Omada Health Inc Aktie

Good day, and thank you for standing by. Welcome to Omada Health's Third Quarter 2026 Earnings Conference Call. [Operator instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Craig Gracey, Chief Accounting Officer and Investor Relations. Please go ahead.

Thank you. Good afternoon. Welcome to Omada Health's third quarter 2026 earnings conference call. Joining me today are Sean Duffy, our 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's available on our website.

We will also make forward-looking statements based on our current expectations and assumptions, which are subject to risks 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.

Thank you, Craig. Good afternoon, everyone, and thank you for joining us. We just reported our strongest quarter ever, and we are raising our full-year 2026 financial outlook. Q3 was another solid quarter of execution. We delivered our highest quarterly revenue, gross margin progression, and our most profitable quarter to date.

Revenue grew 34% year-over-year to $91 million, and gross margin was 76% on a GAAP basis and 78% on a non-GAAP basis, up from 66% and 68% a year ago. We also delivered quarterly record net income of nearly $7 million and adjusted EBITDA of $12 million.

Our diabetes and hypertension programs had another productive quarter, leading all programs in year-over-year growth. Strong enrollments early in the quarter and a mix shift toward our higher-valued programs helped revenue exceed our expectations. The cardiometabolic platform we have built continues to deliver for our members and for our customers.

I also want to spend a moment to share a member quote that highlights what matters most to us here at Omada, and that's the people we serve. I'm so excited. I have changed what I am eating and the way I'm exercising differently. My new labs today are improved, and my A1C is 6.6%, down from 7.3% 3 months ago. My cholesterol also improved. I have more information about diabetes and how to monitor and manage it. I'm confident using the tools, including taking my blood glucose, and I have really benefited emotionally from being able to ask questions of my health coach and the diabetes coach. Stories like that are why we exist.

As we talk about our strong financial performance, I want to remind everybody that behind those numbers is someone working to live healthier, avoid disease progression, and get the support they need between visits with their physician. That's the mission that continues to drive us.

Lastly, as we announced last quarter, on January 1, 2027, Wei-Li Shao will become Omada's Chief Executive Officer, and I will become Executive Chair. I look forward to remaining closely involved, focused on our long-term mission, key partnerships, and strategic initiatives. 15 years ago, I started Omada with a simple belief that the space between doctors' visits, where health is won or lost, deserved real care. When I look at what this team has built, I am humbled. My commitment to this mission remains the same, even with my evolving position in this company. I have extraordinary confidence in Wei-Li and this team. The foundation is strong, and I'm excited to keep building on it together.

With that, I'll hand things over to Wei-Li.

Thanks, Sean, and hello, everyone. Sean, thank you for 7 years of partnership, for the foundation you built, and for continuing to lead Omada alongside me as Executive Chair. I am proud of what we've accomplished this quarter. We ended Q3 with over 1.1 million total members, up 36% year-over-year, reflecting continued demand for our cardiometabolic platform. Our diabetes and hypertension programs continued to lead our growth. Members stayed with us longer, and our ability to provide personalized care at scale reached a new level of efficiency.

As we shared last quarter, we deepened our work with Health Care Service Corporation, or HCSC, one of the largest Blues plans in the country, through an agreement to extend our Prevention & Weight Health and hypertension programs into its fully insured book in 3 additional states, which is expected to potentially reach an additional estimated 1.5 million covered lives at launch in 2027. In the fully insured business, the program is embedded at the benefit level, so clinically eligible members can enroll directly once it launches without a downstream employer sales cycle.

On the PBM side, we have commercial relationships with the 3 largest PBMs in the country, which together processed an estimated 80% of prescription claims in 2025. Our prescribing program is in the market now with Optum. These relationships give us the broadest distribution in Omada's history for our programs. Our work across a diverse set of partners and channels also gives us insight into a range of employer needs and priorities. I want to share what we are seeing in the marketplace and how it's shaping our outlook.

The GLP-1 market remains dynamic. A number of employers have been spending more time making GLP-1 coverage and obesity care decisions, given the size of the commitment, the range of solutions, and the importance of getting these decisions right.

Healthcare costs are also rising, creating pressure across health plans, PBMs, and employers. The importance of outcomes and ROI is top of mind for buyers, even more so than before. Omada has a history and reputation of publishing peer-reviewed research on both our outcomes and ROI. This kind of evidence has always been central to Omada's approach, and we believe it has been important in this year's selling cycle. We observed both of these factors extending the selling season deeper into Q4.

Covered lives are the foundation, and enrollment is how they become members. Two things shaped enrollment and growth this quarter. The first and most important is the strength of our cardiometabolic core. Our diabetes and hypertension programs, along with the broader suite around them, delivered strong results again in Q3.

The mix shift toward these programs contributed to our revenue growth. These are programs where members have tended to stay engaged with us longer because of the chronic nature of the disease, which supports higher lifetime value for Omada.

The second is the pace of enrollment. Strong enrollments in July and August contributed to our record Q3 revenue. As we have discussed, new enrollments have typically been strongest in the first quarter when employers launch new benefits and moderated as the year progresses. We expect new enrollments to decline sequentially in Q4, consistent with that pattern.

The comparison with last year is different. In H2 2025, we added a significant number of new customers and members as part of a new GLP-1 offering from an existing channel partner that included our Prevention & Weight Health program, which supported unusually strong enrollments during a period of time that does not reflect our typical seasonal pattern.

Member engagement is where the durability of our model shows up. As we shared at Investor Day in September, member retention has improved to 58%, up from 43% in Q4 of 2024. That improvement is largely driven by our mix toward diabetes and hypertension, where members have tended to stay with us longer, as well as continued enhancements to our member experience and app.

At the end of Q3, average tenure in our program reached a record of roughly 2 years and 4 months, up 10% year-over-year, and over 30% compared with 3 years ago. That represents an increase of roughly 2.5 months compared with a year ago.

Longer engagement gives members time to turn early progress into lasting improvements in their health. We provide more intensive clinical care early on to help members establish strong habits and continue to adapt their care as their habits take hold. When members can sustain their progress with less frequent and less intensive support, our cost to serve declines and margins improve, while billing remains tied to the care we continue to provide.

We also have new evidence of the clinical value of our care. Recently published peer-reviewed research found that members in our GLP-1 Care Track lost nearly twice as much weight as GLP-1 users in non-Omada care at 12 weeks -- a 6% average weight loss compared with 3.3% -- with about twice the reduction in body fat and greater preservation of muscle mass on average. These results speak to the value of pairing medication with the type of care our GLP-1 Care Track provides. Delivering these outcomes consistently requires continued development of our care model and the technology that supports it.

We previously said that 2026 was shaping up to be what we feel is our most innovative year. Many of this year's enhancements launched in Q3. We improved onboarding to help members start care sooner with goals tailored to their circumstances.

As care continues, personalized reminders and recommendations help them get timely guidance and stay on track. We also strengthened nutrition support and meal reviews that combine human and AI feedback, helping members build healthier eating habits that can support lasting improvements in their health. Our work in cholesterol management, GLP-1 prescribing, and Flex Care are aimed at further deepening engagement in 2027.

Our focus is on bringing personalized care to more members as we scale. As we shared at Investor Day, automation and AI have given our care teams more capacity to apply their clinical expertise and tailor care to each member's needs. That has helped to support more members per care team while continuing to deliver even more personalized care.

Our cost of care, as measured by non-GAAP cost of revenue per total member on a trailing 12-month basis, reached an all-time low of $81 in Q3, down from $85 in Q2 and $94 in Q3 2025. This quarter shows what we have built at Omada. Our commercial relationships give us broad reach, and our cardiometabolic programs have driven growth. Our program mix has supported longer member tenure, and our cost to serve has decreased, all of which contributed to another solid quarter's performance.

Our platform gives customers a choice of programs to meet the needs of their covered populations. Recently published research suggests that roughly 188 million insured American adults have a condition we treat, and one-third of our customers already work with us across more than one condition. This year, we added a prescribing offering and cholesterol as a condition area, further broadening the options available to our customers.

This quarter also strengthened our financial position. We have been profitable for 2 straight quarters. We have a strong balance sheet and no debt. And that gives us real flexibility in how we deploy capital. We plan to continue investing in our care model, technology, and commercial reach, while remaining open to other opportunities that strengthen the business.

As I step into the CEO role, my focus is simple: execute with discipline, stay close to our partners and members, accelerate innovation, and keep pushing on our mission to bend the curve of chronic disease. Sean, thank you again, and to our teams across Omada and our channel partners, thank you for everything you do. Together, we are making a difference in people's lives.

With that, I'll turn it over to Steve to discuss Q3 financial performance in more detail.

Thank you, Wei-Li. Hello, everyone. I'll start with revenue. Q3 revenue reached $91 million, up 34% year-over-year and approximately 4% sequentially from $88 million in Q2. Revenue exceeded our expectations for 3 reasons.

First, strong enrollments early in the quarter meant those new members contributed revenue for more of the period. Second, the mix shifted towards programs that carry higher value. And third, engagement increased across our member base. Together, these drove the quarter's outperformance and support our higher full-year revenue outlook. As we look to Q4, we expect new enrollments to moderate sequentially, consistent with historic seasonality.

On a trailing 12-month basis, revenue per total member was $294 in Q3, compared with $280 in Q3 of last year and $284 in Q2. That reflects the shift toward our higher-priced diabetes and hypertension programs, partially offset by lower billing frequency among longer-tenured members. This measure can move modestly up or down in any given quarter.

We added approximately 43,000 net new members in Q3, bringing our total member base to a record 1,134,000, up 36% year-over-year. To support continued growth, our commercial teams are focused on building our pipeline and closing new business for the next benefit year as the selling season continues.

Turning to profitability, GAAP gross margin for Q3 was 76%, up from 66% in Q3 of last year. On a non-GAAP basis, gross margin was 78%, up from 68%. Gross margin expansion this quarter reflects a lower cost to serve our members, driven by lower care team delivery costs and the maturation of our longer-tenured cohorts. It also reflects seasonality, since enrollment volume drives care team and device costs, and the first quarter has historically been when those costs are highest.

Next, I'll cover operating expenses. On a GAAP basis, operating expenses were 71% of revenue, compared with 70% a year ago. On a non-GAAP basis, they were 64%, compared with 65%. The improvement in non-GAAP operating expenses reflects the drivers we have consistently pointed to, including scaling through channel partnerships, getting more from our existing sales force, tight spending discipline across the rest of our business, and AI. The timing of headcount additions in Q3 benefited the quarter's expenses. We expect R&D expenses to increase in Q4 as we add staff to support development of our platform.

That brings us to the bottom line. GAAP net income for Q3 was nearly $7 million, compared with a GAAP net loss of approximately $3 million in Q3 of last year, an improvement of approximately $10 million.

Adjusted EBITDA for Q3 was $12 million, an improvement of approximately $10 million year-over-year and a quarterly record for Omada, representing an adjusted EBITDA margin of approximately 14%. These results reflect revenue growth and a lower cost to serve, as well as seasonal costs and the timing of hiring I just discussed.

Our strengthened profitability profile has continued to contribute to a strong balance sheet. We ended Q3 with cash and cash equivalents of approximately $243 million and continue to carry no debt.

Now, let me turn to our full-year outlook. Our Q3 performance and our visibility into the fourth quarter give us the confidence to raise our full-year 2026 revenue and adjusted EBITDA outlook. We expect full-year revenue to range from $344 million to $346 million, up from our prior guidance of $334 million to $340 million.

At the midpoint, this represents approximately 33% revenue growth compared with 2025. We are also raising full-year adjusted EBITDA guidance to $32 million to $34 million, up from prior guidance of $21 million to $27 million. At the midpoint, this represents an improvement of approximately $27 million compared with 2025, or roughly 5.5 times our 2025 adjusted EBITDA.

A few factors shape our expectations for the fourth quarter. Our outlook anticipates Q4 revenue below our Q3 level, reflecting the lower new enrollment and engagement activity we have historically seen during the holidays. We expect revenue to come primarily from continued engagement among existing members.

On adjusted EBITDA, our higher outlook reflects our performance year-to-date and the operating leverage in our model. We expect fourth quarter adjusted EBITDA to moderate from Q3 as we add R&D headcount to support development of our platform and ramp care team staffing for the 2027 benefit launch.

In summary, Q3 was a strong quarter for Omada, with 34% revenue growth, our highest gross margins, and our most profitable quarter to date. We are raising our full-year outlook on the strength of those results.

With that, we will open the call for questions.

[Operator Instructions[ Our first question comes from the line of Ryan MacDonald from Needham & Company.

Congrats on a great quarter. Wei-Li, maybe to start with you and Sean -- sorry, both of you -- you talked about selling season activity, about GLP-1 coverage decisions top of mind with buyers right now, but that's maybe pushing or extending the selling season deeper into fourth quarter relative to last year. Can you just talk about, as you think about coverage adoption or adding GLP-1 coverage versus discontinuing, is there one scenario versus the other which is more favorable to Omada, and where are you within those discussions with your clients?

Yes. Ryan, great to hear your voice. Thanks for the question. Regarding the GLP-1 marketplace, you are correct. The market still for GLP-1s is dynamic, and certainly, our employer clients are taking the time they need to make those particular decisions. We have seen, per your question, some reports come out regarding GLP-1 coverage in the employer marketplace seemingly to decrease heading into 2027. It's hard to think about or hard to characterize exactly the quantitative degree that that's happening. So I guess we will have to see after the turn of the new year exactly where the numbers actually fall, but it seems to be happening.

Per your question in terms of favorability for Omada, the way I would put it's that we have carefully constructed our go-to-market, our GLP-1 product strategy, to actually straddle both sides of the coverage decision, meaning if employers are covering GLP-1s, we have a suite of prescribing and lifestyle support GLP-1 Care Track solutions that are covered in a number of PBMs and health plans. And so we can serve those employer clients that way.

For the employers that are actually deciding not to cover GLP-1s, a couple years ago, we thought about this particular scenario and anticipated that this could actually be the case, and we concepted at that time the GLP-1 Flex Care product, which we actually announced and launched earlier this year in March. And that particular program is interesting in the sense that it provides the same level of prescribing, clinical expertise services, as well as lifestyle support for GLP-1 users, but in an environment where the employer is not covering the GLP-1. The employer is realizing that regardless of coverage decision, their employees are increasingly seeking GLP-1s from elsewhere. And so that's interesting fact point number 1.

Interesting fact point number 2 is the reaction as we are educating and selling the GLP-1 Flex Care product into the marketplace. Employers are understanding potential upside for ROI and merits to the program for a couple of reasons.

The first is that you get amplified weight loss. The second is that weight loss is of higher quality, meaning more fat loss and preservation of lean mass. The third is greater adherence on GLP-1s for the patients or employees that should be on it. And then the fourth, of course, is that if you stop a GLP-1, literally little to no weight regain, as proven by our data at 12 months.

And they are looking at that data and saying that, gosh, we are not covering GLP-1s, but might there be a potential ROI providing Omada as clinical services and support, and for our employees on GLP-1s to get that ROI? That interest seems to be growing. Even though it has been a partial selling year for us, as an example and proof point, we closed a relatively large financial institution mid-year, and they have actually decided to accelerate and launch in-year.

And the feedback we are getting from members is trending positive. So we are really looking forward to 2027 in the sense of being able to service and help create value for our employers that are covering and not covering. And we look forward to a full selling year cycle for our GLP-1 Flex Care program.

I appreciate all the color there, Wei-Li. And then maybe just as a follow-up, Steve, can you just clarify the comment on total member count for fourth quarter implied in the guidance? I think early on, I think Wei-Li might have said in his prepared remarks, declines. You said, moderation. Can you just flesh that out for us a little bit?

Yes, that's exactly right, Ryan. Compared to last year, we did see acceleration in the back half of last year as we were launching our new GLP-1 product with one of our new channel partners. 2026 is more typical of our normal seasonality, where we see a big influx of members in the first quarter, and then that starts to moderate as you go throughout the year. The current implication is that we will step down slightly going into the fourth quarter on a total member basis. And we are really focused on just execution, building a pipeline with our employer clients, our health plan, and PBM partners to make sure that we get off to a strong start going into 2027.

Our next question comes from the line of Saket Kalia from Barclays.

Hi. You have Carly on for Saket. Steve, if we think about the growth drivers in 2027 and beyond in the context of your 20% plus growth target, there's a ton to talk about with the white space available in the market, a growing Omada platform, greater adoption of higher-priced programs, and more commercial partnerships. So can you break down that 20% plus growth for us a bit? How much could come from member growth versus ARPU growth? And what are some of the puts and takes that could make that growth formula look different year to year as different products and commercial partnerships ramp?

Yes, Carly, thank you for the question. Where we spent a lot of time, namely at Investor Day, was really focusing across the 3 main growth levers within our business: continue to expand covered lives, continue to drive improved enrollment rate, as well as continuing to focus on engagement and making sure that folks are staying in program longer. So, as it pertains to the distribution of the 3, we're going to be focusing next year on driving all 3.

Wei-Li mentioned up top an addition of 1.5 million covered lives with HCSC, and then we have a lot of investment bets going into next year to continue to drive improved enrollment rate efficacy across our email channel, as well as continuing to leverage direct marketing. That's a channel that's continued to drive incremental enrollments for us, where we've done over 100 million plus emails over the last 12 months. So, we continue to A/B test with that medium, getting more folks in the door on a covered lives basis and enrolling more folks in aggregate as we go quarter by quarter.

And Wei-Li also mentioned up top in the prepared remarks, now we're seeing folks on average in our programs for 2 years and 4 months. That's up 10% on a year-over-year basis. That's a result of continuing to drive multi-product adoption, having more folks who are diabetic and hypertensive in our programs. Those are some of our highest-priced products. They have the strongest LTV as folks stay in program longer. And as we go into next year, we're going to continue to focus on pushing our prescribing capabilities. That's going to be our highest-priced product. And as you see more of those members start to roll through our base, you're going to see an increase in expectation in overall trailing 12-month revenue per member. So it's really the core drivers that we laid out in the Investor Day that we're going to be focused on next year. Thank you.

Our next question comes from the line of David Larsen from BTIG.

Congratulations on the great quarter. Can you maybe just talk a little bit about the MSK business, behavioral health, and women's health? Obviously, there's a lot of demand for obesity health and GLP-1s, but those seem to be very important markets.

Yes. David, Wei-Li here. Thanks for the question. As it relates to each of those 3 different categories, they are very, very different. And let me provide a little bit of context around some of them. Regarding MSK, Yes, it's true, we've been in the MSK business for several years now. It makes up a relatively small proportion of our revenue by percent, but it's a strategically important asset for our cardiometabolic strategy. What do I mean by that? Our strategy is less about standalone MSK and more about how do we continuously serve with a greater experience and greater outcomes and ROI for our cardiometabolic segment.

We know, for example, that people with diabetes, about 40% of them have a bona fide MSK condition, which may not be surprising when we think about what's going on metabolically. Oftentimes, people with diabetes are overweight or obese, and as a result, there's a lot of weight on hips, backs, and knees, and that creates an MSK condition. And that's important because if there's reduced mobility or reduced ability to exercise, it's one lever that's taken away from the patient or the member to improve their diabetes condition.

And so our strategy really with MSK is to fully integrate that with our cardiometabolic platform for the aforementioned reasons. And we're going to continue to invest in integration. We have some new things coming next year that we hope to talk to you about after the turn of the year. But rest assured that that's one particular area that we're making continued investment.

In terms of the other areas, like menopause, this one's kind of interesting in terms of women's health. I mean, obviously, when you take a look at the GLP-1 utilization and demographics, just writ large across the United States, the majority of the users are women that are falling into a particular age group that's perimenopausal. We're acutely aware of that. We actually have outreach campaigns specifically towards the perimenopausal and menopausal segment, specifically because whether they're on GLP-1s or not, there's a lot of basically biochemical changes going on and hormonal changes in the body that people are wanting to learn about.

And so that's been resonating strongly with our customers. And then we also, as part of that, have women's health or menopause learning tracks to help the female population within our GLP-1 and non-GLP-1 programs.

So suffice it to say is that when we see these things overlap significantly with our cardiometabolic segment as well as our strategy, we fold them in as necessary to best serve the outcomes and ROI for our members and our clients.

Great quarter. Congratulations.

Our next question comes from the line of Elizabeth Anderson from Evercore ISI.

This is Ayush on for Elizabeth. Congrats on the quarter. You called out in your prepared remarks that there was a strong July and August enrollment, and you saw improvements to onboarding launch during Q3. Just curious, did faster onboarding materially shorten the time from enrollment to the first billing event and maybe contribute to any of the revenue outperformance this quarter? Or was the benefit primarily more people enrolling?

No, that's exactly right. We made a tactical shift earlier in the quarter to be able to enroll folks instead of in weekly groups as they sign up. And as a result of that, we just saw immediate more pickup in conversion to our enrollment rate improvements. And so that translated into us just realizing immediate conversions, especially early in the quarter, and that's what partially led to the revenue beat in quarter.

Our next question comes from the line of Sean Dodge from BMO Capital Markets.

Yes. Maybe just going back to the selling season and just thinking about across all of Omada, so inclusive of the GLP-1s and your other offerings. I know you have a number of your larger kind of initial PBM relationships that are still continuing to mature, but just any updates you can share on how the selling season overall has progressed or is progressing? Just any preliminary dimensioning you can do on how much you would expect covered lives to expand heading into next year?

Yes. Sean, Wei-Li here. Thanks for the question. Yes, a couple of things. I will comment on covered lives as we are finishing out the closing season, but before that, let me provide a little bit of framing in context. As mentioned in the prepared remarks, we are observing and keeping a close eye to a couple of things in the external market. One is the dynamism in the GLP-1 marketplace and the financial decisions that employer clients have to make. And the second one, of course, is the overall rate of rising healthcare costs, and how health plan buyers or health services buyers are deliberating a little bit more.

The reason that's important is because both those factors are extending the selling season later in Q4. This is something that we typically do not see, which is why we brought that up. But it's important to note, because it's hard to quantify or characterize exactly where we are ending the year at this point in time, because we still have a significant amount of pipe yet to close because of the extension of the buying, selling, and closing season. So I cannot characterize the actual amount. Obviously, as we turn over past the new year, we will come back to this and create a little bit more color on that.

But I understand and appreciate the question in terms of what it means for 2027. So maybe in lieu of providing a quantitative answer, I can provide maybe some color on exactly what has happened in Q3 and how Q4 is shaping up as it relates to selling season or our pipeline. We headed into the selling season, or actually the selling year, this year with 2 primary objectives aligned to our strategy. So not surprisingly, number 1 is multi-condition sales, and number 2 is diversifying our channel mix across our partners. We are executing on both of them.

On the multi-condition front, even in Q3, consistent with what we have said before, new deals that we have closed, 40% to 50% of them are for multi-condition or more products being purchased by the buyer. We like that because that's obviously better for us, but most importantly, it's better for our clients, because people with cardiometabolic disease oftentimes suffer from 2 or more conditions. And so we are just able to provide a better, seamless care experience.

On the channel mix side of things, if you look at our pipeline in Q3 and obviously our later-stage deals in Q4 that we are still actioning against, it's a pretty even distribution. And again, that reflects CVS and Optum coming up a little bit more than in previous periods, as well as our preexisting channels that we are still selling into.

So pretty even distribution across the channels across our pipe. And really, both our performances on that channel mix as well as multi-condition is a reflection of the intention as well as the execution by the sales force. So more to come. Stay tuned on how the pipe shapes up in finality as we turn the new year.

Okay. That's great. Thanks for all the color there. And then you highlighted again the win into HCSC's fully insured book, where your offerings are embedded at the benefit level. And I know it's still early there, but how much do you think being embedded like that can push your enrollment or conversion levels higher? And are they the only payer you have this type of relationship with at this point? And then just kind of what is the pipeline like for adding more of those?

Yes, I think it will help to maybe characterize the dynamics of the deal in terms of how we are going to market. I think maybe that will help answer the question as it relates to 2027 and what we can expect. So yes, so basically roughly about 1.5 million lives expansion into 3 additional states across our hypertension and prevention programs.

We will begin going live directly on January 1, which means that we will start working in partnership with HCSC to outreach directly to the members and the covered lives within that 1.5 million. Now, we will not do it all at once. It will phase throughout the entire year. So we do not expect all the lives to come into the marketplace immediately. They will be, again, phased throughout the year. And we should yield results from that next year, and we look forward to reporting on that.

In terms of other lines of business, your question of do we have other kind of direct-to-member-like arrangements, like fully insured books of business elsewhere? The answer is yes. We have those across some other fairly large-scale partners. So it's a motion that we are familiar with and that we have had success with in executing, and can certainly follow up with more details if you like. But we do have those in other books of business as well.

Our next question comes from the line of John Pinney from Canaccord Genuity.

John Pinney on for Richard Close. Congrats on the quarter. I guess I just want to dig in more on the better in-year enrollments that you had here. You said it benefited a bit from real-time enrollment rather than this weekly batching. But I guess, is there anything different that you have done this year as far as outreach to the covered lives base that has helped with that mid-year? Anything that you'd say you have done a little bit better than last year that led to these better results in enrollment?

Yes. John, Wei-Li here. Thanks for the question regarding enrollment performance. Regarding what are we doing differently, are we doing something differently, maybe let me share with you a little bit of historical context in terms of year-to-date performance. We've seen the yield rate or enrollment rate year-to-date grow about 10% compared to last year, and we certainly saw that carry through in Q3 as well. So it was good to see that persistent effect. And that certainly has helped some of the tailwinds into the Q3 performance.

Regarding, are we doing anything differently, and what does that mean for the go-forward? Each year, we undergo a fairly extensive A/B testing optimization process. It usually begins in H2 after we see kind of the enrollment and yield performance in H1. We've done that this year too as well. We've run dozens of tests, both in email, direct mail, as well as other channels. We have been doing more in the social channel. We're seeing some moderate uptake and improvement there and performance there, but nothing of significant material to note. But it does represent an area where we are experimenting with and seeing some green shoots.

So in terms of overall optimization of our campaigns, like I said, that's an exercise that we've started in H1 -- or H2, rather -- and will continue throughout the end of the year. And so we'll look to characterize a little bit more about that enrollment yield improvement next year at the appropriate time.

The only build I would just offer there is, across our 25 million covered lives, we are using direct mail on a very selective basis. We can directly track the ROI and the CAC/LTV on these campaigns. So for some subpopulations where they might not have email access, we've seen some efficacy on using direct mail to get more folks in the door. We'll specifically target the higher acuity conditions, especially the diabetic and hypertensive populations, where we can reach out to them directly and get those folks in the door. So that's been another tool in the toolkit where we've seen some progress across 2026 as well.

All right. Thanks for the color. I guess one follow-up here. Steve, you mentioned it's a yearly occurrence that you kind of gear up for care team headcount going into the new year. But I guess I'm just kind of curious of where you're at with your care team right now. Do you feel like you're kind of hitting capacity and you need to actually gain more capacity? Or is this just typical getting ready for the new benefit year? Or just any commentary you can provide there would be great.

No, I mean, on a year-over-year basis, we've realized so much efficiency across core operations, across standardized work. Jennifer Becker, our Chief Care Delivery Officer, has done an amazing job at making that organization very efficient. And now that we're leveraging more AI, we've actually seen net headcount decrease on a year-over-year basis there. So we do plan to potentially gear up just a little bit for Q1, because we do see a spike in Q1 in terms of net new enrollments. But that's all in support of hitting our longer-term gross margin target of 80%. And we really believe that, over the better part of the last 5 years, we've really optimized the way we staff that organization, being able to match the supply and demand really optimally over time, and feel good about the setup going into next year.

Congrats again.

Our next question comes from the line of Craig Hettenbach from Morgan Stanley.

This is [ Jay ] on for Craig Hettenbach. Thanks for taking my question. So with some competitors marketing 100% fees at risk for cardiometabolic programs starting next year, I'm just wondering if you're seeing higher proportions of RFPs mandate those outcome-based risk sharing? And for your existing book of business, can you remind us what share of revenue today is tied to clinical performance guarantees versus baseline engagement milestone fees?

Yes. Jay, Wei-Li here. Thanks for the question. I think it's an important question, and the reason being is that obviously, as healthcare costs accelerate and rise, employers, health plans, and PBMs have to do their jobs and are looking very, very closely at the value in terms of return on investment or savings that any healthcare provider program can provide, and certainly Omada is in those negotiations and discussions too as well.

Directly answering your question, are we seeing more performance guarantees, outcome guarantees, or ROI guarantees? I would answer it by saying that for, I would say, probably the last 3 or 4 years, they have been probably more and more prevalent in our negotiations and discussions. And that's something we have been contending with over that period of time.

I think it's also noteworthy to also set the stage and the frame that we have a reputation in the marketplace for being evidence-based and doing a lot of clinical trials and other types of observational trials. We have got 30 plus-some-odd publications that have been peer-reviewed, taking a look at not only the outcomes of our programs, but also the economics.

And I raise that because, when we approach these negotiations, if there is a need to undergo some sort of performance or ROI or outcomes guarantee, we really stand on our data, and it allows us to take the appropriate risk relative to the outcomes that we can deliver, which our aim, of course, is to meet the expectations of our buyer clients. So, it's not a new thing. It's not a fixture. Obviously, with growing healthcare costs, we see it a little bit more, but we are standing pretty firm on our outcomes and our economics, and we feel like we are having some success there.

Our next question comes from the line of Gene Mannheimer from Freedom Holdings.

Congrats on a good quarter. I just want to dig in a little bit more on that gross margin, which was really strong. So you made the comment -- I think it might have been Steve -- but as your members continue to mature, and assuming duration stays around the same level or improves as it has been, is it fair to say that the gross margin then will continue to trend higher? And I am assuming that's one of the elements to get to your 80% longer-term target. And I am wondering if that's the main driver or if there are other components.

Yes, Gene, certainly there is. Thank you for the question. There is certainly a multitude of drivers. I will start with the top line. Most importantly on the top line is continuing to push multi-product adoption, getting more folks who are diabetic and hypertensive, and now getting in market with our prescribing capabilities. As we improve the mixture of those conditions in our overall member base, that lifts gross margin and overall LTV gross profit dollars through time.

On the cost side of the equation, then you have 3 levers. You have our care teams, making them more efficient, which we covered a little bit earlier. You have us continuing to negotiate across our supply chain with our devices, as well as our shipping partners. And then you have more recently us using AI to make our care teams more efficient and more effective. So it's those 4 that are the main components that directly drive it.

And then to your point, the longer folks stay in program -- we are seeing folks in their fifth and sixth years with Omada -- they are further out on the engagement curve. They do not bill as much revenue when they are that far out, but they are some of our highest gross profit members because there is very little incremental cost when you are that far out on the tenure curve. So we really like those members because we are still taking care of them, we are making sure they are healthy, but they are driving incremental dollars that are going directly to the bottom line.

Our next question comes from the line of Stan Berenshteyn from Wells Fargo Securities.

This is Corey DeVito on for Stan. Thanks for taking my questions. You had credited diabetes and hypertension for the growth in Q3. Did GLP-1 Care Track members grow from Q2? And how many employers signed up for 2027 through Flex Care or Lilly Employer Connect?

Corey, Wei-Li here. Let me tackle the second question on 2027 and how many employers have signed up, so on and so forth. As mentioned before, the closing and selling season is extending further into Q4 than normal. And so it probably wouldn't be prudent for me to actually characterize quantitatively what the total covered lives are heading into 2027 with a good amount of late-stage deals being actioned as we speak. So can't comment there. Look forward to characterizing more after 2027. And that would be the case for any program as well as the GLP-1s as well.

Thank you. This concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Good afternoon, everyone, and welcome. Thank you for being here today. Today marks an important milestone for Omada. I was reflecting back, and it was just over a year ago today that we took the business public right here at the Nasdaq with a very high set of expectations of what we intended to accomplish. And now just over a year later, we've exceeded those expectations in many aspects. At this moment in time, we expected to be at 850,000 members. We're now at 1.1 million. We're supposed to be at 66% gross margin. We're now at 70% gross margin and climbing.

But what I want you to take away today is that's -- we're not talking about where we've come from, we're talking about where we're going. Today, you're going to hear about the opportunity that lies ahead of us. We're going to hear from our leadership on specific investments and bets that we're making across our commercial organization, across our product organization, across technology and care delivery, and how we're also leveraging AI across our business.

You're also going to hear us raise the bar on ourselves. We're going to be issuing new long-term targets across both gross margin and adjusted EBITDA, which we believe really put us in rarefied air across the digital health care sector. So with that, let's get into it. As always, financial disclaimer. We will be talking about forward-looking statements. So please make sure that you read the disclaimer associated with the presentation.

We really felt it was important to not just bring our presenters here today, but bring our entire management team. It really showcases the breadth and overall depth that we have in our leadership. They've helped us get to where we are today, and they're really setting the foundation of where we're going in the future. So let me walk through the run of show today. Sean is going to kick us off. He's going to attempt to distill down 15 years of progress and execution into about 10 minutes.

We're then going to go to Wei-Li. Wei-Li is going to talk about where we're going, our future, our vision, and how we're going to capture the market opportunity that's in front of us. I'm going to spend about 20 minutes going through our financial model, about our growth algorithm, about how we're building for the future as well as issuing our new long-term targets. I'm going to pass it off to Britt. She's our VP of Cardiometabolic Care. She's going to talk about our commercial initiatives, how we're going to continue to focus on adding more covered lives as well as continue to focus on improve our enrollment rate.

Then I'm going to pass it on to Dr. Tom, to Danika, and to Jennifer. They're going to walk through our clinical strategy, our product road map as well as initiatives that were taking place in our care delivery organization. Finally, we're going to pass it off. We're going to do a customer panel with 2 of our customers. We have representatives from Harris County and from Costco. They're going to talk about how they've deployed Omada within their organization and the success that they've been realizing.

And then at the end, save your questions, you can keep all the hardening stuff at the end for Sean, Wei-Li, and I. We'll have a dedicated Q&A session towards the end of the day. So with that, I'd like to turn it over to my friend, my colleague, Sean Duffy, Co-Founder, current CEO for not much longer, but here goes. Thank you.

Awesome. Thank you so much, Steve. Hello, everybody. I got an applause. All right. How about that. So welcome, everybody. Welcome to Omada's first inaugural Investor Day as a public company. We're thrilled to have you here. For those of you who traveled in, thank you for doing so. And for those of you on the webcam, hello. We'll seek to make this as engaging as possible for you even though you're not able to join here in person.

So we hope you leave the day with a crisper, more detailed understanding of the business that we all care so much about here at Omada. But equally, we hope you leave with as much energy and enthusiasm for what we plan to accomplish here in the business to drive value for customers, for members, for shareholders alike. And per Steve, most of this will be about the future, but I do want to start with a little walk down memory lane, especially for those of you who are newer to the story.

So I founded Omada Health while at Harvard Medical School, and it was against a reality that I saw on a day-to-day basis. And that reality was that traditional health care does not work for chronic disease. I'd watch PCPs with patients that maybe had diabetes, say, here's your script, please come back in 6 months, take your medicines, don't forget to check your sugars, try to lose weight, eat differently, exercise more. And unfortunately, none of that would happen. And each month that went by, these people got sicker and their cost to the system rose.

So that became the challenge. And we asked the question, well, it's obvious that the existing care system doesn't work. So what is the right care model? What is the right kind of care for the 156 million Americans suffering from chronic disease. So we sat in the homes of patients. We sat in their living rooms. We listened to their goals, what the health care system offered, unpacked their needs. We studied the literature on care models that have worked in chronic, and we thought deeply about how they could be translated digitally.

And the answer was right in front of us. The answer to the right kind of care was that people needed proactive longitudinal care between their doctors' visits. They need the combination of devices, care services, software, they needed a feeling that someone was rooting for them in their corner in their pocket persistently at all moments in time. So that became the marching order.

And then we looked at the task ahead. Unfortunately, the existing health care system from a regulatory standpoint, a billing standpoint and a technology standpoint, it is not set up to deliver that care model. And we had to start from scratch, and that is when we founded Omada Health in 2011. We got hard at work building the very first version of Omada's care experience for prevention and weight launching that in 2012.

Quickly, I realized that digital health was the underdog, and we needed to earn the trust of the existing health care system, which is a very risk-averse buying market. I knew I had to convince my classmates that were going to be clinicians that are product work. So we began publishing evidence. We spun up a research agenda. And as we produced peer-reviewed evidence, quickly, we began to earn the trust of the system, really beginning with the CDC, where we partner with them on trial designs and evidence generation such that we could earn the place as a fully recognized diabetes prevention program provider. We then took our body of evidence to the American Medical Association and partnered with them.

We knew we needed to do this because in order to deliver between visit care, we had to be able to bill as an actual health care provider, but there were no CPT codes for digital providers. We worked with them to create the industry first, the first ever digital-specific CPT code that allowed us to bill through claims as a between visit care provider that was digital, never had been done before. Our trials enabled us to do that. That set the stage for us to bill the real medical spend, actual medical expenditures, not as an invoice into a wellness budget, no different than an HCA, Tenet, a Stanford Hospital, existing providers.

We then turned internally. We wanted to make sure we could recruit the very best and build a culture of high ambition, high delivery success, earned many awards organizationally, including earning a place on the Fast Company's most innovative health care list. When you get great talent working on big problems, success compounds and quickly, we earn the right with customers to do more for them, expanding to diabetes, expanding to hypertension. We quickly from there eclipsed to over 1,000 customers and the data set began amassing at over 50 million weight readings, longitudinal readings, watching our patients and our members engage.

From there, we expanded into musculoskeletal care. And we kept alongside this the publication engine running. That allowed us to do things like earn the very first NCQA accreditation for a digital company in our space, published the 18th peer-reviewed publication earned URAC MSK accreditation, again, working to find a place to be a proper health care provider within the U.S. health care system. In 2023, started looking at GLPs and hearing the pain points from our customers and deployed our GLP-1 care track, I think ahead of the curve designed to optimize for outcomes while on medicine, optimize for durability while not on medicine and support a very complex decision for our benefits buyers on if they do cover the med, how they should do it.

And if they don't cover the med, what can they offer even though they can't afford the medicine at present. These tailwinds compounded and it left us feeling confident to list on the NASDAQ in Q2 2025. And as Steve's highlighted, that's where our leverage has really shown through in Q4 of '25, delivering our first adjusted EBITDA positive quarter. And as shared on the last earnings call, we're in a position now with Omada with more channels, more distribution partners, more customers, more care offerings to offer those customers than ever before in Omada's history.

The thing I'm most proud about is over the last 15 years, we have built an asset. That asset has cost hundreds of millions of dollars to build. And that is a full stack between visit care platform because to accomplish those industry first. We had to have a complex care services layer that involved licensure operational complexity, operational precision to scale to the many millions. We had to have a technology stack to be able to sell to very risk-averse enterprise buyers an entire device supply chain to make sure we can fulfill and give our members connected devices that automatically feedback into the Omada platform to guide their care in partnership with their care teams.

We built software not just for our members, but we built the entire software for our care team employees because it was obvious that an EMR was not going to cut it for between visit care. Equally, we bill in a different way. We don't use fee-for-service billing. We charge a monthly membership fee that's recurring billed through the CPT code. We had to develop our very own reimbursement infrastructure to be able to bill in this alternative model that's more aligned with customers and members alike.

And over the last couple of years laid the foundation for AI infrastructure, which is just so incredibly exciting to watch the impact that it's having internally with our talent, the velocity of ambition, the innovation, but also what it can offer to our members in that intricate dance between AI answers and accountability that people can provide. And that's the platform upon which we stand to achieve our mission of bending the curve. The ambitions at Omada are to see our impact in the nation's epidemiology data. That's what we mean by bending the curve.

And we need to do it. We need to do it for people like Heather. Heather is a real Omada member, and I want to go ahead and read what Omada has meant to her. The catalyst for change started with my son looking at old pictures of me and not recognizing that it was me. I was the heaviest I've ever been and couldn't do things that most people find easy like walk up a flight of stairs or walk down the block with my child. That wasn't the image I wanted to portray to my little boy. Recently, I've been able to kick the soccer ball around again. My son tells me how proud he is of me.

"Not only did my son get his mom back, he got the best of me, and it was Omada that got me here." Thank you. Thank you for caring. Thank you for supporting me. Thank you for giving me my life back. So the task at hand from here is to create many tens of millions of stories just like that, tens of millions of stories like Heather's. And here to communicate a vision of how we're going to begin to achieve that task. I'd love to welcome no other than Omada's President, my long-standing business partner, Wei-Li Shao, the one and only and soon to be as of January 1, Omada Health Chief Executive Officer. Thank you, Wei-Li.

Well, good afternoon. Excited to see you all. Thanks for coming out to our Investor Day. We're going to cover a number of things, but let me enumerate them out clearly. So first, we're going to dig into our financial model in a detailed way. We're going to outline out the 4 growth drivers behind our go-to-market. We're going to talk a lot about the momentum we're feeling in our commercial engine. And then we're going to dig deep into our clinical rigor, which is the foundation for the advancements in our product technology that is aimed at improving engagement amongst our members and of course, driving scale across care delivery.

We're excited to kind of peel back the layers on that for you. But before I do that, I want to talk to you a little bit about why Omada Health matters, the importance that it plays, we believe, not only for ourselves, but also for you, your loved ones, your family, your friends and why we think Omada is actually important for the world. So underlying the problem that Omada is solving with its care solution. At the center of it is the epidemiology and the epidemic of obesity. Oftentimes, we talk a lot within Omada and also with our customers that obesity is a primary disease, meaning that it oftentimes shows up first earlier in the years of your adult life and then gives way to and causes a number of downstream cardiometabolic conditions like diabetes, hypertension, high cholesterol. So it's a precursor. It's primary. It happens first.

And the challenge with obesity, of course, is that it's not abating. It's not actually getting less despite the fact that we've had tremendous medical innovation over the last several years. Today, over 40% of adults suffer from obesity. 30% actually not only suffer from obesity, but also have another cardiometabolic condition, again, like high blood pressure, diabetes or high cholesterol. What's more, go out, maybe not even 10 years. And it's expected that despite all the medical advances nearly 50% of adults will have clinical obesity here in the United States. The problem is not getting better, it's getting worse, and it's driving an exorbitant amount and acceleration in health care costs, not only for employers and payers, but also for our members.

So there hasn't been a more crucial time for something like Omada than today. Now how does this problem? How does the epidemiology of obesity and the surrounding cardiometabolic conditions manifest itself in the market and the opportunity that we're actually pursuing. So if we take a look at, there's roughly about 255 million people that have some sort of coverage or insurance through the United States. Roughly 200 million have commercial insurance, another 50-plus million or so have Medicare or Medicaid coverage.

And of that, 188 million actually suffer from a condition that Omada actually treats. And of that 188 million, there are 99 million people, close to 100 million that actually suffer from at least 2 or more conditions that Omada actually treats. So the problem is profound not only in its severity and long-term nature, but also in its size. But yet year-to-date, Omada has only been able to help a little over 1 million. We have currently about 1 million people that we're actively taking care of.

We're certainly proud of that 1 million. It's allowed us to build a scaled business model, a high financially performing model, one that's high growth and also profitable. We've been able to build around this 1 million people, outcomes, return on investment, a brand that's trusted in the marketplace, but yet it's only 1 million out of the 100 million to 200 million people out there that actually represent the opportunity and market for us. It's immense, it's extraordinary, and it's profound in its nature due to the size and scale and scope.

Emerging from this market and this challenge and this problem, of course, is a recognition of a singular truth that is also backed up by a preponderance of data. And that data shows that despite all of the investments inside of health care today, our health care system is not set up to actually bend the curve on these chronic conditions or these metabolic diseases. And in fact, it just doesn't work. All the data would show that across the cardiometabolic conditions, things are actually getting worse. So we know we have to do something different, and that's what we set out to actually do.

Imagine today in your own lives for me and for you, if you were to take out your cell phone, our digital experiences are just one click away. They're easy. They're easy to understand. They're practical, they're accessible. There could be nothing further from that than health care itself. Health care is hard to navigate. It's full of friction. It's opaque, and it's not understandable. And so that's what we're actually dealing with here today. So to put it in stark terms, we've had this experience.

We have to clear our morning schedules, to make an appointment with a doctor. We have to travel an hour or 2 through traffic to go see our doctor. We get there, we wait. And then we talk to 4 other people and discuss the same information with each of them sitting behind the desk, clicking and clacking on 4 different computers. And then we get into the exam room, we wait another 10 to 15 minutes for a visit that only lasts 10 to 15 minutes. And then we go home. We receive an expensive bill that we don't understand for a kind of care that we actually don't love.

This is the problem with today's U.S. health care system. So one of the things that I think is underpinning this is what Sean gave a head nod to in his opening remarks. Over 10 years ago, Sean and Adrian, our co-founder, sat in the very homes of our members that we treat today. And they distilled and discovered one salient and insightful truth that all of Omada is grounded on today. And it's the following. When it comes to cardiometabolic diseases and chronic conditions, the problem is not in the doctor's office. It resides in everyday moments of life.

The time and space between doctors' moments when life is happening to all of us. Today, primary care doctors, yours, mine, they all have the technology and the tools to actually conduct an office visit, but they have zero influence on what happens in the 8,000-plus hours between doctors' visits where 80% to 90% of all the outcomes for chronic conditions are determined, zero influence. It is that single asymmetrical truth that gave birth to Omada. So imagine you go to your primary care doctor, you have diabetes, it's uncontrolled. What does your doctor tell you do?

Take your medication, change your lifestyle, eat less, eat more healthily, move more. They give you a pamphlet and you're on your way. What generally happens after that, your weight slowly creeps up without you knowing it. Your A1c creeps up, your diabetes control gets worse. And what's happening there is you don't know about it because diabetes and other chronic conditions are a silent killer. They are insidious. They decay your health at a slow incremental time and then towards when you get older, it accelerates and quickens in its severity.

But you have no visibility to it. You don't know how you're doing. And nobody is watching and therefore, nobody is actually caring for you in between that time when you're living your life. And you go back to your doctor's visit, your primary care doctor, what happens, it's predictable. You've gotten worse, and he or she tells you to do the same thing. The challenge here is that traditional care, is point in time. It exists in micro moments in your life, maybe for a few minutes a year to treat a lifelong chronic situation or disease that you have.

Omada is different. We've set to change and upend the way health care is actually done. So imagine you actually now go into the same doctor's office, let's say, you have diabetes, same situation that's uncontrolled. You get the same lecture, the same class of instructions. You leave with the plan, but only this time you enroll in Omada. What happens at that point in time is you receive on your doorstep easily and seamlessly, a series of connected devices, a scale, a continuous glucose monitor, a connected blood glucose meter. You start using it, you're weighing in every day.

Your results are easily seen in application. But let's say your weight starts to increase over time. Your coach actually notices. Your coach reaches out to you proactively just to check in to see how you're doing. And she finds that you're actually under a lot of stress and a lot of the positive healthy habits that you've built over time start to decay and wax and wane. Instead, what ends up happening then is your coach says, "Hey, listen, let's work on a small, smart goal, something we know you can achieve. And let's create a mutually accountable plan that we can work towards together."

And we set another goal and another goal, the care stacks such that you go back to your primary care and it's a different story and a different outcome. Your diabetes gets controlled. We have replicated this between visit care that is persistently available 24/7 in a longitudinal way in the everyday moments of your life on demand. Our care is daily and it's over time. It's persistent. The concept, if you think about chronic disease and what members and patients are going through is so simple to understand, and it's so simple to understand why the existing health care system doesn't work, but it is radical when compared to how the legacy health care system works today.

But we're having success in this model as evidenced by the over 1 million people that we're currently serving today. How do we do it? Underpinning this daily continuous form of care is Omada's innovation flywheel. It's got 4 components. The first one is it's grounded in clinical evidence, meaning that we look at the publication data as well as frontier data, and that serves as the groundwork and foundation for understanding what reliably works and moves the needle on engagement and outcomes.

We then take technology and wrap an experience around that digitally and virtually so that it's engaging, elegant, and delightful. We then have human care teams that engage our members to create mutually accountable plans. And then finally, clinical measurement to make sure that we're delivering the outcomes and the ROI we promise to those that we're selling to. And we utilize and aggregate that data, billions of data points now to actually inform the development and discovery and innovation of the next generation of our programs. And that allows us to move this flywheel over and over again to create more and more value, not only for those that buy from us, but also most importantly, the members that rely on us.

But we're coming into right now an exceptionally exciting period of time. It's a historic moment, not only because we're gaining traction in the marketplace, but because of something I talk to our customers about, also our fellow Omadans, and I describe it as the convergence of the 3 S curves. So what are they? The first one is medication. Cardiometabolic medications and innovations have come a long way. We're all aware of them, GLP-1s. They have an outsized outcome effect size that we've all seen, and it's exciting in the marketplace.

But it doesn't stop there. There are new GLP-1s coming. There's more data coming. And in fact, there are other cardiometabolic GLP medicines, non-GLPs on the horizon that we think to have an outcome effect size on the rest of cardiometabolic diseases that we're excited about. What's interesting about that as medications increasingly have innovated, the demand and ask for Omada has actually increased alongside it. We see it today in the GLP-1 class of medications with weight loss. And the simple reason is this, is that our buyers and our members are understanding and realizing in an accelerated way that when you match up innovative medicines with an innovative form of care like Omada, you get better outcomes, a better experience, and better ROI.

The second S-curve, of course, is artificial intelligence and machine learning. Clinicians across the world, across the country are beginning to understand that AI/ML has the ability to actually improve the quality of care and reduce the cost of it. We are seeing the same thing inside of our operation here at Omada. A little bit later today, Danika, our Head of Product, is going to talk to you a little bit about how we're using artificial intelligence inside our program experience to expand and increase the user experience around engagement and outcomes.

Jennifer, our Head of Care Delivery is going to talk about how we're using AI/ML to augment the human care delivery experience, thereby lowering the cost of care, not only for us, but also for our customers. The last one is devices and wearables. We are at a tipping point in the marketplace with devices and wearables such that they're reaching ubiquity, mass utilization. What we love about devices and wearables is that it's outputting streams of data that are riding alongside our between visit care model. It is another thing that sits in those 8,000-plus hours in between doctors' visits.

And the opportunity to bring in devices and wearables above and beyond what we're doing today to actually augment the insight that we're driving, the prediction in the next best step in the personalization is exciting. So how are we actually taking our innovation model, our go-to-market model? How are we leveraging also these 3 S-curve moments in the marketplace? Well, it can be summarized in a vision around a system of care. What do I actually mean about that? So across the top are the conditions we actually treat.

You're aware of them. In the dark boxes, you have metabolic health, cardiovascular health, musculoskeletal health, advanced care. And in the actual ovals, the dark ovals there, the orange reddish ovals you'll see are actually recognizable. You should recognize them. That's currently what we do. There are existing programs, prediabetes, diabetes, obesity, diabetes itself, hypertension, cholesterol, MSK, mobility, and of course, GLP-1, care track and prescribing. Those are the things we do today. What you're going to notice next are the areas in the dotted ovals.

These represent product expansion areas or category expansion areas for Omada. It's a head nod to a potential future for us. What's exciting and interesting about what is in the dotted ovals is that every one of these condition expansion areas have been discussed with us proactively by our customer set. And you know from our historical conversations that our strategic approach to program expansion and innovation is to listen to our customers, partner with them to develop the products they want to bend the curves that are important to them. These are the areas.

But our vision and our expansion around this system is not limited to just category or condition expansion. It includes lifestyle support tracking, wearables and devices. It also includes a full care cardiometabolic stack. Right now, we order labs and we prescribe GLP-1s. Our customers for now a period of time, they've begun asking us to expand that lab service as well as our prescribing network into other cardiometabolic areas like diabetes, hypertension, and cholesterol with the idea that there's a full cardiometabolic spectrum of care that we can provide.

Last but not least, of course, is an AI/ML to expand our capabilities to not only create more sticky programs, but ones that drive more outcomes and engagement. Folks, the challenge with the marketplace right now is that our buyers and our users are inundated by a sea of point solutions, kind of like visually like a number of life rafts just aimlessly floating around in a vast ocean. Our job is not to do that, but to create an integrated system of care focused on cardiometabolic, a full care stack focused on bending the curve of cardiometabolic conditions. We're excited about this vision, and we think it can be real for us.

As you can see, we're not really waiting for the future to come to us. We're not waiting for it to arrive. We are hell-bent on actually building it with intention. The way we're going to do this is by pursuing what we have known and have always known true from 15 years ago is that a daily contiguous, persistent, always there form of care is the actual insight to act on. We've built success around it and scale with over 1 million people. And now we're endeavoring a future that includes a more holistic systemic form of care in the form of a cardiometabolic platform. I hope you all are as excited as we are as the potential for Omada going into the future.

So with that, I'd like to introduce and bring back our dear friend, Steve Cook, Finance extraordinaire, car enthusiast, also happens to be our CFO. So thank you all very much.

Awesome. Thanks, Wei-Li. I'm going to spend the next 20 minutes walking through our financial model. I'm first going to start with where we've come from, and we're going to bridge to where we're going. We're going to go into more detail on the 4 growth levers that Wei-Li just articulated. And then I'm going to take a moment to update our long-term targets, which I'm also very excited about. So let's get into it. So first, I want to spend some time here. This is going to be a theme you're going to see cascading throughout the rest of the day.

It's really important that you're going to hear from all of our leaders on how we're making targeted bets across each one of these initiatives and are core to our growth algorithm going forward. It first starts with our covered lives. We're currently at 25 million. You just saw that donut chart of 188 million. There's a significant amount of market opportunity still in front of us. We just closed 2 of the largest PBMs in the country. We're launching a major expansion with a major health plan, and we have plenty of room to continue to grow and expand our overall covered lives basis.

The next is enrollment rate. How effective are we at converting those covered lives into members. Today, we're at 4.4%. We have 1.1 million members on 25 million covered lives. We've made progress here over the past several years, but there's still significant room to grow. You're going to hear Britt go into a lot of detail across both of these. And then almost most importantly is once folks are in the Omada program, how effective are we at keeping them engaged. Our ultimate aim is to make folks healthier. So the longer we can keep folks in program and hitting their milestones interacting with their coaches, we end up keeping them in program longer.

They drive more billable months, and that drives more durable revenue for our business. And then the last is efficiency. This kind of has 2 flavors. How are we going to continue to operate the business just executing on core efficiencies, making sure our care delivery teams are staffed efficiently, making sure we're managing OpEx efficiently, and now beginning to deploy AI throughout our entire organization. So you're going to see in the subsequent section that we're going to address all of these in greater detail.

Before we go there, I just want to take a moment to kind of articulate where we've come from. Over the past 2.5 years, we've seen significant progress across the P&L. Members have gone from 391,000 to 1.1 million. That's led to a compounded annual growth of 45% over the past 2.5 years, but we haven't just been focused on top line. We've been intent on expanding margins across both gross margin and adjusted EBITDA. Over the past 2.5 years, we've taken gross margin from 60% to 70%, and we've taken adjusted EBITDA from negative 43% to positive 7%, including the last 4 quarters being profitable from an adjusted EBITDA perspective.

And then I think almost more importantly was in just over a year ago, the expectations that we set forth in the IPO roadshow. At this moment in time, we expected to be at 850,000 members. We're now at 1.1 million. $251 million in revenue, we're now at $310 million. We're beating non-GAAP gross margin by 4%, currently at 70% on a trailing 12-month basis. And instead of negative 2% adjusted EBITDA, we're now at positive 7%. So now probably what I'm most excited about today is on top of the core execution that we've been able to deploy across some of the top line opportunities and momentum we're seeing, across the opportunities that we're seeing on the cost side of the equation with AI, we're going to take a moment to update our long-term targets.

So at the top line, we're going to stay consistent with what we set forth in the IPO to grow the business at a minimum of 20% for the foreseeable future. But we're taking up gross margin from 70% to 80%, and then we're going to flow through that entire raise to EBITDA, taking EBITDA up from 20% to 30%. So how are we going to get there? This is a beautiful piece of our business, especially on the gross margin side of the equation is we have multiple ways to get there. You can think about roughly as half being split between top line and half being split between cost.

On the top line opportunities, you're going to continue to see us leverage AI. You've heard of our releases on Omadaspark and Meal Map using AI to make our program more compelling, more engaging. When folks stay in program longer, we're able to bill more months, and that's incremental revenue that drops directly to the bottom line. You're going to hear later from Tom, from Danika, from Jennifer on a specific engagement efforts that we're using to make our products and our features more compelling. You just saw Wei-Li showcase all the future opportunity we have with new adjacent product areas.

As we release these, that drives engagement, that drives more time in program, which leads to increased revenue. We're currently in market with Optum with our prescribing product. This is our highest-priced product. You'll see a breakdown shortly here on unit economics. We're going to continue to drive our prescribing product as well as multiproduct penetration. Diabetes and hypertension and selling across a multiple conditions have been a large portion of our success over the past couple of years. And then moving to the cost side.

On this side, we're going to keep doing what we've already been doing. Jennifer has been amazing at really incorporating standardized work and workflows across our care delivery organization. We've seen significant amount of progress in making our coaches more efficient just by standardizing overall workflows. We're going to continue to look for supply chain discounts across our device ecosystem, across our shipping partners. As we do more volume through our partners, they're willing to entertain volume-based discounts for us.

And I think most importantly is now we're going to continue to leverage AI. We've already had several use cases within our care delivery teams, how we're making them more efficient and really more effective to engage with our members, which ultimately drives better outcomes and more durable economics for our business. The same set of considerations also exist on OpEx. We're looking -- we've stood up an internal AI transformation council. This council is tasked with looking at every function within our company and how we can deploy AI across the entire company in order to make our teams leaner and more effective using the tooling that's becoming available to us.

So we're going to continue to deploy AI across our organization in order to hit that 20% -- 30% long-term target. Next, I want to take a moment to really just simplify our financial model and think through the building blocks and how we think about modeling our business. And they all go back to the growth algorithm that we teed up upfront. Today, we're at 25 million covered lives. Our enrollment rate on those covered lives is 4.4%. That's where you get the 1.1 million active members. Trailing 12-month revenue per member is currently $284.

That then gets you to our current trailing 12-month revenue of $310 million. So what's most important here is we don't -- there's not a single lever here. We're aiming at all 3 of these levers. We're going to continue to expand covered lives. We're going to continue to drive enrollment rate up, and we're going to continue to focus on increasing revenue per member through engagement efforts. You're going to hear about specific shots on goal across all of these measures later on in the presentation. That then translates into $217 million of gross profit at our current non-GAAP gross margin target of 70%.

As we make progress towards that 80% target in the future, you're going to see increased flow-through from revenue to gross profit. And that's what we really like. You're going to hear Jennifer go into more detail on that front. I also want to take some time on something that I think is really important and foundational to our business. Sean mentioned this a little bit earlier. But we're not like the billing models of old. We've seen these billing models of like when you do a PEPM, you charge a 1,000-person employer for their entire population, only a subset of that population uses the service and you have this weird perverse incentive game that you're playing with the service provider and the employer.

When we set out to build this company, we want to make sure that we align the incentives across all parties. So at its core form, we only bill if you're actively engaged in our programs. So what that does is it aligns the incentives across our PBM and our health plan partners, across our employer partners, across our members, and across Omada. So when we win, our partners win, and that is a core tenet of how we built this company. Moving forward to our market opportunity and what's in front of us. We went into a little bit of the detail here, but currently, about 3/4 of the American population suffers from a condition that Omada currently supports.

As we've gone through time, you saw Sean build into that chart, we've entered new condition areas, not because we were necessarily seeking new TAM, but it was our customers coming to us, asking us to support them across multiple conditions. And as a result of those efforts, today, 33% of our customer base works with across more than one condition. So there's a dual benefit here. First, we can go back to some of our earlier customers. They might be working with us across just one product, and we get to upsell them across our entire cardiometabolic suite.

And then our new products, we're starting the majority of our new business in a multiproduct fashion out of the gate. That's adding stickiness, that's adding more penetration within the employers, which has led to the number on the right, which we've consistently had north of 90% plus customer retention over the past 3 years. What that's led to has been a consistent, predictable member build over the past 2.5 years. We're at 391,000 in 2023. We're now at 1.1 million at the end of Q2 2026. And I think underpinning that is actually the diversification within our overall channel and our customer base.

Many of you are familiar with how we contract. Two of our largest partners are Cigna and ESI, that's on the left chart. These are the contracting entities that we ultimately pull through. But underneath that, we have thousands of employer clients in fully insured lines of business at the customer layer. So our largest single customer represents 15% of our revenue. But when you get to our fourth largest customer, there's no single customer that makes up more than 2% of revenue. So at the customer layer, we have a tremendous amount of overall diversification across all industry types, across multiple segments, and we feel that we have mitigated our risk from that perspective.

And that's just a moment in time. Where we're going, and I think we get -- we've had a lot of inquiry on this topic is, how are you going to be building into some of your newer relationships? So as we've disclosed, we've had multiple years to build into the Cigna and the ESI relationships. These are older relationships where we partnered really closely with these organizations. Sometimes you'll start with a single product, maybe it's prevention in their ASO book of business. As you demonstrate efficacy and success, they underwrite you into fully insured, then they add diabetes.

So we've been building into these books for a very long time. And now we're at a new inflection point. We've announced Optum. We've announced CVS. We just announced an expansion with HCSC. These are newer relationships that take multiple years to foster and to build into. On these newer relationships, we're in there with more products. We're starting with multiproduct Optum out of the gate. In the Optum book of business, we have our prescribing capabilities, which is our highest priced product. So if we just execute the same way we have been with our existing book in these new channels, it presents a significant market opportunity for us in the years to come.

You're going to hear Britt go into this in more detail. So how has this been translating into overall top line growth? On the revenue side, we've been growing at an average of 45% compounded over the last 2.5 years, starting at $123 million and exiting at Q2 at $310 million. And one feature that we love about our business is that the revenue is highly predictable and highly visible when you get to the end of the year. So when we're exiting a calendar year, when we're looking forward to the next year, roughly 75% of the revenue is highly visible for 2 main reasons.

The first is the existing members that you closed in the prior calendar year are recognizing revenue in the following year. And then when we look at our existing employer base, the Costcos of the world, we know at the Costco, at the employer layer, how many new enrollments that they're going to contribute every year. A portion of Costco's population is naturally going to churn out every year. They're going to replace those employees. We get to remarket to a new subset of that population. And we have a decade-plus worth of data understanding how many new enrollments our existing customer base is going to contribute.

Then we have the remaining 25%, which is our go get in year. That's what our sales team is going and closing in year and making sure that we hit our overall revenue targets. Then we look how that's translated into member and unit economics. We've consistently maintained revenue per member over the past 2.5 years at that kind of mid-280s mark, exiting Q2 at $284 on a trailing 12-month basis. There are some puts and takes here. On the positive side, what's happening is we've been more successful selling multiproduct. We're selling our GLP-1 care track.

That's increasing overall trailing 12-month revenue per member as we are selling more expensive products to our overall employer base. What we've also observed, which is -- which we talked about in some of our earnings calls, is we're actually observing members going into their fourth and fifth year with Omada. So what's happening there is to really make it simple in the first year, a member is often billing 10 to 11 months on average. When they get into their second year, they're billing 5 to 6 months on average. In their third year, they're roughly billing 2 to 3 months on average.

So they're not billing as much revenue, but what's most important is these are some of our most profitable members. When you get into that third and fourth year, there's very little incremental cost. You front-loaded the device cost into that first year, you front-loaded the majority of the care delivery cost in that first year. So these are some of our most highly profitable members, which is what you're seeing in the dark orange bar. We went from $157 on average gross profit per member to now $199 gross profit per member. So we want to keep these members in program as long as possible, especially as you go further out along the curve there.

Next, I'm just going to walk you through the unit economics at the product level. We do break these out periodically. So if you look on the graph on the right, this is LTV over a 5-year period across our different product types. The numbers above the bars are indexed against prevention. So prevention is indexed at 1.0x, roughly $1,100 over a 5-year period. MSK steps slightly down from there. Cholesterol equal with prevention, hypertension worth 1.1x, diabetes worth 1.9x, and prescribing worth 3.8x. These are gross profit contribution dollars over a 5-year period.

Worth noting that all of these products are north of 70% on a gross margin basis, but these are the gross profit dollars. So there's a huge incentive for us to continue to drive more diabetes enrollments, more hypertension enrollments, and more prescribing enrollments because we like the amount of gross profit flow-through that, that creates on the bottom line. And then over on the left, a really cool feature of our business is we're fully paid back at the member level by month 3. You go negative months 1 and 2, you're shipping the devices.

Our care teams are spending outsized time upfront, making sure our members are successful on program. You're breakeven by month 3 and then you're gross margin accretive from month 4 through the rest of the member's life cycle. And that's also translated into product diversification over the years. You saw Sean shared that graph earlier about kind of our overall time line and when we've entered new condition areas. So in 2019, all of our revenue was coming from prevention. We entered our first selling season for diabetes and hypertension in 2019. We entered MSK shortly thereafter.

And now over 25% of our overall revenue is coming from non-prevention products. We love this because they're higher-priced products. They have more favorable unit economics. They create more stickiness within our accounts. That's what's leading to that 90% customer retention. The more we're able to go and penetrate accounts with multiple products, the higher likelihood that they're going to stay with us long term. This has also led to a significant improvement in member retention. 2.5 years ago, we were at 43% member retention. We're now at 58%.

This is so important. When you don't lose a member when they're not dropping out of the bottom of the bucket, that's one less member that you have to replace the following year. So the more we can improve product mix, the more we can continue to improve engagement, keeping folks in program longer, that is a significant benefit to our economic profile. So with that, I just want to wrap with -- again, these are -- you're going to hear in detail the core growth levers across the business. We have specific investments aimed over the next several years and making sure we continue to expand covered lives, continue to improve our enrollment rate, have targeted investments focused on engagement, and are also continuing to use AI across our business to make it more efficient.

With that, I want to bring up Britt. Britt has been with Omada for 11.5 years. She is a fountain of knowledge. She's done like half the jobs within this company. So I'm excited for her to share with you today more on the commercial organization.

Thanks, Steve. All right. Good afternoon. I'm Britt. I'm excited to be here with you today. I have had the privilege and the opportunity to get to design and build out Omada's commercial go-to-market engine over the past 11.5 years, as Steve noted. Today, we're going to talk about 4 things. First, I'm going to share with you why we win. Then I'll walk you through how our commercial go-to-market engine works. From there, we'll talk about the progress we've made to date with that commercial engine as well as the incredible white space ahead of us.

And finally, we'll talk about one of the most dynamic parts of our market, the GLP-1 market and how we're helping our customers navigate that situation. So with that, let's dive in. If we zoom out for a moment, I think it's important to reflect on where our customers are and what are the pressures they're wrestling with and then therefore, how does that influence how we show up in the market. If you look back, customers are really at an inflection point right now. They are faced with rising costs that have been rising faster than they have in the past 20 years.

GLP-1s are a big part of that. Not only are they part of the cost challenge, but they are one of the most sought-after benefits employees are looking for right now, and our customers are really wrestling with how to handle GLP-1s. In addition to that, they're raising the bar and they have higher expectations for the evidence and the proof points that they expect from programs like Omada. As a response to all of these trends, buyers are consolidating. They're asking a smaller number of partners to take on more of the clinical and financial risk of their populations. And this is the context and the backdrop for why we win.

In short, we win for 3 main reasons, and I'll walk through each of them. Program breadth. Today, we have a multi-condition platform across prevention and weight, hypertension, diabetes, cholesterol, MSK, we have GLP-1 solutions. Taken together, over 74% of the insured population can be served by the programs we have in place today. 30%, as Wei-Li noted, suffer from 2 or more of these conditions.

This is important because that means customers can work with Omada as a one-stop shop across these needs, which also represent one of their top spend challenges, which is the cardiometabolic category.

Next is market reach. Over the past 15 years, we have diligently sold and won access to partners, to lines of business across 3 national PBMs, 25 health plans, different lines of business across self-insured, fully insured Medicare Advantage. We have a direct sales motion. We have reseller partners. And all of this is in an attempt to make it easier and faster for customers to choose, buy and implement Omada.

Next is buyer trust. Our long-standing commitment to high-quality, transparent research is the backbone of the trust we have with our buyers in the market. We have 32 peer-reviewed manuscripts, 5 clinical accreditations. This is increasingly important in today's environment where buyers are looking to consolidate solutions and put more trust in fewer partners.

This graph here is proof that our strategy to win is working. There is no market report that compares to players in our space. And so we think the best thing to look at is global app downloads. You can see here that our growth strategy is working. It's getting better and stronger, and we're outpacing the pack.

One of the core strengths of our business is something that we've built diligently over time, which is our go-to-market flywheel. It's repeatable. It's scalable. It aligns value across incentives and value across the value chain. And again, it makes buying fast and easy for our customers. Let me walk you through how this works.

Step one, a new employer is sold. Often, that's through a partner. Sometimes that's through our direct sales motion. We launch the employer and members enroll. From there, members get healthier, and that shows up to our customers by way of healthier populations and lower overall costs.

Our customers feel that success and our partners do as well. They're motivated to bring us to more of their customers. They're motivated to expand lines of business with us into fully insured and Medicare Advantage. They adopt more of the programs we bring to market, and the flywheel continues. When a partner adopts more of our programs, we're able to sell more employers, we enroll more of those members and so on and so forth.

Each of these has a broader ripple effect in the partnership ecosystem as well. Oftentimes, the trend we see is when an employer leaves their health plan or partner, they bring Omada with. This allows our growth to continue to compound.

Now I want to double-click into exactly how this motion works because it's important to understand, and you will notice as we go through the rest of the presentation, each of the steps in this process represents a growth lever for us to continue to accelerate the business.

Step one, we win a new deal. We win a deal with a PBM or a health plan, and that becomes partner access. Step 2, we sell with those partners to their employer covered lives. When we win those, we call them covered lives. Step 3, depending on how many of our solutions, of our programs a customer adopts, more or less lives within that population become what we call program eligible. If you buy one of our programs, a certain step that is covered. If you buy more, more lives become program eligible. And then from there, we enroll members.

There's a few other bits of context about this that are important. One is this cycle takes time. The rule of thumb in health care is that selling partners takes on average 24 months. Then to sell employers through this motion takes another 12 to 18 months. Additionally, I can't underscore how advantageous this motion is, both for our buyers and for Omada.

This motion means that customers can avoid a lengthy procurement contracting and implementation process. They can sign up for Omada with a form. They can launch us in a matter of weeks. This is obviously advantageous for Omada, too, because it provides a really scaled way for us to grow the business across employers.

Often, when we show success within a given partner and we drive results, a new path to accelerated enrollment opens up. The model I walked through previously is most common for growing our self-insured employer base. That is where employers bear the risk of the financial cost of their populations and they pay the claims. When we show proof, we are often embedded into new lines of business like fully insured. This represents a new bar for complexity.

Fully insured and Medicare Advantage lines of business are governed by actuaries. It takes years of results and complex analyses to win these books of business. It creates a really important moat for Omada. In here, the process is streamlined. We skip the step where we sell employers. We get access to a partner. We determine how many lives are eligible based on the programs that partner selects, and we enroll those members.

So now that you understand how our main motions work, let's talk about the progress we've made to date and the white space ahead of us. So we're really proud about the significant access in the major deals we've won across the PBM and health plan space. We have 3 of the nation's 3 largest PBMs contracted with Omada. We have over 25 regional and national health plan partners as well as reseller partners. And across these partners, we have over 2,000 customers, representing 28% of Fortune 50 organizations and 23% of Fortune 100.

We've achieved significant growth through these partners, over 25 million covered lives across these 2,000 customers. You can see how that breaks down between the lines of business on the left, 19 million self-insured in PBM, 6 million fully insured, and a small but growing slice of business for us in the Medicare Advantage space.

On the right, you can see just how these lines of business have grown for us over the past 2 years. So 37% growth in self-insured and 35% in fully insured. We're proud of this growth, but there's a lot of potential for us in the future. You can see in the markets we're in today, nearly 90% of the opportunity is out there for us to go and win and capture. That's 184 million lives across self-insured, fully insured and Medicare Advantage.

This is not even to mention future markets and future motions we can expand into. Future markets include government lines of business, Medicare, Medicaid, new motions that help us grow include a direct-to-consumer play as well as continuing to grow our impact with health systems as referral partners.

Let's look at this through the lens of the partnerships we've already closed. So we talked about the growth we've seen to date, and this is explained -- this is shown across 5 of our top partners here. On the left are some of our partners that we launched earlier in our tenure. On the right are some of our newer partners. And we've diligently been chipping away at those year-over-year.

What's exciting is within these partners, without any additional contracting, we have access to 150 million additional lives that we can win. It takes time to realize the growth and the potential of these partners. We already talked about the buying cycle of 24 months for a partner, 12 to 18 for an employer, but we're confident with the flywheel we've honed as we continue to run these plays, we will grow into some of these newer channels and reach even more potential across our closed book.

Another key lever to expanding value within a customer is to add more of our programs. So we have more program eligible lives. This illustration here helps you visualize that. Imagine a customer where we launched just our prevention program. Those lives on the far left in the oranges color represent the population that will be available to us to enroll. As that customer expands to hypertension, cholesterol and diabetes, more of their members become program eligible for Omada.

We also have GLP-1 solutions in Care Tracks. One in eight U.S. adults today are on a GLP-1. That's yet another level -- or another lever to enroll this population with programs that would be attractive to them. For customers that deploy our MSK solutions, 100% of the population is eligible for episodic MSK care when they need it. So yet again, another way for us to grow value within the customers we've already sold.

Steve mentioned earlier, about 33% of our current contracts today are multiproduct. So you can clearly see the growth potential ahead of us to continue to expand programs within customers. Enrollment is the final step of our commercial engine. This is what helps us ultimately realize value and turn eligible lives into enrolled members that drive revenue in Omada.

In order to realize the potential, we've built a scaled multichannel outreach engine that works across a number of channels I'll walk you through now. E-mail is the foundation of our outreach engine. Our optimization efforts over the past few years have driven 30% year-over-year improvement. In the last 2 years alone, we've more than doubled our e-mail conversion rate. And this is really important because every basis point of improvement here directly translates to our revenue without additional acquisition costs.

Direct mail and paid media are next. These are channels we can use to promote an even more surround sound approach to get employees aware and to enroll into Omada. Each of these generates the 3x lifetime ROI, meaning for every dollar we invest in these channels, we get 3 in return across that member relationship.

And finally, on-site and customer-led. This is important, and I've firsthand seen the importance of this channel, and I'm sure we can all imagine it as well. When a leader at your organization puts their weight and condones something that -- or encourages something that you've invested in as an organization, you pay attention. You read these e-mails from your leaders. The effect here is no different.

And that's why we see a 33% lift when our customers' leaders wrap their arms around Omada and promote it within their populations. So each of these individual channels is working. Each are important. Combined, this really helps us realize the potential growth we can within our partners and support as many members that need us.

Okay. So we've talked about growth. We've talked about the white space ahead of us. None of this matters unless we're able to have satisfied customers that stay with us. So we're proud to share these results here. As mentioned earlier, we have on our book 3 of the 3 national PBMs. We have 90% retention across our employer customers, 95% retention across our fully insured lives and a 90% customer satisfaction rate, which underscores the value we provide to our customers that makes them retain us.

All right. I'm going to switch gears for a bit to talk about something different, which is our GLP-1 business. This part of our business is super near and dear to my heart. I have seen firsthand the impact these unbelievable medications can have of our members. Our members are realizing outcomes they never dreamed of, members -- or outcomes they've never experienced in their lifetime with Omada.

I've seen it in my own community. I've seen it in my own family. I'm sure many of you in the audience have witnessed the potential of these medications as well. In short, GLP-1s, and Wei-Li mentioned this earlier, they've been a real tailwind for our business.

First and foremost, it's simple. GLP-1s are the #1 problem and challenge our buyers and customers are wrestling with designing a solution set around going into next year. And with that comes Omada. This is a top spend area, and they're looking for Omada to help them develop a strategy that fits their needs.

GLP-1s have led to direct opportunities for us to establish new relationships with PBM partners as well as deepen our existing relationships. GLP-1s serve as the front door for our broader cardiometabolic platform. Many times when an employer is designing a GLP-1 strategy, they're not thinking just about GLP-1s.

They're thinking about the broader cardiometabolic picture because they know these members struggle with hypertension, struggle with cholesterol, struggle with diabetes and other comorbid conditions. And so when we meet with them, we talk not only about our GLP-1 solutions, but our broader portfolio to figure out how we can support them with the right mix.

And then finally, as I already mentioned, these are a transformational tool for our members. This is a really exciting time to take our member outcomes to the next level. And you see the results on the right, 52% year-over-year GLP-1 billings growth and a 14% engagement lift for GLP-1 members versus non.

One of the decisions we made early on as the foundational design principle was that we wanted to have solutions in place that can support every employer customer, whether they cover GLP-1s or not. And that's because of the data you see here. Today, 43% of medium to large employers cover GLP-1s on their pharmacy benefit. 57% do not. And I'm sure many of us have seen recent reports, which show that most likely the number on the left will shrink going into next year, the number on the right will increase, and more organizations next year will not be traditionally covering through the pharmacy benefit.

So we've designed our solutions as such. Our Care Track and our prescribing can be deployed if your population is covered for GLP-1s or if an employer wants us to route members to one of the cash pay options. And then our core programs are no different. They can be deployed to either set.

Additionally, it's been really important for us to design our solutions, our account management strategies, our operations in a way that's very nimble because our customers' decisions and strategies in this category are evolving, and we need to be ready and willing to evolve with them, and that's exactly what we're doing.

We invested early and heavily into research and outcomes in the GLP-1 space. We all know through reading the news, the potential of these medications, but we know that, that is not promised. That is not guaranteed. All too often, we see members who stop their medication before reaching their clinical outcomes because they were struggling with side effects, or they come off the medication and they regain all the weight that they fought so hard to lose.

And we knew it will be important for us to design programs and put out evidence that show when you pair a GLP-1 with Omada, you can realize those best-in-class durable outcomes. And we knew this will be important for our customers to unlock growth for us in this category. So let me walk you through some of the results we have in market right now.

For members taking a GLP-1 with Omada at 12 months, they lose 2x more weight than members taking a GLP-1 without Omada. At 12 weeks, our muscles -- our members have retained 3x as much muscle mass compared to those taking GLP-1s without Omada. Weight regain is a hot topic with our customers. These are expensive investments. And the last thing our customers want to do is invest in them, have people drop off for whatever reason and regain all the weight back. That becomes a wasted investment on their behalf.

And so we've designed our programs to help members maintain their weight loss almost entirely out to 12 months. Our members are only regaining 0.8% of the weight they lost on their GLP-1 compared to traditional evidence, which shows 11% to 12% regain at 12 months.

And finally, and hot off the press per our press release yesterday is our savings. We are able to show a simulation model that when you pair GLP-1s with Omada as we're able to drive clinical outcomes, that unlocks $11,000 of savings across 5 years for our members.

Importantly, at 1 year, this is over $1,400 of savings, which shows a 1:1 -- or a 12-month 1:1 ROI on the investment in the Omada program. And that's a really important bar to meet in today's cost-sensitive buyer market.

So in summary, we talked about -- Steve talked about the 4 levers for growth and durability of our business. Our commercial engine really impacts the top 2. Direct and partner sales motions increases our covered lives. We have made significant progress here, and there's even more potential for us to continue to grow into these white spaces.

Program expansion within accounts is a huge growth lever for us. Across all of our programs, we can enroll and support up to 74% of U.S. adults covered by the conditions we support. And then enrollment. Multichannel outreach converts our eligible individuals into enrollment with Omada. Our e-mail campaigns are battle tested and our conversion has doubled twice -- has more than doubled in the past 2 years.

So next, I'm going to turn it over to my colleagues, Dr. Tom, Danika and Jennifer to walk through our product and technology experience. And we'll start with Tom, who is the brains behind all the clinical outcomes we just reviewed. Thank you so much.

Thanks, Britt. That's -- thank you for the wonderful overview of GLP-1s and the innovation that Omada is doing in that space. It's an honor to be with you today. My name is Tom Tsang. I'm Omada's Chief Medical Officer.

So throughout my career, I focus on the challenges in the health care system, cost, quality and patient experience, the triple aims. Today, health plans and employers are seeking comprehensive solutions that can address all 3 domain areas. Now Wei-Li talked about this flywheel.

I want to emphasize that it starts with a robust clinical strategy, a strong clinical strategy that's enabled by great technology, delivered by well-trained human-led care teams, with a singular focus really in achieving cost savings and outcomes. So my 2 amazing colleagues, Danika and Jennifer, will be walking through technology and care delivery and how they spin this flywheel. But I want to start off with clinical strategy first.

So I'm an internist. I used to practice 3 blocks from here, and I had offices at the Amex building and the Morgan Stanley building as well. And I used to see 25 to 30 patients a day. This is another life when I was a practicing internal medicine doctor that was taking care of cardiometabolic conditions.

And these patients came from Wall Street, Chinatown, there are restaurant workers, investment bankers and little grandmothers from Chinatown. The majority of them had cardiometabolic conditions, obesity, hypertension, cholesterol, high blood pressure and diabetes.

Now I want to really underscore the enormity of the situation here. [ 155 millions ] Americans with diabetes and prediabetes. 90 million Americans with something called metabolic syndrome, which is a combination of obesity and 2 other cardiometabolic conditions. And when I saw these patients, I saw them maybe about 3, 4 times a year at 10 minutes, 15 minutes of visit. That averages 1 hour a year. That is why it's so critical that we have in-between visit care to support these patients.

I couldn't do it. I was part of the system that had all these issues. So that's why we continue to grow our cardiometabolic programs, and we started off with diabetes prevention, and we've grown our portfolio to include other chronic conditions such as hypertension and MSK issues. And each new program builds upon the one before it. The more conditions we treat in one platform, the more covered lives we will reach. And that lifts enrollment and engagement, and engagement increases and lifts our outcomes.

So as we treat more conditions, the greater the impact and the greater savings we can generate for our customers. And as we look towards the future, as Britt and Wei-Li mentioned, there are more opportunities and conditions that we can add on, like fatty liver, sleep apnea and many, many more.

And as you've heard throughout today, health care is getting more complex and more expensive. And organizations have to decide on who to trust and what solution should be best. Now, Omada has invested tens of millions of dollars over a decade into peer review research while pursuing the best-in-class digital care -- the best-in-class digital clinical care model.

This can't be replicated with AI, and it can't be done overnight. And this is how we set the bar for care, which is why in the marketplace, customers choose us. We have more peer review studies and accreditations than our key competitors, 30-plus peer-review studies vetted by external experts, and they review our methodologies and the results before any journal can publish the studies.

And we also conducted what we believe at that time was the largest randomized controlled trial of a digital diabetes prevention tool, which is the gold standard on evidence generation. Additionally, our programs have been vetted by external standard setting bodies such as the CDC and NCQA. So this is a high bar for scientific evidence, and the ability to prove our outcomes drives employer trust and confidence, which leads to enrollment and engagement.

So after practicing for 15 years, I've seen thousands of patients with cardiometabolic diseases, and I needed to create a sustainable treatment plan that was both engaging and delivers outcomes. I choose the right medicine, give the right advice for the right patient for the right scenario.

And what you're seeing in front of you are the outcomes that you would want as a physician. There is no single Heather journey here. And across our programs, members like Heather has achieved a 5.5% reduction in weight loss in our prevention program, a really significant 61% reduction in pain for musculoskeletal issues and demonstrated more loss in body fat while preserving muscle mass in GLP-1 treatment.

These outcomes and savings drive our commercial engine. And these are the same reasons why PBMs and customers choose us, over 2,000 customers, by Omada, and we've been able to retain 90% of them. By staying focused on outcomes, Omada has built a reputation as a leading solution in cardiometabolic care.

So to summarize, we lead with clinical strategy because we believe that's the best way to achieve outcomes for our members and results for our customers. It's grounded in science. And we set -- and when we set clinical strategy for our programs and services, the results follow better outcomes, more savings.

While clinical rigor is the anchor, it's not the whole story. It's the connection between our clinical foundation and our product that truly brings our product to life. And now Danika is talking about technology, and Danika is an avid hiker, but she's really the queen of product. So thank you.

Hi, everyone. I'm Danika Harrison. I'm the Chief Product and Growth Officer. It's an incredibly exciting time to lead product. AI is changing not only how we build, but how quickly we can release product. And I just want to start by saying this is in stark contrast to my very first job in product 28 years ago. Now I'm going to date myself.

I was fresh out of Georgetown, and I took a first job at a credit card company called MBNA. And we started there now to level set at the time with your credit card 28 years ago, if you wanted to do anything with your credit card, what did you have to do? You had to pick up the phone and you had to call a human in customer service, and they would answer whatever questions you had. So we wanted to change that.

So for 2 years in product, we worked on building something new, their first online banking platform. So after 2 years, we released, are you ready, a website. And that website, you could do 2 things. You could check your balance, which was really exciting. And you could also view your monthly statement on a really new technology that was called the PDF. So that was our big foray.

So I think back to that, and I am really glad to be leading product today versus then when we can today release things every few weeks. So what we're going to talk about today is the new innovations that we're launching within our product. And during this presentation, we're going to be talking a lot about engagement.

Why does engagement matter? It matters because the more members engage, the better the outcomes are that they're wanting to get with Omada. And also, it matters for us as a company because members who are engaging longer allow us to bill for those members over time.

As Tom mentioned, our clinical strategy informs the best way for our members to achieve health outcomes. But again, in order for members to get these outcomes, they have to engage. Every single thing we do within product is designed to drive longitudinal engagement for members as they navigate their health journey. Our technology supports members in a deeply human way as they make the...

Sorry, I was like listening to the webcast.

Okay, we're good. Our technology supports members in a deeply human way as they start -- make the decision to enroll and then begin their journey on discovery and onboarding and then they make the decision to change the behaviors in their lives in order to get better health outcomes. Our experience is so engaging that over 55% of members engage with Omada 12 months into the program.

Within our onboarding experience, we immediately engage you and allow you to tell your story. We're going to ask you questions. We're going to learn about your hopes and dreams. We're going to ask you what you tried before, what worked, what didn't work. We allow you to personalize your journey with us by choosing a learning path, identifying goals, understanding your motivation, sharing your preference on how you want to work with a coach.

And at the same time that you're going through this digital experience, something arrives in the mail. You might receive a scale or another device to help monitor and track your health. You'll also receive a personalized welcome kit that for the first time, makes the program feel tangible, not just something on your phone.

And at the end of this onboarding experience, you have a care team and you have a clear starting point shaped around your personalized life and a program that already feels like it was built just for you. Within our onboarding experience, as with all of our member experiences, we're constantly innovating.

Just in the past year, we implemented changes to the landing pages, application and account setup processes that increase application submission rates and conversion by 3% to the application submission rate and over 40% conversion from people who submit their application and then log in.

Once you're in our program, you can engage with a multitude of experiences. You can track meals and other health metrics. You can set goals, complete lessons, engage with peers or a community, engage with your coach. And it all starts each day with your personalized homepage. Every single day, we provide you with a suggested focus area.

In this example, we're suggesting that you set a new goal centered around nutrition. We walk you through a few quick steps and then your new goal of eating grilled chicken 4 times appears front and center on your home screen.

By continuing to optimize our homepage to be more personalized and more engaging, we've recently seen significant lifts in member retention at both 4 and 12 weeks. This early engagement matters because we know that when you're starting a big behavioral change program, you're most likely to drop off early in the program. So we know that members who retain an engagement through this early period are more likely to engage for longer periods of time, which again means they'll stay engaged, they'll get better outcomes. We can also bill for those members over longer periods.

And this is just the impact of our homepage alone. The reality is that we have hundreds of different engagement pathways that you as a member can take advantage of. Maybe you want to learn how to boost your gut health by engaging with one of our lessons. Maybe you want to try some new recipes from our 25 ideal dinners, or maybe you want to engage with your group focused on staying active at home, where today, members are talking about how to fit in a quick walk during lunch.

Over the past 2 years, we've built a robust nutrition experience that goes well beyond tracking macros that most apps offer. Our nutrition experiences meet you where you are. Maybe you're in the kitchen trying a meal and you want some recipe suggestions. Maybe you're sitting in the car, waiting to pick your kid up from school and you're trying to plan ahead on what you want to make for dinner.

We can help you with meals, recipes, remind you how to prepare the food. We can look at the ingredients you have and help you with that next step in your health journey in order to achieve your goals. And as a result of our ongoing innovation and nutrition support, which relies heavily on AI innovation, we have also seen lift in the percentage of members that continue to track meals at week 4.

In addition, as we've added prescribing capabilities and expanded our medical care solutions, you can come to Omada for more than ever before. During enrollment, if you indicate that you're interested in medication, you can easily meet with a provider. We'll ask if you're ready to meet and then once you confirm that you are, you're routed to the intake process for your first virtual visit.

When you visit your care plan in order to join the video call, you can also receive an e-mail and text reminding you of the call, and then you'll be immediately connected to a provider who has already reviewed your intake forms and is ready to discuss treatment options. Now compare this to a process where you might be waiting weeks to see a provider.

After the visit in the app, you can see a summary of that visit with notes and instructions from your provider. You can also see details about your prescription and you can choose a pharmacy for pickup. When you scroll down within your care plan, you can see any lab orders, you can see -- and you can schedule an appointment directly with that lab in order to have those labs done.

As all of these members engage with all of these unique experiences, they're generating data, clinical data, engagement data, care team data, all of the data around the personalized interventions. It creates an enormous feedback loop based on billions of data points to optimize our clinical strategy and our care programs in order to drive higher engagement and outcomes over time.

And when you think about what this means over Omada's history, we have information about billions of things. For example, even just 163 million meals that have tracked. And we can use that to gain deep insights on how food choices impact health and how our recommendations can impact members' food choices.

When you think about this scale, it can't be bought or replicated very easily because we have one connected record, including all of these data points for every single member. And thanks to Sunil, who's in the back of our room. He's our Chief Technology Officer. It's not just our product that leverages amazing AI and technology, our engineering team does as well.

Under his leadership, we've been able to ensure that 100% of our software engineers use AI coding tools and agents. What this means is that our engineers are, on average, 15% more productive than they were just 2 years ago. That means we can take on more growth and more capacity without adding anyone to this team or additional OpEx.

As we've talked about today, driving engagement, outcomes and efficiency is important not only for our members but for Omada as a company. We've highlighted some of the key features of the product today, but I wanted to take a time to talk about a few things that we've launched recently and what's upcoming in the next few months. So we're going to share a video with you with some of those innovations.

[Presentation]

Great. Well, as we wrap up this section, I hope we've been able to share how a member engages with their health journey is really deeply personal. It has to be completely relevant to that unique member's life and their experiences and their personal struggles. Over the last few years, we've been expanding and deepening our platform to create this personalized experience, which has increased engagement among our members in both the short term and the long term.

And these investments over time continue our strong track record of strong engagement and outcomes for our members. And so now to wrap up our product section, I'm going to hand it over to Jennifer Becker, our Chief Care Delivery Operations Officer, who comes to Omada with a wealth of health care operations and program development experience. So thank you, Jennifer.

So glad to be here with you today. I have dedicated my entire life to the delivery of health care. Tom shared the story earlier of being a physician who had patients with chronic disease that he saw 4 times a year for an hour at the total -- in total. I have spent my career working alongside Tom in different health care systems, trying to build the systems within legacy health care that actually can provide between care management, and we frankly have not been successful within conventional health care.

And so I'm so proud to be here because Omada has this figured out. We're doing it. It is working. Our members love it, and I'm just so proud to be part of this. So thanks for coming today.

I'm going to more specifically today, introduce you to who our care team is, what our devices enable. I'll also show you why human relationships are critical to achieving outcomes with Omada's particular member base. We have a unique population that we serve. And I'm also going to introduce you to how we have built an increasingly efficient human-led AI-enabled care delivery system.

So behind strong clinical outcomes is a care team that knows our members and remains with them throughout their entire journey. The care team offers proactive one-to-one support that stays with a member for the entirety of their journey with Omada. The care team experience begins with our health coaches like Jessica, you see here, a real health coach, all of whom are certified diabetes prevention program lifestyle coaches. So every Omada member is offered a coach who provides lasting behavior change and lifestyle support.

Next, our clinical specialists, all of whom are certified diabetes care and education specialists. They provide medication support and clinical data interpretation for all of our members. Physical activity specialists are certified personal trainers or certified strength and conditioning specialists who work right now with our GLP-1 members. You saw them introduced in the last video that Danika played.

Licensed physical therapists provide musculoskeletal clinical care. Prescribers are board-certified providers who prescribe and manage anti-obesity medications, including GLP-1s. And our member services associates are people selected for exceptional customer service skills to provide program and technology support to all of our members. And finally, we have our behavioral health team of licensed clinical social workers who support our member-facing teams behind the scenes.

So in addition to the consistent and trusted relationships that our care teams provide, we also provide devices, which you've heard about, which are a foundational component of our care delivery system. We provide members with devices unique to their conditions, capturing strong data that enhances our care team's ability to be effective and deliver clinical outcomes.

Most of our devices are cellular by default. So it makes it easy for our members to set up a simple and seamless experience when they unbox their devices, and they just work. They love that. Our data also shows that our devices play a role in engaging our members directly. This is not only clinically important, but it is also motivating for behavior change.

So many of our members, for example, say that, that ritual of getting up in the morning and stepping on a scale actually becomes a mindfulness moment for them to engage the behavior change that they have already been talking and -- talking with their coaches about and choosing to become modern members.

All right. So this is a really important component of our program. As we have studied our member base, we have learned that building relationships leads to 1.7x greater weight loss, which has greater clinical outcomes. We see that AI alone supports the self-directed, but AI plus human relationship enables durable change that is lasting for everyone else.

Only about 2% of our members are who we affectionately call our wellness warriors. Our wellness warriors are people who feel highly self-confident to be able to manage their own health and remain in a healthy lifestyle. Most of our members actually have low confidence in their ability to make and sustain change, and they often experience high levels of frustration and fear.

This is where empathy and care and accountability comes in, and it feels different with a human being. That is directly supporting who Omada's members are. That's why we not only have humans in our program, but you have the same humans that stay with you for the entirety of your journey with Omada. Relationship is what makes the difference.

So how do we use AI in care delivery because we love AI. But our strategy is to amplify what works for our members, which is the humanity of the care teams, while we continuously optimize our efficiency. We have learned that some tasks are best suited for AI and some tasks are best suited for humans. There's something invaluable about knowing there is a real human expressing real care, and we leave that work to our care team.

And we're continuing to offload more and more of the work that doesn't need a human but is better employed through AI or technology. So for example, AI provides context summarization. It provides factual answers and it conducts basic information gathering for our care teams. Our coaches do the moments where the relationship counts. Effective application of AI is a human care force multiplier is what we're learning.

So let me give you 2 specific examples. So our care teams are one on very much of an evolutionary journey. The car analogy, our team -- we love this. So we are in the process of supercharging our car. So first, pre-gen AI is where we started, creating a set of data-driven signals that more precisely guided coach action. Second, we now move to post-gen AI process automation, and we have now shipped, for example, 3 instances of member contact summarization, which enhances and speeds up synthesized information for the care team.

These have been critical improvements that enable our care team to serve members more precisely and deliver care more impactfully while simultaneously reducing our cost of revenue. And there's more to come. You can see the next car that we have not yet revealed.

Okay. So the outcome of this care team evolution is that our care delivery system not only works clinically, but it's strategically improved in efficiency as well. Cost of revenue, as you can see here per member, has gone down from $146 in Q2 of '22 to $111 in Q2 of '24 and $85 Q2 of this year. This has come down at the same time that our member base has more than doubled in the exact same period of time.

We strategically use a combination of continuous improvement and operational innovation as our operating baseline, and it comes from a systems approach. It's not just based on a single bet. And I'm going to give you a couple of specific examples of the key levers that we have noted here on the slide.

The first is standard work. The best known way to do a task is documented, it is taut and it is measured so that quality and efficiency do not depend on who is on shift. Workload balancing. So capacity flexes with the demand instead of being fixed across all of our member-facing teams. We spend a lot of energy to get that right.

Workflow automation. We automate workflows through AI and process automation, both in our product and our third-party operations applications. Innovation and tooling. We build features and tooling through a dedicated care delivery guided product design and engineering team, and we continuously experiment with our already built configurable surfaces, deploying successful experiments fully into our operations.

And finally, supply chain optimization. We dynamically route our device manufacturing across multiple global regions and vendors and proactively pivot weeks of supply to absorb geopolitical issues like tariffs and crude oil price spikes. We continuously assess and optimize import lanes for international shipping and last mile strategies for our domestic shipments as well.

And as Steve mentioned earlier, roughly half of that new 80% gross margin target will come from cost of revenue. This is our path, and we are already well underway. Okay. So where are we going next? I mentioned supercharged earlier. I kind of let the cat out of the bag. Our same team is becoming supercharged. This is a fundamental building block of how we go from 70% to 80% gross margin.

Supercharged care teams is an AI strategy. It's how and why we use and employ AI throughout our care team to amplify and augment the humanity of our care teams because we know that works for our members, replacing low-value human work wherever possible, all while staying laser-focused on driving engagement and outcomes for our member base.

And as you saw earlier, we began with data-driven signals, AI synthesized context. We're now getting ready to launch our supercharged care teams, which includes deeper journey summarization, automated escalation triage and audio coaching, driving engagement and outcomes while simultaneously reducing costs and preserving the human relationship that we know actually works.

And as you see, our next car that is uncovered, we're still -- we're already working on what's coming next in 2027. So for me, this is like the most powerful slide of this entire presentation, and it's my purpose of being here. This demonstrates the impact that Omada has and creates from the words directly of one of our members, Ajit, a real member -- a real Omada member. So thanks to Ashley, as you can see, Ajit's specialist, and Saharra, Ajit's coach, he reached his target weight. He brought his diabetes under full control, and he completely reversed his hypertension.

Now this is not an atypical message. We receive member testimonials all the time. I read every single one of them because it's key data into the operations. And these kinds of messages are prolific about the impact that Omada and our care teams, in particular, are having on our members and the changes that are happening in the lives of our members. It's really quite beautiful.

Okay. So 2 key takeaways I would -- I have for you today. First, human-led AI-enabled care matters for Omada's members to drive better engagement and outcomes. That is the secret sauce. And second, we have a proven track record of improving efficiency, and we are well on our way to achieve 80% gross margin. I am confident.

With that, we're going to move to a break. So you have 5 minutes, and we'll be -- when you get back, we'll begin with a virtual customer panel, and then you'll take another break, and we'll open up the room to Q&A following that with a group of our team. So thanks so much. Enjoy your break, and we'll see you back in a minute.

[Break]

All right. So this next section, we're super excited about them. You've heard from a number of our Omada leaders today talking about the business. But what we thought would be really great is to hear from the people that are actually purchasing and buying our programs and products and how they're seeing it, how they're using it.

And so we have no other -- or none other than Sean Duffy. He's going to moderate virtually a panel for us. So we've got Celeste and Sarah joining us. So let's do a little bit of a mission control to the virtual teleconference check. Sean, are you there? Can you hear us?

Perfect. You're really coming in loud and clear, and so excited for the session. I mean it's a privilege that we get on a daily basis to talk to customers, listen to their needs. And we've got 2 incredible representatives of very special customers to Omada. So welcome, Sarah. Welcome, Celeste. Thank you so much for being willing to share your insights with the group here. Maybe we start with just some quick introductions, if you could share your name and role, and maybe in no particular order, Sarah.

All right. Hi. I'm Sarah Acosta. I'm the Director of Benefits and Wellness here at Harris County, Texas and -- which is located in Houston. So we're in the greater metropolitan area of Houston. Thanks.

Awesome. Celeste?

Hello. Celeste Parker, Director of Employee Benefits for Costco Wholesale located in Issaquah, Washington.

Well, wonderful. Again, thank you all so much. And I wanted to start maybe with the fundamental question. Sometimes I describe Omada's competitor as not other digital health companies, but either doing nothing or just trusting the existing health care system. So maybe a broad question, why anything at all? And of course, why Omada? Celeste, maybe I'll start with you. Why put any solution in place at all?

Sure. So we partnered with Omada when point solutions were just starting to surface. So many, many years ago, it was new to Costco and new to a lot of other organizations. And Costco is not first adopters of anything. We like to be very mindful in decisions that we make, especially those that impact the people we're responsible for. So when we started to explore Omada and what they could offer, we were really attracted to the diabetes component. We had seen through claim data that, that was an area that our employees and family members could use additional assistance from.

We have a great partnership with our TPA, we've been with them for over 30 years. A lot of the solutions that they come forward with are custom-built for Costco. But even with that, we still felt that this would be a great area to start exploring a point solution for.

We definitely see that there's gaps in between seeing your provider, staying adherent to your treatment and your medication, start tackling it from a preventive measure. We saw all of those opportunities, and that's really what made us go and start partnering with Omada.

And as far as comparing with other solutions, Omada just came to the table with a solution that seemed the most Costco-ized and seem to be more in the interest of building with us instead of us going exactly with what they had already built.

Wonderful. Thank you. That has been an amazingly long and exciting project. I remember when we first started working with you in California walking into -- actually, every Costco in the area. And just you have seen people getting screened by Omada's program and feeling the engagement. So thank you for that partnership.

And maybe, Sarah, over to you. You've been a customer since 2019. Maybe a similar question. Why anything at all in the cardiometabolic space versus just hoping traditional health care supports your employees, and why Omada?

Right. Yes, we've been partners since 2019. And previously, we had a weight management program. And so what was appealing about Omada was that it was evidence-based. It met those parameters for the CDC's diabetes prevention program. And so a lot of that data and just being science-backed was relevant and important to us.

And very much like Costco, I mean, diabetes as well as diabetes prevention was very much on our radar as what we were trying to make an impact with. So it was the right fit. It felt -- and it really met our members' needs, meeting what they wanted to focus on weight management and eventually, diabetes.

Amazing. So more recently, we've all collectively grown with each other. More recently, Celeste, we launched cholesterol in partnership with you. And you didn't hear this because you weren't at the investor conference here, but what we always talk about is the most important strategy driver for Omada.

It's not our strategy team, but we love our strategy team. It's our customers and listening to their needs, seeing what they see within their populations and thinking, do our capabilities fit those needs, do they not fit those needs, and really using that to drive the innovation agenda.

And we're thrilled to launch with Costco, Omada for cholesterol. And maybe just describe how that happened, from your perspective, how can we lean on Omada versus looking elsewhere, and what the need you were solving within your population looked like?

Yes. So we were past with showing how our rich employee benefits plan that has a low premiums, low deductible, low coinsurance, 95% of our employees enrolled. What does that result in? Like are our employees healthier than employers where they don't offer that. So that was challenging to get that type of data.

But one of the metrics that we use is we pulled up our biometric screening data and compare that with similar employers and to see how do our employees rank health-wise. And surprisingly, we show that diabetes and hypertension, our employees were ranking really well there. But where we were in the red was cholesterol. Well, that's both interesting and makes sense all at the same time.

We have a solution that we've had for well over a decade for 2 of these things and not for one. So let's explore that. And unlike maybe the practice we had in place when we first adopted Omada, we are disciplining ourselves to look at other partners before solidifying a decision. And so we talk to other partners, and then we talk to Omada.

And it's always our preference to go with the current supplier, especially one that's been with us for so long, who shows that they can build and deploy exactly what it is that we need. And Omada was very engaging. We had several -- they had several questions. We had several meetings about what would this look like?

A lot of people who have high cholesterol might already be in the program. But are there people who just want to tackle cholesterol, people who only have high cholesterol and don't have these other conditions?

So really good conversations, and they were able to deploy something that exactly what it is that we needed. And we've only had it for a few months, and we're showing great numbers with that. But that's kind of why it was even presented and how it evolved and how we made our final decision.

I love it. Well, I mean, internally, it's so exciting for us, especially as you shared, to watch really the early data and see such promise there. And maybe another theme from the meeting we've had for you, Sarah, one thing we always talk about is the life of a beneficiary is difficult. And my gosh, to find paths to allow for easier contracting matters to us. It matters to them.

You've contracted Omada in different ways through your employer, through health plan, now through the PBM. Maybe just share a little bit color on why the PBM route this time? What did moving between them look like from your side? And what are some of the considerations in working with digital health relative to how you contract?

Right. Yes. So when we first began with Omada, it was through the health plan and that partnership there. And again, seamless lift there. And so when that carrier contract ended and we were moving to the next carrier, they didn't have that solution in place at that time. And so we felt very strongly to continue that programming.

And we had so many members that were engaged in the program already, that it made sense to work through a direct contract. So that way, we don't have any gaps or any loss in care for those members going through those different programs. So that was a seamless transition.

Of course, we knew well in advance of that contract was terming and moving to the next carrier, that we were able to onboard and do all of those things necessary to make sure there wasn't any hiccups. But I mean, the team there made sure that, that was a seamless transition to the members. They did not even realize the change behind the scenes.

And then we had an opportunity. So then our PBM partnered with -- our current PBM partnered with Omada, and that's where we were able to leverage moving back to that type of structure, but through our PBM. And that made more of a financial sense because we had better pricing by going that route and some more available programming, I think, is what became at that time as well.

So it's been seamless going between one to the next, to the next. So I think that has been the big plus of this partnership.

Well, yes, it's awesome to hear it. I mean the teams at Omada, of course, have put a ton of work to try to make that experience seamless because no one likes having to switch contracts, especially if it causes implementation problems. So thank you for the partnership there.

And maybe turning to a theme that's, again, near dear to our hearts, and that you've already touched on Sarah, but maybe to ask you expand a bit on, is clinical evidence. So I founded the company --well, medical school. It's always been important to us to earn the trust of the enterprise health care market.

I knew at some point, I'd have to convince my medical director, med school friends that our solutions worked. Why are solutions with clinical evidence in your eyes preferred? And how does that factor into decisions you make within your benefits program?

Well, that's a very important factor. And especially when we were bringing Omada on board, I had to prove to our leadership at the time that this was the right move and kind of provide some comparisons related to what we were currently in from a weight management program with another point solution.

And so to me, it was very obvious, but you're having to take it to leaders that don't work in this space every day. And so that was the biggest piece, is Omada provided that information, that evidence-based backing that was digestible and relevant to the population.

So that way, they understood it once we were able to connect the dots for how there'd be a savings, but also that it's -- we know it's going to happen because you've done studies, you've got journals, you've got other things that are going to point to why XYZ leads to this solution and the outcomes that we're looking for.

Amazing. Maybe same question to you, Celeste, and you've already highlighted something that I just love, and that we've been together so long. It's almost an amazing peek of population health experiment and to see the early data that led to Omada show heightened diabetes and hypertension numbers, and then fast forward over a decade, to have those within the norms or below norms relative to your industry is really special.

And when you work with companies in your space, how does the evidence factor into your decisions?

Yes. So evidence is a big component without that, right? We can't even consider it. And it's not just evidence that shows impact and utilization, but it's the whole experience. Experience is top priority to us because you can have a great product, right? But if the experience is lousy, people aren't going to proceed further, or they'll hear about it from their coworkers.

One thing about Costco is they might not trust the insurance company, right? They might not even trust the direct manager. We hope they do, but they might not. But the one consistent thing they do trust is their coworkers. They all speak the same language here. So if they find out that it was a lousy experience, they're not even going to try it.

So that's a big component of what I talk about when I talk about Omada or any program that we have that is going well is, yes, there's these numbers, of course, like we obviously wouldn't be able to proceed if they weren't showing good numbers, but it's the actual experience, and experience includes communication.

Are they willing to partner with us to communicate this service and educate our employees about the service in the way that our employees will understand and appreciate? And that's another example of how Omada was able to tailor what they were offering in a way that would make sense for Costco and Costco employees. And because of that, we've been able to maintain good utilization with them.

Yes, I love it. And I mean it's such an adage where if it's not a great experience and nobody joins, then you have no chance for any impact at all, which is something that's super, super important to us in the market.

All right. Shifting gears, my wife at this point, she jokes that I don't know any other acronym besides GLPs. So if we were on this panel that I didn't bring up GLPs, it'd be off the norm here. So maybe we'll turn to that.

Starting with you, Celeste. To the extent you're able to share, what is the GLP-1 coverage strategy, benefit strategy been like for Costco? Where do you see it going? What are some of the considerations you've been thinking about in processing?

Yes. So Costco, I want to say, left out in that our pharmacy plan had always had an exclusion of weight loss drugs. And so because of that, when GLPs were entered into the marketplace for purposes of weight loss, we didn't see a huge spend in that space.

There are a lot of employees and family members that switched their treatment for diabetes over to Ozempic, which is more expensive. So we saw an increased spend there. But we weren't vulnerable to having to cover for weight loss.

This is a very fluid area, with both cost and need and supply and demand, all things, very fluid. And so it is something that our employees keep requesting. Costco, like I said, we're not first adopters. We like to really carefully watch things and make sure it makes sense because once we do adopt something, we keep it. We're not going to take a benefit away from our employees.

So we -- starting about a year ago, we said, okay, it's -- we're just not there to where we can add it to our pharmacy plan. We're not -- this industry is just not there. It's far too expensive. We don't want to jeopardize adding it and then not being able to sustain it.

So then about 1 year, 1.5 years ago, we started entertaining the idea of providing some sort of discount or company subsidy for employees that purchased it directly through the manufacturer. But we held off with that because it seems awkward to influence our employees to go and fill a prescription outside of Costco. We don't do that in our pharmacy plan.

So one of the primary manufacturers has worked very well with Costco's pharmacy department. Almost a year ago, they started offering direct-to-consumer pricing to all Costco members. So right there, that was a huge win. Employees being Costco members, they were able to get direct consumer pricing at the cost of the pharmacy. So that's great.

And to further that, come January, we're going to subsidize a portion of that. So we will pay for part of that cost for employees that are getting prescribed outside of the diabetes diagnosis. And we're going to encourage, not mandate, but definitely encourage a weight management, lifestyle management program, particularly with Omada.

And the reason why is even with us partially subsidizing it, this is still a very large expense to not only Costco but the employee. We are invested in our employees. We want them to make good sound financial decisions for themselves, and covering a good portion of their GLP medication, we want to make sure that they're successful in that. That's an investment for them.

And so we are definitely going to encourage participation in Omada's program that specializes in GLPs. We had a lot of conversations with Omada to make sure that this isn't just a weight loss program. It really is tailored to those on GLPs because the makeup of what they need is different than someone who's trying to lose weight without a GLP. So that's our strategy and talk to me in a year, and it will probably be slightly different, very fluid area for sure.

Yes, isn't that true? I mean, in your state and our state every year, you have to just pay a lot of attention to a very, very fast-moving market, and we're going to be honored to bringing our best sell forward and best capabilities forward to support your employees on GLPs.

And [indiscernible], Sarah, maybe over to you on the same question. Harris County doesn't cover GLP-1s yet you did decide to implement our enhanced GLP-1 Care Track. What led to that decision, even in the context of not covering the medicines?

Right. Yes. We're very much like Costco, it seems like, because we also have historically excluded drugs for weight loss, and so -- and are very much slow adopters. We like to test the waters first, see what everybody is doing. And so especially in this space, there's so much evolving like you've talked about.

And so it's -- we've been receiving pressure like most other employers from our employees to cover it on all levels through surveys, through like just verbally, like people just sharing that to high leadership, expressing that they pay out of pocket for some of this medication and have for the last few years. So it's something that's very much near and dear to even just me just understanding it and being a dietitian even.

So it makes sense to at least get ourselves into a space where if we did need to flip that switch, that we would have something or guardrails of some sort put in place. So that way, members, if we were to cover this drug or provide some sort of monetary part of payment for that, that we would have something that's built into Omada already that would give them that ability to make sure that they are getting the best bang of their buck when they are utilizing that GLP-1.

So that was really the steps of why we added the enhanced Care Track. And then also, we just know, like you kind of referred to, people are already taking these medications, of course, with the direct-to-consumer programs, compounding pharmacies. We've heard all kinds of stories about things happening.

And so ultimately, our employees, they typically are long tenured, and we most likely will see them in retirement. So it's an investment for us to make sure that if they are going down that path on their own, that we're able to provide some support in that space and making sure, again, like if they're financially putting that on themselves, that we're able to help get their best bang out of the buck with that drug.

I love it, love it. And maybe last thing before we move to kind of the wrap-up portion is on the other buzzword in the world, artificial intelligence. And I'm sure, Celeste, you probably have like 15 companies in your LinkedIn inbox right now saying, look, we can just do an AI-only solution, improve the health of everyone automatically in your population.

At Omada, we believe, of course, in the intersection and the power between both people and AI. But from your perspective and your seat, as you think of benefit strategies and care strategies, how do you view AI only, people only, kind of the mix? What are some of the factors you've been mulling about relative to your ideal partners?

One of the recipes to a good partnership is that the companies we work with share a lot of the same ethics and philosophies with all things, right, how they treat their workforce, their mission, all the things. But AI is one of them. So Costco's stance on it is we are not scared of AI. We do see a great place for AI, but we are still -- and we are going to remain to be a people company.

We serve our members and we serve our employees. And those are people, and we're going to continue to serve them with people. So AI works great to help those people responsible for other people to do their job more effectively. And that's what we would want to see our partners do.

There are enhancements for sure, especially administrative enhancements, member experience enhancements, absolutely where AI would be a great fit. But to remove the people, the expertise coming from the people and the people touch, it is not really aligned with how we see AI serving our people. So yes, an AI-only solution doesn't really fit with how we view any program that we would want to offer to our employees.

I mean, per the philosophy point, I mean we, on a daily basis, see this incredible intersection and the power of what people and accountability and emotion and feeling that cared for it can bring as well as these remarkable technologies and how they can better member experience, better stickiness, improve efficiency. It's a world we're both live in.

All right. To close this out and wrap up, maybe one final question. So let's say you get a knock on your door and it's a peer, Head of Benefits at a corresponding company, and they're saying, look, I've got this cost and health issue in metabolic disease, diabetes, what is kind of one thing you tell them? Maybe starting with you, Sarah.

Right. And I love when people ask others. I think like the networking part between different companies, organizations is just so valuable. And so if this knock came, which it has, actually, is really just being science and evidence-based programming and really looking to put peeling back the cover.

Yes, you can have data, but you also need to make sure that it's grounded in science, and that there's proof to the pudding, you say, like so that it actually is going to have outcomes happen and have the impact that you're looking for, for your organization, for your employees, your members that are on your plan.

And the other piece I would add is, and I think this goes for a lot of point solutions in this space, it's just partnering with somebody that's just not trying to sell you up all the time. So I think that's very much a partnership that we have established with Omada, is that you're coming to us and we have a really focused view, and that if there is an evolution of what services, what things are coming up, even just making things bigger and better, that it's not more of a sales pitch that it's something that's looking to evolve the whole program and partner with the organization.

And also the member experience, that's very true and valid to make sure that, that's improving and maintaining the essence of why you have Omada in place.

Same question to you, Celeste, sees, you get that knock. I got a huge problem with metabolic disease. Help me, Celeste, what should they do? What would you say?

Yes. So we definitely say that there's a lot of players out there, more and more every year and explain what's important to Costco, and chances are it's probably important to them, which is they continue to provide excellence year-over-year. You can see that there is a change in employees' behavior and health, that they are truly partners in solving for whatever solution it is that you've hired them for.

And their partners in customizing, whether it be communications, reporting, the delivery, the best fits for your organization's needs. I'd also explain that experience is everything, right? We've seen a great product on paper, but then it comes down to experience. And at the end of the day, it was never successful because of the experience. So they're really honing on the experience.

And I also very much agree with Sarah, that any supplier that is interested in getting their hands wet in all sorts of things and not just concentrating on what they're really good at, probably, based off of my experience, won't work.

Here at Costco, we're not expecting any supplier to be excellent in everything. What we are expecting them to be excellent at is the product that we hired them for and to continue to excel in that arena. And if they're focused on a bunch of other stuff, probably not going to work out.

So yes, I would say all of those things are what I would freely talk to a peer, just trying to do what I'm doing, but with another company.

Awesome. Well, with that, again, a huge thanks to the 2 of you. I mean the mission of Omada, as you know, is to bend the curve of disease, and we wouldn't have any chance of doing that without incredible partners like yourselves. And thank you for giving the audience here the privilege of what we get to do on a daily basis, which is here, a day in your life, the strategies that you have to grapple with as you seek to improve the health of your populations and reduce costs.

So with that, for those in the room here, we're going to take another quick 5-minute break, and then we'll all come back to the plenary here. We transport myself to move to Q&A. And so that is the panel. Thank you again, Sarah and Celeste.

[Break]

Why don't we go ahead and grab our seats? Let's go ahead and get started. We're rounding out the last section of our Investor Day. Thanks for hanging with us. Let's have Steve and Sean join us, and we're going to do some Q&A. So get curious, ask your questions, and we're here to help out to help you understand the business. Okay. Steve, do you want to...

You want me to pick?

You pick.

How do we pick from audience?

I'll start left to right. Saket, why don't you kick us off?

And we've got traveling mics, wait for the mic. And that way, we can hear -- everybody can hear the question.

Okay. Great. Saket Kalia from Barclays. Steve, I thought the formula of 25 million covered lives times a 4.4% engagement rate kind of getting to 1 million -- 1.1 million members. I thought that was a super useful framework. Maybe there are 2 questions around it, right, relatedly. I think the first one is, what's the realistic upper band of where that 4.4% can go on the engagement rate? And then secondly, as you think about that 20% sustainable growth rate, right, that we talked about in the long-term growth rates -- long-term targets, how do you think about the interplay of kind of covered life growth versus engagement growth or even ARPU growth? Does it make sense?

Absolutely. And just to clarify, that's enrollment rate, not engagement rate. So the 4.4% is the amount of folks that we enroll on the 25 million. We just heard from Costco. We have a great asset in our S-1 about how many folks we've enrolled inception to date with Costco, which I think represents the upper bound of what we can achieve. It's 27% of all members lifetime in Costco that had suffered from our underlying conditions that we supported have enrolled in an Omada program. So what you need to execute on that, you need tight integration with their HR organizations like we just saw today.

If we have contact known files where we know which populations within that employer suffer from our disease space, we can send them more targeted messaging and on a [ redacted ] basis. And then when we're able to lead marketing with an employer, that's a huge lever for us. Some employers, they don't want you to like be able to run your own print within them for a variety of reasons. But when we're able to lead with what we call Omada-led comms, we see a roughly threefold increase in how many folks we're able to convert within an employer population. So 4.4% today going to 27%, there's still multiple standard orders of magnitude that we can continue to improve on that dynamic.

On the second question, through time, I don't think -- I think it could be equally distributed across the 3 growth levers. We're certainly aiming to make initiatives across all 3. We've seen certain years where there's lower covered life growth and then we made significant inroads on enrollment rate and engagement and other years where we've had outsized growth on covered lives, we're ramping into a new channel like ESI over the past couple of years, and we saw outsized growth from that perspective. So we do anticipate that it will be distributed across all 3. And that's actually, I think, a beautiful part of how we're going to continue to win going forward is really putting bets on all 3 of those.

And maybe if I add on the enrollment rate of 4.4%, Steve answered kind of the top level in terms of best-in-class performance. We certainly were working towards that. The question is how, how we progress it? What's the slope? What's the rate? Will it be 30% next year, 20%? Hard to know and hard to forecast, irresponsible to do so. But what we do reliably that you all can bank on is that every year, our growth team, our consumer growth team runs a process that's very, very disciplined around A/B testing, new iterations, new call to actions, new creative, new headlines, so on and so forth that actually allow us to improve the enrollment rate year-over-year. And we've done that now back to back 3 years in a row.

We're doing that process again just as we speak. It's already been kicked off now for several months. And we're being able to do that not only across e-mail, but also direct. And then most recently, I don't know if you caught in the presentation, but we're most recently also experimenting in social direct-to-consumer outreach to reach areas of awareness where there's a high concentration of people with the Omada benefit that are looking at other places other than e-mail, direct mail or in-office signage, but rather in social media discovering us, building awareness and then driving enrollment through that channel, too as well. So we've got multiple tools in our toolkit to continue to experiment and drive year-over-year improvement in yield rates. And so we're confident there's still headway on that 4.4%.

David.

Appreciate it. Dave Larsen with BTIG U.S. Bank. So I was getting asked by a bunch of investors yesterday while marketing, what can you get your EBITDA margin up to where our expectations heading into this event. So nice work on the 30% EBITDA margin guide, and congratulations on actually delivering on what you promised. So that's rare, and that's great. Can you just maybe talk a little bit more about how you're going to get to that 30% EBITDA margin? And what sort of margin expansion we should look for on a year-to-year basis? There's been a lot of talk about AI. How real is that?

Yes, absolutely. And I think before starting with the EBITDA target, it's really the gross margin piece that's helping drive that target long term. And so you heard myself, you also heard Jennifer go into detail here. It's going to be a mix of both top line and cost measures. So we're just getting started with our new prescribing product. That's going to be one of our highest gross margin, highest gross profit products.

We're going to continue to sell multiproduct, continue to take that 33% upwards. I think that when we've looked at our new business that we've been closing in year, over 50% of our net new business has started in the multiproduct fashion. So as we continue to drive that upwards, you're going to see continued expansion in gross margin, which we expect to flow down to the bottom line. And then we spent a lot of time during the IPO just articulating the core operating leverage that we have across our various functions.

So our sales team, it's only roughly 30 people. That's pretty small relative to the size of business we're running. That's because we're able to leverage our plan and our PBM partners to distribute Omada on our behalf. So we can keep a fairly small overall sales team, and we haven't grown that team meaningfully over the past couple of years, and we continue to increase revenue at that 45% compounded growth rate.

The next is marketing. You heard a lot of detailed marketing last year. We did 112-plus million e-mails across thousands of campaigns. It's extremely cost effective for us. We'll leverage direct mail where appropriate for specific populations as they don't have a lot of e-mail access or if we want to target a specific condition type. And then lastly is our homegrown EHR. That's the tooling Jennifer previewed and you saw with Danika that our care delivery teams use every day to engage with our members. That's a result of Sean and us spending tens of millions of dollars over the better part of the last 15 years, standing up that functionality.

We approach that with modularity, with flexibility in mind. When we stood up our GLP-1 care track in 2023, that was just done in a couple of months on our existing tech stack. We didn't need to go deploy tens of millions of dollars back into that. So that's like not even including AI. That's just the core operating leverage that we have in our day-to-day business. Then you stack on AI on top of that. I mentioned we currently have an internal AI transformation council, which includes a lot of the executives here today. We're looking function by function for the most obvious use cases. We're going to be applying AI in the finance function, the accounting functions across legal, across IT. And we do -- we are going to be putting like internal targets for us to hit across the functions over the next coming -- over the years to come.

Elizabeth?

[indiscernible] potential future opportunities [indiscernible] How do you think about the pacing on adding that over the next couple of years? And then on [indiscernible] over the next couple of years? I guess how do we think about that [indiscernible].

Yes, maybe I'll address the first part of the question around the product launches. Your question makes me think about the slide that Sean shared on the upfront about the time line slide that had this little upwards with all the dots and milestones on it. We launched prevention and weight health, obviously, back in 2011. And then several, several, several years later, we added in diabetes and hypertension and then acquired our MSK platform. And we purposely put on the right-hand side of the deck basically the addition of multiple products all in a year.

We've added a GLP-1 Flex Care product. We've added in prescribing for GLP-1s as a program as a stand-alone product last November. We announced that. We announced cholesterol expansion also this year, not just the announcement of it, but also going live with our -- with key customers like you heard from Costco and others. And we're continuing to innovate this year on some additional products that we've not yet announced. All this to say is that the pace of innovation is quickening and picking up here at Omada.

We said during our last earnings call that we expected 2026 to be the most innovative year that we've had in the history of our company as it relates to product launches, and that is bearing out, and we're showing that, and we're shipping. And so the pace of our innovation is picking up. So to directly answer your question in terms of like how quickly can we expect all these new things, it's probably best to say responsibly that the pace will quicken. The time between them also will reduce. But the one thing we also have to understand is the sales cycles will not change relative to the number and speed of new products that we launch out in the marketplace.

And so we could go much faster. We could be launching things every quarter, maybe 2, 3 things every quarter, but we also have to make sure that we responsibly release them into the market in a way that the sales cycle can actually adopt them. So we're always balancing the speed of our innovation as well as kind of the sales cycle and the ability for our buyers to digest all the new things. So 2027, we expect to be an innovative year, too, as well. We should expect to see even more product innovation inside the user experience, expansion of AI capabilities inside the user experience as well as augmenting the care delivery space.

Lastly, I would say that we're not here announcing any new products related to kind of what we showed on the vision slide. But rest assured, you can have the confidence that we're looking pretty assertively in those particular areas.

And I mean it's really fun because historical context has been needing to say no more than yes because Omada was a smaller organization operationally, like less mature, like we want to make sure anything we do, we do a great job of it for our customers. And so you have a beautiful offset of a far more mature, well-run organization that can do more, meets AI, which for Danika increases [indiscernible]. And so cholesterol is one example. When we decided to do that, I kind of rewind the clock, would we have said yes to that ask? Because we get asked all the time from customers. Would we have said yes to that ask 5, 6 years ago? I think the answer would have been no. And that [indiscernible] was an obvious. So again, we want to do a great job, but just to reinforce, we're just so excited with the pace of innovation within the company.

Do you want to speak a little bit to the PBM ramp as well?

Yes. The comment about taking the ruler to the slide. Look, the PBM relationships, we are incredibly encouraged by -- of course, that's not to the exclusion to the more than 25 relationships that we have with health plans. We continue to expand in those areas, too, as well. But PBMs are getting a lot of interest, at least as it relates to Omada because of the size of the big 3, making up 85% of roughly all the prescriptions for cardiometabolic diseases as well as others across the country.

In terms of the ramp, we like a few things. If you look at the historic ramp period for Omada in other channels, it has followed historically a pretty predictable pattern. They add in prevention. And then a year or 2 goes by and then they add in diabetes and/or hypertension and another year or 2 goes by and they add MSK. And we see this not only with our employers, but also with our health plans, too as well. It's because the health care sales cycles are long. It's nothing new with Omada. Everybody knows about that.

What's different with our PBMs is that in one fell swoop, essentially all, if not the majority of our products have gone into that channel all at once. What that allows us to do is drive more product -- multiproduct upsell or multiproduct new logos from the get-go. And we're seeing that as evidence that year over year over year, we've seen an increase in actually multiproduct sales for new accounts. We, on average, now regularly and consistently quarter-over-quarter, whether it's a peak closing period or a quieter period just because beginning of the year, there's fewer deals closed.

40% to 50% of all the new deals we close are for multiple products, and it's a direct result of not only the value proposition, but also because PBM channels, for instance, in this particular case, are actually carrying all of our products and our customers can get access to them. All that being said is that we should expect the multiproduct uptake as well as covered lives to grow healthily as that slide suggested in a way that we believe should be at a faster acceleration pace because the channels are just broader and they carry the majority, if not all of our products in almost every one of those instances.

And notably, especially within the Optum book with the prescribing capability, you saw the unit economics during my section. So on a one-for-one like relative value compared to a prevention member, that's a 3.8% uplift on overall contribution margin during that period. So if we can execute just 1:1 on a member basis, you should see an uplift and an acceleration in revenue build with that product.

Ryan MacDonald with Needham. If I think about the linearity of the gross margin expansion, I'm assuming the targets that you've set out today are just based on the current programs that you have, but obviously, a lot of innovation, a lot of potential expansion categories. How do you think about managing for that margin expansion linearly, I can't speak today. As you launch into new categories because obviously, there is a lot of upfront investment in terms of building out the go-to-market motion, doing the -- creating the clinical evidence and doing the studies to sort of validate. So how should we think about balancing margin expansion as you continue to expand the program portfolio?

Yes, that's a great question. I think when we actually make the investments to stand up these products, that's typically hitting OpEx. So you're typically going to see a slight drag on maybe the EBITDA slightly lagging that. I think we have increased confidence just on the way we're core executing within our core product set to continue to drive towards that 80% margin target on our current stack. And then if we are going to add more new products, we're typically intending to price them at or more than our current gross margin targets.

So you might see, if we come out like with cholesterol, with GLP-1s, when we release those products, we did say like, hey, we're going to be investing. This is in a moment to invest to stand up these products to drive long-term revenue and gross margin through time. So if we find a new obvious condition area because our customers are pounding the table and say, you need to go into this next condition area, we'll likely articulate the size and scope of that investment and then the relative drag, if any, on gross margin.

Yes, Richard.

Richard Close, Canaccord Genuity. I guess a question on engagement and LTV, thinking about that. You really highlighted nutrition. You talked about a strength program being rolled out initially to, I guess, the Flex Care program, if I'm not mistaken, and then maybe the other programs. So I'm just curious, what's the definition of engagement in order to bill? And how do you see programs like nutrition and strength impacting being able to bill and the LTV impact?

Sure. I'll start and then you feel free to pile on. If you remember in my section, remember, we only bill off what's an engaged member. We have different pricing profiles and billing types for we have 2,000-plus customers, but there's different flavors across the board. But in general, the most common flavor is do you complete a certain number of activities -- X number of activities over a Y period of months. So that could be engaging with your coach, it could be logging a device reading. It could be logging into the app. That's how we define engagement. And so once you hit that [ billing trip ] wire, we then, in turn, file a claim and recognize the revenue.

What we actually find in reality is that folks are engaging with us well beyond those billing thresholds, often 30 times per month if they're an actively engaged member. They're in there daily with their coaches doing live messaging back and forth. They're stepping on their scale. They're logging device readings across that. And so when you talk about the nutrition, those are different bets that we're making to keep folks more engaged.

So if we're able to add MealMap functionality, OmadaSpark, that's keeping them in the app more. That's keeping them logging in more of their device utilization and then also increasing their meal protocols. And when they put more in the app, that in turn creates an activity and then we can, in turn, bill for that.

What I would add on to that is that if I were to kind of just split up our engagement curve over 12 months in 2 ways, there's the head and there's the tail. So the head is loosely characterized as maybe the first 90 days, like the first 3 months. And if you're going to drop off, you tend to drop off inside the first 90 days. This is a classic health care phenomenon. We see it in pharmaceuticals. We see it in doctors' visits. We see a similar phenomenon inside our own application utilization too as well.

And then there's the tail. The tail is essentially what it says is that after a period of time, it kind of levels off, which is why year 2 engagement looks very similar to year 1 engagement because by then, if you're going to stay, you're going to stay on for a really, really long time. So why am I bringing that up? When you think about engagement and the question, Richard, that you asked about, hey, MealMap, nutrition, so on and so forth, Danika and her team are really, really, really focused in part of their efforts inside of that first 90 days. So she talked about data about 11% improvement, 14% improvement at week 4, at week 12, at week 15. And it's all because it's basically if you can work on ahead of that curve and actually reduce the degradation, then we can keep that tail at a higher level for a longer period of time.

Now that's how the financials of it works out and how it links to product innovation. Hopefully, that makes sense. Now that's the financial part of it. Now what it means for our customers and our members is what Dr. Tom was talking about is that engagement, we know leads to outcomes because we build those features and those engagement user experiences based upon the reliable evidence that we know that generates reliable improvement in outcomes. Because at the end of the day, our customers buy us for outcomes and ROI, and they look at enrollment rate and engagement as a lead indicator of recouping those dollars and creating outsized savings.

The only thing that I would add relative to the growth algorithm is compared to the first 2 with covered lives and enrollment rate, they still have to pass through cost of revenue and go through gross margin. With engagement, there's very little incremental cost if you keep folks in program longer. So those incremental revenue dollars we drive if you stay 1, 6 months longer are dropping directly to the bottom line. So on the 3 levers, in my opinion, it's one of the most powerful. We still want to obviously create top of funnel, enroll more people. But by making the program more effective and keeping folks in program longer, that's where you're able to drive really strong EBITDA contribution.

We got about 2 more questions, Gaurav.

[ Gaurav Gupta with Floating Capital ]. You highlighted over the past 3 years, you've successfully taken up enrollment rates pretty meaningfully by our calculation, 50 to 75 bps a year. A number of things that you've announced here today, including additional product opportunities that appeal to more and more of your covered or eligible lives, clients like Costco actually pushing your product more actively to their own employees, your marketing team having better sort of outreach with social media, et cetera.

It seems like you might actually still be in the very early days of that enrollment rate increasing. Can you maybe give us a sense of the pace at which the enrollment rate can continue to increase as we sort of get up towards that 27% Costco upper bound? Could it continue at that 50 to 75 bps a year?

I think it'd be maybe a little tough and maybe irresponsible for me to characterize the pace at which we think we can grow it because we run a process, like I said, every year to take a look at what we can do to improve the yield rates on our covered lives. And so I probably just don't want to guess on that. But what I can say is that we believe we've got a world-class team in the industry. They're working hard. They're working on all the A/B testing and things like that. We're seeing some green shoots there. And so we think that the headroom to continue to make improvement there still exists. I don't think that the likes of Costco are a singular N of 1 customer. I think it's something that we could replicate over time across a large part of our book of business.

I find myself when I walk down the streets of New York City, I want to grab every 1 in 10 person because just about 1 in 10 commercially insured adults has an Omada program as part of the medical benefit many don't know. And I'd echo Wei-Li's sentiments is irresponsible to cast it. Equally does compound. In some of the channels that you saw, even direct advertising, they wouldn't have been possible in yesterday's model because we didn't have density. And so more coverage density can actually help feed more enrollment, more covered lives that are more multiproduct can help feed more enrollment rates. So teams are laser-focused every year working to step forward.

Maybe time for one more. You want to double dip, we can let you go.

Yes, I'll go one more. As you're having conversations with your existing clients, obviously, one of them -- the conversation up here is that likelihood that coverage of GLP-1s declines overall in the industry. How is that sort of impacting your views on sort of that engagement rate or member engagement rate of those who might have been using Omada along with taking a GLP-1? Like what are the puts and takes as you see with your clients going into 2027?

Let me take that one. I think the best way to think about that, the puts and takes as potentially covered at an employer level, I think, is your point that drops, how do we see the engagement in our program? Would it drop? Would it stay the same? Would it increase? I think is what's behind the question there. I think there's 2 ways really important to look at this, specifically talking about people on GLP-1s. Regardless of coverage, whether your employer is covering it or not, we are seeing writ large increase in GLP-1 utilization period no matter whether or not your employer is covering it or not. That is an important market trend and one of those S curves that I talked about that make it a very unique moment in time for Omada.

So why is it a unique moment in time? And what's the point of saying that? Because it gets to the second thing is that regardless of where employees are getting their GLP-1, they are looking for support to make sure that the GLP-1 is doing what they want it to do for them. For some of them, it's getting through the most difficult periods of titration. Omada's care team, we're designed to do that. For others, it's how to stay persistent on it and make sure that you're changing the lifestyle and diet so that you get a better quality of weight loss, meaning more fat loss while preserving lean mass. Omada studies have proven that we do that too as well.

For some people, it's all about the GLP-1 journey and getting to a point where you've lost and got reached your target weight, but then you want to try to come off the GLP-1, again, [ stands ] where you've gotten the GLP-1 that's covered or not. Again, we've done the work and the studies to show that if that happens, we can help you keep the weight off, and we've shown that out to 12 months. So in either situation, whether it's covered or not, your employees, as an employer, are going to seek out GLP-1s. And as long as you're covering Omada in the support program, whether it be through prescribing plus support or support alone, you're going to be able to support your employees in that way.

The last thing I'll say is a little bit of a maybe market arbitrage opportunity or moment for employers that if they're not paying for GLP-1s, but their employees are still getting it, cash out of pocket, but they are supporting Omada. It's a bit of an ROI arbitrage moment because when you use Omada, our promise and commitment to them is to raise the ROI that you get from that by utilizing Omada plus a GLP-1, but they're not -- the employer is not paying for it. So in those particular cases, we see kind of an all ships rising moment, especially as the market continues to expand writ large for GLP-1 utilization and weight loss. Hopefully, that makes sense.

Well, listen, thank you all so much for your questions. Thank you all for your attention today during our first inaugural Investor Day. There is a reception out there. We hope you'll join us so we can -- if you have any additional questions, we're here to answer those too as well. But I hope you left today with a few key takeaways. The first one is the financial discipline and performance in our business and of course, the according rise in the long-term financial targets. The

second one is the 4 growth drivers behind our go-to-market around covered lives, enrollment engagement and care quality and efficiency that is allowing us to put forward an increased long-term financial targets. The third, of course, is the innovation that's occurring resident inside care delivery as well as our user experience technology and product. And the last one is, hopefully, you're just as excited about where Omada is going with our vision around the system of care in cardiometabolic across multiple dimensions. Hopefully, you're just as excited and enthused as we are as well as our customers.

I'd last close it out by saying, as you've heard from a number of our leaders today, there are others that didn't present that are here today, you'll find that many of us have come straight from health care. And it's because of the reasons that Dr. Tom and Jennifer talked about is that they knew and they saw inside of their own practices, inside their own health systems that there was a major gap that they believe that Omada could fill, which is why they are here. Even for my own situation, I've been in pharmaceuticals prior for over 2 decades. And if you would walk in inside the halls of pharmaceutical companies, you will find pharmaceutical leaders who also quietly will say that our job is to deliver medicines, but we realize there's a major gap in care, especially in cardiometabolic, and that's the role that Omada serves.

With that, I want to thank you all very much. Look forward to seeing you at the reception, and thanks for joining us today again.

Good day and thank you for standing by. Welcome to the Omada Health Second Quarter 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Craig Gracey, Vice President and Chief Accounting Officer. Please go ahead.

Thank you. Good afternoon. Welcome to Omada Health's Second Quarter 2026 Earnings Conference Call. Joining me today are Sean Duffy, our 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 will also make forward-looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties, including factors posted 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.

Thank you, Craig. Good afternoon, everyone, and thank you for joining us. We are excited to be speaking with you today to discuss two significant points in Omada's journey to bend the curve in healthcare.

First, we just reported our strongest quarter ever, reaching a record number of members and our highest revenue and gross margin to date. With more than 2 million lifetime members served, commercial relationships with the nation's three leading PBMs, and a proven and profitable model, Omada is in its strongest position since the company's founding.

Second, this strong foundation is why, after founding Omada over 15 years ago, I'm ready to pass the leadership baton. On January 1, 2027, Omada's President, Wei-Li Shao, will become the Chief Executive Officer. Wei-Li is known to many of you. 7 years ago, he joined Omada as Chief Commercial Officer, and for over four years has served as our President.

Wei-Li has cultivated the trust of the team and our partners, delivering not only reliable performance, but new innovations that have put Omada on what we believe is a durable long-term trajectory. I'm excited to watch Omada accelerate into its next chapter under Wei-Li's leadership.

I am equally excited to move into my new role as Executive Chair, where I will continue as part of the management team, focusing on long-term strategy, catalyzing partnerships, and other opportunities we believe will create the greatest value for Omada over the long term. Before I hand it over to Wei-Li to discuss our operational performance, I want to spend a moment to highlight what matters most to us here at Omada, and that's the people we served.

"I'm glad my organization provided Omada as a health option. Over the past year, the helpful resources, daily tracking, and guidance from my diabetes specialist and my health coach helped me achieve major milestones. Thanks to them, I reached my target weight, put my diabetes in full control, and completely reversed my hypertension by transforming my lifestyle. I am incredibly grateful for the support."

Stories like that are why we exist. As we talk about revenue, margins, and membership growth, which are important indicators of the business we're building, I want to remind everybody that behind those numbers is someone working to live healthier, avoid disease progression, and get the support they need between visits with their physician. That's the mission that continues to drive us. With that, I'll turn it over to Wei-Li to discuss the operational momentum we have seen across the business.

Thanks, Sean. Before we turn to the quarter, I want to express my gratitude for the opportunity to become Omada's CEO in January. It's a genuine honor. This is a defining moment for Omada as three powerful forces converge to shape our next chapter.

First, the commercial reach we are building allows us to bring high-quality clinical care to more and more Americans, allowing us to further our mission to bend the curve. Second, GLP-1s and adjacent therapies are powerful new tools that complement what we treat and how we treat it. And third, the rapid evolution of AI is reshaping how personalized care can be delivered at scale. My focus as CEO will be translating these forces into better health outcomes for millions of Americans.

We have shown our model works and our results support our ambitions. Now is the time to push even harder on our mission to bend the curve of chronic disease in America. As Sean mentioned, this was a record-setting quarter that we're incredibly proud of. Q2 caps off an exceptional first half of 2026 for Omada.

Year-over-year, we delivered 43% revenue growth and expanded gross margin by 700 basis points to 73% on a GAAP basis and by 600 basis points to 74% on a non-GAAP basis. We also generated $5 million in net income and $11 million in adjusted EBITDA versus a loss a year ago. Once again, we exceeded consensus, enabling us to raise our full year outlook.

More importantly, we saw strong momentum across our programs, bringing the total numbers as of the end of the second quarter to 1.1 million, up 45% year-over-year. I will walk through our Q2 execution through the four parts we are focused on: covered lives, enrollment, engagement, and operating efficiency.

Covered lives represents the individuals with benefits coverage to apply for and enroll in one or more of our programs through our employer, health plan, pharmacy benefit manager, and other customers. We update this figure annually. As of December 2025, we had more than 25 million estimated eligible covered lives, and we are building off that base as we set up for 2027.

A quick reminder on the typical seasonality of our commercial year. The first half is when we build new customer relationships. The second half is historically when we close them. And January is when the annual benefit cycle launches. Q2 sits at the front end of that cycle.

Our commercial progress in Q2 continued to be strong, like we saw last year. During the quarter, we added new customers spanning food service, national retail, public sector education, and industrial employers. These wins support the pipeline we expect to close the rest of the year, and we have seen particular strength in our new products, including our GLP-1 suite and cholesterol.

The breadth here reflects something fundamental to our business. The need for chronic care support is broad and diverse across the types of employers and categories of conditions we are positioning to treat. Turning to our newer PBM channels, we also saw continued progress in Q2. One channel, now in its second year, has built a strong customer pipeline into the second half and tracking ahead of our expectations. The other, which is also our first partner to include our prescribing program, is in the very early stages of its sales motion with encouraging signs.

We also deepened our footprint inside customers we already serve. The expansion I'm most excited to talk about this quarter is with Health Care Service Corporation, or HCSC, one of the largest Blues plans in the country and a partner we have worked with for several years across our prevention and hypertension programs.

In Q2, we extended those programs into HCSC's fully insured book of business in three additional states, reaching an additional 1.5 million covered lives launching in 2027. This expansion matters for a couple of reasons. First, HCSC is an example of the kind of longstanding partner we can expand with over time as we prove our results across successive programs. And second, the fully insured component is embedded at the benefit level, which means members can enroll directly without a downstream employer sales cycle. This is the kind of channel dynamic we are working to build for scale.

We believe Q2 was a strong quarter for the front end of our commercial cycle. We saw new customer wins spanning diverse industries, meaningful progress in our newer PBM channels, and continued expansion inside customers we already serve. This is the covered lives base we will seek to activate through the 2027 benefit cycle, and we believe that the momentum is here setting up for a strong second half.

Turning now to enrollment. Enrollment is where we turn covered lives into Omada members. Let me highlight three things for the quarter. The first and most important is the breadth of our enrollment growth. As in Q1, growth in Q2 was broad-based through our cardiometabolic suite, reinforcing that our momentum extends well beyond a single program.

Since our last earnings call, we reached two important milestones that speak to the breadth ahead. First, we launched cholesterol as a standalone care track for the first time with one of the largest retailers in America, and that early engagement is an encouraging proof point of demand. Second, we have advanced prescribing discussions with channel partners and employers, including our first closed prescribing customer that will launch in 2027, which gives us an early signal on market fit for this program.

Building on that same theme, revenue growth from our diabetes and hypertension programs continue to meaningfully outpace our Prevention & Weight Health program in Q2, reflecting a healthy shift in mix toward our higher value programs. As we continue to expand the platform through the likes of our GLP-1 suite and cholesterol, we believe we can continue to increase enrollment over time.

The second is the effectiveness of our enrollment engine. Our email campaigns are the primary channel through which employees learn about and enroll in our programs, and they converted approximately 20% higher year-over-year. We believe this is a leading indicator of the health of the enrollment efforts, reflecting improvements in targeting, personalization, and messaging on the same audience.

The third is seasonality. Q1 was exceptionally strong, and that strength pulled enrollments earlier into the year. That is a benefit over the balance of the year, because enrollments from Q1 are already in active care and generating revenue sooner. Typically, total member base continues to grow throughout the year, but Q1 remains our strongest new enrollment period as employers launch new benefits programs. Our next major inflection comes with the 2027 benefits cycle, where we expect millions of Americans will get the opportunity to enroll with Omada and receive treatment.

Which now brings me to engagement. Engagement is where members receive care from Omada and where the durability of our business shows up. One important signal from Q2 is worth highlighting: members have stayed in active treatment with Omada nearly 10% longer than a year ago, driven by growth in our GLP-1, diabetes, and hypertension programs, in which members have typically engaged on our platform longer.

This builds on the ongoing investments in our platform, including Omada Spark and MealMap, and the increasing personalization and clinical depth we bring to member care. Longer tenure in our programs generally reflects more billable months per member, higher lifetime value, and stronger margin per member over time.

Finally, let's now talk about how we deliver care and support this mission as a company. Our cost to serve has declined over 10% year-over-year as measured by cost of revenue per member on a trailing 12-month basis. This has been driven by increased efficiency in delivering both digital and human care. On human care delivery, we have continued to see rising capacity per care team member as we scale.

We are putting AI and machine learning to work throughout our support for the care team, from smarter tooling for our coaches to better prediction of member demand to more standardized ways of working across our member-facing teams. Beyond the decline in the cost to deliver care, the broader business has also become more efficient in support of our mission.

Despite significant investments to stand up new programs and channel partners, we have delivered 41% incremental adjusted EBITDA margin and lowered non-GAAP operating expenses from 68% of revenue a year ago to 62% this quarter. We believe that this demonstrates our ability to invest in Omada's growth at increasing rates of return, and it is the operational engine behind the margin expansion Steve is about to walk through. With that operational picture in mind, let me turn it over to Steve for the financials.

Thank you, Wei-Li. Hello, everyone. Q2 is the strongest second quarter in Omada's history. We set quarterly records for revenue at $88 million, gross margin at 73% on a GAAP basis and 74% on a non-GAAP basis, net income at $5 million, and adjusted EBITDA at $11 million.

Q2 also marked our second quarter of GAAP net income profitability, following the fourth quarter of 2025. These are meaningful milestones for the business, and we believe they reflect the structural profitability of the model we are building. I will walk through Q2 with the four operational drivers Wei-Li just covered in mind, then turn to guidance and the balance sheet.

Starting with revenue, Q2 revenue was $88 million, up 43% year-over-year, and up 13% sequentially from Q1, driven by continued strength across our GLP-1 care track, increased multi-condition penetration across our cardiometabolic suite, and continued progress in enrollment effectiveness. Revenue growth in our diabetes and hypertension programs continue to outpace our overall revenue growth of 43%, consistent with the enrollment breadth Wei-Li described.

Our growing member base is a direct result of that revenue-driving activity, and it brings me to something new we are sharing this quarter. We ended Q2 with approximately 1.1 million total members, up 45% year-over-year, reflecting the enrollment effectiveness Wei-Li described. As a reminder, we define a member for this purpose as a person enrolled in one of our virtual care programs who generated a billing event in the preceding 12 months.

Because we primarily bill on the care activity our members receive rather than on a flat subscription, we believe the most representative measurement of our unit economics is trailing 12-month revenue set against that same 12-month member base. On that basis, trailing 12-month revenue per total member was $284 in Q2 compared with $279 in Q2 of last year. We believe this evaluates the unit economics of our member base, and we would typically expect this metric to move modestly up or down in any given quarter as cohort mix, pricing mix, and seasonality shift at the margin.

The consistency we have seen here continues to reflect the durability of our per-member economics. Turning to gross margin, GAAP gross margin for Q2 was 73%, up from 66% in Q2 of last year, representing approximately 700 basis points of year-over-year expansion. On a non-GAAP basis, gross margin was 74%, up from 68% in Q2 of last year.

Gross margin expansion this quarter reflects a lower cost to serve our members, driven by the lower care team delivery cost and reinforced by deeper multi-condition engagement and the maturation of our longer-tenure cohorts. We have previously said we believe there is a path to exceed our current long-term target of 70% annual gross margin. Our Q2 result is consistent with that trajectory, and we will update our long-term financial framework, including gross margin, at Investor Day.

Moving to operating expenses, we drove significant operating leverage this quarter. On a GAAP basis, operating expenses fell approximately 4 percentage points as a percentage of revenue, from 73% to 69%. On a non-GAAP basis, they fell approximately 6 percentage points, from 68% to 62%. That leverage reflects the drivers we have consistently pointed to: scaling through channel partnerships, getting more from our existing sales force, and tight spending discipline across the rest of the business.

AI continued to be an increasingly important driver of our operating leverage as well. As we shared last quarter, we are evaluating AI tooling across every function of the company, not just any one area. As AI adoption deepens, we believe it can continue to support operating leverage as we look towards 2027 and beyond.

GAAP net income for Q2 was more than $5 million compared with a GAAP net loss of approximately $5 million in Q2 of last year, representing an improvement of approximately $11 million year-over-year. This is our second quarter of GAAP net income profitability following the fourth quarter of 2025. Adjusted EBITDA for Q2 was approximately $11 million, an improvement of approximately $11 million year-over-year and a quarterly record for Omada.

We believe this level of adjusted EBITDA in the second quarter reflected the structural profitability of our model playing out at scale. And it is a meaningful contributor to the improved full year adjusted EBITDA outlook I will discuss in a moment. Our strengthened profitability profile has continued to contribute to a strong balance sheet as well. We ended Q2 with cash and cash equivalents of approximately $222 million and continue to carry no debt.

Now, let me turn to our outlook. Our extraordinary second quarter performance and continued visibility into the second half give us the confidence to raise our full year 2026 outlook on both revenue and adjusted EBITDA. We are raising full year revenue guidance to $334 million to $340 million, up from the prior guidance of $322 million to $330 million. At the midpoint, this represents approximately 30 percentage point revenue growth compared with 2025.

We're raising full year adjusted EBITDA guidance to $21 million to $27 million, up from prior guidance of $14 million to $20 million. At the midpoint, this represents an improvement of approximately $18 million compared with 2025, or roughly 4x our 2025 results. Our raised outlook reflects both the extraordinary strength of Q2 and a more measured second half growth trajectory based on the historic seasonality and contracted visibility.

As Wei-Li described earlier, our business has historically followed a typical seasonal pattern where typically Q1 is our strongest new enrollment period, followed by continued revenue contribution from that member base through the balance of the year. Consistent with that pattern, our year-over-year growth rate is expected to moderate in the second half as we follow an exceptionally strong first half enrollment period.

We expect those first half enrollments to continue to generate revenue at healthy per-member economics to sustain a strong margin profile through the rest of 2026. Q1 remains our strongest enrollment period each year as employers launch new benefit programs, and the next significant enrollment inflection point comes with the 2027 benefit cycle.

At our Investor Day on September 10, we will lay out an updated long-term financial framework, including the growth, gross margin, and operating leverage trajectory that will inform how we manage this business over the next several years. With that, we will open it up for questions.

At this time, we will conduct the question and answer session. [Operator Instructions] Our first question comes from the line of Craig Hettenbach of Morgan Stanley.

Congrats, Wei-Li and Sean, on this transition here. I want to start with just the AI efficiencies. I mean, very strong gross margin performance year-over-year. Steve, as you mentioned, kind of gives you confidence into longer term outlook. But anything else you can share in terms of how that's kind of flowing through, whether it's shaping your headcount decisions as the business continues to scale?

Yes, hey, Craig, this is Sean here. Thanks for the congratulations. I'm thrilled for Wei-Li here. Yes, so on AI, as we've shared in prior calls, it continues to be a source of leverage, an important driver, and this is both how we support our care teams and the member experience as well, ranging from smarter tooling of our coaches, better prediction of member demand, more standardized ways of working across our member-facing teams, as well as the whole palette of solutions we've launched for members, including MealMap and Omada Spark.

And just to punctuate some of the results we shared, highlighting that the cost of revenue per member is down over 10%. And per Wei-Li's remarks, members have stayed active in Omada nearly 10% longer than a year ago. So this is an area where we'll continue to press forward, and we believe it's starting to show up in the numbers.

And then just as my follow-up question, Wei-Li, you alluded to the second PBM partner tracking ahead of expectations. Anything you could share in terms of what you learned through the first partner and how that evolved, and is that shaping that, or is there anything else influencing, kind of, the strong uptake on the second one?

Yes, hi, Craig. Thanks for the question. Yes, I mean, we've been working successfully with some of the top PBMs in the country now for years. And so I'd like to think that we've got in the industry a pretty strong playbook as to how that should happen. The learnings are consistent, whether it be with one of them, two of them, or three of them.

And they fall along the following lines, one of which, of course, is partnering very, very closely with their sales teams. As you all know, our sales team footprint is mighty in its capability, but small in its footprint, because we partner very, very closely with the sales teams of the PBMs and also for the health plans. And that helps to really raise the share of voice of Omada across an outsized number of potential prospects that are now showing up in our pipeline.

The second thing that I think is important is also the product market fit of our products. I mean, we sit squarely in the center of almost every benefit -- health benefits discussion because of our presence in GLP-1s and, of course, in the broader conversation around cardiometabolic disease still being a major, major cost driver for almost every employer in America. So the product market fit helps a ton, and that also garners a lot of interest and excitement back to the AEs or the sales personnel from the PBMs that we deal with.

I would say the last thing that is materializing is we have a suite of products that are pretty comprehensive across the cardiometabolic spectrum. And because of that partnership, we're seeing fairly healthy build in our pipeline from a diversity standpoint across the cardiometabolic programs that we have. So we're excited coming into the closing season, which we're just now opening up right now.

Our next question comes from the line of Ryan MacDonald of Needham & Company.

Congrats on a great quarter and congrats, Wei-Li, as well. Sean, obviously, best of luck and well-deserved in being able to take a little bit of a step back here. Maybe just want to double down on that last point, Wei-Li, about, sort of, the diversity of your pipeline, because I think sometimes within the investment community, a lot gets just bucketed into, sort of, hey, it's just a GLP-1 beneficiary, and this is a temporary, sort of, decision-making process.

But can you just talk about sort of, clearly there's a broad discussion across multiple programs, and this isn't just GLP-1s, but what do you think is resonating within your customer base and your platform partners that's making sort of a broader cardiometabolic health discussion, sort of, top of mind right now?

Yes, I mean, it's a great question. We've long said strategically as we entered into the GLP-1 marketplace a few years ago, that it's a bit of a bridge to a broader cardiometabolic condition. If you talk to employers, and this bears out in the Mercer surveys, the Aon surveys every year, when they ask employers, what are the areas that you care about most, and what you care about most are tied to what is driving the most cost in your organization.

Year after year, consistently, cardiovascular disease, metabolic disease, obesity, diabetes, heart attacks and stroke are always within the top five, dominating a number of those positions. And so it's always top of mind. Then you overlay, obviously, the demand and the pull around GLP-1s. It's just amplifying the front-of-mind conversation around cardiometabolic.

And we have the benefit of actually being able to play in both those spaces in the sense that we've got a full suite of cardiometabolic options across, diabetes prevention, hypertension, diabetes management. Of course, most recently we announced our cholesterol program, which is doing quite well in the marketplace. And then the full suite and complement of GLP-1 care programs with the most recent launch and announcement of our prescribing program to complement our wraparound support service. And we really tailored a number of those solutions to meet the number of different needs that are out there in the GLP-1 marketplace.

So when you step back into the marketplace and you take a look and employers take a look at, okay, how do I address those top areas of concern, what they usually find is the deepest and broadest cardiometabolic offering and solution out there is front and center with Omada. That in combination with our channel penetration and diversification across the top three PBMs and dozens and dozens of health plans makes it easy for Omada to be installed. So it's a combination of the breadth and depth of our program, the outcomes, as well as the relatively easy way to contract and bring us into the organization. And so that's resonating among our customer base quite a bit.

So, there's diversity of the pipeline in that regard. I think it's probably worth mentioning too as well that we're also seeing a greater channel diversification also. We've been working quite diligently over the last few years. We brought in CVS, OptumRx, the full complement of our cardiometabolic programs as well as our GLP-1 programs, and then most recently, as we announced in our earnings press release, the expansion with HCSC.

And so channel diversification also has been important, and that's a lead indicator for revenue diversification and all of that is materializing in our pipeline that we're going to be converting in H2. So we're feeling good about how that sets us up for 2027.

And look, Ryan, I would just add, yes, just one last comment there. Per some of the prepared remarks, we did see our diabetes and hypertension books being the two fastest-growing books on a year-over-year basis in the second quarter, both over 50%. This is really important to us. There are some of our highest-priced products. These members stay in program the longest, they have the longest duration. So GLPs have really been acting as that initial conversation that we'll be able to go back and then sell across the entire product suite, which has been very beneficial for us economically.

I appreciate that important call out there, Steve. And maybe as a follow-up for you, so obviously things going extremely well in the business. We can see it in the numbers. Can you just help unpack the guidance assumptions a little bit as for the back half of the year? I think as we were looking through sort of to get for the top-line guide, if you essentially are just flat on revenues from 2Q into third quarter and fourth quarter, you actually come in at sort of the high end of the range. And so is there anything you would call out there, or is there member counts where they start to decline in the back half? Just want to understand sort of what's built into the guide for the top line here.

Yes, I'm absolutely happy to provide some color there. And Q2 is obviously a fantastic quarter for us. Per some of the prepared remarks and what Wei-Li said, we expect 2026 to be a more normalized year for us. Our typical pattern is to spend H2 building up new pipeline, closing new employer clients. And then we launch in the first half of the next year, which is what you saw transpire in the first half of 2026. We had a really strong selling season in the back half of '25. And then we had north of 40% member growth in Q1 and Q2 in this year, as well as north of 40% revenue growth in both quarters as well.

And so it is important to note that we are comping off what was a very strong 2025. Revenue growth last year was 54% in the back half. We were ramping into one of our largest channel partners across several lines of business during that period. And so 2026 represents a more normal cadence for us from a seasonality perspective.

Our next question comes from the line of Saket Kalia of Barclays.

Hi, you have Carly on for Saket. Congrats to both Sean and Wei-Li. I think one of the important parts of the story here is how the prevalence of chronic conditions in the U.S. creates a meaningful TAM for Omada to go after, particularly given the multi-condition approach. As we look into 2026 and beyond now, Omada has an even bigger platform to sell with GLP-1 prescription, FlexCare, and the new cholesterol program. Can you help us understand how these additional solutions are expanding the TAM for Omada and how that could play into the growth formula here at longer term?

Yes, this is Sean. I mean, one of the things that we're so excited about is how really early the markets are, here not just for Omada, but for the next class of digital health companies and if you look at our progress as of the end of last year, roughly 8% of the ASO market, 10% of the fully insured market, around 1% of MA. So plenty of white space. And the expansions that we've announced, as we've shared before, are really customer-driven.

And what's happening is as the existing traditional healthcare system every year just disappoints patients, disappoints clients who are paying for it, they're asking for change. Now that change is what we've created in the form of between-visit care that leverages technology, efficient care services, unique experiences. And so that's led to the expansions. And as I shared on the first earnings call this year, I mean, we have launched more new program capabilities in market this year than ever in Omada's history.

And we're blessed with the most robust channel landscape and selling landscape we've ever had in Omada's history. And so, all sights are of course on laying the foundations to capitalize that, not only in the back end this year but over the course of the next year.

Our next question comes from the line of Richard Close of Canaccord Genuity. Richard, your line is open.

Sean, congratulations. Wei-Li, congratulations as well. Sean, I hope we see you around in the future.

You can't get rid of me, Richard.

I appreciate the comments on the enrollments and seasonality. Just thinking about it a little more, last year you had some pretty big jumps quarter to quarter, and obviously sounds like you're not going to have as maybe as pronounced jumps here this year. And then with diabetes and hypertension programs growing the fastest, I'm just curious, is this any indication on the GLP-1 front that employers are maybe saying, hey, we're not going to cover these for weight loss and let employees go direct-to-consumer? So maybe the GLP-1 suite for you guys has taken a little bit of a breather in terms of -- compared to last year in terms of growth?

Yes, hi, Richard, this is Wei-Li. Let me address that from a market standpoint and what we're hearing. I mean, look, we're in the middle of the time period during the year where employers are evaluating what they're going to cover and what they're not going to cover. I think it's probably intuitive and safe to assume that there are a number of employers that are considering expanding coverage for GLP-1s for weight loss and some that are walking away. We see the headlines and things like that on both sides of those coverage decisions.

So across our book of business, we're seeing both those situations occurring, but it's hard to predict and probably not the right thing to do because everybody's just making their decisions right now. So we'll have to see where that falls by the end of the year.

What I will say is the most important for folks to remember is that whether you are an employer that is currently covering GLP-1s or will coming the 2027 year, we have a host of prescribing plus wraparound GLP-1 support lifestyle services that can increase the outcomes and ROI of that particular investment. So we feel very, very well positioned from a product market fit there, especially because of the channel penetration and diversification we have at the PBM, as well as the health plan level covering those benefits.

On the other side, for those employers that are maintaining a non-GLP-1 coverage situation going into next year for weight loss or stopping their coverage, it's easy to erroneously think that maybe we don't have opportunity there, and nothing could be further from the truth, and that's really in two ways.

The first one is that, with the launch of our GLP-1 FlexCare program as well as our partnership with the Lilly Employer Enterprise Connect program, we have the ability to appeal to the employers who oftentimes care about providing good clinical support, that clinical layer, regardless of whether or not they're covering for GLP-1s, knowing that their employees are going to direct-to-consumer or other direct channels and doing cash pay. And we're seeing quite a bit of interest in that particular area because there's an opportunity by supporting them clinically, the employers supporting them with a clinical layer like Omada, that they can actually still get ROI from their employees choosing to pay cash out of pocket through direct channels for GLP-1s.

So we're really in this situation, Omada is, where we've got product market fit in either situation. So we feel like we're hedged from an opportunity standpoint, and that feels right also.

The second thing that is worthy to note for those employers that have decided not to cover GLP-1s is they are still experiencing high levels of healthcare resource utilization in cardiometabolic in general. And so we remind them, of course, that we have a whole host of cardiometabolic programs that, Richard, you're familiar with that and oftentimes they're considering in those cases because their employees still need support regardless of their coverage decision on GLP-1s.

Okay, thanks. And maybe as a follow-up, I'm curious in terms of new program opportunities, you've obviously rolled out the prescribing pretty quickly and then cholesterol, and you're integrating AI. I'm just curious in terms of new product or new program roadmap. And do you -- is it more internal development or M&A like we saw with another company earlier this week?

Yes, Richard, so we've shared before, and this is consistent with what we'll share today. We love our platform. We think it's resonating with the market. Every year as part of our consultations with accounts, we ask them, where should we go next? Every year they have ideas for us.

Now, whether we seize those ideas or stay consistent is kind of our choice, but critically, the way we've built the technology, the infrastructure, the operations of Omada, as evidenced by our success, evidenced by the success beyond prevention in a way that Steve highlighted in diabetes and hypertension, et cetera, we have the capabilities to go multi-product. So I think in the long arc of our journey here, we'll continue to keep an open mind, listen to our customers, and take it from there. But we're addressing, as it stands, enormous populations at a critical moment of need for the market.

Congrats.

Thanks and Richard, maybe I'll just tag onto that. You asked a little bit about our roadmap. In what I would say is what we can expect is continued investment in AI and scaling that into our application experience and making sure that is enabling a human-centered, empathetic experience. We're going to continue to move on that and expand on what we're doing with Omada Spark, as well as AI in the application.

The second thing as it relates to the GLP-1 landscape. I mean, look, things have definitely not settled. It's still dynamic out there. I think we all know that. And rest assured, our customers, as well as others on this call, can be assured that we'll continue to invest in innovating our GLP-1 offerings as the needs arise.

Our next question comes from the line of Sean Dodge of BMO Capital Markets.

Hi, this is Chris Charlton on for Sean here. Congrats to both Wei-Li and Sean. Can you maybe walk us through some of the dynamics with the updated EBITDA guidance? The margin for the quarter was around 12%, but the midpoints of guidance would imply around a 7% margin for the back half of the year, some moderation there. And I appreciate the color on the seasonality on the revenue line with how that plays out with member enrollment being strongest to start the year, but is there any seasonality we should be considering, whether in terms of investing to support in advance of member enrollment at the start of the year? Or does this kind of relate to other dynamics, whether it be a moderation in gross margin or additional AI or marketing investments? Thanks.

No, you're spot on. There's kind of two main things happening. So, as we kind of laid out on our Q1 call, we had a lot of investments that we wanted to front-load at the beginning of this year, namely in Q1. So we hired roughly 50 people across the first quarter, across go-to-market, across R&D. And those folks generally started with a mid-quarter convention in the first quarter. Now they're annualizing at full run rate Q2 through the rest of the year.

We'll do a little bit of incremental hiring through the back half of the year, but you can expect OpEx to roughly hold flat if not tick up slightly in H2. And then per some of the seasonality comments with revenue, we do have that implied stepping down slightly, which is where you're getting to a slight step back in overall EBITDA margin. But overall, this is expected. This is part of our normal business cadence. We're really working to set ourselves up for a strong start to 2027 and drive ROI on those investments.

Great. That's super helpful. And then on the cholesterol program, with that now being deployed, is there anything else you can share on the pricing for that and how that compares to other offerings and any more detail on how the demand for that's kind of shaping up?

Yes, hi, this is Wei-Li. In terms of the pricing and kind of for cholesterol, it's accretive to our revenue and gross margin. We've long said, hey, listen, if you want to earmark a range for our programs between $50, $60 on the low end to $90 on the high end, cholesterol sits well within that range, probably more similar to our prevention product, and so that's kind of how it's positioned.

I think the most important thing to consider about cholesterol in terms of the opportunity, I mean, there's the price and the ARPU of it, but then there's the demand and the volume side of it. If you step back and take a look at the cardiometabolic profile of a lot of people, oftentimes, cholesterol is one of those things that is quite silent and is undertreated, kind of at the primary care level.

And so there's a huge opportunity there as we work with people with diabetes and hypertension then to obviously upsell or cross-sell into the cholesterol program and just take a more holistic care approach, thereby improving their outcomes. So the cholesterol program is as much about selling more in terms of more products into our client bases as it is to synergize with the rest of the cardiometabolic products we have, thereby conferring more total ROI for that particular patient profile for a company.

Congrats on the quarter.

Our next question comes from the line of David Larsen of BTIG.

Congratulations on the good quarter. Can you maybe talk a little bit more about your relationships with the big PBMs? And also, what portion of your members now would you consider to be GLP-1 members? I think it's something like less than 20% of total, which I view as good because there's plenty of upsell opportunity. And then with respect to the PBM relationships, can you touch on the reporting back to the self-insured employer client? Can they see who's using the program, how much weight each member has lost, the impact of total claims trend, and so forth?

Yes, sure. This is Wei-Li. Let me comment on kind of the relationships with the large PBMs and kind of the reporting details, so on and so forth, then I'll kick it on over to Steve to talk about kind of the percent of revenue in the GLP-1s and so on and so forth contribution there.

In general, our relationships with our PBMs are similar to the relationships that we have with health plans insofar as we contract with them for provider services. In this particular case, across the three big PBMs, all of our cardiometabolic programs, like diabetes, diabetes prevention, hypertension, and MSK. Cholesterol, since we launched it earlier this year, is often not in those contracts, but certainly we're seeking to upsell that in. And so that's how the contractual nature of it.

Now the actual sales motion, if you were wondering about it, is similar to as we do with health plans. So we partner with the account executives at the PBM level to raise awareness within their client books of business. And then we go to market with them, we create outreach to them, and then we close deals together, much like we would in other relationships we have.

And then we do the deployments. Deployment meaning is that we launch the program with the employers into their employee base, do all the enrollment outreach in most of the cases, and then that's generally how we create membership through those channels.

As it relates to reporting, the answer is yes to your question. So it doesn't matter whether you have a direct contract with us or you're contracting us through a health plan or any of the big three PBMs, what you can expect from us is a number of reports that characterize, for instance, how is the deployment going? What's the penetration, the enrollment rate? What are members doing inside the application? How are they engaging with our care teams?

And then as the business builds, obviously the number of employees we're helping grows, and then we naturally begin reporting out on not just utilization, engagement, but also outcomes. Was their blood glucose controlled? Was their weight controlled? Was their blood pressure controlled? So on and so forth, such that our customers then can be convinced that we're conferring the value to their employees and to their business that we talked about during the selling process. So that's a little bit how we work with the PBMs and how we report.

Again, this just adds some precision on the GLP-1 mix comment. During our Q4 disclosure of last year, we had 150,000 members on our GLP-1 program against 887,000 total. That ratio has roughly held constant now that we've gone into Q2. So we continue to see broad-based traction across all of our product sets, GLP-1s being a key driver of that growth.

Our last question comes from Elizabeth Anderson of Evercore ISI. Elizabeth, your line is open.

This is Ayush Vyas on for Elizabeth. On the HCSC expansion, adding about those 1.5 million covered lives across the fully insured book, do those fully insured lives convert to enrolled members at the same rate as self-insured, and when should we see those lives start enrolling? And then on the retailer cholesterol deployment, is that account new to Omada entirely or is that an existing multi-condition client adding cholesterol?

Hi, Ayush. This is Wei-Li. Let me take both those for you. With the HCSC expansion, we've had a long-standing relationship with them, both in their ASO book and a couple of states for their fully insured book. The 1.5 million or so expansion references an additional three-state expansion within the HCSC book.

The implication of your question, I would say, is correct in the sense that with the fully insured book of business, the Omada programs, in this case, prevention and hypertension, are fully embedded in the benefit. So there's no downstream sales cycle that's required for employers. So it's a faster return in terms of deployment.

And so what can we expect? We're working busily with HCSC to set that up and have that deployed. We should see revenue start hitting the books throughout H1 of next year and obviously ongoing from that point in time.

As it relates to cholesterol, we announced that, early in the year and then quickly, closed that large retailer. We have many other deals in our pipeline for cholesterol because of the short sales cycle, you might imagine it was an existing customer. Indeed, that is the case. And we're seeing meaningful enrollments from that already.

I think what's important from that is that the fast upsell there for a very large client, we think, is a great lead indicator to the product-market fit and traction. And if you were to look into our CRM, you would see inside of our pipeline a number of cholesterol deals, not only for upsells for existing clients, but also new logos. So we feel good about the momentum coming into the back half of this year for our closing season and are excited about it for 2027.

At this time, I am showing no further questions. This does conclude our program. You may now disconnect.

All right. I think we're live here. Well, I want to welcome everyone to the -- I guess the last session of the 2026 Goldman Sachs Global Healthcare Conference. Very pleased to have the management team from Omada here with us today. Sean Duffy, Founder and CEO; Steve Cook, Chief Financial Officer.

I want to keep this as interactive as possible. I say this in every session, offer the opportunity to ask questions. No one asks any, but they're more than happy to come up after and ask you. But this is being webcast, so in the event you do have a question, please just raise your hand, and we'll get a mic to you or I'm happy to repeat the question.

Maybe, Sean, I'll kind of start high level here. You've been public about a year. Maybe just kind of give us your reflections on sort of what you envisioned for the company as you began the public market journey and how things have gone?

Well, thank you, David. Hi, everybody. David is saving the best for last here. So we just crossed the year milestone of being public and just been extraordinarily proud of the team's progress. I mean if you look at all the commitments we had at the time of IPO, I mean every single one, financial, revenue, margin, profitability profile, strategy, we delivered.

I think we've come ahead of schedule in many areas. And I think it's all reflected in the Q1 results. I mean, a $78 million quarter, 43% growth, adjusted EBITDA positive in the most cost-heavy quarter of the year. So just thrilled with the progress. And it's against the backdrop of just so much excitement and dynamism in the chronic disease space and the recognition that yesterday's care models of a visit-by-visit approach won't serve tomorrow's needs. So we're feeling that, and it's showing up in the numbers.

And I want to dive into the business model for a second. I want to -- obviously, we'll get to some -- more of the specifics. But you compete in a space that's been challenging for companies to really figure out a durable growth model. And I think we actually first met in like 2014 or '15 when you were early in Omada's journey, you were sort of figuring out, I think at that point, you were doing like a risk-sharing model with one of your key customers. And over time, you've sort of evolved the business model. Talk to us about how you landed on the current business model for the company and why you think it's a sustainable growth vehicle?

Yes. I mean the big AHA, which has always been Omada's strategy for the business is to be an actual provider of care delivering the real clinical and economic value. And I think if you looked at yesterday's digital health, those business models did not have that characteristic. And that's where real public health care spend is. And so Omada, we are between-visit provider. We contract as a covered entity. We file claims. It's on kind of unique codes, but it allows us to hit the exact same medical expenditures as an HCA would, a tenant would, a Stanford hospital would. Although, of course, we don't have the clinics that we have to pay to build out. And it's tailor-made specific for chronic care.

And so the revenue model is very simple for Omada. We love it. It is when someone signs up, we start to charge. And it's a monthly fee. And that monthly fee is filed through claims, hits the medical expense no different than if that -- let's use the self-insured employer, if that employee went across the street to get a procedure at Stanford Hospital. But it's a monthly fee that includes all of what we do.

And so that model really works for a number of reasons. Number one, you're very aligned with your customers. They know that when they're paying for the Omada solution, they're paying for people that are engaged, they're paying for value. We love that. Secondly, it has great durability characteristics for the business. I mean, I think you've seen that. If you look at our quarter-by-quarter revenue build, you just see the consistent growth over time. I think the pricing and the revenue model is reflective of that.

And one of the things you referenced there, that I think sometimes goes overlooked is just the breadth and depth of clinical data you have, especially when compared to other digital health companies these days. The way sometimes I described the company to investors and they ask why is this different, I will use, a lot of companies started as software companies and tried to become health care companies. You've actually -- you've made investments very similar to a health care product type company and clinical-to-clinical data that you're now leveraging software to deliver care. Maybe just sort of talk about your clinical development strategy and how much you think that's contributed to the revenue you generate.

Yes. So the end market for us is a very risk-averse buyer. And the moment you say hi, especially if you're supporting an employer through a channel like a health plan or PBM, you've got the medical directors of these organizations inspecting your solution and they want to see data. And I remember in the earlier days -- I mean, I left medical school at Harvard and -- to found Omada. And I kind of asked myself what would convince my critical friends that our solution worked. And it's -- there's one answer. It's peer-reviewed studies. And so we've spent many millions of dollars. I mean, these are multiyear investments. We have an arsenal of 30 peer-reviewed publications, they range from operational trials that we optimize for speed to academic medical center led multimillion-dollar RCTs.

And when we go to buyers, we can show those data, both clinical and economic as well as things like industry-leading accreditations. Omada was the first and remains the only NCQA accredited for diabetes and -- diabetes and hypertension and that allows you to earn trust with buyers, which becomes a durable moat at the end of the day.

Maybe we can sort of jump into the business now. I mean you started as a kind of prevention company and you've evolved in this multi-platform, multi-service line business pretty quickly. So maybe just contextualize for investors where you are in that kind of diversification of offerings and give us a feel of like where adoption is in each of those.

So we began Omada's journey in prevention of obesity. So really it was kind of the first chapter of Omada. We expanded the diabetes to hypertension, to cholesterol, to MSK care. And that was not TAM driven. Just to be clear, that was customer-driven. Because what happens is if you earn trust with customers, employers -- I mean, we have over 2,000, 25 million covered lives, over a decade of operating history with them. If you earn their trust, they ask you to do more for them. And so each one of those condition expansions came from a customer ask where they saw in action, they saw our capabilities and they recognized that they have new needs that they'd love us to support.

And the way we judge those is number one, clinical feasibility. Is this a between-care need, where longitudinal day-to-day support matters for patient outcomes and not just an incrementally different way, but a transformationally different way. That's kind of the first judge. The second judge is their business model and is there commercial adoption. And so if a customer asks for it, that helps answer the yes on the other side.

And we've seen really just exciting full platform growth. I mean the -- right around 50% of new customers start Omada's journey -- with their journey with Omada in a multiproduct fashion. We did announce, looking kind of last year, that both hypertension and diabetes grew over 45%. So it's not just weight, it's not just GLPs for Omada. It's the attention broadly on metabolic and chronic care is -- that is supporting the remit of all the clinical...

And maybe just to go one level deeper. Can you just visualize for us what a between-visit care need looks like for a type 2 diabetic, endocrinologist every 6 months, like what is -- just paint a picture of someone that's not maybe on a pump and a CGM and they're on drugs, like what are those between-visit needs?

Let's contrast it to the existing. I mean, this brings me back to early Omada, before we [Audio Gap] I sat at home. And it's funny because I remember we did a tour outside of Atlanta and I'm sitting at home with this patient and the health care academic would have said, "Oh, this individual is under care." Because they have an attributed PCP, they've been prescribed their meds. But then you ask what they received, what's on their mind, and they didn't pick up their scripts. They weren't taking their meds. Their health trajectory was heading in the wrong direction. They had no idea on their sugar levels.

And that became the issue. Because if you study this space, it's extraordinarily hard to get any outcome. You really have to drop in the paratroopers in this clinical category and they need day-to-day support that includes a symphony of things, connected devices to monitor progress, education curriculum, community support, care team engagement. That's not just that doctor telling me what to do, it's the health coach or the diabetes educator that's listening to their goals, supporting them because what you need to create is a feel of accountability and progress.

And so what our care teams do is: a, make sure that the person is equipped with all the needed connected devices. So we mail a cellular scale, blood pressure cuff, glucometer, every patient with diabetes gets right at the beginning to -- FreeStyle Libre CGM, so those are the hardware. Then they meet their care teams, diabetes educator, health coach. Those care teams get to know them as individuals. And then the software experience combines all of those other pieces.

And so that gives the person a feeling of for the first time in my life, I have like someone in my corner, in my pocket on a daily basis rooting for me. And you ask them if they -- like what -- to compare and contrast back to standard of care currently, and it's a night and day difference.

And then maybe how does it work on the other end? One of the questions I get from investors is like if Omada is offering all these different services, don't they hire a ton of professionals to support that. Help us understand your side of it and how much infrastructure is required and how technology can be leveraged to make that efficient?

I mean, we did benefit we did -- it's interesting, like I -- we did have to bite off building it all. Now thankfully, all those costs are behind us [Audio Gap] numbers. But we had to build every single piece of [Audio Gap] at least we didn't believe you could deliver the member experience needed as an example and you -- like an off-the-shelf EHR. So we built our entire Care Team platform that our care teams use to support our members ourselves because it's different. Like the care we deliver is a longitudinal daily engagement model versus fee-for-service episodic model, which a lot of the EHRs are built upon.

So we did have to take burden of that, but equally, we're appreciating that. I mean our -- if you look at our margin progress, our long-term targets that we've communicated are 70% plus, we ended last year in the upper 60s, 68%. So nipping at it. Could we have done that without the Care Team platform, investments in technology, AI? No. I mean, I was our first ever health coach for Omada when I founded the company, flying totally blind, just look at a weight chart, message a person, total guess. And the way we run the operations right now is the complete opposite.

I think one piece just from an economic standpoint, on the R&D side, when we want to spin up a new Care Track on our existing tech stack, we approach that with like modularity and flexibility in mind. We revamped our new GLP-1 product in just a couple of months on our existing tech stack. So we didn't need to go back and deploy tens of millions of dollars to reinvest to stand that up. And so that's going to continue to benefit us from an operating leverage perspective as well.

And maybe that's a good segue to talk about GLP-1s.

Never heard of them.

Yes. I was just at ADA this past weekend. So certainly all the rage. I don't know if GLP-1 adoption has gotten to that part of the country quite yet. But the -- maybe just talk to us about why you launched the GLP-1 Care Track and talk about the prescribing thing in a second. Maybe we'll start with just the Care Track, why you've -- what you said is probably -- it sounds like customer-driven. What were customers telling you about GLP-1s that led to that development? And what have you seen in the utilization so far?

Yes. I mean this is an area where I think we're thanking ourselves for, in our view, getting really ahead of the market here because 3 or 4 years ago, I mean, Omada -- imagine Omada, we've got thousands of customers at that point in the journey, a lot of them were prevention obesity customers.

Some of them started to cover GLP-1s for obesity. And then they started calling us. And there the average voice would say, "Sean, we're looking at the cost of this and the slope of the curve and it looks vertical. There is no slope in the curve. Like does this go to infinity. Like what do we do? Equally, we're looking at persistence data. And we're seeing that our employees who are paying for these meds before are not persistent on the meds. We're seeing a regain in real-world evidence. Like help us think through what to do here. Because clearly, the med can be effective. But equally, we're worried about waste, and we want to think through how to maximize the value."

And this is an area that we care a lot about because these are incredible medicines, and they're incredible pairing with comprehensive lifestyle solutions. And so we developed the first version of our Care Track, which is kind of gen 1, which paired the Omada that they knew alongside a GLP-1, optimizing for on-therapy outcomes.

And then if the patient goal was to discontinue, doing everything we can to reduce or ideally eliminate regain after discontinuation. And then every year, we've built upon that knowledge in kind of a rinse-and-repeat fashion, leading us to the most recent version of the Care Track, which includes all the bells and whistles, including prescribing and titration of the medicines themselves.

Because the market is getting more and more complex and more and more difficult for buyers. Despite some, obviously, moderation in the price, you take almost any unit price for GLPs and multiply it by the prevalence, and this is an enormous cost decision for employers. So for Omada to come in to almost manage effectively that spend and be really a value maximizer and almost like a GLP operating system layer for the accounts has been attractive to the market.

And do you have a sense of how customers are measuring the success? They look at their medical spend and they add GLP-1 to it, is their intention that we had a medical spend of some number. We add GLP-1 and this number comes down to justify the investment? Or -- and what are you seeing play out in the real world?

It's interesting, so you've got like a 40-60 split -- 45% or so but you got the minority of employers or the lesser are those who cover GLP-1s for obesity. They're not covering it right now because they are hoping for a total cost of care reduction. They're covering it because they see that these meds are effective, and they are responsive to employee voices. And so they bring Omada in -- really in the hopes of gaining what we're all after, which is that saving. And it's that savings through medical outcome.

So they want to see from Omada, are the right employees using the meds. And so that's where our prescribing network can come in. Of course, aligned with all the obesity society guidelines, best-in-class clinical practices. So it helps kind of avoid the stories you hear of the dermatologists that it's like a fitness center prescribing a GLP-1. And so there's kind of the clinical integrity piece that they're getting from Omada. And then there's the weight loss outcomes while on the med, of which we've seen upwards of about 30% increase in weight loss on our Care Track than not.

And then discontinuation because you talk to a patient, a very common goal is to try to get off the meds. And so what we can say to the individual is, "David, that's an amazing goal. It's not going to be an easy one, but it's not your destiny to have to set your goal to regain. Let's work together while on therapy." And the analogy we often use is would you run a marathon tomorrow without training. And the answer is obvious no.

And so you can use that on therapy window to support rethinking nutrition habits, exercise habits, kind of ask what a week in their life looks like from an eating standpoint, ask them if there's anything they've ever wanted to do physically that they can't, and build some success there. And then we've seen that in the discontinuation data. And we followed patients out to a year, seeing weight -- minimal, minimal regain at the end of the year, whereas the natural progression should be 6% to 7% increase at that point.

Got it. GLP-1s obviously represent a huge opportunity, but I -- sometimes I think investors do get a little bit over their skis in the sense of GLP-1s is all the growth in members. And we try to do some math behind what sort of GLP-1 and ex-GLP member growth is contributing. Our assessment is in that the non-GLP member growth actually represents the majority of your growth and GLP-1s is additive to that. Maybe help us think through the -- is that an accurate interpretation? And how do you want investors to think about GLP-1s and then the aggregate growth profile?

Let me talk about the selling motion and then pass it off to Steve. The selling motion for the GLP-1 Care Track involves saying hi to self-insured employers just like we would any other employer. Now we are proud that we now work with the 3 largest PBMs in the country to deploy not just our Care Track, but the broader suite of Omada services.

And so if an employer wants to contact Omada for GLPs, very quickly, the conversation turns into, "Oh, wait, I probably shouldn't just cover Omada for those employer -- employees that are using GLPs. I should cover more broadly. I should think about Omada for diabetes, Omada for hypertension." So it turns into a broader platform sale, which is reflected in the numbers.

I mean we did -- just to help absolve concerns there, I mean, we do periodically and plan to continue to kind of share a little kind of view at the aggregate GLPs. And end of last year, we announced -- we crossed 150,000 folks in Omada's care programs where we're supporting them alongside of GLP.

886,000 total.

Yes, that's right. And ending Q1 members was just north of 1 million. So it gives you a general sense. Because in any given account, there's still going to be the minority on a GLP, we expect that -- those proportions to continue.

Yes. Look, we got our start of prevention and weight health. What we previously disclosed is that 75% of our revenue is in prevention weight health, where part of the GLP-1 revenue sits and then the other 25% is in diabetes and hypertension. And per Sean, I think given we're using the GLP-1 conversation as the tip of the spear to engage with employers, we've seen growth across all of them fairly equally, one is not really outpacing the other. And it's important because the diabetes and the hypertension economics, they're some of our most profitable members. They're in program the longest, they're priced at the top end of our range. So we really like the profile of those members in our overall P&L build.

And on member growth, I was talking to someone about Omada yesterday, and they asked me, well, if they have 50% retention at year 1, if you have 1 million members to grow that, does that 1 million go to 500,000, then you've got to grow 700,000 to get to 20% growth? It's sort of a confusing dynamic for people. And I was like, no, it doesn't work that way. But maybe just illuminate that for folks more broadly.

Yes, absolutely. So this is just -- it's simpler than it seems. So you are right that if you look at the shape of a member who joins at about the end of the first year, north of 55% are still engaging monthly; end of year 2, north of 50%. So you do -- clearly, obviously, you lose people along the way. Some of that loss is for people leaving the organization. And so what happens mechanically is every single year, you're getting thousands of new enrollments from old accounts that just come in the door.

So you look at some of our legacy customers like Costco, every single year, we get thousands and thousands of new business as usual Costco new members coming in. And the whole cost structure for Omada, the lion's share of the cost structure is getting that account. It's not the e-mail marketing to get the members in. Those are just automated once we close the accounts. And so that, once we explain that, tends to help people get a little bit more comfortable. So it's not like we're refilling that 50%. A lot of that is coming from the existing accounts because of those exact dynamics.

The revenue variability is at the account layer. We've gone back and then looked at every customer vintage in Omada's history and the net dollar retention has always been above 100% because of that dynamic. If Costco has 100,000 employees, they lose 10,000 every year. They're replacing those 10,000, and they're growing on top of that. And then we're going back in and we're adding more products across our existing customer base. And so you just get these really durable, really predictable revenue cohorts across the employer base.

That's a very helpful framing. And maybe just to kind of pull on the 3 PBM contracts where you now have access. Maybe just how should we think about the conversion of the PBM contract access to member to revenue?

Yes. So let's look at just the shape of the self-insured employer market. So we have about 8% of that. And then the white space within that, those are employer accounts that ideally we can knock on their doors and convince them to work with Omada. The thing about employers is the vast majority would far prefer not doing a direct contract with Omada or any solution in our space. They don't want to have to bring it to procurement if they can avoid it. Per the risk-averse buying standpoint, they're like, "Well, I'd like my health plan and my PBMs medical leadership to look at this to see if it's worth its salt to evaluate the clinical data." So that's another argument for why they'd love to go through channel.

And so that's all great. It does create a moat if you can get the channel. Right now, if you add up the market share of the 3 major PBMs, the CVS Caremark, [ Express Scripts ], Optum Rx, something like 80% of scripts. So if you're a sales rep and you happen to be at the Conference Board talking to heads of benefits or self-insured employers, the first question you're going to ask if you're on the Omada sales team is what PBM do you use because the majority answer is going to be one that we work with. And so that turns into a fast follow where you can say, "Hey, that's fabulous. We have an integrated relationship with CVS Caremark. We've worked for years, a wonderful relationship with Express Scripts. Did you hear about our new Optum Rx relationship?" That turns into that meeting where we can talk about the easy button to deploy not just our Care Track, but the broader suite of Omada services.

So if you think about like their own -- the selling cycle to the PBM, but then they also have to go -- there are a couple of different steps there. So if you think about Optum as an example where you've just announced access, you talked about that not being reflected in your 2026 guidance. But maybe just operationally, what are the steps that have to take place now to bring Optum members on to Omada?

The average selling cycle for employers is building pipeline in the first half and closing in the second half. And so in the building pipeline stage, we have our field reps that are out there. We have a channel management team that aligns all the needed relationships in every single market, figuring out a way to structure joint pipeline reviews, make sure that the Optum Rx sales teams have all the right training, that there's great collaborations between their field teams. So you build pipeline and then you close in back half for deployment in the first half of the next year. So that's the typical.

There always is the off-cycle accounts that's like, hey, I really want this tomorrow. And so we may see some of those this year. But in terms of what we underwrite for any new channel, it's pipe build in first half, closing in second half for deployment the next year.

And just remind us the size of the member population or the accessible population that getting Optum brings you?

I mean it's -- I mean OptumRx overall has nearly 70 -- I think 70 million, 80 million covered lives that include fully insured plans. The ASO side, I believe, is closer to 30 million. So if you add up the overall ASO market, roughly 75% to 80% will work with a PBM that we work with is the best way to think about it.

The other point I think about just from a cost perspective, our sales team is roughly 25 total people. Because you're leveraging the health plans and the PBMs to distribute Omada and you're partnering with them, we've been able to keep our sales force relatively flat over time. That's just created a significant amount of operating leverage in sales and marketing over time. So it's a really nice feature of how we're contracting and then ultimately deploying to employers.

And as you think about member growth, Steve, as you and your team do your planning for the year and the budgeting, like one of the things I always get asked, how do you know? Like could member growth be 30%, be 35%, be 20%, be 50%? I mean it seems like there's a wide range of outcomes. So how do you think about forecasting that number? And what are some tools that you can give investors to gain visibility into the outlook there?

Look, for the prior point, we have a decade plus of amazing data on all of our existing book of business. So we know at the account level, how much like, on average, Costco is going to ultimately refresh and add to that population. That's ultimately 75%, 80%. It's just the business you close in year that is going to cascade for the next year.

And then we're going to work really closely with our sales team, look at all of our pipeline build, make some assumption on covered lives conversion, pipeline conversion and then determine like -- kind of stress test like a high, mid, low scenario on how much we expect to close in year. But it's really -- you have so much great insight at the end of the year because you know how much pipe you built in H2, and that's going to be your Q1 revenue build. And that's where you see the majority of our new enrollments come in is in that first quarter. And so we have a lot of great data to help like ascertain where we're going to land early on in the year, and that's how we run our entire planning process.

And as we translate that to revenue, you don't give ARPU per se. It's like trailing 3-year thing you gave at the time of the IPO, I think -- but everyone tries to come up with a sort of PMPM or some reflection of pricing. How should investors think about that translation from member growth to revenue?

Yes. So pricing and revenue per member are distinctly different in our business. Pricing, we've steadily increased through time. Revenue per member is a combination of channel, product mix, customer vintage. So this is a multifactorial way to ultimately calculate that. Last year, in Q1, we were at $279. This year, we're at $276. So roughly flat on a year-over-year basis if we're looking at it on a trailing 12-month basis. That's how we think it's the most apples-to-apples way to look at revenue per member because definitionally, our members are someone who's been billed once in the last 12 months. So it's a complete apples-to-apples compare.

What's not in the guide and where we view potential upside is on additional product closures in the back half of the year, more cholesterol being added, potentially some early wins in prescribing that we realize in the year. And then we have several internal motions on driving engagement up. So if we can keep folks in program longer by making the product experience more compelling and increase the attach and they stay an extra 2, 3, 6 months, that's incremental ARPU that drops directly to the bottom line because it has very little incremental carrying costs. And so you could construe that as being upside to the current guide.

And as you bring on new accounts, I think if you look at this market historically, one of your competitors, they've seen -- when they bring on new accounts, they used to give a PMPM. You actually see it go down. So when you bring on new books of business, do you have to discount at all to bring them on? What's the pricing on new business?

No. Typically, we've had success in increasing price through time and then also attaching more of our products from the outset. CVS and Optum are both great examples. CVS, we're working with them across all of our condition areas, and then we're working with Optum across the majority of our condition areas and then we attach prescribing. Prescribing is priced at roughly 2.5x the price of our legacy -- some of our legacy prevention offerings.

And so we've had -- that's been a huge part of our success is just through time attaching the entire product suite, often coming with higher ARPU products and then folks are staying in program longer, and that's where the durability has been coming from the last couple of years.

So shouldn't that number go up over time?

We expect it to. We certainly would expect it to go up over time. The only counter dynamic to that is we are finding that really in Q1, for the first time, we saw a lot of diabetics in their -- even their fourth, fifth and even sixth year with Omada. When you get further out on the curve of engagement, when you're in that fifth year, you don't engage as much, you're probably billing 2, 3 months on average, you're still contributing revenue at very high margins, but you're in that member count. And so it does have a little bit of a dilutive effect on revenue per member, but that's still revenue and margin that we want. And so we're okay with that. But there's -- I would say we're more biased to like future upside from that perspective given the other areas we cover.

And as you think about setting guidance and targets for the company, you've meaningfully outperformed all of the expectations that were set at the time of the IPO and in your time as a public company and even coming really strong out of the gates here in Q1. I appreciate -- I think everyone appreciates the conservative approach to setting guidance and putting yourselves in a position to deliver consistent results. But maybe just help us like operationally think through like what has transpired in the business, end markets or customers or market share that has enabled such significant outperformance?

You can start.

Well, let me just talk about the three growth levers, if you will, in our algorithm. There's the first, which is covered lives. And so that's what you can sell. That's the care areas, matrix against the end market. So a self-insured employer, fully insured plan, integrated health system. That's kind of like the first. The second is enrollment initiatives. Just every single day, innovation relative to how you get people in, different campaign types, different campaign schedules, different messages, leveraging data science, leveraging A/B testing to figure out how you best get people in. And then the third is engagement. And that's the stickier that we can create the program experience for people, the more ARPU we realize.

And so those are the three. In the last couple of years, we've had a lot of innovation bets in the second two, especially in the back half that have delivered in an outsized way. Those are typically experiments. We never underwrite them because you want to see them come through. And equally, we don't tend to, per Steve's comments, underwrite any like off-seasonality deployments from like a Omada for cholesterol or prescribing given typically you close and then deploy in the next year.

Yes. Anytime we're ramping into a new channel, we'll always take a very measured approach because you just don't know exactly how quickly you're going to build into that. And so with CVS and Optum, CVS is obviously [Audio Gap] Optum. But as those things start to ramp, we can get more specific on how we underwrite that.

And I think to your point, we're a full year ahead of some of the IPO projections. We just logged our highest ever gross margin quarter in Q1 at 64% with our long-term target being 70%. So we have really near-term visibility into getting to that target with the potential to maybe raise that in the future. So we're really excited about that.

And on the point of profitability, you made a couple of references to the different operating leverage points in the model. How do you think about the balance between sort of scaling profitability, but also opportunities to reinvest for growth?

I think this year is a great example of that. We're going to continue to make progress this year towards our 20% adjusted EBITDA margin target, improving upon what we did last year, but we did qualify this as a year where we're going to be investing into AI and into prescribing. I think prescribing was the lion's share of our investment this year, and then we backed that up with the Optum Rx deal. And so that's what we spent a lot of time last year kind of teeing up is like, hey, we're going to go enter prescribing and then we kind of punctuated that with adding Optum Rx, and that will ultimately add some leverage to the business going into next year.

Excellent. Well, maybe just to close out here, maybe, Sean and Steve, I'll turn it back to you, you've obviously been on the road, I think, meeting with investors, you're presenting here today. It is probably one of the last times you'll be in front of investors before second quarter earnings. But what's kind of the take-home message you want to leave people with, both in the room and on the webcast here?

Yes. I think we hit a lot of it. So just to distill it, I think the founding of Omada was predicated on the fact that a visit model doesn't work for chronic. And if you look at where today's disease burdens are, it's obesity-related disease. And if you look at where the therapeutic landscape and the technology landscape has evolved, we now have more instruments pointed toward those areas than we ever had before.

And so the thesis for Omada is AI alone isn't going to cut it. GLP-1s alone are not going to cut it. You need, if you will, a care provider that can tie the two together. And we think we're really well positioned for this [Audio Gap] actually well positioned in a moment where software velocity [Audio Gap] to do more, us to do more for our customers and better leverage our channels.

I mean we have more launches and new programmatic capability launches this year than we ever had in Omada's history. I mean GLP-1 Flex Care, Omada for prescribing, Omada for cholesterol, and that's because our product velocity has increased within the organization, and we're able to leverage our channels to do it. So we really feel blessed that many of the investments we've put forward over the last decade that took a lot of cooking are starting to yield great healthy, nutritious meals for Omada.

Excellent. Well, with that, we're out of time. Steve and Sean, thank you so much for participating in the conference, and we look forward to getting the next update in August.

Super. Thank you, David.

Thank you.

Good day and thank you for standing by. Welcome to the Omada Health First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Craig Gracey, Chief Accounting Officer, Investor Relations.

Thank you. Good afternoon. Welcome to Omada Health's first quarter 2026 earnings conference call. Joining me today are Sean Duffy, our 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 will also make forward-looking statements based on our current expectations and assumptions, which are subject to risks and uncertainties, including factors listed in our press release and in the risk factors found in our SEC filings. 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.

Thank you, Craig. Good afternoon, everyone, and thank you for joining us. Q1 2026 was a milestone quarter for Omada. Here is our financial snapshot compared to a year ago; 42% revenue growth with a lower net loss and positive adjusted EBITDA, with a higher gross margin, and a guidance raise.

Our business is largely driven by four growth levers. Let me explain the importance of each; expanding reach, the total lives with benefits coverage for our programs through channel and employer relationships; increasing enrollment, how effectively we convert those covered lives into multi-condition members; deepening engagement through advancements in our member experience, including our AI-powered food and behavior platform that includes OmadaSpark and Meal Map; and operational efficiency, the AI, clinical model and operational investments designed to improve outcomes and margins as we scale.

I'll walk through the headlines across all four levers. Wei-Li will then take you inside the platform, into the operational and commercial detail behind reach, enrollment and engagement. Steve will walk through the financial picture, including our updated outlook. And I'll come back at the end to bring it all together.

The headline of the quarter is reach. In Q1, we saw the new investments in our GLP-1 capabilities begin to demonstrate traction. Omada is proud to join Optum Rx's Weight Engage portfolio to help employers expand responsible, clinically supported access to GLP-1 and other anti-obesity medications through their existing pharmacy benefit manager. This collaboration marks Omada's first offering of prescribing capabilities within a PBM channel, reflecting our shared commitment to improving coordinated care for employers and members.

Omada now has relationships with the nation's leading pharmacy benefit managers, who serve most commercially insured lives and process 80% of prescription claims. And today, we announced that Omada is joining Eli Lilly and Company's Employer Connect to offer our GLP-1 Care Track, also including prescribing capabilities, directly to employers.

Across these announcements, Omada can now meet employers where they are, whether they are already covering GLP-1s, exploring coverage for the first time or looking for a lower-cost alternative through an employer defined contribution model. And critically, our GLP-1 capabilities remain the tip of the spear for sales conversations across the broader Omada platform which is driving growth across the full cardiometabolic suite.

Turning to enrollment. In Q1, our total members grew 51% year-over-year, crossing 1 million for the first time in our history, a direct result of our expanded reach and our relentless iteration in enrollment marketing effectiveness. We continued to see strong enrollment across our GLP-1 services, but importantly, across the full suite of our cardiometabolic services like hypertension and diabetes.

On engagement, member engagement continued to deepen this quarter as we scaled our nutrition experience, with continued advancements in OmadaSpark and Meal Map. And on efficiency, we narrowed our GAAP loss significantly and delivered positive adjusted EBITDA in Q1, which is historically our most cost-intensive quarter, showing the operating leverage we committed to demonstrating.

Behind that result is AI showing up across our business in a structural way. In care delivery, our tooling now summarizes member data and surfaces potential next actions for care team review, reducing the administrative burden on our care teams. In engineering, AI-assisted development has accelerated our product velocity and the ability to say yes to new customer needs. And across operations and member support, we are converting routine manual processes into automated workflows that create capacity without adding cost. Taken together, these investments are not only improving the member and care team experience today, we believe they are beginning to provide a foundation for a structural tailwind to margins.

The reason we have scaled this way, adding channels, adding conditions, adding capabilities like prescribing without breaking stride is that each new relationship, each new capability plugs into a complex system that promotes a positive, durable network effect for Omada and differentiates us from our competitors.

Part of what underpins our commercial success is a large set of relationships that we have built over the past 15 years. Omada has worked to build institutional trust with many of the nation's largest employers, health plans and PBMs, embedding our programs in benefit designs, clinical workflows and compliance processes, to create integrated partnerships that we believe many of our partners have come to rely upon.

Our clients are not paying us to make their business more efficient; they are not buying software or SaaS seats. They are paying us to improve the health of their members and provide measurable outcomes in diabetes, hypertension, cholesterol, weight health and MSK. We have worked thoughtfully for years, investing in areas like clinical sophistication, regulatory and privacy compliance and information security to meet the exacting standards of these partners, not as a software vendor, an automated tool or a consumer wellness solution, but instead as a HIPAA-covered entity and a recognized provider of true healthcare.

We also have rich cardiometabolic data assets, tens of millions of care team interactions and billions of data points across weight, diabetes, hypertension musculoskeletal health. This data advantage is a reflection of our scale and operating history and helps us rapidly improve our care. We have published 30 peer-reviewed studies and maintain third-party accreditations from organizations like NCQA and URAC evidencing our ability to meet their exacting standards and further differentiating our clinical, regulatory and compliance capabilities.

And we have designed our own co-intelligent care model that combines human coaching with AI tools to deliver personalized care at scale using our unique data to power functional AI workflows for members and care teams, not just model benchmarks. That combination of enterprise-grade distribution, extensive data, clinical and accreditation depth, proven and published outcomes and a care model refined over more than a decade of real-world deployment, that is the durable position that we work to maintain and to widen quarter-after-quarter.

Before I turn it over to Wei-Li, I want to ground this in the lives of the people we serve. One member recently shared, I've been using the Omada app for years, and it truly changed my life. Through better choices, discipline and consistency, I've lost over 60 pounds. I don't need a seat belt extender on planes anymore. My toes don't tingle. I make better choices without feeling restricted. For years, I thought food was my best friend. It was comfort. It was coping. Now I see it for what it is, fuel for the life I'm building.

Exceptional stories like that are why Omada exists. 3 in 4 American adults have at least one chronic condition, and over half have 2 or more chronic conditions. And the healthcare system still organizes much of their care around limited clinical touchpoints. Omada puts the space between those visits at the center of care.

With that, over to Wei-Li.

Thanks, Sean. As Sean shared, we crossed the milestone of 1 million total members. We ended Q1 with 1,025,000 million total members, up 51% year-over-year. This is 139,000 net new members in Q1 '26 compared to 107,000 in Q1 '25. Importantly, growth was broad-based across the cardiometabolic suite. We saw strong year-over-year growth in our hypertension and diabetes programs, reinforcing that our momentum extends well beyond GLP-1 offerings. Multi-condition close rates remain strong.

Two complementary drivers are amplifying this growth. First, enhancements to our enrollment experience converted more eligible members across email and direct mail, with particularly strong gains in diabetes and hypertension. Second, we continued to transition a majority of our accounts to Omada-led outreach, which is generating enrollment rates higher than non-Omada-led accounts.

Turning to our commercial progress. This quarter we made meaningful strides expanding our channel and customer relationships. We now have relationships with all 3 of the nation's largest pharmacy benefit managers and are deepening our presence across the GLP-1 ecosystem. As Sean mentioned, we are proud to have joined Optum Rx's Weight Engage portfolio. In addition to GLP-1 care, Omada's prevention and weight health, hypertension and musculoskeletal programs are available for Optum Rx clients to purchase.

And as an independent program administrator in Eli Lilly and Company's Employer Connect, we plan to support employers seeking direct GLP-1 access by pairing our clinical support and behavioral coaching model. Employers will be able to offer their members transparent, clinically guided access to anti-obesity medications alongside Omada's wraparound care.

In the quarter, we also added several large, nationally recognized private employers as customers, including L.L.Bean, QuikTrip and Breakthru Beverage, alongside additional public sector and regional health system wins. Together, these new and expanded relationships meaningfully extend our reach and further multi-condition penetration, while giving us access to a broader and more diverse set of covered lives across PBM, health plan and employer channels. We are still in the early innings of serving many of these newly covered populations, which can take multiple sales cycles to build into.

GLP-1s have not just driven demand for medication, they have expanded how many employers think about cardiometabolic care more broadly. Whether or not they choose to cover these therapies, we find that employers are increasingly prioritizing weight and metabolic health and looking for solutions that can support their populations. This shift has played directly to our strengths. This reflects a fundamental reality. 9 out of 10 people taking GLP-1s for obesity are also managing at least one other chronic condition.

Since launching our GLP-1 Care Track, we have supported more than 150,000 members as of the end of 2025, building proof points for our wraparound care model. Let me walk you through how our offerings map to the different ways employers approach GLP-1 benefits. For employers already covering GLP-1s through one of our PBM partners, our GLP-1 Care Track delivers companion care, including behavioral coaching, support with side effect management and other clinical support, alongside the pharmacy drug benefit. This is now available through the 3 largest PBM channels. Our GLP-1 Care Track can also help sustain outcomes after discontinuation, with data showing just 0.8% average weight change one year after stopping therapy compared to 11% to 12% regain in key clinical trials without ongoing support.

For employers seeking clinically managed prescribing, as GLP-1 therapies evolve, employers need support navigating medication selection and titration across benefit designs intended to improve outcomes and manage cost. Prescribing is a natural extension of our model, and we are excited about our first offering of prescribing capabilities with Optum Rx. Given annual enrollment cycles, we expect revenue contribution from prescribing offerings to build more meaningfully in 2027.

For employers not yet covering GLP-1s who want an alternative to traditional coverage, we can support direct-to-employer pathways that give them a more flexible way to begin offering access with more predictable costs. That includes Omada GLP-1 Flex Care, which combines clinical evaluation, prescribing support, behavioral coaching and ongoing virtual care, while eligible members access medication through vetted cash-pay channels. It also includes our work with Lilly's direct-to-employer offering, which provides employers with another option for transparent net cost for Zepbound and allows them to define contribution levels, creating a predictable cost structure for obesity medications.

For members discontinuing GLP-1 therapy who need ongoing support, we provide behavioral coaching, clinical guidance and multi-condition care. In published results, members who remained engaged with our Care Track largely sustained their outcomes at 12 months. This is where the full value of the platform becomes clear, supporting members not just during medication use, but across their broader health journey.

The strategic takeaway is this, GLP-1s have increased both the demand for and the complexity of cardiometabolic care. Employers need a partner who can navigate that complexity across coverage models, clinical needs and member journeys. And Omada is building exactly that clinical infrastructure, connecting programs, prescribing and support into a unified platform to help maximize the benefits of GLP-1 investments.

Now turning to our evidence base. Our newest clinical analysis announced last month, demonstrates that Omada members in our GLP-1 Care Track on average lost 1.8x the total weight and twice the body fat, while preserving their lean muscle mass compared to a control group over a 12-week period. This is a clinically meaningful result that we believe matters to employers seeking to justify spending on GLP-1 medication. Without structured lifestyle and clinical support, employers may end up paying for poor results, funding high pharmacy spend on medication that is not providing the durable outcomes their employees seek.

These results, combined with our established body of 30 peer-reviewed studies and insights from supporting 2 million members over the past 15 years, have continued to differentiate Omada in competitive evaluations. Taken together, our expanding commercial relationships, broadening GLP-1 capabilities and growing body of evidence reinforce a simple point, Omada is becoming part of the connective tissue between how employers buy, how members engage and how outcomes are delivered across the digital cardiometabolic landscape.

With that, I'll turn it over to Steve.

Thank you, Wei-Li. Hello, everyone. Q1 was the strongest first quarter in Omada's history; on members, on revenue, on gross margin and on adjusted EBITDA. Over the past year, we have been building capabilities to position Omada for durable growth, prescribing infrastructure, AI-empowered care delivery and an expanding set of GLP-1 and cardiometabolic solutions.

Revenue was $78 million, up 42% year-over-year, driven by strong GLP-1 Care Track adoption, increased multi-condition penetration across our cardiometabolic suite and continued progress in enrollment effectiveness. As discussed in last quarter's call, Q4 2025 included approximately $2 million of revenue related to a one-time transaction that did not recur in Q1. Adjusting for that item, Q1 revenue grew 6% sequentially over Q4. The strength of these results, combined with the early traction we are seeing across our new commercial relationships, gave us the conviction to raise full year guidance, which I will walk through in a moment.

Turning to gross profit. The leverage in our business continued to show as we delivered strong year-over-year gross margin expansion. Our GAAP gross profit was $49 million in Q1, representing a GAAP gross margin of 62%, up from 58% in Q1 '25. On a non-GAAP basis, gross margin was 64%, up from 60% in Q1 '25. As we've shared, Q1 has historically been our lowest gross margin quarter due to higher enrollment volume and the related care team and device costs.

The underlying drivers remained strong, efficiency gains from our self-built care team platform, AI-powered tools that enhance care team productivity and the operating leverage inherent in our multi-condition model. As a result, we see a path to continued gross margin expansion over time, and we believe there is a path to exceed our current long-term target of 70% annual gross margin.

One item I want to flag briefly is the minor impact we have seen thus far from the conflict in Iran, which modestly increased device-related cost of revenue due to increased shipping costs. This has not been material to Q1, and we currently estimate the full year impact at roughly $1 million. We are also evaluating selectively pre-purchasing certain devices to incur shipping costs upfront as a further hedge against volatility.

Let me walk through the unit economics. Total members is our headline metric, but it is a composite of members at different stages with different economic profiles, and that composition is key to understanding our business. Historically, the shape of the member curve has been largely consistent. In year 1, revenue per member has generally been at its highest, because enrollment, devices and initial care activities are concentrated in that period. In years 2 and 3, revenue per member has historically stepped down as members move into streamlined, longer term care, but gross margin per member has stepped up as care delivery costs are meaningfully lower once the front-loaded first year activities are behind us. The member relationship has generally become more profitable on a unit basis as it matures, even as the revenue line moderates.

The takeaway in this quarter is a positive structural shift in our member base. Members have stayed with Omada longer, and each successive enrollment year has been larger than the one before it, 2025 most of all. Together, those dynamics mean a structurally higher share of our total members sits in year 2 and beyond entering 2026. That puts near-term pressure on blended revenue per member by design, while lifting typical longer term gross profit per member, the more accretive phase of the curve.

This is a good outcome for the business without any change to per program pricing or contract terms. We expect gross profit per member to remain a strength of our model and aim for it to expand further over time as new channel partnerships, our GLP-1 care options and prescribing programs layer incremental economics into the existing member base.

Moving to operating expenses. Our approach is unchanged, invest responsibly behind key opportunities and continue driving toward profitable growth. On prior calls, we mentioned our investments into prescribing capabilities, and it's now clear these investments are aligned to serve our new agreement with Optum Rx. While building these capabilities, we also demonstrated operating expense leverage in the quarter. On a percentage of revenue basis, both GAAP and non-GAAP operating expenses declined approximately 5 percentage points year-over-year. That leverage is the output of the drivers we have consistently pointed to, scaling through channel partnerships, getting more from our existing sales force and tight spending discipline across the rest of the business.

The other driver, and an increasingly important one, is AI. We are not evaluating the leverage opportunity from AI in only one area of the company, the opportunity reflects a deliberate company-wide evaluation of AI tooling across every function. As AI adoption deepens, we believe it can become a tailwind to operating leverage and margin expansion as we look towards 2027 and beyond.

Our GAAP net loss narrowed to $3 million compared to $9 million in Q1 '25 and adjusted EBITDA was $1 million, an improvement of $5 million year-over-year. Delivering positive adjusted EBITDA in our historically highest cost quarter reflects the structural scalability of our model playing out. This strong start to the year has led to an improved full year adjusted EBITDA outlook that I'll discuss in a moment. Our strengthened profitability profile has continued to a strong balance sheet as well. We ended Q1 with cash and cash equivalents of $212 million and continue to carry no debt, having fully repaid our term loan ahead of schedule in 2025.

Now let me turn to our outlook. We are raising our full year revenue guidance to $322 million to $330 million, up from our prior range of $312 million to $322 million. For adjusted EBITDA, we expect a range of $14 million to $20 million, up from a prior range of $7 million to $15 million. At the midpoints, revenue guidance represents approximately 25% growth year-over-year and adjusted EBITDA reflects a nearly 3-fold improvement compared to 2025. For both revenue and adjusted EBITDA, the low-end of the new guidance range is approximately at the high-end of our previous range, reflecting the strength of the quarter and our improved outlook for the year.

The raise reflects 2 drivers; continued commercial momentum across our channel and PBM partnerships and sustained enrollment effectiveness across the cardiometabolic suite. We believe the new and expanded commercial relationships, along with the record number of planned new program launches, position Omada well for durable growth, more diversified revenue and increasing profitability. Several of those programs and relationships are still in the early stages of commercial ramp, and we do not expect them to contribute materially to revenue in 2026. However, we are in the active selling season for 2027, and that is where we expect these relationships to begin converting to revenue. We believe our growth rate and margin trajectory together demonstrate the financial profile of a durable, high-quality growth business with a clear line of sight to the next wave of revenue from new programs and expanded commercial relationships.

With that, I'll turn it back to Sean for some closing remarks before we open it up for questions.

Thank you, Steve. Let me bring it together. Less than a year ago, we stood in front of you as a newly public company with a bold set of ambitions. We said we would invest responsibly in GLP-1 capabilities and AI, demonstrate operating leverage and prove that clinical quality and scale are not fundamentally at odds. We feel we have delivered on those commitments every quarter since, and Q1 2026 is the latest proof point. Today, we have over 1 million total members. We have significantly expanded our commercial reach. We have an expanding multi-condition platform that includes prevention and weight health, GLP-1 support, diabetes, hypertension, cholesterol and musculoskeletal care.

We have an evidence base of 30 peer-reviewed studies and a growing body of real-world data that powers our differentiated use of AI and helps us demonstrate ROI to customers. And we have a financial profile that has tracked meaningfully ahead of where consensus expected us to be at this point in our journey as a public company. Our 2026 plans include rolling out more new offerings than in any year in the history of our company. The foundation is built. We believe the market is responding. And our team has the ambition to expand our impact from here.

With that, we will open it up for questions.

[Operator Instructions] Our first question comes from Craig Hettenbach at Morgan Stanley.

Wei-Li, nice to see you stay close to your former employer. GLP-1 developments are moving fast, and you outlined a bunch of these. Can you just touch on where you're seeing the most interest from current and prospective customers?

Craig, Wei-Li here. Good to hear your voice. Thanks for the question. In terms of where the market is moving as it relates to interest from customers for GLP-1s, we're really seeing it kind of spread fairly evenly across the spectrum. And so maybe it's worth kind of reminding people what that spectrum is. You can basically look at the GLP-1 marketplace, from an employer standpoint, split into 2 buckets. The first one is those that have leveraged the various number of GLP-1 benefit design solutions to their PBM or their health plan. And then those who have yet started -- have not yet provided coverage for GLP-1s but are actually wanting to, and that represents at least half the marketplace.

And so what we're seeing across the spectrum is really interest in 2 categories. Again, the PBM provided solutions, they're diverse. They meet certain market needs. And then also a new segment that's taking a look at alternatives that include different benefit design solutions, different defined benefit contributions and so on and so forth. This year is, from our perspective, the year where employers will take a look at all these different solutions, determine which one makes sense and they'll be experiencing a wider range of benefit design solutions to meet what we see as a very diverse and wide-ranging set of needs.

Having said all that, we are building traction in our GLP-1 Flex Care program. Obviously, we've just now become part of an option within the Lilly Employer Connect program. And so we'll begin building pipe there. And then obviously, Optum Rx as well as the relationship with CVS Caremark that we mentioned last year. So we're really seeing kind of even table growth in our pipeline across all those relationships. And we see that as reflecting the, again, diverse and wide range needs from GLP-1 coverage options across the employer landscape.

And Craig, this is Sean here. So just to pile on top. To summarize the strategy, Omada endeavors to have a version of our GLP-1 solution that meets whatever version of your strategy sits in. And we think that's strategic because it is a dynamic market. You find employers that want to cover, you find employers that can't and the flexibility in our solutions allows us to address all of these segments.

Very helpful. And then just as my follow-up, any update on just the multi-condition sales? Kind of how that's trending and implications to the operating leverage in the business?

Yes. Thanks, Craig. Wei-Li here. In terms of the multi-condition sales, we continue to build momentum in that direction. As you know, others know, that's been a long-standing strategy for us, consistent strategy for us. We have shared in previous earnings calls that our multi-condition close rates or attach rates are on average between 40% to 50%. That hasn't changed. We continue to see that, which we think is a good lead indicator and reinforcer of the strategy and the momentum we will continue to experience in multi-condition sales.

Our next question comes from Constantine Davides at Citizens.

Just on the PBM partnerships you announced, obviously, ESI is furthest along, but I'd love to understand what's similar or leverageable from one PBM relationship to another? And then as you look at Caremark ramping up and soon Optum, what nuances require a little bit of learning or heavy lifting on your part?

Yes. Constantine, Wei-Li here. Thanks for the question. In general, if you're referring to the go-to-market motion with each of the PBMs, if that's the question, I would say, in general, the approach is similar directionally. And the way I would describe that is basically we partner with their sales teams, their account executives. They oftentimes number in the thousands, which helps us expand our share of voice and selling footprint out in the marketplace. And we're certainly doing that across CVS Caremark, Optum Rx. We've begun doing that now, of course, as you might expect, and of course, ESI or Evernorth. So that part is similar and is a scalable motion for us given the enablement is similar and we can do that.

The other one that is similar, of course, is multiple of our products are available through each and every one of those channels. So you'll find a complement of our cardiometabolic as well as MSK programs available in addition to GLP-1. So that too is similar as well. The other one that I think would be reliably similar across them, which again speaks to the scale of the opportunity across all 3 is that the sales motion and sales cycle is similar from a timing and what it would take, and they actually feather and layer on top of each other.

So what do I mean? So obviously, we've had a longer-standing relationship with ESI and Evernorth. That's a mature business. It continues to grow nicely. We build pipe. Last year, we announced CVS Caremark. And at that time, when I -- when we announced that, I said our first order of business is to build pipe. We did that. Our second order of business in the back half of the year was to close deals. We did that too as well. And then the third order of business, of course, was Q1 this year is to deploy those deals. And we've got now thousands and thousands of new members coming into our business through the CVS channel. We expect and certainly plan to do the similar thing with Optum Rx. So we'll follow that same first, second, third order of business with material gains and contribution from Optum Rx predominantly beginning in Q1 of next year.

Our next question comes from Richard Close at Canaccord Genuity.

Yes. Congratulations. I'm curious on the Lilly announcement direct-to-employer, how that specifically works? What's the, I guess, program offering you're offering? And is it the employers are giving the member essentially a certain amount of money to purchase the drug directly and then you're essentially getting paid by the employer for the companion program? Just help us better understand that.

Yes, Richard, this is Sean. Let me just characterize which segment that sits in, and then I'll pass it to Wei-Li for the details there. So the Lilly Direct program is for the employers that do not cover GLP-1s. And so it's a similar category as our GLP-1 Flex Care. And so it offers the chance for those employers to give their employees something. And although in that instance, they're not paying for the med, they can create an employer-specific benefit contribution to the med.

Yes. Thanks, Sean. Let me follow through in terms of how it works. Obviously, Lilly would be the definitive body to talk about the entire program, but I certainly can talk about how it relates to Omada. The Lilly Employer Connect program is a solution that is outside the PBM, it's a carve-out. And employers will opt into the Lilly Employer Connect solution. And as part of that, have the option to actually engage and utilize Omada should they actually choose Omada as their clinical backbone.

If they do, there are 3 components. The first one is the clinical part of it, which is a scaled offering of our GLP-1 prescribing solution seamlessly married up to our GLP-1 Care Track, which is our lifestyle wraparound solution. The second one is through Lilly and the Employer Connect program is to be able to access a net transparent cost or price for Zepbound. And then the third is, as you mentioned, an option for employers to actually reduce the out-of-pocket cost for the GLP-1, in this case, Zepbound, through a defined benefit contribution and employers in partnership with the different administrators on the platform could pick the level that they want to do so.

All in all, the goal is to provide an alternative to -- because again, the need for coverage and how they want to do coverage and how employers choose to do that, the needs are diverse and wide ranging, and this represents an opportunity to meet a significant amount or a few segments in that buyer selection. And so I think I'd cap it off by saying, as Sean just said, to reinforce that, we're proud and privileged to be able to be part of the Lilly Employer Connect program, but it really is about a bigger portfolio strategy and allowing employers to opt into a number of different potential benefit design solutions, knowing that Omada is the clinical backbone in the one they would choose.

Okay. Very helpful. And then we've been hearing a lot more of employers in the face of these rising costs historically have waited to implement programs with January, the new benefit year. But we've been increasingly hearing that they need to do something now. So I'm curious what you're hearing? What you're thinking about like the opportunity for intra-year launches? Just any update there would be helpful.

Yes. Richard, I take your question to me not just about GLP-1s, but writ large in the category and what's impact to Omada is. I'll speak to GLP-1s first, then I'll speak to the broader cardiometabolic sector, obviously, that we lead in. On GLP-1s, yes, I mean, it's true. There are a number of employers that have made their benefit design solution decision, some of which obviously are rolling them out, some of which are kind of waiting and watching and evaluating this year.

Suffice it to say, I think a lot of employers, regardless of their solution are accelerating their decision-making process, meaning they're engaging in that process sooner in the year than they normally do. Now whether or not that leads to an acceleration for off-cycle closed deals, we're too early in the year to be able to see that. But we know that the pipeline is building nicely in that regard across the portfolio of benefit design solutions. So I think there's stuff there yet to be seen. But certainly, the conversations would be more active than typical, I guess, is the way I would put it.

Across the cardiometabolic suite, because GLP-1s is kind of the gateway to a broader cardiometabolic discussion to support clinically those employees that are not taking a GLP-1, that is kind of riding the coattails of the GLP-1 discussion. And so we find that also to be increasing in activity and is certainly contributing to pipe build. But again, too early to call as to whether or not that's going to lead to more off-cycle builds.

Where we do see -- our off-cycle deals. Where we do see more off-cycle deals coming through is when we're launching actually new programs. For instance, we announced our cholesterol program last year, we are seeing more off-cycle deal closes sooner in the year than we normally would have for a product that may be for a few years.

Our next question comes from David Roman at Goldman Sachs.

Steve, I wanted just to come back to your commentary around pricing, and I don't know if the right metric is revenue per member. Is that a metric that are you suggesting is going to be flat over time? Is that going to go up as we look at an increased number of multi-condition contracts? I'm just trying to make sure I understand the direction of travel that you were pointing us to on that dynamic.

Yes, David, great to hear from you, and thank you so much for the question. For some of the prepared remarks, this is really the output of 2 features in the business that we actually believe to be beneficial. The first is that we're just improving churn, and we're having members stay with us longer into their second, their third and even their fourth year of Omada tenure. And as a result of that, what you have happened is you see a little bit more moderated revenue contribution into those second, third and fourth years. But what's most important there is those carry very little incremental cost as most of the cost is front-loaded into the first year of their engagement. And as such, they're driving -- they're some of our highest margin members in our total member base.

We do expect that to be relatively flat for the rest of this year, in line with Q1. But first, from the prepared remarks, we still have remaining upside across continuing to execute on some of our prescription opportunities, driving engagement initiatives. We have internal motions directed at both of those internally, and we will potentially be able to uplift ARPU in the back half of this year, if not more into 2027.

Very helpful. And then as we think about the profitability profile, clearly, you've hit an inflection here earlier than you had expected. How are you thinking about on a go-forward basis opportunities to drop profitability to the bottom line, but also where there might be the potential to reinvest, whether that's organically or even inorganically given the scope of your distribution and just a number of smaller participants that are out there?

Yes. We think both Q1 and our full year guidance reflect this dynamic. On a $4 million top line beat, we dropped $4 million of EBITDA to the bottom line. And then on our guidance raise of $9 million, we're carrying forward $6 million of incremental EBITDA. So flowing through 2/3 of the revenue beat down to the bottom line as well. But that said, look, we said -- we did what we said we were going to do. We did invest in the back half of Q4 as well as into Q1 into standing up this prescribing capability and launching Optum Rx. And we believe that's going to give us the ability to drive durable revenue at really attractive margins in the years to come. That's going to be ongoing dialogue where we're going to be looking at abilities to invest in key responsible areas that are going to benefit us in the future.

And David, maybe I can take the back of the question there. We have communicated the primary engine of growth for Omada is going to be focused on organic. I mean we like the capabilities we have, large end markets. I think Richard's comments on the employer dynamism summarized really what we're feeling at the level of the buyer here. That being said, you do highlight something that we think is a great competitive advantage for Omada, which are large-scale distribution channels to a complex risk-averse buying market. And we do have capabilities to sell multi-product. And so of course, we'll keep an open mind, but be selective relative to anything inorganic.

Our next question comes from Sean Dodge at BMO Capital Markets.

Maybe, Steve, just going back to your comments again, just on the member curves and how revenue and margins develop as the enrollment cohorts mature. Just to make sure I understand, you said revenue declines in year 2, but gross margins go up. If we think about that in terms of gross profit dollars on a per member basis, how do the absolute dollars per member compare in year 2 to year 1? Is that also up? And can you kind of frame for us maybe how much?

No, that's exactly right. You hit the nail on the head. So gross margins are going up in year 2. The absolute gross profit dollars do go down on a total basis because we're just recognizing overall less revenue as those folks go into their more mature years going to the second, third and fourth year in aggregate. And so on a margin profile, it is accretive. On a gross profit dollar perspective, it does step down in the second and third years.

Okay. And then maybe just on the enrollment conversion rates. Wei-Li, you talked before about the work you're constantly doing to optimize those. You're always experimenting with different messages and content and channels. Maybe just to put it in context, the improvement in e-mail conversion rates you all were able to drive in 2025, you talked about 24% improvement in that metric. How does that compare to what you're able to do in years prior? And then maybe how does that compare to what you hope to achieve in 2026? I guess, how much do you think you can continue to increment up your conversion rates in any given year?

Yes. Thanks, Sean. I appreciate that, and I appreciate the reference to prior discussions we've all had regarding our efforts in enrollment rate, yield rate improvements. But for the others, just to rehash, each year, we go through an extensive process, usually commencing in the middle part of the year after we've seen H1 results and response rates, an extensive set of A/B testing, so on and so forth. We've pretty much got this engine down pretty good. And each year for the last several years, we've been able to improve our yield rate significantly. And the range is varied anywhere from the low side of 20% to the upside of 60%.

We certainly did that and repeated that process last year across both direct mail, other multi-channel things, including e-mail as well as frequency, duration of campaigns and so on and so forth. And we are seeing what we had expected, which is increased enrollment yield rates in Q1. We certainly, at this particular point, not disclosing numerically what it is because we really need to see what Q2, Q3, Q4 and the remainder looks like. But we have optimism to believe that the majority of what we're seeing in Q1 should be carrying through for the rest of the year based upon the results we've seen so far.

Our next question comes from Elizabeth Anderson at Evercore ISI.

This is Ayush on for Elizabeth. Building on some of the prior questions that were asked, on your last call, you did compose gross margin as a combination of multi-condition mix and care team labor optimization. Earlier, you mentioned the potential to grow beyond the 70% long-term gross margin target. Is that mainly coming from the condition mix or labor optimization or is it sort of a mix of both? Could you maybe just put some rough weights around that and how you kind of get to that higher margin?

Yes. You hit the nail on the head. You got 2 of the 3. So we're obviously really happy with the Q1 results. 64% non-GAAP gross margin is the highest in the company's history. So we have direct near-term sight into hitting our long-term target at 70% plus on an annualized basis. And we are going to be conducting our Investor Day later this year in September in New York, where we likely will revisit our long-term gross margin target and potentially lift it from there.

The only other one that you missed was AI. That's where we're investing significantly, and that's why we're gaining additional confidence that we can actually push gross margin beyond 70% in the future. We're using -- we have a ton of examples internally on really impactful use cases that are making our care teams more efficient. And so we're really excited with what we're seeing there.

Our next question comes from Saket Kalia at Barclays.

You have Carly on for Saket. Sean or Wei-Li, maybe for you. I'd love to touch on some of the AI-related solutions you've developed like the nutritional AI assistant and Meal Map, which I think you've embedded into your program. What kind of feedback have you gotten from customers and end users so far? Are you starting to see those features drive more activity in the app or is that more of a longer term opportunity?

Yes. Thank you for the question. It's such an exciting moment in software, and stating the obvious, the software velocity and the code creation at Omada has certainly increased. And our customers are driving value from that and our ability to create more new things for them, but you've highlighted some of their members -- some of the value our members have experienced as well. And each and every day, we really push the frontier of the intersection between what models can do and what people can do. And we've seen really heartening data with the tools we've rolled out.

I mean with Meal Map, for instance, we've seen nearly a 16% relative lift in the weekly active meal tracking among new members. So for those where their job is to track and they're working with their care teams on doing that, that just makes it easier, you get a lift. And then equally, the speed upon which a model can get back to our members on something specific is just really incredible. I mean in yesterday's world, if a member wanted to say a recipe, they might ask their care team member and they might pull from one of our libraries. Now they ask our nutritional education tool, which we've fine-tuned over 3 million foods that has context on that person's clinical status, their dietary preferences, et cetera. So it's great.

The way we look at it is every single product manager across Omada is really thinking through an AI-first lens on how they can embed AI in whatever surface area they're working on. And this is an area where we're blessed, in that we've built every single piece of the care team platform ourselves, the member experience ourselves so we can embed AI really throughout.

Our next question comes from Stan Berenshteyn at Wells Fargo Securities.

Maybe going back to Optum Rx first, I'd love for you to elaborate on the scope of this partnership. I'm curious, are there any other vendors besides Omada offering similar solutions here? I just want to get your thoughts on that.

Yes. Stan, Wei-Li here. Regarding Optum Rx, kind of a little bit more detail around that and your question about are there any other vendors, there are 2 others that were preexisting inside the Weight Engage Optum Rx program, and that makes us obviously the third addition there, too, as well.

I think what's important about the Optum Rx opportunity is a few-fold. First is that it represents our first large-scale deployment around GLP-1 prescribing married seamlessly up to our GLP-1 Care Track, which is the lifestyle support program for GLP-1s. And that's important. But it's not just about GLP-1s. Alongside that, we now have the opportunity through this relationship to expand the utilization and uptake of the rest of our cardiometabolic programs as well. So it's really a GLP-1 plus expansive cardiometabolic opportunity for us, which obviously we like, and we see that as a major value proposition advantage for our buyer segments out there. That's number one.

Number two, the Optum Rx relationship singularly is important, but in aggregate from a portfolio strategy is very, very important in the sense that, obviously, it's kind of like the last puzzle piece to crack the big 3. And together now the big 3 across those PBMs, we have the ability to tangibly and materially realize a market that is associated with more than 70% of all patients covered by those PBMs in the United States, 80% of all commercial prescriptions are adjudicated by those 3. And so it represents an incredible material opportunity for us to realize going forward. And of course, all sites and efforts are on doing that. And we like that too as well, because again, it feathers in on top of the CVS Caremark announcement we had last year as well.

The third and last point is that with the addition of Optum Rx, and of course, as I just mentioned, the other 2 PBMs, it's an opportunity for us to significantly diversify our business over time.

That's helpful. I appreciate the color. Just as my follow-up, I just want to go back to the prepared remarks regarding the Omada-led outreach, improving member adoption rates. Just if I think about benefit managers that oftentimes want to have control of the channel between themselves and their employees. If we think about the totality of your covered lives, what percentage of those lives do you have the capability to pursue directly using this strategy?

Yes. It is true in general, Stan, that if you were to ask any generalized or generic digital health or virtual care company out there, do their clients prefer to do their own deployments? I think the general response would be yes. I think that is increasingly not the response you would get from Omada Health. We have worked over the years to demonstrate to our employee base or employer client base that when we lead the enrollment, of course, in partnership with them, but lead the enrollment efforts, you get about 2x to 3x better yield rate. And the overwhelming majority of our clients like that because their mission is aligned with ours, which is helping as many of their employees as possible across the various programs that we deploy with them.

In terms of your other part of your question in terms of, I think it was just overall like Omada-led outreach penetration across our client base. Suffice it to say, it's not 100%, but it's the majority. And so while we're being increasingly successful year-over-year-over-year moving our clients over to Omada-led outreach, we're not done yet, but it's the majority of our clients at this time.

Our next question comes from Ryan MacDonald at Needham & Company.

Congrats on a nice quarter. Wei-Li, maybe first for you. As you think about the new Optum Rx program and the Lilly direct-to-employer program, I think as you mentioned before, you're not sort of the only vendor within these programs. So as you join them, can you just talk about sort of the allocation of resources from a go-to-market and a marketing perspective to sort of ensure that you're getting sort of mind share within those large populations? And how much help are you getting from Lilly or do you expect to get from Lilly and Optum Rx as you sort of ramp those efforts there?

Yes. Great question. And maybe I'd frame it this way is that you've heard Sean and I talk about our portfolio strategy for GLP-1s as it relates to benefit design solution options for the employer. That's really the strategy to get the share of voice and the mind share of employers. And the reason is the following. When you step back and you look at the landscape today, there is a wide and diverse set of needs that employers have because every employer, for lack of better words, is in their own financial, what they can afford situation related to GLP-1 coverage. Some have a different strategy to provide them at a very, very low co-pay. Others have a strategy that says, hey, listen, we're in a different financial situation, we can't afford as much and we need a defined benefit contribution plan where we pay only 10% of the monthly GLP-1 cost. So you have people and employers across the entire spectrum.

So back to your question about mind share and share of voice, how do you get it? Well, our strategy allows us to get it because no matter where you are on that spectrum, our strategy is to make sure that we are plugged in and part of that various and diverse set of benefit design solutions so that you as an employer can concentrate on what is financially the best coverage decision for your employees, not having to worry about what the best clinical option is because Omada is the clinical backbone in a range and number of solutions across that spectrum. That affords us to be at the table and be called at the table when employers are considering making a GLP-1 solution because we know that we're essentially in a number of different benefit design solutions. So that really is the predominant strategy to create mind share and share of voice. And we're seeing that work because we're building pipe across the various benefit design solutions that we talked about here on this earnings call.

The second piece is that our go-to-market for Optum Rx as it is with other health plans as well as other PBMs is very, very much to enable and partner very, very closely with their sales forces, which of course, number in the hundreds and thousands, as mentioned before. And so really by that, we were able to extend presence and extend share of voice, and we have a number of enablement meetings coming up to drive that. That's a recipe and that's a strategy that's worked well for us. We have no reason to believe that it won't be a durable model for us, and we're going to execute like crazy on that, as you might imagine.

Rounding out your last question in terms of Lilly. That's probably a question you'd want to ask Lilly in terms of what commercial resources they're putting behind advertising that and marketing that. But we're proud to be part of that platform. And certainly, as we talk to employers and lay out the spectrum of benefit design solutions that are available to them, rest assured, we will definitely be putting that up there because it's receiving great interest.

Appreciate all the color there, Wei-Li. And Steve, maybe a follow-up for you. Obviously, great to see the improved retention rates and the longer duration that you're seeing there. I think historically, you've talked about sort of about 55% or so of members sort of stay on past 1 year. How much of an uplift are we talking about in terms of the improvements off of that 55% number? And then are there any specific programs you would call out where you're seeing sort of the greatest improvements in 1-year plus retention rates?

Yes, absolutely, Ryan. I think the first most important point here is just our ongoing success with multi-condition traction. So we've added more diabetic and hypertensive members for those chronic conditions. Those members just tend to stay in program significantly longer. Again, recall, we launched those programs in the 2019, 2020 time frame. So we're actually observing some members in really their fourth and even their fifth year in a modest tenure. And so that's a big driver of where we're seeing some of the uplift there. We haven't exactly calibrated it to be apples-to-apples with the 55% and the 50%. We'll potentially release that data in the upcoming Investor Day and share some updated color from that perspective.

Our last question comes from Gene Mannheimer at Freedom Holdings.

Congrats on a good start to the year. A lot of good information here. Did you call out how many total members are now on GLP-1s? And do you break that out across your original Care Track versus the new Flex Care pathway? And then my follow-up on that would just be, can you or would you provide an update on your cholesterol program? And whether that's still targeted for availability next year?

Yes, Gene, Wei-Li here. We disclosed just by way of reminder to folks that through the end of 2025, we had brought in a total membership of around 150,000 or so. We've not yet disclosed Q1 in terms of at the product level offering, which includes, of course, our GLP-1 Care Track. We're likely to do so each year from an annual standpoint. But suffice it to say, the momentum and frothiness of the GLP-1 marketplace continues.

In terms of our cholesterol program, I think your question was about the same in terms of what the uptake and traction looks like there. We're encouraged and primarily also not surprised, because as we know, when you have diabetes, hypertension, obesity or are at risk of diabetes, some or one of the above, the likelihood that you have unfortunately high cholesterol is very, very high, anywhere from 40% to 70% depending on the population you're looking at. So naturally, when we talk about our cardiometabolic programs to our employer audience, they naturally gravitate towards the cholesterol program.

Last year, when we announced late in the year the launch of the cholesterol program, we basically had closed a couple of clients, one of which was a very large retail customer, over 300,000 global employees. We since added to that list of deals closed, including a few more enterprise clients as well as 2 large jumbo clients, one in the multi-industry -- industries segment as well as energy and natural resources segment for several hundred thousand additional lives as well as some other enterprises.

It's worthy to note that pursuant to the interest that I talked about with cardiometabolic, with cholesterol, these obviously were closed off cycle, which I think is a reflection of the value proposition in the marketplace.

This concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Omada Health Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Allan Kells, Vice President, Investor Relations. Please go ahead.

Thank you. Good afternoon. Welcome to Omada Health's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Sean Duffy, our Co-Founder and CEO; Wei-Li Shao, President; and Steve Cook, CFO.

Before we begin, I'd like to note that we'll 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 available on our website. We'll also be making forward-looking statements based on our current expectations and assumptions, which are subject to risks 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.

Good afternoon, everyone, and thank you, Allan. 2025 was a milestone year for Omada. We became a public company delivered 53% revenue growth for the year and achieved GAAP profitability for the first time in Q4. We also significantly outperformed initial expectations from the time of our IPO and we believe we are entering 2026 with momentum, with ambition and with a clear plan for what's next. Here are the highlights from Q4 and the full year.

Total members reached 886,000 at year-end, up 55% compared to 2024. Revenue grew 58% in Q4 and 53% for the full year to $260 million. Gross margins expanded to record levels. We achieved our first quarter of positive GAAP net income in Q4 at $5 million, and we delivered positive full year adjusted EBITDA of $6 million. We believe these results reflect the impact of strong market tailwinds, combined with a decade of investments.

Omada technology and operational platform, our clinical programs, our peer-reviewed research, productive distribution channels and more than a decade of rich and unique data are strongly suited for this exact moment. for when customer demand for chronic solutions, a rapidly evolving GLP-1 marketplace and AI-driven innovation converge.

We believe that 2025 demonstrated how we can capture that momentum. But the real story is at the level of the person we're supporting as a GLP-1 Care track member recently told us. The Omada program in collaboration with my doctor and the use of GLP-1 meds has been life-changing. I learned real skills needed to lose weight and be healthy for a lifetime. The beauty of the Omada plan was that I did not just jump in with all of these changes on day 1.

The plan guided me to focus on different lessons each week and then select a goal for the coming week. When I was stuck, my coaches were there to make suggestions and help guide me along the way knowing that someone cared and took the time to check my meal log and comment about a recipe or a new meal idea I put together that looks good, helped me feel that I was not doing it alone. Stories like that get to the heart of what we do.

Omada is on a mission to bend the curve of obesity-related disease. 40% of adults have obesity and nearly 2/3 have at least on [indiscernible] risk factor such as obesity, diabetes, hypertension or cardiovascular disease. We believe the health care system is structurally unable to address this at scale without a fundamentally different care model. A person's disease trajectory is determined largely outside the doctor's office through nutrition, movement, sleep medications and care plan adherence Yet the broader health care system still organizes around infrequent 15-minute visits.

Omada puts the space between those visits at the center of care through an integrated multi-condition care model refined over more than a decade. We've built a member experience that brings together care teams, AI, connected devices and a custom care platform designed for quality at scale. We've expanded into a multi-condition platform spanning weight health, diabetes, hypertension, musculoskeletal care, GLP-1 companion care, GLP-1 prescribing and our newly launched cholesterol program. giving employers the convenience of a single partner for multiple highly prevalent conditions.

We've accumulated a large and growing body of peer-reviewed evidence and accreditations, which we believe is a key reason, employers and health plans choose Omada. We help the market understand that Omada delivers true clinical quality health care, which enables us to contract and bill as a health care provider, allowing our fees to be treated as medical spend. We've established thousands of customer relationships across a broad web of distribution channels, spanning an estimated more than 25 million covered lives and in operating for over a decade, we've amassed a robust and unique data set, tens of millions of care team messages and billions of data points that underpin our product, strengthen our AI capabilities and allow us to innovate more quickly on the back of significant scale. These investments form the foundation of everything ahead. They allow us to look through the windshield with optimism, ambition and excitement.

2025 served as a significant launch pad for our next chapter. And I want to touch on 3 areas where we're particularly proud. First, we believe 2025 was the year we solidified our position as a leader in enterprise GLP-1 companion care, while reinforcing that our opportunity expands well beyond GLP-1s. Employer demand to maximize the value of their GLP-1 investment and reduced waste drove significant adoption of our GLP-1 care track. As we've scaled to over 150,000 members on GLP-1, we've seen what we believe these members need most, support to stay on therapy, manage side effects, build sustainable habits and maintain results if and when they discontinue. Our results have shown that GLP-1 [indiscernible] members on average achieved greater weight loss compared with published real-world evidence and critically largely maintained their weight on average, 1 year after discontinuing GLP-1 therapy. These outcomes challenge the narrative of inevitable weight rebound and underscore the power of behavior change layered on top of medication.

In November, we announced our GLP-1 prescribing capability. As the landscape grows more complex with oral and injectable options, variant doses and emerging maintenance therapies, employers are asking us to help them navigate it all. Adding prescribing strengthens our position by helping ensure that the right member is on the right medication at the right time while also delivering lifestyle support designed to improve outcomes and minimize waste. At the same time, the broader spotlight on GLP-1 has increased attention on cardiometabolic disease overall. Because Omada supports weight health with or without GLP-1s and helps members manage diabetes, hypertension and now cholesterol, we've also seen strong growth among members not on GLP-1s.

For customers that choose not to cover GLP-1s, our weight health programs support their employees, and new options like our GLP-1 [indiscernible] create flexible path for employers to offer meaningful support even when they are not in a position to afford the medicines. Second, we made meaningful progress with AI in 2025, and I am particularly excited about our potential for AI innovation going forward. We've embedded AI throughout Omada.

For members, we launched Omada Spark, our AI-powered assistant that works alongside human coaches for real-time nutritional support, motivational challenges and have it building. We launched that in Q2 of last year and followed with enhancements in Q4 with Meal map, an AI-driven experience focused on food quality, not just calories. For our care teams, AI-enabled tools like summarization let coaches spend less time on administration and more time on personalization. And 100% of our engineers are equipped with AI-assisted coating tools to improve development speed and output. What makes AI Omada different from a typical software business is what sits underneath. In caring for members, we've received tens of millions of care team messages, billions of data points and more than a decade of specific clinical outcomes, comprising what we believe is one of the most exciting cardiometabolic data sets in digital health. That data can improve our AI tools and overall member experience such that interactions with today's members make the experience better for tomorrow's.

The last area I'm proud of in 2025 is our commercial success. As we leave will share, in 2025, we closed significant additional covered lives, which we believe positions us well going forward. Our between visit care model and multi-condition platform continue to resonate as we closed contracts in the second half of 2025. Employers and health plans increasingly the advantage of working with a single scaled evidence-based partner and our year-end results reflect buyers leaning into that vision. In 2026, we plan to maintain our focus on the pillars that power or modest growth, expanding covered lives through new customers and channel partnerships increasing enrollment effectiveness so that more eligible people become active members and driving deeper engagement and retention through AI in a continually improving member experience. Across these pillars, we're expanding capabilities.

GLP-1 prescribing, cholesterol and [indiscernible], greater personalization in content through AI and the use of AI to drive efficiency across engineering, operations and care delivery. These investments are intentionally designed to balance growth and profitability as we continue to move toward our long-term ambition of 20% plus percent adjusted EBITDA margins. We accomplished a great deal in 2025 for Omada's mission, and we are entering 2026 with bold ambitions to bend the curve of disease. That's what we're here for, and that's why we do what we do. With that, I'll hand things over to Wei-Li.

Thanks, Sean, and hello, everyone. I'm proud of our teams and what they accomplished in 2025. It's an exciting time to be at Omada, and I'm pleased to walk through our results and progress. As Sean shared, we ended the year with 886,000 numbers, up 55% year-over-year. This includes 55,000 net new member additions in Q4, nearly double the net adds in Q4 of 2024. For the year, we added 314,000 net new members compared to $182,000 in 2024. Growth continues to be driven by both multi-condition adoption and demand for our GLP-1 support capabilities. which together position Omada as a broad integrated partner for cardio metabolic care.

We also benefited from improvements in marketing effectiveness, which drove higher enrollment rates across both new and existing customers. Key performance drivers in 2025 included estimated covered lives grew by more than $5 million, and we ended the year with over 25 million estimated eligible lives with strong performance across multiple channels, including the successful launch of a large new channel partner.

Our e-mail enrollment rate improved significantly with the average percentage of a customer's population that receives our outreach and then in rolls increasing by 24% year-over-year. Member engagement remains strong as well. As of December 2025, more than 55% of our members in their 12-month of cardiometabolic programs engaged with the platform at least once during the month and more than 50% of members in their 24th month engaged at least once during the month. Our focus on outcomes also remain consistent across our programs.

Taken together, we strengthened funnel conversion at multiple layers, which gives us confidence heading into 2026. We ended the year having supported over 150,000 members on GLP-1s, adding more than 100,000 in 2025 alone. And as Sean mentioned, we continue to see growth beyond GLP-1s across our cardiometabolic suite Substantial white space remains and our penetration across combined self-insured and fully insured lives is below 10% with a total addressable market that we estimate at over $138 billion.

We have also been pleased to see developments in government-funded health care such as the passage of the Prevent Diabetes Act, which cemented Medicare coverage for virtual diabetes prevention programs. And while it's early and details are still developing. We are closely watching emerging programs like balance and [indiscernible] from CMS. This government activity reinforces that virtual first prevention is increasingly recognized as essential to expanding access to quality care. Our strategy is organized around 3 pillars: Innovation, programs that work and our multi-condition platform. The results we delivered in 2025 are a direct reflection of progress across each.

Beyond the AI capabilities Sean described, our innovation agenda in 2025 extended across several additional fronts. With respect to GLP-1 prescribing since sharing our plans, we've had many discussions with interested customers and channel partners who are looking for help managing GLP-1 complexity. As GLP-1s evolve across oral and injectable forms, different doses and new mechanisms, employers need to manage switching, titration and benefit design in ways that improve ROI, not just increased spend prescribing is a natural extension of our model, allowing Omada to active GLP-1 value maximizer across the entire journey from informing prescription decisions to supporting numbers on therapy to safely discontinuing medication when appropriate.

We look forward to providing updates as we build out this capability. In addition to prescribing, we also have plans to support more flexible GLP-1 access models, including the GLP-1 FlexCare option we announced today. The need for alternative GLT-1 benefit in design solutions is underappreciated and we believe this could represent a significant opportunity. The GLP-1 market for large commercially insured employers is currently split, roughly 45% covering GLP-1s for obesity and roughly 55% that dot within this segment that covers 2 of the country's largest PBMs have built GLP-1 solutions that include or offer Omada programs. One offers employers financial reassurance through a spend guarantee. And Omada has been a successful partner in that solution.

The other expanded its GLP-1 offerings last year and Omada programs are an option there as well. But the 55% that aren't covering GLP-1s needs something different before moving from waiting and watching to confidently cover it. That's where GLP-1 [indiscernible] comes in. It gives employers a structured way to connect eligible employees with clinical evaluation, prescribing an ongoing medical oversight for GLP-1 alongside Omada's lifestyle behavioral support. Employers pay for the doctors' visits, labs and behavioral support, employees purchased branded GLP-1s out-of-pocket through credible cash pay channels.

We believe the future for GLP-1 coverage will include multiple benefit design solutions addressing diverse employer needs, including robust clinical services, broad GLP-1 access, lifestyle support and financial reassurance. Our strategy is to be part of that spectrum, so employers can access the clinical benefits of our programs regardless of the benefit design they choose. We've also recently expanded our cardiometabolic offerings by adding a cholesterol program. This is a risk area that is often underserved in traditional cardiometabolic offerings despite the fact that up to 70% of adults on obesity have high cholesterol Evidence from our existing programs has shown that virtual behavior first interventions can drive an average 39-point reduction in total cholesterol in 4 months among participants with diabetes and high cholesterol.

Omada for cholesterol will build on that foundation, connecting behavior change, lab awareness and ongoing guidance from clinical specialists to cholesterol risk becomes visible and actionable within everyday wire. We recently completed an initial commercial launch with a large enterprise customer that has more than 300,000 employees and then we expect a broader rollout in 2027. In summary, our innovation allows us to broaden how we support the management of cardiometabolic risk, leverage AI as a differentiator and deepen our relevance across a wide range of benefit strategies, making Omada a more flexible long-term partner for employers and health plans.

Our second pillar is programs that work. solutions grounded in evidence and behavior change science that deliver measurable durable outcomes. In 2025, we expanded our body of research on GLP-1 support. One analysis showed that members in our GLP-1 care track who discontinued medication largely maintained their weight 1 year later with an average weight change of only 0.8% compared to 11% to 12% average weight regain reported in key clinical trials without ongoing lifestyle support. A separate analysis found that members in our enhanced GLP-1 care track who remained in the program and persisted on the medication for 12 months, achieved average weight loss of 18% and compared to 12% in real-world evidence without structured support.

We also published our 30th peer-reviewed manuscript, focused on our joint and muscle health program, which showed that patients using a modest virtual physical therapy have lower total health care utilization and reduced MSK related costs and encounters on average at 6 and 12 months compared to in-person PT even after accounting for program costs. These results demonstrate that our human-led digitally enabled model can drive outcomes that matter to members and customers. Our third pillar is the power of our multi-condition platform relative to Point Solutions Customers increasingly recognize the advantage of working with a single scale partner across multiple conditions.

Our ability to support obesity and weight health, diabetes, hypertension, cholesterol and MSK conditions, and GLP-1 Care as 1 provider continues to be a key differentiator and the growth across our cardiometabolic suite reflects this. Revenue from our weight health program, which increasingly includes numbers on GLP-1s for weight loss, grew more than 50% in and revenue from both our diabetes and hypertension programs grew at rates 45% or more year-over-year. That broad-based growth across conditions reflects employers and health plans leaning into a bottom as their integrated cardio metabolic partner, not just a single condition solution.

In summary, our progress across innovation, programs that work, and our multi-condition platform helped to drive our strong 2025 results and provide tangible proof that customers are buying into this vision. We believe we're well positioned for 2026 and beyond. And with that, I'll turn it over to Steve.

Thank you, Wei-Li. Hello, everyone. I'll walk through our Q4 and full year 2025 results, discuss the key drivers and provide our outlook for 2026. Let me start with top line results. Members grew 55% year-over-year to $886,000. Revenue in Q4 was $76 million, up 58% year-over-year. For the full year, revenue was $260 million, up 53% compared to 2024. The primary factors driving growth include a broad industry focus on cardiometabolic conditions, deeper penetration of multi-condition customers strong adoption of our GLP-1 programs and more effective enrollment campaigns.

As these strong results in macro trends feed into our business model, they are creating a durable, visible revenue stream with meaningful operating leverage, which I'll discuss in a moment. I'd also like to note that in Q4, we had a onetime transaction that resulted in approximately $2 million of additional revenue, gross profit and adjusted EBITDA. While relatively small and immaterial to full year results, I wanted to note it for any impact on sequential modeling from Q4 to Q1. Turning to gross profit. We saw significant margin expansion in both Q4 and the full year. Q4 GAAP gross profit was $54 million, up 67% year-over-year with GAAP gross margin of 71% versus 67% in the prior year. For the full year, GAAP gross profit was $171 million, up 66% and GAAP gross margin was 66% versus 61% in 2024. We Q4 adjusted gross profit was $55 million, up 65% compared to Q4 '24, and adjusted gross margin reached 73% in Q4, an all-time high and a 320 basis point improvement year-over-year. demonstrating our ability to operate above our long-term 70% plus adjusted gross margin target for the first time. For the full year, adjusted gross profit increased 64% to $176 million outpacing our 53% revenue growth by 11 points and driving adjusted gross margin up 450 basis points over 2024 to 68% in 2025.

Over the past 4 years, we've nearly quadrupled revenue and expanded adjusted gross margins by more than 1,600 basis points, a trajectory that underscores the leverage in our business -- this has been driven by our growing member base and multi-condition expansion with spreads fixed costs across a larger revenue base as well as care team efficiencies enabled by our platform, AI-powered tools and optimized staffing models. We believe these drivers can continue contributing margin expansion as we pursue our long-term target of 70% plus full year adjusted gross margins. Moving to operating expenses.

We continue to demonstrate strong leverage below the gross profit line. Q4 GAAP operating expenses increased 28% year-over-year to $50 million -- for the full year, GAAP operating expenses were up 25% to $183 million. Adjusted operating expenses grew 27% to $47 million in Q4 and 24% for the full year to $170 million. That 24% annual growth supported 53% revenue growth with strong operating leverage across all 3 operating expense lines. Key drivers included scale from our channel partnerships and BA B2C go-to-market approach, sales force leverage from selling multiple conditions with 1 sales force R&D efficiency from a flexible program architecture and spending discipline as we work towards sustained profitability. Our steadfast commitment and multiyear focus on achieving profitability paid off in 2025 as we reached positive adjusted EBITDA a full year ahead of expectations, a milestone driven by financial discipline, strong growth and the operating leverage I've just described. We're proud of this accomplishment. Notably, Q4 also marked our first quarter of GAAP net income profitability. Specifically, we delivered GAAP net income of $5 million in Q4, which was a $13 million improvement compared to a net loss of $8 million in Q4 of 2024. For the full year, GAAP net loss was $13 million, an improvement of $34 million compared to a loss of $47 million in 2024.

Adjusted EBITDA in Q4 was $8 million with an 11% margin, an improvement of $12 million and 18 margin points compared to a loss of $4 million and a negative 7% margin in Q4 '24. We Full year adjusted EBITDA was $6 million with a 2% margin, an improvement of $35 million and '19 margin points compared to a loss of $29 million and a negative 17% margin in 2024.

Notably, we converted 40% of incremental revenue to the adjusted EBITDA line in 2025, which continues to highlight the scalability of our business. To wrap the discussion of our P&L, I'd like to provide some additional perspective after we went public in June, initial consensus estimates were approximately $222 million of revenue and a $19 million adjusted EBITDA loss for 2025. We delivered $260 million of revenue and $6 million of adjusted EBITDA, with the positive adjusted EBITDA occurring a year ahead of projections. We're pleased with that performance, and we believe it reflects our strong market position, solid execution and the strength of our business model.

Specific to our balance sheet, we ended 2025 with $222 million of cash and cash equivalents, up from $199 million at the end of Q3. We generated positive operating cash flow for the full year, a significant milestone. We have no debt outstanding having repaid our $30 million credit facility earlier in 2025. This gives us a strong financial position to invest in initiatives aimed at driving incremental growth and ROI while also maintaining flexibility. As for our guidance, we expect 2026 revenue in the range of $312 million to $322 million, with the midpoint reflecting 22% growth over 2025.

We expect 2026 adjusted EBITDA in the range of $7 million to $15 million with the midpoint reflecting a $5 million increase compared to last year. Similar to our 2025 performance, our 2026 guidance is significantly above initial post-IPO consensus expectations. With our revenue midpoint approximately $50 million higher and adjusted EBITDA approximately $15 million higher, reflecting continued strong execution. Let me provide context on how we've approached guidance and on our growth trajectory. Our guided revenue of 22% at the midpoint comes on top of a 53% growth year that included a strong first wave of GLP-1 adoption and significant commercial momentum. This is an exceptional baseline to build from. We built our guidance, starting with our year-end base of 886,000 members and over 25 million estimated covered lives. Then we layer in historical enrollment conversion rates and observed engagement and retention trends with no significant improvement assumed. This allows us to anchor to what we consider our more highly visible level of revenue. Just as important is what's not in the guide. We have not embedded meaningful contributions from GLP-1 prescribing, GLP-1 FlexCare or our cholesterol program, and we have not assumed further improvement in enrollment conversion rates or significant revenue from contracts not yet signed.

Our adjusted EBITDA guidance reflects the revenue outlook combined with the investments we've discussed. If we achieve revenue upside, we would expect a portion to contribute to a stronger adjusted EBITDA. We believe this approach reflects appropriate prudence for initial guidance and positions us to build on our track record of execution. Stepping back from the specifics of our guidance, we believe the most important story is the quality of our growth in 2025.

As I shared, we converted 40% of incremental revenue to EBITDA. We achieved our first quarter of GAAP profitability, and we generated positive cash flow for the year. We continue to believe in the long-term scalability and profitability of our business. In closing, we are very pleased with our 2025 results, which reflected outperformance across all key metrics.

Looking ahead, we believe our market position, strategic investments and scalable business model position us well for durable profitable growth. With that, we'll open the call for questions.

[Operator Instructions] Our first question comes from David Roman with Goldman Sachs.

Steve, I really appreciate the detail on the guidance basis as you think about 2026. So maybe I could just push you a little bit on the assumptions there. And very specifically, I just want to make sure that we're hearing the [indiscernible] correctly that effectively the guidance contemplates only contribution from the existing business and not necessarily some of the new opportunities -- and if that is the case, I just want to make sure that we're not misreading this, and it looks like the guidance suggests some of the base business starting to hit a wall or markedly decelerates. So just to make sure that we're interpreting that correctly, and that's how you're intending to frame the guidance.

Yes, David, thank you for the question. Firstly, we're obviously extremely proud of the results in 2025 per some of the prepared remarks, growing 53% in 2025 was well ahead of expectations. And when we look back at your commitments from just 6 months plus ago during the IPO, we're trending meaningfully above that path at $50 million ahead on revenue and $15 million ahead on EBITDA. So we're carrying a tremendous amount of momentum, and we're a full year ahead of expectations that we set at that time. It's also worth noting that from the get-go, we have been communicating externally that we intend to grow this business for the foreseeable future at, at least a minimum commitment of 20-plus percent. And we think that the guidance reflects commitment against those projections. As we think about some of the inputs there, you're exactly -- you're correct in that we're basing it off of 886,000 exit members we're looking back. We're coming through all of our historical trends on enrollment rate conversion on engagement rate and assuming that there's no material improvement across those metrics throughout the course of the year. have a lot of internal investments and initiatives focused on improving those metrics to the extent we're able to capitalize on those throughout the course of the year, that would be incremental revenue compared to our guide. And then person of your commentary, we spent some time in talking about our prescribing capabilities FlexCare cholesterol. These are also not materially in our guidance numbers. Are we going to be launching a lot of those in market this year and as those gain market traction, and we have more of our customers purchasing those, those will be reflected in potential upside to the guide.

Super helpful. And maybe just a follow-up. As you kind of think about the what you've observed in January and February from conversions off of the 2025 -- sorry, excuse me, 2026 selling season. Can you just give us some flavor of maybe a little more detail how that tracked? And then how we should think about just the cadence of revenue and profitability throughout the year to make sure we have the phasing of the year, correct.

This is Wei-Li. Let me talk a little bit about how we close the end of the year and to the extent that I can cast a little bit of high-level color on what we've seen this year in just the first couple of months. We're pretty pleased with how we closed the end of the selling season. I mean, we're up over 5 million additional eligible covered lives across our business. We've also seen continued momentum in terms of multi-condition product sales. And as mentioned earlier, last year, we improved our enrollment rate yield, our enrollment rate performance. more than 20%, 24% to be precise. And so we're pleased with the overall funnel developments, if you want to put it that way or funnel conversion improvements. And as mentioned by Steve, that's going to be carried on into how we think about this year's performance. I won't go into too much quantitative characterization of January and February. But suffice it to say that things are tracking, and we like what we see there. As you might expect, as it is every year, the additional covered lives that we closed in the prior year, oftentimes are going live at the beginning of the year, it's the heavy enrollment season. and that certain pattern or that seasonality certainly exists to as well.

And David, I'll just add a little bit of color on some of the revenue and the EBITDA progression per your question. We do expect -- we had an extremely strong Q4. We saw 11% sequential growth quarter-over-quarter. That's stronger compared to what we've observed historically. If you looked at 2024, we only saw a 5% increase there. So we don't expect as big of a jump on Q4 revenue -- on Q1 revenue basing off of we exited the year, and we also did have that onetime $2 million adjustment, which we don't intend to repeat going through the year. So Q1 should roughly be -- expect to be flat relative to Q4 win accounting for that $2 million, and then we'll sequentially grow revenue throughout the course of the year. And then as you're aware, Q1 is our largest net new enrollment volume quarter. It carries additional costs associated with increased device shipments as well as increased cost for our care teams as there's more labor in the first quarter. And then we'll steadily climb out of that as we go throughout the year, improving gross margin and improving EBITDA margin throughout the remainder of the year.

Our next question comes from Sean Dodge with BMO Capital Markets.

I just want to start maybe understanding a little bit better the mechanics of the new GLP-1 flex care program. It sounds like the existing GLP-1 care track, but now just building connections for the member to get a script and actually buy the drug. Does building that in, does that change the economics of the program for you at all? Do you get compensated for facilitating those connections? Or is this just more about kind of broadening the appeal and kind of the utility, the program to more employers.

This is Sean here. Happy to talk about Flex. Let me just start with the characterization on the segments. -- in the employer market specific to GLP-1s for [indiscernible] because there are 2 primary groups. The first is those who cover. So that's roughly 45% of the market. They cover GLP-1s for obesity. Historically, when we talked about our care track that, that was targeted towards. Those are folks who want to maximize the value of that investment. It's actually a bigger segment. And that's -- roughly 55% of the large employers and those that just do not cover GLP-1s for obesity yet. But equally, they do want a way to support their employees. And that is what the GLP FlexCare solution is targeted toward because it gives these employers a structured model, where, yes, your comments, they do pay Omada and would pay Omada more for the GLP-1 FlexCare offering because that includes clinical evaluation, prescribing lab ordering and Omada lifestyle and behavioral support while eligible employees can purchase the branded GLPs out of pocket through vetted cash pay channels, of course, with a focus on accessing the lowest available price. So this, in turn, allows that segment of the market to still offer their employees a chance for high-quality GLP-1 care with strong oversight without immediately taking on that full drug spend risk.

Okay. That's super helpful. And then, Wei-Li, you mentioned having improved enrollment yield. I think you said 24% last year, so driving significant efficiencies on the marketing front. Is there anything you can -- anything more you can share on just like how you've been able to do that? I think you mentioned AI playing a role there. And then just maybe how much runway you see being left when it comes to driving kind of incremental margin or marketing efficiencies?

Yes, sure, Sean. Let me address that. In terms of how we were able to achieve that -- as you and others may recall, we do a lot of digital marketing. And as a result of that, we actually have the ability to do dozens if not hundreds of AB tests. Those AB tests can switch out concepts, creative, language, call to action, you name it, across the spectrum of what one would think about optimizing in our campaign outreach. And so that certainly is a component of that, and we did that last year. We did that in 2024. We did that in 2023. We're going to do it again in 2026. And we still think that there's runway to optimize those campaigns in that outreach. The other component, of course, is a multichannel component. And when we say multichannel or omnichannel we mean about digital signage on-site at an employer, especially if they have a large distribution center with a large warehouse, for instance, employees that are on site. And then other forms, including direct mail, other types of flyers, so on and so forth. And even in those particular channels, we can then optimize, again, the frequency, how often we send what is the depth of the content, the copy, the creative. And then we can actually look across entire campaigns and how we define a campaign is really a combination of all those things in a multichannel approach to understand how we stack them on each other. And so there's multiple dimensions upon which we can actually optimize and improve yield rates or employee enrollment rate. And we think, again, that there's still a runway to improve that in 2026, and that certainly is on the docket for us to do so.

Our next question comes from Craig Hettenbach with Morgan Stanley.

Sean, just going back to AI. [indiscernible] debate on the impact, including potential disruption to business models. So against the backdrop of some of the concerns in the marketplace -- where do you see Omada is most insulated? And what are some of the things you're doing to benefit from AI as opposed to be disrupted?

Craig, thank you for the question. It is one that I and we think about a lot. Pulling that beyond Omada, I believe we are on the frontier of just a remarkably innovative moment in the history of health care. And this is the moment where, in our view, it's being propelled by AI. And so against that, there are a number of things that, I think, frankly, any innovative company can do. that these include leveraging AI coding assistance, using AI to improve member support using exciting frontier models within their app. So Omada is doing these. We're already seeing signs of how this impacts the business on a day-to-day basis, our members on a day-to-day basis, and that is, of course, an important part of ongoing improvements to margin. That being said, those are perhaps table stakes. I mean yes, there is one thing that we believe that is true today and will be true tomorrow. And that is the value of unique data sets that, in many cases, take years to build. We have tens of millions of care team conversations, hundreds of millions of biometric data points and billions of real-world data points. And so what that allows us to do and what we're excited is allows us to customize and personalize care in a way that's unique and in a way that's valuable. So it will take time to prove this out, and it will take time because we are in health care. We're regulated. We have devices, hardware, a supply chain, a complex web of distribution relationships and we're dealing with people's lives, which we take very seriously. So when I'm asked that question, I don't tend to view it as if AI will disrupt health care or disrupt Omada, rather, I view it as a question of who is going to build it in the right way in health care. And I believe we have the unique foundations to do just that here [indiscernible].

Helpful. And as a follow-up, I wanted to focus in on just the hypertension diabetes programs. I feel like they tend to get overshadowed just by all the excitement and interest in GLP-1. So -- can you talk about the traction you're seeing in those programs and just how you see the runway for growth in the coming years?

Yes. Craig, this is Wei-Li, and you get extra points for asking a non-GLP-1 question. So I appreciate that. Yes, we've always said that the GLP-1 moment is actually a cardiometabolic moment. insofar as meaning that the discussion is a gateway into the broader cardiometabolic kind of condition question and challenge that our customers face. And in fact, when you look at the cardiometabolic landscape, the overwhelming majority of people who suffer from those conditions are not taking a GLP-1. So it actually represents a TAM that is as, if not larger than the current GLP-1 accessible market. So what does that mean in terms of our performance. We've always said from the get-go that a pillar of our strategy is to understand and realize that people who suffer from, let's say, obesity also have diabetes also have hypertension. As we all know, and that's why we provide a multi-condition platform. In multi-condition sales continues to be something that is strategically important and a huge strategic focus for us. And we talked about our progress on that. It continues -- we continue to make progress on that, and we're happy with that. But maybe a way to talk about the results in our portfolio products is that we [indiscernible] metabolic suite, but across the individual programs. And so prevention or weight health, obesity grew more than 50% in both diabetes and hypertension group 45% or more year-over-year. And we think that breadth of growth really reflects the customers increasingly using Omada as their integrated cardiometabolic partner excuse me, and not just for a single condition. So we're seeing growth in summary, in both diabetes and hypertension, almost directionally similar to the overall growth rate that we saw last year overall in revenue.

Our next question comes from Ryan MacDonald with Needham & Company.

Congrats on a quarter. Steve, maybe first for you, just so as we're thinking through the 2026 guidance. So obviously, you mentioned sort of no material changes or improvements in sort of enrollment yields and rates from there. So should we sort of take the guidance as sort of you grew covered lives 25% on a year-over-year basis. And so if you assume that sort of same conversion rate that sort of member count grows about that 25% rate. And then you see then some declines in average revenue per member. And if that's the case, can you help us understand what you're seeing from a program mix perspective that may be driving sort of this continued sort of ARPU declines.

Yes, absolutely right. Happy to provide some color there. Again, per some of the prior comments, just to recalibrate on what's in our baseline assumptions. It's just starting with that 886,000 members and then layering on some historical assumptions around enrollment conversion as well as engagement rate. I think the easiest way to think through the [indiscernible] next year is that ARPU stays relatively flat Historically, it's been roughly just shy of $300 per ending member. And so -- and then building up your total member base off of that growing roughly in line with revenue guidance at 22%. What's important is what's not in the guide. And we talked a little bit about this, all which have the ability to drive incremental ARPU throughout the year. The first being some of the new product categories we're entering to the extent we're able to layer on GLP-1 FlexCare prescribing cholesterol. These are all accretive to ARPU throughout the year. we are creating internally some investments around driving more engagement through increased product and feature enhancement. The longer we can keep folks in program that also has the ability to drive additional ARPU with a little incremental cost as we go throughout the year. So the really way to just take the basis is to grow the member count by 22% and keep revenue roughly flat.

Super helpful. I appreciate the finer point on that. And then maybe a secondary question for Wei-Li or Sean. Earlier this week, we had a benefits conference and what the conversation really standard around sort of for this year was -- so this idea that your average employee benefits portfolio is about 28 different point solutions today and that the conversation is really around in the current budgetary environment with health care costs continuing to rise at accelerating rates, as more of a consolidation, looking to see where there are duplicate solutions and then optimizing for outcomes would love to know if this is something you're seeing sort of in the early stages of the 2026 selling season and how maybe this could potentially favor your multi-condition platform relative to sort of individual point solutions providers.

Thank you for the question. I mean if you serve as the head of benefits and we're on LinkedIn, you'd have about 50 messages a week coming in from point solution providers. And that does grow tiring, and that's a message we hear frequently about and it's 1 that we respond to. It's been a recurring theme that customers love the fact that they can get quality care across multiple care areas from Omada. We see that across our portfolio suite. And even we see that within GLP-1s, where one buyer is one buyer that and equally, they recognize that tomorrow strategy, specific to their GLT1 may not be the same as today's. And so we are thrilled with that. In fact, I think we have a proof of concept of this approach right in front of us in cholesterol.

We announced Omada for cholesterol. That's a natural extension of our cardametabolic suite. We like that, high cholesterol, often as shared in remarks, coexist with [ obesity ], diabetes, hypertension. And one of the reasons that we got excited to do it is we heard about it from our largest customers. who said this is a clinical area where I care about Omada, we trust you, we'd love if we could work together on it. And then we're starting out of the gate with the customer line for motor cholesterol.

And if I were just to tag on a little bit to that and add and what really drove that particular situation, and we're seeing is repeated across a number of opportunities is exactly what you mentioned around a fatigue around single-point solutions, imagining somebody who suffers from obesity, diabetes, hypertension and now, of course, some [indiscernible] or high cholesterol, they could be on as many 4 different applications in the consolidation into one multiproduct company, Omada, that has proven evidence-based results and outcomes and ROI, certainly is attracted to buyers, and we're seeing that play through, which is why we continue to see momentum in multiproduct sales and growth across the portfolio of programs. The last that I would also mention is that we happen to be in the actual therapeutic areas or disease areas that HR benefits company CEOs, CFOs understand are actually the biggest drivers of their health care spend cardiovascular events, cholesterol, heart attacks, diabetes, obesity, MSK, they always register small company, big company always to the top of the top 5, top 6 areas that are driving spend. And so as employers and benefit solution providers decide to consolidate away from "you said [indiscernible] different point solution providers". Obviously going to think about Omada, they're going to think about multi-condition platforms, but they're also going to think about those providers that are in the sweet spots that are driving most of their year-over-year health care spend and it happens to be the ones we're in.

Our next question comes from Elizabeth Anderson with Evercore ISI.

Improving gross margins. Steve, obviously heard what you said about the contribution to gross margins from the $2 million, but still improved quite nicely even without that. So can you talk about that and how you see those flowing through into 2026. I understand that, obviously, you guys have seasonality that will impact the 1Q numbers, but just sort of how to think about that incrementally. And then if there's any more color you can provide on sort of what that adjustment was in the fourth quarter, that would also be super helpful.

Yes. Maybe I'll start there with the adjustment in the fourth quarter. We did have a $2 million onetime true-up. This was a negotiation that was cascading throughout the year with one of our larger partners real to resolve that in the fourth quarter and as such release that revenue. If we had negotiated it and resulted earlier in the year, you would have seen that revenue recognized ratably throughout the course of the year. We don't expect that to recur on a go-forward basis. With regard to gross margin, again, tremendously proud of our performance in Q4, hitting 73% gross margin. As we've communicated consistently, our terminal annualized target. It continues to be 70% plus. So we believe Q4 really demonstrates our ability to hit to March towards that target in the long term. Two main drivers here: the first being ongoing traction with multi-condition customers. So the more diabetes and hypertension revenue that we drive through, those are coming through at our -- those are our highest priced products. and they drive incremental gross margin dollars and gross profit dollars for us. That was a large contributor. And then the second piece is just [indiscernible] labor costs across our care teams. We've experimented with dozens of staffing malls, and we really feel like we fine-tune that over the course of the past several years, which led to additional margin expansion as well as some of the prepared remarks, us continuing just to use AI and using a contact summarization, making our care teams more effective and more efficient. And we're going to be planning to roll some of those -- that momentum throughout the course of the next year. and we envision 2026 being another key stepping stone on our path to getting to a 70-plus percent gross margin.

Our next question comes from Stan Berenshteyn with Wells Fargo.

First on retention dynamics, I know you commented that they're pretty steady over 12 and 24 months. I'm curious whether the new products of Komodo Spark and map, whether they've demonstrated any measurable improvement in engagement that you can point to?

Wei-Li here. Let me take this one around modest park. So we launched this in the first half of last year and then fast followed with some enhancements to Omada Spark. And so we're proud of that, and it allows our members to essentially have a nutritional AI assistant. Food is such an important part of the behavior change process. And then, of course, the meal map allows individuals to either dictate their food, snapshot their food with their camera, long winter food in a number of different ways and then the nutritional density the food is actually registered very accurately, and then that information then translates into what meaningful changes can they make. And so I kind of recourse all of that because you can imagine the value that numbers have in seeing this knowing that nutrition in food and food quality and nutritional density is such an important part of generating a positive outcome, not just in obesity and [indiscernible] but across diabetes, hypertension and now cholesterol and believe it or not, even in MSK as well. We're encouraged by the early results, members who interact with a lot of Spark, our Health AI assistant, along with meal [indiscernible] demonstrating higher levels of ongoing engagement. And in fact, because they are returning to the app more frequently compared to those who haven't yet used the tools. And so we're seeing that lift. Now specifically, the meal map, which is the part and parcel of understanding what you eat, and then matching the behavior change. We're also seeing meaningful lifts in actual food tracking behavior, which is one of our strongest predictors of sustained weight management. And so all of these, of course, drive more activity in the app. And because we bill based upon activity for the majority of our business, we do believe over the long haul, and over time that this should potentially create some meaningful improvement in terms of financial performance.

And then I just want to follow up on the cover lives. I think you mentioned $25 million. That's about $5 million incremental from your prior disclosures can you share with us what is the mix of self-insured versus fully insured within those $5 million that you onboarded.

Yes, sure. Right. So of the $5 million that we closed, the way to think about it and characterize that is that it was driven by strength across multiple commercial channels and across the product portfolio. So it wasn't densely concentrated in 1 significantly over the other. But if you were to look at the mix, our PBM channel is the largest contributor followed by strong performance in our self-insured fully insured and ASO business. Thank you.

[Operator Instructions] Our next question comes from Richard Close with Canaccord Genuity.

Great and all the success this year. Sean, maybe on GLPs, welcome your perspective on how you think about GLP prices coming down and how that impacts the growth opportunity for Omada I do think there's some fears out there as those prices come down, maybe demand for programs like Omada gets impacted?

Yes, Richard, thank you for the question. It's certainly an important one. And within that, it's also important to share that the way our accounts and customers view Omada is not a cost on top of their medication spend but rather a value maximizer of their decision to cover GLP-1s for obesity. And so again, right now, the accounts that cover GLP-1s for obesity, it's roughly 45% of the market. they know the cost of that decision and what they're after is reduced waste. And so Omada care tracking capabilities allow us to support them across the entire journey from helping inform prescription decisions with our new prescribing capabilities to supporting realized outcomes well on therapy and, of course, to safely discontinue when appropriate. And so net relative to the price of the meds, we believe these lower price points actually have the potential to increase GLP-1 utilization, which increases access to the medicines and thus, increases the need for care track services like Omada. And equally, for the market where employers say, look, I just can't afford these meds. I mean that's where a new GLP-1 Flex care offering comes in, and that's the 55% of the employer market segment specific to GLP-1s.

Okay. And then, Steve, maybe as a follow-up. I think you mentioned all the new programs are accretive. Can you put that into perspective in terms of ARPU?

Yes. That's a great question. We have priced across prescribing cholesterol and our GLP-1 Flex care above our current rates. So for cholesterol, specifically, that's roughly priced in line with hypertension. But as we view -- as we observe more customers in taking these products, all the potential to uplift ARPU above where our current run rates are at $300 per year per average member. So as we get more traction in market, again, these are very nascent products. We're just starting out with them. We'll be able to provide more specific guidance on the exact measure of uplift that we're observing as we get traction with some clients.

And our final question comes from Carly Becker with Barclays.

You have [indiscernible] here. If we look back to 2018, when Omada launched its diabetes and hypertension programs, can you walk us through what the adoption curve looks like for those programs over time as we think about kind of a parallel to help frame the launch of the cholesterol program. How long did it take to roll out the diabetes and hypertension modules more broadly? And when did you start to see adoption really pick up steam and drive incremental revenue?

Yes, I can start because again, those are good examples of how we love to innovate, which is on the back of really listening deeply to customer needs and a and ideally finding kind of one or multiple that marquee customers to start the innovation journey with you. And so that was a couple of long-standing customers that had said, you know what Omada, we love what you do in prevention and it will be in obesity and weight health would you consider diabetes. And so that started the journey, and then we did highlight the growth rates which are comparable to prevention, which I think a statement on how that journey has gone. And so we're hoping to rinse and repeat with, of course, cholesterol, hoping to rent and repeat with that same process of listening intently on things like GLP-1 prescribing GLP-1 FlexCare because we know based on how those grow, how they can be accretive over time. But I don't know, Wei-Li, if you have any comments on top of what I've shared.

Yes. The only thing I would share on top of would be kind of qualitative and just imagining kind of the intent of the question. That was 6, 7 years ago in the Omada that was then in 2018 we're a very, very different Omada today. Our capabilities are far more evolved across the entire conversion funnel starting with closing lives with channels and then employers in the course enrollment rate and engagement and so on and so forth, activation through the numbers. All that to say to mean that, I think what would have taken us 3, 4 years to eventually sell through a payer or a and then build a book of business to employers and then begin to enroll. I think we've gotten better at that. I know we've gotten better at that. And so we certainly think that we can beat those time curves in terms of full-scale adoption. The last thing I'd also remind everyone to as well is that our approach over the last few years in innovating and expanding new programs, has not really just been looking at TAM. But as Sean mentioned, really listening to our customers and oftentimes, the trigger for us, which accelerates adoption is actually when a customer says, boy, if you do this, we'll buy it and we're seeing that reflected with our cholesterol program, where a large customer came to us and said, "Hey, we're seeing this being a cost driver in our health care spend. We'd love to partner with you all, and we built that and immediately winded contracting and launched that customer earlier this year. And so the approach there is as such. And then last thing here. So just stepping back, what's fun is if you look at all these launches, we believe they really add up. I mean, between GLP-1 prescribing, GLP-1 Flexcare Omada for cholesterol, as I reflect on the journey we've been on, we are on pace to roll out more new offerings in 2026 than in any year in the history of our company. And so what this translates into, of course, is the opportunity set transits into new ways to support specific customer needs and we believe a solid foundation for durable growth.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, everyone. My name is Lisa Gill, and I head up Health Care Services here at JPMorgan. This morning, with great pleasure, I have with us Omada Health. This is actually Omada Health's first time as a public company presenting. I know you've been here many times as a private company. Presenting for the company will be Sean Duffy, and then we will have a little fireside chat afterwards with Wei-Li and Steve Hooks. So with that, let me turn it over to you, Sean.

Super. Well, thank you, Lisa. Good morning, everybody. So I'm Sean Duffy. I'm the Co-Founder and CEO of Omada Health. And Omada Health is a between visit provider. So excited to share over the course of 20, 25 minutes what we do and the big mission of the business. I'll start with, obviously, the most beautiful slide, which is our disclaimers. These can be found on our website. So reading material for tonight.

Omada's explicit mission is to bend the curve, and that's to bend the curve of disease and epidemiology. When I was a medical student at Harvard, I saw a problem on a daily basis in front of me, which is that many patients, especially with today's disease realities, have the wrong kind of care. And this was especially true for the 156 million Americans suffering from chronic disease.

And so I sat in the homes of people with obesity with diabetes and asked them, what has the health care system offered to you? And the usual answer was, well, I got a medicine and my doc said come back in 6 months. And it became very obvious that to move the needle clinically, an entirely different care model was needed and a model that supported the patient on a daily basis, longitudinally over the course of time, critically between visits. And that is that, in our view, was the solution. That is how to bend the curve of disease.

So that's been the mission from the beginning. And again, we do that by supporting the medical home, delivering care between doctors' visits in a simple, elegant and seamless way, which are the themes that you'll hear from me and have been the themes really from the beginning of Omada.

So just some of the operating highlights and punchlines here. So Omada's go-to-market is to ask and kind of make the case for employers, plans and systems who bear the financial cost for our members to pay for the program for their constituents. And so there are now over 20 million Americans in the U.S. and individuals that have benefit coverage for one or more of Omada's programs.

The constitution of that is over 2,000 customers as shared, that's typically employer plan and integrated health system. And if you've heard me speak or studied the business at all, there's a couple of strategic themes that I typically highlight. One is supporting our customers more broadly.

So Omada began our journey with prediabetes and obesity care services. We expanded to diabetes to hypertension to MSK care. And on our earnings call and many of the one-on-ones, I talk about 2025 and have talked about 2025 as the year of the Gs, GLP, which my wife doesn't think I know any other acronym besides that one and then GPT. So that was kind of the theme of 2025.

In reflecting on the year, I began to realize I left off 2 more Gs. Ready for it. Great growth. Starting with a little humor. So we announced on Monday our preliminary unaudited results. The midpoint on the revenue was $257 million. That is 52% year-over-year revenue growth. We think that's a reflection of a differentiated capability, meeting a market need. And then we're proud that we now support 886,000 members.

And so these are individuals that we're actively supporting. We're actively building on. Omada only charges when people sign up. So when we say members, those are individuals that are under our care, and we're charging for them with our monthly recurring membership fee. So a little bit more on kind of the problem set and the why. I shared a bit of what I saw in people's homes while in medical school. But the truth is, if you unpack what actually can move the needle in chronic disease, it doesn't happen in that 15-minute visit with a doctor. I think that's no surprise. It's very ineffective to hand someone a pamphlet. It's very ineffective to say, hey, come back in 6 months. Don't forget to take your medicines, lose weight, eat differently, exercise more, check your sugars, that doesn't work.

And so that's the area -- that's the white space that Omada felt burdened with the privilege of filling on behalf of our patients. And there are many carriers that fit this rubric where yesterday's care model of being handcuffed in the visits just doesn't work. It will not get us to the promise land of better outcomes and value.

The carriers we're in of metabolic risk, prediabetes, obesity, diabetes, hypertension, MSK, they fit that clinical rubric, and we've expanded into them. When I talk about our expansion, what I always remind folks is this was really customer-driven. It wasn't Omada seeking new TAM. When we talk to the Costcos of the world and our customers, they'd ask us you know Omada, it'd be so convenient and beneficial to our employees if you did a little bit more. Any chance you do diabetes, any chance you consider hypertension, any chance you consider MSK care.

They recognize the convenience because it's kind of nice to work with one partner across multiple care areas. But equally, they know that their employees have comorbidities amongst these condition sets. I mean even 58% of people with diabetes also have a musculoskeletal disorder. So there was really kind of a strategic customer reason for the expansion as well as a really important reason to organize and support coordinated care for our members.

So then that brings us to the how. Equally, when I was in the homes of people before writing a single line of code, I recognized that there wasn't going to be a silver bullet here. We really had to take a full stack approach, and that approach had to combine people and technology. And the people side is the compassion, the care, the feeling of accountability and Omada has that people component, and we're known for it.

The technology side is not only how you scale those individuals, but how you leverage these incredible technologies to add efficiency, to add personalization to create a dynamic experience that's delightful, that's interesting, that feels differently than the care models they may or expect. And so that intersection, it's a very difficult. It's an artful intersection that requires a lot of thought, a lot of nuance and a lot of substance. And that's what excites us about the capabilities we've built and where they're headed.

Just to quickly give you kind of a feel for how it works, imagining perhaps you're an employee of Costco. Step one is to find out that we're a brand-new benefit. Typically, the way we do this is announce that Omada exists through e-mail campaigns, through generalized marketing campaigns. We've got sometimes what I think of as a little mini ad agency inside of Omada that listens to the customer, listens to the demographics of the employers, kind of looks at our library and patterns of what we've done before to create kind of campaigns that we know will work.

Then from there, there's a quick application process, confirming clinical and coverage eligibility. Then we ship any needed connected devices. So in our device arsenal, we have a cellular connected scale, cellular connected blood pressure kom monitor and CGM. So these are critical because that allows the biometric feedback to come not only to the care teams, but the individual. And then you meet your care teams.

All too often in health care, we forget that we should ask for what patients' goals are. get to know them, ask what brings them joy, really ask. Understand them as people and cultivate that trust because trust is the currency for improvement in health. And so the care teams are real people. They get to know you. We're proud of who we hire and how we manage that organization.

And from there, it brings you to the product. Within the product experience, there's kind of a goal-setting infrastructure where you align with your care team on what the next couple of weeks should look like for you.

Against that, there's a curricular pathway and paths that mirror appropriately the goals that you're on. We've got these really neat community layers that provide social support against a specific topic, against a specific thing that you as a member may be up against. And then there's a progress layer that includes food, activity tracking, biometric tracking in a very elegant sophisticated way. And throughout the member experience, you're supported on a daily basis from your care teams because we want to create is a feeling that one of Omada's members has someone in their corner in their pocket, supporting them on a daily basis that doesn't tend to happen in care.

Equally, we recognized early that we kind of had to build all of the pieces of technology, including what we call our care team platform. Think of this as our EHR. This allows us to manage the operations of our care team, hit our margin targets, manage the performance of that organization, but even more importantly, add a lot of personalization and care and proactive care to our members.

So this is -- sometimes I think of this is the crown jewel behind the scenes that nobody gets to see, how privileged are you, you get to see it. But this was purpose-built over the span of many, many years to support our care teams. And having been our very first health coach, I know how blind I was flying when I first supported my first member, just looking at a chart and kind of praying what to do, not having any data insights or sophistication.

So the first question, when we show the Omada experience we get from folks is do people use it? We're very proud of the engagement stats. For any of you who've cited consumer engagement curves, I think you'll be equally impressed by these numbers. So at the end of 12 months, you take 100 people, more than 55 will still be engaging with Omada. You cast that out to 2 years, 50 of those original 100 will be engaging with Omada. So these are individuals where the goal is to become part of their life and create the sense of like, well, now interesting, Omada is now my care partner. I think of them in support of my health and they're here for the long haul.

So that's step 1. And step 2 is, does it work clinically? We've invested millions of dollars, many, many years in developing a robust arsenal of clinical literature. We have 30 peer-reviewed publications. These range from observational studies to multimillion-dollar academic medical center-led randomized controlled trials.

And critically, we look at clinical outcomes, we publish that. We look at economic outcomes. We published those. So every HE that you see on the slide here, that's a health economic publication showing the financial value of what we do, and we're proud of these data. I won't give the punchlines in each care area, but we're proud in all of them. And equally, one thing that we've decided to do is lean into accreditations, attaining things like NCQA accreditation for diabetes.

That was an industry first, remains an industry only. In fact, NCQA had not accredited a digital organization before Omada, but we came to them and said, you know what, digital health is the underdog. We need to show and prove that we can and should be part of existing care models. We need accreditation to do that. So we're proud of the investments required to attain that.

And then on the health economic literature and modeling here, when buyers look at Omada and ask us, well, how can we and should we think about savings in metabolic over the course of 3 years, you're looking at a 3x to 6x ROI in MSK, we tend to look at a year or so time horizon, $1,000 to $1,500 gross health care savings So does the program engage people?

Yes, does it work clinically? Yes. Does it save money? Yes. Those are the 3 assets that we need that to go to market. And the go-to-market for Omada is through 3 primary routes, 2 are the majority. The first is self-insured employers. So we will contract directly with the Costco, large jumbos that self-insure that are looking at their cost of diabetes, looking at the health of their employees and saying, you know what, the existing network is not working. I need something new. And that's where Omada comes in.

We're fine doing the direct contracts equally oftentimes, when we ask the employer, would you prefer to bring us through procurement? Or would you prefer to work through your plan or your PBM? The answer is the plan or the PBM as the contracting entity.

That tends to be our preference, too, because you get a lot of scale there. And so we can work with an employer through our contracts with the Blue Cross Blue Shield of Minnesota, Cigna, increasingly a PBM. So that's one of the routes to the employer market.

And oftentimes, these health plans, when they see savings, when they see clinical outcomes, they'll write us into their fully insured benefit as well. And those are the dollars that they're paying on their fully insured lines of business.

And then we do a modest amount of work with these systems that are integrated. So the Intermountains of the world, where we are a care partner between visit care partner for Intermountain. Just to give you kind of a sense of the various lines of business and the penetration, these are as of the end of 2024, about 13.1 million self-insured lives.

Again, those are self-insured employers that bear the cost of their care. 5.3 million fully insured lives. We're particularly proud of that. It's really an honor for a company in our position when the plan says, hey, this is looking great on my ASO line. I'm going to go ahead and write you into my fully insured line of business as well.

And then Medicare Advantage government sponsored, that's increasingly a growth opportunity as more MA plans out there recognize that the changing population that they serve requires digital strategies in ways that it hadn't before. And then PBMs have been an increasing route to market, and many of you may have heard of it. Within our metabolic suite, we launched a GLP-1 Care track. I'll talk about that.

We can bring that in our entire suite of services to market through PBMs as the contracting entity. So if you're an employer and use Express Scripts, great. You can get the full suite of Omada through Express Scripts. If you're an employer and you use CVS Caremark, great. You can get the full suite of Omada through your CVS Caremark contract. So that adds efficiency to the buyer and the employer, and it's a great way to deploy all of our capabilities and an even better way to deploy our GLP-1 care track, which again, we will talk about. And in the market, when we ask our customers, well, why you pick Omada? What the highlight is, look, we like that you're multiproduct.

And even if they started with us in one carrier, they like the fact that at time, they could consider a broader offering with us. They love our evidence. They love the accreditations. They find that to be unique. They like the approach of people plus technology and that when we talk about AI, which we're leaning heavily into, there's substance behind it, there's use cases, there's a job to be done for that specific member.

And they love the fact that we've worked with customers like them, and we're scaled and we're reliable and we're SOC 2 type 2 accredited, and there's a sense that they can trust working with us from an implementation standpoint.

So we're proud of that. And a couple of years ago, these accounts that we'd earned trust with started to come to us and saying, you know what, GLPs, what do I do? I've chosen to cover the meds, and I'm looking at the cost profile and I see what feels like a vertical line. Clearly, these meds work, how do I think about this? And this led us to launch our GLP-1 care track.

And within those capabilities, we find that there's 2 kind of archetypes of customers. There's the first set of employers, roughly 43% of the kind of 5,000 market that just -- that choose to cover GLP-1s for obesity. And by doing that, they're saying, you know what, these meds work, but they're also worried. What they're worried about is people not getting the behavioral support alongside the med. An injection doesn't get to know you, an oral medication doesn't get to know you.

They're worried that GLPs can help on the quantity side, but not the quality side. So they lean on us to deliver that behavioral support to maximize the potential of these medicines and support their employees who want to try getting off the medicine.

In many ways, they view us as a GLP-1 maximizer. Like, look, if I'm going to cover these meds, I need to do it with sophistication, and I need to maximize the investment dollars and avoid waste. So that's category 1.

And they'll work with us on GLPs, but they'll also cover the broader solutions. Category 2, they just don't cover. Now employers by disposition, they want to find a way to say yes, but there are employers out there that look at the cost profile, and that's 57% of the market that say, I can't. I want to, but I can't.

And they look at the core Omada offerings, our clinical outcomes, our economic outcomes, and that's a buying decision. And what's helpful as well is it's an answer to their employees who are e-mailing them saying, you know what, my friend at their company, their company covers that bound.

Now they can offer something. It's like, look, we can't afford that now, but we're going to introduce you to Omada. And they like that we have the GLP-1 care check because they know that today's strategy in this market is not going to be tomorrow's. So if they do start to put the toe in the water to covering the medicines, they know Omada has longitudinal value as a partner to them.

And from a member side, the Care Track is all about taking these medicines, leveraging the inertia that these medicines can offer. When someone has a BMI of 43, you can create a really positive psychology of rolling the boulder down the hill, creating success. And our job is to seize that, work with them to maximize on therapy weight loss and listen to their goals if they want to get off the med, have an honest conversation that look, that's going to be hard, but it's not your destiny.

We need to work together in the on-therapy window to help enable your chance of success in doing that. And so that is the Care Track. Thousands of little details make up the Care Track because every member journey is unique. And we're proud of the results.

For enhanced Care Track, we're seeing 28% greater weight loss than without the enhanced Care Track. And looking at discontinuation, we're watching the members that have told us, hey, I'm going to get off the med. I want your support in keeping the weight off.

We've published 12-month data showing a weight change of 0.8% at 12 months. If you look at the real -- the RCT evidence on what should have happened in med discontinuation and absence of support, they should have regained about 11% to 12%. So this is about listening to patients' goals, saying, perfect, let's work together. That doesn't have to be your destiny to regain. If that's your goal, let's do what we can to support that.

So this is a really neat opportunity. I mean if I think of one of the many marks that Omada wants to leave on humanity, it's making sure that we best leverage these incredible tools in the toolkit and support our customers with the complexity in the space there.

And we think that, that capability and that depth of capability is really reflected in the progress and what's now the 4Gs here. So again, preliminary unaudited results that we put out on Monday, $257 million in revenue. That's 52% year-over-year revenue growth. So that's -- I think that's -- yes, us being proud, but equally, that's our customers saying, we trust Omada and Omada is offering something that we really need.

And then we're making progress across the P&L. I mean if you look at adjusted gross margin percent, LTM 3Q '25 at the upper 60s. You can look at the progress from 2022 being in the 50s. That's the care team platform that's leveraging technology. That's some of the promising early signs of AI, and we're committed to our long-term margin target of 70% plus.

And then progress on the bottom line, too, adjusted EBITDA margin percent of LTM 3Q '25 minus 2.4%, whereas in 2022, it was nearly a negative 70%. And then we posted our first adjusted EBITDA positive quarter in the third quarter of 2025 to the tune of $2.4 million. So proud of the revenue, proud of the leverage we're seeing across the cost of revenue and proud of the OpEx leverage as reflected in the gross margin progress here.

And so looking forward, there are 3 categories, if you will, of a growth algorithm for Omada. And so just to kind of explain because this is how we think about the business. This is how we underwrite any investment relative to growth. The first is covered lives. And so what that means is the 4 care areas, which of those can you sell or which lines of business? It's kind of a matrix, 4 care areas, self-insured employers, fully insured lines, government-sponsored is kind of the primary.

So efforts and unique strategies in each. The second is, great, you now have -- this is a benefit. How do you just continue to year-over-year, effort over effort, deepen your sophistication in sharing that this is a benefit that people should sign up for, and this is enrollment effectiveness because the more people, obviously, that enroll in any given deal, the better you're leveraging the sales and marketing resources that you've put forward to close that account, which is where the lion's share of the costs lie relative to the CAC.

So that's enrollment effectiveness. And then the third is engagement. How do we leverage these incredible technologies like AI. We launched an entire feature set called Omada Spark. Each year, we think how do we dream bigger, how do we leverage the scale that we have to ensure that every member that joins makes the program better for that next member.

And so that's engagement, where is the North Star of how engaging Omada can be and how we can best build trust for those members, deepen their engagement, deepen the value that we can provide to them, not just for today, but ideally for the life of that member. So those are the growth categories. And it's a wonderful moment in time.

I mean, if you pull up, there is a spotlight on chronic disease. There's a recognition that yesterday's care models do not best support patients in the spirit of improving their outcomes, in the spirit of improving the financial health of the country. And within that landscape, we feel great about the decade plus of investments we've made in building a differentiated care model. This is a de novo care model. This is a recognition that fee-for-service was just not unfortunately going to cut it for today's diseases. It works for yesterday's but not today's.

And then against that care model, we found a business model where our customers win, we win, we're aligned financially, and we're getting leverage with that business model. And I'm deeply proud as well of the leadership team we've brought in. I was in medical school of Shared at Harvard when I founded the company, prior to that worked in technology at Google. And the #1 remit I have is to pull 2 worlds that don't often sit together, get them in the same room and think how do we leverage the best of each to innovate on behalf of our core mission, which is, of course, to bend the curve of disease.

So that's Omada. Happy to be here at the first conference, proud of the progress, and we're dreaming big about what could be ahead of us here. So thank you so much.

Great. Thank you so much, obviously, the pre-announcement was very nice on Monday, 52% revenue growth, 886,000 members. As I think about back to the IPO, exceeding all of the expectations, can you maybe just spend a couple of minutes around what actually drove the outsized growth versus your expectation? And then how does that set you up going into '26?

Yes, sure. So similar to some of the themes I shared, it starts with a differentiated capability. That's kind of step one. Multiproduct GLP-1 care track that met the need 3 years ago ahead of the market, 30 peer-reviewed publications. And then a market that's fed up with yesterday's care reality. So I think those 2 really supported the growth. And then frankly, our 2024 investments in the 3 growth pillars that we underwrote supported 2025. And that's how we thought about the investments in 2025 for the next year.

One of the announcements you made on the third quarter was the decision to start prescribing GLP-1s. Can you maybe just walk us through why you decided to do it at this time? What the customer demand has been?

Yes. Why don't I start and then Wei-Li you pile on. So I think if we were to remain in a therapeutic landscape of 2 injectables, roughly the same price point, similar efficacy, we wouldn't need to prescribe. But that's not the era that we've just entered. If you fast forward, obviously, subject to approvals, we're likely to see single agonist, dual agonist, tri agonist, orals, multiple orals. In fact, if you were at Lilly's presentation yesterday, they highlighted 24 incretins in development.

That therapeutic landscape creates new questions and complexity for our buyers. They're thinking, well, it's not just how do I optimize these simple med regimens for lifestyle, it's how do I make sure that the right med is being applied to the right member at the right value.

And in order to provide that optimization, provide what they're asking us for, which is GLP-1 maximization of the value that those meds are providing, we needed to prescribe.

And maybe if I can add on to that, Sean, is we've always said also that what drives our road map for development across product is also a factor of what our customers are actually asking for. And what happened out throughout 2025 is we made headwinds, we made headway into the GLP-1 companion products market space with our Care Track. Our customers actually were asking us, hey, can you start prescribing? And it was a little bit befuddling for us, to be honest with you, because we were saying, gosh, the last thing that the market needs is another commoditized GLP-1 prescriber. There are thousands of them out there. And so as we began to hear more and more noise towards us about once you get in prescribing, we started talking to our customers about it.

And what they said is actually what we really, really want is for our employees and our members from the first prescription of their GLP-1 to basically have no gap getting into your GLP-1 companion Care Track. Because if you think about the journey of a member and an employee, they may get a prescription from their doctor that they've been seeing for years and years and years, and they may never find Omada and the support that they need to get the maximum outcomes and adherence and persistence support they need.

And so our customers are saying, can you put these things together? Can you close the gap? And certainly, we've responded to that, which led to the announcement of prescribing. But strategically also, we see that the prescribing and utilization of GLP-1s become far more nuanced and targeted over the coming years. And so there's both a short-term and medium-term strategic need for this.

Wei-Li, when I think about just different chronic conditions, and you're obviously talking about GLP-1 specifically, but do you see prescribing for other areas as well within chronic conditions where you could close that gap in care as well?

I mean, certainly, we've talked about this. We've been -- in our long-term strategy process, we always talk about, okay, what more value can we actually create for our members and our buyers and our customers. And we've talked about this one. We certainly are not here to announce anything broader from an expansion standpoint into other chronic conditions.

But it's probably not hard to understand that if we have success here, and we think we will, that it might be something that we consider in the future. But again, we look to our customers. And if they're pounding on their proverbial desks asking us to do it, we'll listen and we'll consider it.

So coming back to the Gs, we'll come back to GLP-1s for a minute here. How do you think about the drivers of long-term margin expansion and how GLP-1 prescribing plays into that?

Steve?

Yes, I can absolutely take that. As we've disclosed, we intend to price our GLP-1 offering, our prescribing offering at a premium to our current offerings in market. So as more employers uptake that product and they attach that, we're going to see weighted average ARPU lift across our book of business.

But with that, we're still seeing a tremendous amount of opportunity across our cost profile. There's still a lot of efficiencies to gain from our cost of revenue across making our care teams more efficient, continuing to leverage within our supply chain across our device ecosystem. And then really, I think next year in 2026 and '27, we'll be able to really start to harness AI and make the cost profile more efficient the board.

So let's spend a minute there when we think about artificial intelligence, that's been brought up pretty much at every single presentation here this year. Can you maybe talk about where you would see the efficiencies with artificial intelligence and what potential cost savings you could see?

Yes. I can start with maybe the member experience. I mean we've launched a number of AI features that are member forward. The umbrella name for that is Omada Spark. And we're proud of a lot of them. I mean they include nutrition, motivational interviewing Yesterday's Omada Care team member, if they got a member saying, hey, any idea for a healthy fish recipe. We have a library.

They think about the context of how they work with that member and provide something. Today, we leverage our nutritional intelligence agent. They almost delegate that work. There's no reason that a person needs to be doing that work. In that nutritional intelligent agent, it's been trained and fine-tuned over 3 million foods, 150 countries, and it has context of that person's clinical status, their dietary preferences already.

And so that adds not only efficiency, which is important, but the trap with efficiency is you can't do it if it doesn't increase personalization, especially with the model for the more engagement you get, the more revenue you get. And so that's one example. And the goal is to take hundreds of those little tiny products, features and use cases and add them up to a differentiated experience for our members.

On the third quarter, you talked about 2026 being an investment year, and we should expect a slower ramp in EBITDA post the positive results on EBITDA in the third quarter. Can you maybe just walk us through what some of the investments are and how we should think about them going into '26?

Yes. I think Sean teed it up really nicely at the beginning. It's the year of the Gs. So you're going to see a lot of investment across the AI initiatives and then as well as standing up our prescribing capabilities. We think both of these areas are like critical like moments in time to make these investments so they can drive further durability in our revenue growth long term. What I want everyone to just take away is like we remain extremely committed to hitting our 70% gross margin target.

We did 68% in Q2, another 68% in Q3. So we're getting pretty close to that and then hitting our 20% plus adjusted EBITDA margin target in the years to come. And 2026 and '27 will be stepping stones along that path.

Yes. You've heard us in the company say, look, the core compass here in the North Star is balance and progress, and those are the 2 words to emphasize.

You've talked a lot about the crucial effective behavior management and program adherence to the long-term success for people on GLP-1s for weight loss and especially as people want to try to get off the drug or wean themselves from the drug.

In your customer conversations, are you seeing a cohesive process in combining prescribing, behavioral management into a single offering? And do you actually see people in their ability to come off the drug?

Yes. Maybe I'll take that one. So there's a couple of things in that question around do we see a cohesive offering? Do we see success in people coming off GLP-1s? So let me kind of parse it out a little bit. As mentioned, our customers see an opportunity and a need to actually combine prescribing just alongside a GLP-1 Care Track, and we feel positioned well to be able to do that. And because they see it that way, it's probably not surprising or not hard to think about maybe there'll be a bundled offering there because they want to buy them together. They synergistically work.

We believe we'll be able to demonstrate better outcomes, persistence and engagement for patients or members. So we haven't disclosed pricing or anything like that. I look forward to maybe doing some of that a little bit later in a few months. But again, not hard to imagine that there's some sort of bundling offering there too as well.

I think it's also probably an important time to reinforce also that while we're certainly expanding the foundations around our GLP-1 offering with prescribing in a companion care track program, it really is continuing to serve as a gateway to actually talk about the rest of our cardiometabolic platform offering to as well. And so we continue to see momentum in both those particular areas as the broader cardiometabolic landscape begins to take center stage with our buyers.

Sean, you touched on what Lilly talked about and the number of different iterations of GLP-1s that will come to market. Obviously, one that everybody seems to be very excited about is the recent launch of an oral GLP-1, right? We're only 11 or 12 days into that now. How do you think that, that changes the landscape in the market? I know a lot of times people don't like the injection. If you travel per se, work, carrying around has to be refrigerated. Does that really change the opportunity in the marketplace?

Yes. I mean more tools, we believe, correlate with more demand and more GLP use. And I mean, we ran a panel on Monday and one of the panel participants, she runs the pharmacy practice for Willis Towers Watson. And she was talking about her customers and what they feel and what they're thinking about with orals. And this is like, wow, increased demand for my employees and increased spend and an increased need to find paths to support them.

And if I am going to cover them, maximize the benefit of that. So it's fascinating. I mean, at the end of the day, I think more tools, the better. Equally, what we need to do per prescribing has helped rationalize some of the complexity there. Like when specifically should an oral be the right medicine? It could be lifestyle, it could be travel. It could be biology, it could be what's working for you. It could be side effect profile. And that's a job that I think we need to do to serve.

Yes. And maybe if I can add on to that, sometimes when people ask us, hey, Omada, what is the effect and impact of orals on your own business in terms of your GLP-1 Care Track demand? Well, certainly, we perceive every new formulation, every new modality of administration to kind of be a growth driver for the overall GLP TAM.

I think they said yesterday, both Novo and Lilly said about 10% of people that are probably clinically eligible are using GLP-1. So I think the headroom there is still significant. So we certainly consider that to see continued momentum and growth for us. But I think the other thing that they're sometimes asking about is if the price of orals continues to come down, what is the willingness for employers and payers to continue to pay for a GLP-1 Care Track or service like Omada?

And the best way to maybe understand it is I think maybe the question is a little bit misplaced. Because it misunderstands what employers are actually trying to achieve and what they're actually trying to pay for. And so instead of seeing Omada as an additional service cost on top of a falling price, the better way to understand the value proposition is that the GLP-1 care track by Omada is actually a GLP-1 maximizer. It's an amplifier. We just released 12-month outcomes as well as persistent results, persistency results. And what you basically see is that we exceed basically what you see in real life on both of those dimensions.

And so when our buyers see that, they begin to see us as an enabler and a reduction of waste. And what that means to them is a reduction in the medium, long term in cost of care, ROI. And that equation is beginning to compute quite sensibly within our buyers. And so that's kind of how our buyers are going to understand what is that we're doing as prices...

Our understanding is in talking to employers, they want to cover these drugs. But at the end of the day, they would do what's best for their employees. But to your point, they want a return on their investment. They don't want to just pay for an expensive drug and not get that return. Really, the hope is that you're going to lower a lot of other metabolic conditions, right, not just the weight loss, but cardiovascular...

It's a cascade compounding ROI over the long term. And of course, health care costs for employers are growing astronomically year-over-year. They're seeing that and they're like, gosh, okay, how do I get the biggest return from my investment.

Yes. No, I agree. Let's move in the last couple of minutes to talk about your selling season for 2026. Through the third quarter, you've closed multiple clients, representing 180,000 eligible lives with double-digit year-over-year growth in deal volume. Can you give an update on your conversations as you closed out the year? And where do you expect the momentum kind of going into next year?

Right. Certainly, lots of curiosity, getting lots of questions about that throughout the conference, understandably so. Obviously, in our Q4 kind of full year '25 earnings call in March, we'll disclose more details about that. So mark that on your calendars. We look forward to talking to you.

I guess I'd reinforce what we said during Q3, we're seeing momentum. We like what we see in terms of the deals in pipe. We ended the last year basically closing more both on deals and covered lives we did in the year before. So that's good. We continue to see progress in our multiproduct sales percent closing. So we feel like the momentum was good in '25, and that's really important because it sets the foundation for 2026.

And talking just about the multi-signings, I think you've talked about 75% of new signing clients offered more than one of the conditions. Is that -- can you just give us a baseline of what you've seen historically? Is that unusual for what you've been able to sign in '25?

So certainly, we continue to make that a particular focus, again, because of the comorbidities of people unfortunately diabetes have hypertension, obesity, so on and so forth. And so what I can characterize is what we said before, it's been pretty consistent, 40%, 50% of our new deals that we close oftentimes on average are multi-program sales, and we certainly continue to see those multiproduct sales manifest in the closing of the year as well.

You talked a little bit on the different relationships you have from a payer perspective, and you touched a little bit on Medicare Advantage. Can you spend just a minute talking about the current administration who seems to be really focused on make America healthy again. We're looking at them covering GLP-1s, right, going into 2026 this year. What are the opportunities you see there? And if there's any conversations that you're having with the administration that you could share?

Well, they've certainly given us a lot of reading material, and I'm sure you all do in December with balance, Access, Tempo, 5 other programs. So I love the spirit more broadly, there is more of a focus on chronic disease in the care areas that we serve right now from the government than ever in my decade plus of leading the organization. And so that's exciting.

There may be opportunities to seize with CMS. Obviously, there are a lot of details forthcoming even with access, the price has not been announced. So we've rolled up our sleeves. We've learned. We positioned ourselves for that if there is some to do there, we're excited to do it, but there's details forthcoming. But more broadly, the conversation is helpful. The conversation and dialogue on chronic is really at a high.

And my guess would be when I just look at that small percentage of Medicare Advantage and I look at what's happening with cost trend in Medicare Advantage and how much is tied to chronic conditions, do you see those opportunities? Because I mean, a lot of them are the same payers that you see in the commercial market.

Yes, absolutely. I mean the earlier 5, 6 years ago conversations I'd had with MA is like, I don't really know if the tech environment for our seniors is there. Today, it's yes, our seniors need technology, and we can imagine care services that are digital that work for them. So it's a different nature of conversations, and we view it as a growth driver.

Sean, we only have 1 minute left went very quickly. Just if we're sitting here together next year, what do you hope that investors will appreciate about Omada that maybe they don't today?

Yes. I mean I think it's us continuing to lead in innovation, innovation across GLPs, recognizing that it's a very complex landscape, both in how you cover them, how you best support the member and that complexity requires sophistication and somewhat of an operating layer. And I think I like what Wei-Li said, it was called you GLP. What my colleague GLP said, what Li said, GLP-1 maximizer. And so like we are ambitious. We feel good about the lead there.

And sometimes when you're in the lead, the goal is to make the moat even deeper. And so I'm excited to share a lot of updates at the next conference on that strategy.

All right. Great. Thank you very much, everybody.

Super. Thank you all.

Good day, and thank you for standing by. Welcome to the Omada Health Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Allan Kells, Head of Investor Relations for Omada Health. Please go ahead.

Thank you. Good afternoon. Welcome to Omada Health's 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 risks 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.

Good afternoon, everyone, and thank you, Allan, 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 '24. And for the first time, we delivered a positive adjusted EBITDA 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 Care Track members recently told us, having struggled with weight for most of my life, I realize 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 giving 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. And during the third quarter, I believe, we demonstrated meaningful progress towards this mission.

First, innovation remains front and center. Today, we announced prescribing for anti-obesity medications within our GLP-1 Care Track 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 users, behavioral support to drive outcomes well on the medicines and sustainability well 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 1 year after discontinuing GLP-1 therapy, evidence that challenges the narrative of inevitable rebound weight gain.

We are also proud that the business has been scaling efficiently. Through the first 9 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 multiproduct approach. One sales team currently sells 4 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 2 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 life cycle. 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 Tsang 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. And 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.

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 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 Care Track, 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 6 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 OmadaSpark, 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, OmadaSpark 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 in 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 Care Track, 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 1 year after GLP-1 discontinuation.

Participants in the analysis experienced a mere 0.8% average weight change 1 year after discontinuation with 63% maintaining or continuing to lose weight during that period. That compares to the 11% to 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 6 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.

And with that, I'll turn it over to Steve to discuss the financial results in more detail.

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 '24, and our GAAP gross margin was 66% compared to 63% in Q3 '24. 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 sales force, scale created through our channel partners in our B2B2C 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 '24, 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 '24. Adjusted EBITDA in Q3 was $2 million, which compares to a loss of $5 million in Q3 '24. Our Q3 adjusted EBITDA margin was 4% compared to negative 11% in Q3 '24. 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 '25. 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 to $254.5 million, up from a prior range of $235 million to $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 breakeven, 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.

[Operator Instructions] Our first question comes from the line of Lisa Gill from JPMorgan.

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 the coupon or the prescription to the pharmacy? Just if you can talk about this new initiative that you have today and how that will play out.

Yes. 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 Care Track. So let me just describe a little bit more on the why behind prescribing, and we can answer some of the tactical details you highlighted here. First and foremost, any time we do something new to Omada, we listen to customers, we listen to members.

And 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. And 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. So 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, and that's really germane to the mission to bend the curve.

Specific to some of the tactics, actually, this will be an integrated experience within the Omada care program, but these will not be compounded meds. They'll be branded meds fulfilled by the pharmacy of the member's choice, and it will be an enterprise model working specifically with clients and plans. And I don't know, Wei-Li, you have anything to comment on top.

Yes, 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 just only announced the capability today, there's nothing to share regarding pricing. But 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 TrumpRx 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?

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. And it's almost a 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. And so that's germane to the news we announced today. And we're thrilled by it. I mean, at the end of the day, lower prices enables broadened access. And we think that's a great thing for the world and are really heartened with seeing that news.

Yes. Lisa, thanks. And maybe I'll just add on to that a little bit just because all this news, of course, is just fresh off the page. And 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.

But again, all this information is fresh off the newswire. And so 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. And 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.

Our next question comes from the line of Craig Hettenbach from Morgan Stanley.

Just following up on that and understand 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?

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 our or 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. So 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. But this has been on the back of our health plan customers, our PBM customers asking us to stand up this functionality. So we do realize that it's going to be an investment that we're going to need to make in 2026.

Got it. And then just separately, a question on the selling season. Last year, I think 50% of new customers started with 2 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 1 year to the next in terms of what's really resonating most with customers this year?

Yes. Craig, this is Wei-Li. Thanks for the question regarding the multiproduct 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, and we continue to make traction against our multiproduct sales. And 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. So we like what we see. But of course, the selling season is not over yet. And our sales teams, you can bet, are busy closing out the year as strong as possible.

Our next question comes from the line of Richard Close from Canaccord Genuity.

Yes. 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 the ZIP code of 68% even with rolling out this new offering or prescribing?

Yes. 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. And 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. And 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, continuing 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. And then just on the recent large partnership or CVS launch. Those clients that you talked about, are those launching January 1 and then the consulting would that arrangement launch January 1 as well?

Richard, this is Wei-Li. I won't comment specifically to the performance with CVS. We have built pipeline. We have closed deals. And yes, 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 time frame consistent with what normally happens there.

Our next question comes from the line of Elizabeth Anderson from Evercore ISI.

Congrats on the quarter. I was just wondering, maybe to piggybacking on the back of that one a little bit. You're obviously -- you're talking about these investments, and that makes very -- 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're -- 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 range. So I just want to make sure I have that down correctly.

Yes. 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 Care Track. Regarding the typical seasonality on 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 will follow the normal selling cycle. And so that selling cycle in the enterprise world, B2B world could be anywhere from 6 months, 12 months, 18 months depending upon the client. So you would expect that as we do that, we'll follow that normal selling cycle. And so they're unlikely to be immediate sales because we've got to move through that motion.

Elizabeth, I would just add in terms of specifically on your guidance question and seasonality. Historically speaking, Q4 is a little bit slower as we get towards the holidays. So we're -- 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. So we're going to spend the rest of that Q4 really building that pipeline and make sure that we hit 2026 strong out of the gate.

Our next question comes from the line of Saket Kalia from Barclays.

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? So 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.

Yes, for sure. So thank you so much for the question. This is Sean here. So this will be a new capability that can be turned on and, of course, offered to existing clients. So clients that offer our current GLP-1 Care Track 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. And equally, it's something that we'll work to bring forward to net new clients as well. So 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. So if you want to support Omada without prescribing, you want to add prescribing, we have flexibility there and a number of permutations within. So we're excited to really meet this unique moment where there's a lot of dynamism at the client level relative to 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.

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. And maybe it's tough to break out, but if you can, can you just talk about sort of how that member growth looks like for the GLP Care Track versus your other offerings? And maybe relatedly, I mean, I think going back to the IPO, we kind of all assumed sort of a very consistent engagement rate. Maybe just to mark-to-market, has the engagement rate changed at all given all the new offerings that you have?

Saket, 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 Care Track has been a tailwind in our growth. We have seen significant growth year-over-year with that. So that is part of the growth story in Q3. But it's 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 shifts, 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. And we're seeing that happen.

The second one is we've been committed to a multi-condition, multiproduct platform sales approach now for years. We've noted in previous disclosures, the progress we've made against that strategy last year. And what we're really seeing is that, that selling or that multiproduct penetration that we achieved last year through the selling season is really pulling through into 2025 this year, and 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 1. And then if you make it to year 1, you're highly likely to stay engaged with us at year 2, 50% are still engaged at year 2. And we're seeing that trend continue, and we're quite pleased with that progress. So hopefully, that answers your question and backs into a little bit of kind of what explains the accelerated growth in Q3.

Our next question comes from the line of Ryan MacDonald from Needham & Company.

Congrats on a great quarter. Maybe this one is for Wei-Li. Completely understand that and it's great to see sort of the demand across multiple conditions. But 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 sort of broader multi-condition conversations. But I guess as a 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 to solution to covering GLP-1s amongst your client base?

Yes. Thanks for the question. The short answer to that is we are actually seeing both. So when we look at the marketplace, what we observe are different segments of buyers with different needs. And 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. And oftentimes, there is demand and interest not only in our GLP-1 Care Track, but also to make sure that they're supporting others within -- with cardiometabolic conditions that are not on a GLP-1, aka diabetes, hypertension, diabetes prevention and weight health. And that's where we're seeing demand and interest for a significant multiproduct 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. And in those particular situations, their employees are still having demand to be supported for their weight health journey. And in those particular cases, of course, they're not purchasing or buying our GLP-1 Care Track, but they are interested to understand how the rest of our cardiometabolic suite can be helpful for them. And so we're seeing traction in both of those segments per se across our selling season.

And as I mentioned before, that has been our strategic intent and bet that GLP-1s, whether they're covered or not, is a tide that will lift our multi-condition platform shifts. And we're seeing that materialize. And again, we're seeing that in the closing season as well as our Q3 performance.

And Ryan, this is Sean here. Just 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. And 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. So it really is a rising tide lifts all boats scenario.

And then sometimes we get asked, well, we are seeing some, although it's the 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, and we can come in and really shine light on our support and our capabilities to support people having stopped the med. So 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 and the configurability and the scale we have to meet a multitude of those demands, we believe, is a differentiator.

Super helpful color. Maybe as a follow-up, and I recognize we only had probably 4 to 5 hours to process sort of the Trump administration announcement here. But obviously, Omada has always been sort of very focused on the commercial side of the market. But 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. That's -- 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?

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

Our next question comes from the line of David Roman from Goldman Sachs.

I wanted just to go a little bit broader here. There's clearly a ton of focus on GLP-1s. But maybe you could talk about how you're 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're getting to is about 2/3 of the growth coming from your established franchise, about 1/3 coming from GLP-1. So any perspective you could provide there would be helpful.

Yes. David, Wei-Li here. I won't comment to the proportional or fractional split of the 1/3, 2/3. But what I can say or will say is that GLP-1, for instance, the GLP-1 Care Track volume still is a minority of our total new member as well as total member number. So hopefully, that gives you and others some indication. So the majority of our growth in volume is still coming from our non-GLP-1 business spread across MSK, prevention and weight health, diabetes and hypertension. And 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 multiproduct sales, which is, again, something we've been working on and pursuing for years now and is materializing well in the Q3 performance.

David, just one other key driver of overperformance in the quarter. Very consistent with Q2 is our efficiencies on the marketing front. We've been -- this has been a tailwind for us throughout the entire course of the year. And 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. So that -- we saw that momentum also continue in Q3.

That's super helpful. And I know you talked a little bit about growing engagement in response to an earlier question. But if you look at the trend in members, one of the things that I think is unique about what you've seen in the past 2 years is for a lot of businesses like yours, you see a big uptick in Q1 in members when you expand into new contracts. And then it kind of like peters off throughout the year as people try something, they don't repeat utilization. But you're sort of seeing the opposite effect of a big step-up and then actually continued incremental growth from there in members. So Steve, is that -- obviously, there's a dynamic there with product value proposition, but also marketing effect. 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?

Yes. 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. We have -- 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 led to Q3 performance. The first one, of course, is back to the multiproduct. 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 a 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, and 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 a, what we call a multi-campaign digital outreach strategy, complemented by a multichannel outreach strategy, for instance, digital signage on site as well as direct mail and all the other things you might imagine. And 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. And so 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.

And 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 OmadaSpark. We really took a big step forward in what we're able to offer to members. And 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. So oftentimes, it gives us more to talk about in that first outreach, and you can really turn the product innovation into something that helps pull more people into your experience.

Our next question comes from the line of Gene Mannheimer from Freedom Capital Markets.

Congrats on the great results. Do you guys publish or disclose a product density number? Or said differently, you talk about the percent of members that are engaged in multi-condition programs and how that has trended, say, the last couple of quarters?

Yes, Gene, thank you for the question. What we have disclosed in the past is the percent of customers who are working with us in a multiproduct fashion. So at the end of last year, we had 31% of our total customers working with us across more than one product. And when we looked across the 2024 selling season, over 50% of our net new business started with us in a multiproduct fashion. So that's a metric that we're going to evaluate if we want to continue to disclose on a go-forward basis, but we'll potentially be updating that after we close out 2025.

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.