Omada Health’s 2026 Guidance Excludes New Programs Contradicting Q3 Accretion Claims

Date of Call: Mar 5, 2026

Financials Results

• Revenue: Q4: $76M, up 58% YOY. Full year: $260M, up 53% YOY
• Gross Margin: Q4 GAAP: 71% vs 67% prior year. Full year GAAP: 66% vs 61% in 2024. Q4 adjusted: 73%, an all-time high and a 320 basis point improvement YOY

Guidance:

• 2026 revenue expected in the range of $312M-$322M, with the midpoint reflecting 22% growth over 2025.
• 2026 adjusted EBITDA expected in the range of $7M-$15M, with the midpoint reflecting a $5M increase compared to last year.
• Guidance assumes no significant contributions from new offerings (GLP-1 prescribing, GLP-1 Flexcare, cholesterol program) or improvements in enrollment conversion rates.
• Q1 revenue expected to be flat relative to Q4 when accounting for a one-time $2M adjustment in Q4.

Business Commentary:

Revenue Growth and Profitability:

• Omada Health reported revenue of $260 million for 2025, up 53% compared to 2024, with Q4 revenue reaching $76 million, up 58% year-over-year.
• The company achieved its first quarter of positive GAAP net income in Q4 at $5 million and positive full-year adjusted EBITDA of $6 million.
• Growth was driven by strong market demand for chronic care solutions, the impact of GLP-1 programs, and AI-driven innovation.

Member and Covered Lives Expansion:

• Omada Health ended 2025 with 886,000 members, up 55% year-over-year, and estimated covered lives grew by more than 5 million, totaling over 25 million.
• This expansion was fueled by increased multi-condition adoption and demand for GLP-1 support capabilities, along with improvements in marketing effectiveness.

Gross Margin Improvement:

• Q4 GAAP gross margin reached 71%, a 4 percentage point improvement from the prior year, with adjusted gross margin hitting an all-time high of 73%.
• Margin expansion was supported by multi-condition customer growth, care team efficiencies, and AI-powered tools.

GLP-1 Program Impact:

• Omada Health supported over 150,000 members on GLP-1s, adding more than 100,000 in 2025 alone, with GLP-1 Care Track members achieving greater weight loss compared to real-world evidence.
• The growth in GLP-1 programs was driven by employer demand to maximize the value of GLP-1 investments and reduce waste.

AI Integration and Innovation:

• Omada launched AI-powered tools like Omada Spark and Meal Map, enhancing member engagement and food tracking, contributing to higher retention rates.
• The integration of AI was aimed at improving member support and operational efficiency, leveraging a unique dataset for personalized care.

Sentiment Analysis:

Overall Tone: Positive

• Statements include: '2025 was a milestone year for Omada' and 'we believe we are entering 2026 with momentum, with ambition, and with a clear plan'. Financial outperformance noted: 'we delivered $260 million of revenue and $6 million of adjusted EBITDA, with the positive adjusted EBITDA occurring a year ahead of projections.'

Q&A:

• Question from David Roman (Goldman Sachs): Concerns about 2026 guidance basis and whether it contemplates contributions from new opportunities.
  Response: Guidance is based on historical trends with no assumed improvement, excludes new products (prescribing, Flexcare, cholesterol), and reflects strong momentum; any upside from new offerings or improved conversion would be incremental.

• Question from David Roman (Goldman Sachs): Follow-up on January/February conversion trends and revenue/profitability cadence for 2026.
  Response: Selling season closed strongly with >5M additional covered lives; early 2026 tracking is positive. Revenue expected flat Q1-Q4 adjusted for a one-time Q4 item, then sequential growth; Q1 is seasonally largest enrollment quarter with higher costs, improving margins thereafter.

• Question from Sean Dodge (BMO Capital Markets): Mechanics and economics of the new GLP-1 FlexCare program.
  Response: Targeted at 55% of employers not covering GLP-1s; employers pay for clinical oversight and behavioral support while employees purchase drugs out-of-pocket, allowing employers to offer care without full drug spend risk.

• Question from Sean Dodge (BMO Capital Markets): Follow-up on driving enrollment yield improvements and remaining runway for marketing efficiencies.
  Response: Improvements via A/B testing across digital marketing and multi-channel optimization; believes there is still runway to optimize campaigns in 2026.

• Question from Craig Hettenbach (Morgan Stanley): How Omada is insulated from AI disruption and benefits from AI.
  Response: Unique, years-built dataset allows customization/personalization of care; views AI as a tool to enhance (e.g., coding, member support) rather than disrupt, leveraging healthcare's regulated, data-rich environment.

• Question from Craig Hettenbach (Morgan Stanley): Follow-up on traction and growth runway for hypertension and diabetes programs.
  Response: Strong growth (45%+ YOY) in diabetes and hypertension; multi-condition sales are a strategic focus, with customers increasingly using Omada as an integrated cardiometabolic partner.

• Question from Ryan MacDonald (Needham & Company): Assumptions behind 2026 guidance and potential ARPU drivers from program mix.
  Response: Guidance assumes ARPU relatively flat at ~$300; growth comes from member count increase. New products (prescribing, Flexcare, cholesterol) and enhanced engagement features are expected to drive incremental ARPU upside.

• Question from Ryan MacDonald (Needham & Company): Follow-up on employer consolidation trends and favorability to multi-condition platform.
  Response: Customers are fatigued with multiple point solutions; Omada's multi-condition, evidence-based approach addresses co-morbidities and rising healthcare spend, driving momentum in multi-product sales.

• Question from Elizabeth Anderson (Evercore ISI): Gross margin drivers and outlook for 2026, including the Q4 adjustment.
  Response: Q4 gross margin of 73% driven by multi-condition higher-priced products and care team cost efficiencies (e.g., staffing models, AI tools). The $2M adjustment was a one-time contract true-up; 2026 is seen as another stepping stone toward 70%+ target.

• Question from Stan Berenshteyn (Wells Fargo): Impact of new products (Omada Spark, Meal Map) on member engagement/retention.
  Response: Early results show members using AI tools demonstrate higher app engagement and food tracking, which are strong predictors of sustained weight management and could improve financial performance over time.

• Question from Stan Berenshteyn (Wells Fargo): Follow-up on mix of self-insured vs. fully insured in the 5M incremental covered lives.
  Response: Mix was driven by strength across multiple commercial channels (PBM largest), not densely concentrated in one segment.

• Question from Richard Close (Canaccord Genuity): Impact of potential GLP-1 price declines on Omada's growth opportunity.
  Response: Lower prices may increase GLP-1 utilization and need for care track services; Omada is a value maximizer, not a cost add-on. For non-covering employers, FlexCare offers an alternative pathway.

• Question from Richard Close (Canaccord Genuity): Follow-up on ARPU accretion from new programs (prescribing, Flexcare, cholesterol).
  Response: New programs are priced above current rates (cholesterol ~hypertension pricing), with potential to uplift ARPU from current ~$300/year/member; exact uplift to be provided as traction grows.

• Question from Carly Becker (Barclays): Adoption curve for diabetes/hypertension programs and parallel for cholesterol program launch.
  Response: Customer-driven innovation accelerated adoption; with evolved capabilities, believes cholesterol program adoption can be faster. Multiple new launches in 2026 (prescribing, Flexcare, cholesterol) support durable growth.

Contradiction Point 1

2026 Guidance Assumptions and Inclusion of New Programs

The 2025Q4 guidance explicitly excludes new programs, contradicting the 2025Q3 expectation that they would be accretive.

David Roman (Goldman Sachs) - David Roman (Goldman Sachs)

2025Q4: The 2026 guidance is based on the existing business... It does not include contributions from new offerings like GLP-1 prescribing, FlexCare, or the cholesterol program. Any revenue upside from these new products... will be additional to the guide. - Steve Cook(CFO)

Does the 2026 guidance include contributions from new opportunities like GLP-1 prescribing and FlexCare, or is it based solely on the existing business? - Lisa Gill (JPMorgan)

20251107-2025 Q3: [Pricing details are not yet disclosed], but it will be incremental pricing on top of the monthly chronic condition management fee, intended to be accretive to both revenue and margins. - Sean Duffy(CEO)

Contradiction Point 2

Financial Impact and Pricing of New Programs

The 2025Q4 guidance assumes ARPU is flat, while 2025Q3 stated new pricing would be incremental and accretive.

What are Ryan MacDonald's insights on Needham & Company's earnings performance? - Ryan MacDonald (Needham & Company)

2025Q4: In the guidance baseline, ARPU is assumed to stay relatively flat (~$300 per member). Revenue growth of ~22% is driven by member count growth. New products... are not included in the guide but have the potential to accrete ARPU. - Steve Cook(CFO)

Given the 2026 guidance, does the projected 25% member growth imply an ARPU decline, and what program mix factors are contributing to this potential pressure? - Lisa Gill (JPMorgan)

20251107-2025 Q3: [It will be] incremental pricing on top of the monthly chronic condition management fee, intended to be accretive to both revenue and margins. - Sean Duffy(CEO)

Contradiction Point 3

Strategic Communication and Inclusion of New Initiatives

Contradiction in how new business initiatives are framed regarding their contribution to financial guidance.

David Roman (Goldman Sachs) - David Roman (Goldman Sachs)

2025Q4: The 2026 guidance is based on the existing business... It does not include contributions from new offerings like GLP-1 prescribing, FlexCare, or the cholesterol program. - Steve Cook(CFO)

Does the 2026 guidance include contributions from new opportunities like GLP-1 prescribing and FlexCare, or is it based solely on the existing business? - Lisa Gill (JPMorgan)

20251107-2025 Q3: [The new initiative] will be incremental pricing on top of the monthly chronic condition management fee, intended to be accretive to both revenue and margins. - Sean Duffy(CEO)

Contradiction Point 4

ARPU Trajectory and Revenue Growth Drivers

Contradiction on the primary driver of revenue growth, with Q4 implying pressure on ARPU versus Q3's focus on accretive pricing.

Ryan MacDonald (Needham & Company) - Ryan MacDonald (Needham & Company)

2025Q4: In the guidance baseline, ARPU is assumed to stay relatively flat (~$300 per member). Revenue growth of ~22% is driven by member count growth. - Steve Cook(CFO)

Regarding 2026 guidance, does a 25% member count growth imply an ARPU decline, and what factors are driving the program mix impacting ARPU? - Lisa Gill (JPMorgan)

20251107-2025 Q3: [New program pricing] will be incremental pricing on top of the monthly chronic condition management fee, intended to be accretive to both revenue and margins. - Sean Duffy(CEO)

Contradiction Point 5

Financial Forecast Clarity and Inclusion Criteria

Contradiction on the transparency and criteria for including new business in financial forecasts.

David Roman (Goldman Sachs) - David Roman (Goldman Sachs)

2025Q4: The 2026 guidance is based on the existing business... It does not include contributions from new offerings like GLP-1 prescribing, FlexCare, or the cholesterol program. - Steve Cook(CFO)

Does the 2026 guidance include contributions from GLP-1 prescribing and FlexCare or is it based solely on the existing business? - Lisa Gill (JPMorgan)

20251107-2025 Q3: [New program] will be incremental pricing on top of the monthly chronic condition management fee, intended to be accretive to both revenue and margins. - Sean Duffy(CEO)