more effective at getting more folks in the door. We saw that momentum also continue in Q3.

That's super helpful. I know you talked a little bit about growing engagement in response to an earlier question. If you look at the trend in members, one of the things that I think is unique about what you've seen the past two years is, for a lot of businesses like yours, you see a big uptick in Q1 in members when you expand into new contracts. Then it kind of like peters off throughout the year as people try something, they don't repeat utilization. You're sort of seeing the opposite effect of a big step up and then actually continued incremental growth from there in members. Steve, is that obviously there's a dynamic there with product value proposition, but also marketing effectiveness.

Maybe help us understand a little bit better what's helping you diverge from what we normally see in businesses of sort of similar structure.

Wei-Li Shao, President, Omada Health: Yeah. To make sure I understand the question, I think you're asking—this is Wei-Li, by the way—asking about, "Hey, listen, most companies," and you could see this in the global app download data, especially with the Sensor Tower data, "have strong performance in Q1 and then just a downward slant to Q4 and then a strong repeated cyclical performance in Q1." It's true. It appears that maybe we have a little bit of a different trend. I think that what we've seen are a few drivers that have lent to Q3 performance. The first one, of course, is back to the multi-product. I mean, this is a classic example of what you do in the previous year will either hurt you or help you in the following year, depending on how well you do, which means of the multi-condition.

Kind of product penetration success that we've had in previous years, including last year's selling cycle, paying off now in the back half of this year. The second piece is what you mentioned that I'll pick up on, and we feel like you're correct, is on the marketing outreach or marketing enrollment rate performance side of things. As Steve alluded to a little bit earlier, we have in 2024 saw the 60% improvement in enrollment rate performance. We committed back then that we'd continue to work on that, and we have, and we're seeing. Continued improvement in enrollment rate performance through the year. That certainly has been a contributor as well. The third and last piece I'd say is that.

We, for many, many years now, have been working on what we call a multi-campaign digital outreach strategy complemented by a multi-channel outreach strategy, for instance, digital signage on-site as well as direct mail and all the other things you might imagine. We feel like we've got a decent rhythm and cadence that not only supports, at least we saw this year, a strong Q1, but also supports continued performance throughout the year as opposed to just cyclically just in Q1. We continue to experiment in that particular area. We're seeing some success, and we believe that that also has been a contributor to what we've seen in Q3. David, this is Sean here. One other thing to just highlight is Q3 was a very innovative quarter relative to the member experience. We talked about Meal Map. We talked about building on top of Omada Spark.

We really took a big step forward in what we're able to offer to members. We found that when we launch really exciting new product capabilities, that's, of course, attractive to the members that are already using Omada. Equally, that's interesting and attractive to folks that are just learning about Omada for the first time. Oftentimes, it gives us more to talk about in that first outreach. You can really turn the product innovation into something that helps pull more people into your experience. Very helpful. Thank you very much, everybody.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Gene Manheimer from Freedom Capital Markets.

Wei-Li Shao, President, Omada Health: Thanks. Good afternoon and congrats on the great results. Do you guys publish or disclose a product density number? Or said differently, you talk about the % of members that are engaged in multi-condition programs and how that has trended, say, the last couple of quarters.

Sean Duffy, Co-founder and CEO, Omada Health: Yeah, Gene, thank you for the question. What we have disclosed in the past is the % of customers who are working with us in a multi-product fashion. At the end of last year, we had 31% of our total customers working with us across more than one product. When we looked across the 2024 selling season, over 50% of our net new business started with us in a multi-product fashion. That is a metric that we're going to evaluate if we want to continue to disclose on a go-forward basis. We'll potentially be updating that after we close out 2025.

Wei-Li Shao, President, Omada Health: Okay. That's great. Thank you very much. Congrats.

Conference Operator: Thank you. At this time, I'm showing no further questions. This concludes Omada Health's third quarter 2025 earnings conference call. Thank you for participating. You may now disconnect.

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