Omada Health’s Earnings Call: GLP-1 Member Ratio, EBITDA Margin Trajectory, and PBM Revenue Timing Shifts Don’t Align

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Date of Call: Aug 6, 2026

Financials Results

• Revenue: $88M, up 43% YOY and up 13% sequentially
• Gross Margin: 73% on a GAAP basis and 74% on a non-GAAP basis, up 700 basis points YOY

Guidance:

• Raising full-year 2026 revenue guidance to $334M to $340M, up from prior $322M to $330M.
• Raising full-year 2026 adjusted EBITDA guidance to $21M to $27M, up from prior $14M to $20M.
• Expecting a more normalized second half of 2026 with typical seasonality, moderating growth after a strong first half.
• Investor Day on September 10th will provide updated long-term financial framework.

Business Commentary:

Record Revenue and Membership Growth:

• Omada Health reported its strongest quarter ever with record revenue of $88 million, up 43% year-over-year and 13% sequentially from Q1.
• Total members reached approximately 1.1 million, up 45% year-over-year.
• This growth was driven by continued strength across the cardiometabolic suite and effective enrollment strategies.

Gross Margin Expansion:

• The company achieved a gross margin of 73% on a GAAP basis and 74% on a non-GAAP basis, representing a 700 basis points year-over-year expansion.
• This was attributed to increased efficiency in delivering care and lower cost to serve members.

Profitability and Operating Efficiency:

• Omada Health reported $5 million in net income and $11 million in adjusted EBITDA for Q2.
• Operating expenses fell approximately four percentage points as a percentage of revenue, from 73% to 69% on a GAAP basis.
• This reflects operating leverage through scaling channel partnerships and disciplined spending.

Commercial Reach and New Programs:

• The company added new customers across various industries, including food service, retail, public sector, education, and industrial employers.
• New products such as the GLP-1 suite and cholesterol programs have contributed to the breadth of offerings.
• This expansion is driven by the need for chronic care support across diverse employer types and conditions.

Leadership Transition and Strategic Focus:

• Sean Duffy, co-founder and CEO, announced his transition, with Weili Xiao set to become CEO on January 1, 2027.
• The focus will be on translating commercial reach, GLP-1 therapies, and AI evolution into better health outcomes.
• This leadership change aims to drive Omada into its next chapter with a strong foundation and long-term vision.

Sentiment Analysis:

Overall Tone: Positive

• Management described Q2 as "the strongest second quarter in Omada's history" and "record-setting." They noted "strong momentum across our programs," "second quarter of GAAP net income profitability," and "second quarter of gap net income profitability." The outlook was raised, and the tone was confident regarding future growth and leadership transition.

Q&A:

• Question from Craig Hettenbach (Morgan Stanley): Regarding AI efficiencies and how that's flowing through and giving confidence into longer-term outlook, and if it's shaping headcount decisions.
  Response: AI is a source of leverage, improving cost of revenue per member (down over 10%) and member tenure (up nearly 10% longer), with continued investment planned.

• Question from Craig Hettenbach (Morgan Stanley): On the second PBM partner tracking ahead of expectations, what's influencing the strong uptake and what's been learned from the first partner?
  Response: Success driven by a strong playbook with top PBMs, product market fit for cardiometabolic programs, and comprehensive suite across the spectrum, leading to pipeline diversity.

• Question from Ryan McDonald (Needham & Company): Why is a broader cardiometabolic health discussion top of mind for customers beyond just GLP-1s?
  Response: Cardiometabolic conditions are top cost drivers for employers; GLP-1 demand amplifies this conversation, and Omada's breadth and depth of programs, plus channel diversification, resonate strongly.

• Question from Ryan McDonald (Needham & Company): Can you unpack the guidance assumptions for the back half of the year regarding revenue?
  Response: 2026 is expected to be a more normalized year with typical seasonality, comping off a very strong first half and ramping in the second half as employer decisions are made.

• Question from Siket Kalia (Barclays): How are new programs (cholesterol, FlexCare, prescribing) expanding the TAM and growth formula longer term?
  Response: Markets are early; expansions are customer-driven, and Omada's robust channel landscape is set to capitalize on new opportunities in the coming years.

• Question from Richard Close (Concordia Genuity): Are employers potentially limiting GLP-1 coverage for weight loss, impacting growth?
  Response: Both expanding and contracting coverage are occurring; Omada is positioned with GLP-1 support programs for those covering, and clinically supports cash-pay employees for employers not covering, maintaining product market fit.

• Question from Richard Close (Concordia Genuity): What's the new product or program roadmap?
  Response: Roadmap is customer-driven; Omada will continue to invest in AI and scaling existing platform, with an open mind to innovations in GLP-1 offerings as the market evolves.

• Question from Chris Charlton (BMO Capital Markets): Why the expected margin moderation in the second half, and is there seasonality in investment?
  Response: Margin step-down due to front-loaded investments in Q1 (hiring ~50 people) annualizing at full run rate in H2, with OPEX holding flat to slightly up, driving ROI for 2027.

• Question from Chris Charlton (BMO Capital Markets): Pricing and demand for the new cholesterol program?
  Response: Cholesterol pricing fits within the $50-$90 range, similar to prevention; demand is strong due to undertreated cardiometabolic profiles and opportunity to upsell synergistically.

• Question from David Larson (BTIG): What portion of members are GLP-1 members, and details on PBM relationships and reporting to employers?
  Response: GLP-1 members are roughly 17% of total (150k out of 887k in Q4 2025, ratio held constant). PBMs are contracted for provider services; reporting includes deployment, engagement, utilization, and outcomes data to demonstrate value.

• Question from Elizabeth Anderson (Evercore ISI): On the HCSC fully insured expansion, do those lives convert at the same rate as self-insured, and when will they enroll? Also, is the retailer cholesterol account new?
  Response: Fully insured book embeds Omada programs, enabling faster deployment without employer sales cycle; revenue expected in 2027. Cholesterol retailer is an existing multi-conditioned client, showing meaningful early enrollments.

Contradiction Point 1

GLP-1 Member Ratio

Contradiction on GLP-1 member percentage of total members, impacting understanding of business composition and growth drivers.

David Larson (BTIG) - David Larson (BTIG)

2026Q2: The ratio of GLP-1 members to total members (~17%) is roughly constant from Q4 2025 into Q2 2026. - [Weili Xiao](President), [Steve Cook](CFO)

Could you discuss relationships with large PBMs, the portion of members on GLP-1, and the reporting provided to self-insured employers? - David Larsen (BTIG)

2026Q2: GLP-1 member ratio has held constant from Q4 2025 (~150k out of ~887k total) into Q2 2026. - [Wei-Li Shao](President), [Steve Cook](CFO)

Contradiction Point 2

EBITDA Margin Trajectory

Contradiction on the primary driver for expected H2 margin moderation, affecting financial forecasting and investor expectations.

Sean Dodge (BMO Capital Markets) - Sean Dodge (BMO Capital Markets)

2026Q2: As a result, EBITDA margin is expected to step down slightly in H2 as part of the company's normal business cadence, setting up for strong performance in 2027. - [Steve Cook](CFO)

Can you explain Q2 margin dynamics and the expected moderation in the back half of the year? - Chris Charlton (BMO Capital Markets)

2026Q2: Two main factors: 1) Significant upfront investments (e.g., ~50 hires in Q1) annualize at full run rate from Q2 onward, with OpEx roughly flat to slightly up in H2. 2) Revenue seasonality implies a slight step down, leading to the expected, normal business cadence of EBITDA margin moderation. - [Steve Cook](CFO)

Contradiction Point 3

Member Retention and Revenue Per Member (ARPU) Trajectory

Guidance on ARPU stability contradicts earlier mention of multi-condition retention driving revenue lift, affecting revenue forecasting.

Ryan McDonald (Needham & Company) - Ryan McDonald (Needham & Company)

2026Q2: The guidance reflects this pattern, with a more measured growth trajectory in H2 as they follow an exceptionally strong first half and prepare for the 2027 benefit cycle. - [Steve Cook](CFO)

What are the key assumptions driving the revenue and member count guidance for the second half of the year? - David Roman (Goldman Sachs)

2026Q1: Revenue per member (ARPU) is expected to be relatively flat for the rest of 2026, in line with Q1... There is upside potential from prescription opportunities and engagement initiatives, which could uplift ARPU in the back half of 2026 or into 2027. - [Steve Cook](CFO)

Contradiction Point 4

PBM Partnership Revenue Contribution Timing for Optum Rx

Timeline for material revenue from a new PBM partnership shifts from 2027 to immediate contribution, impacting assessment of partnership value and growth prospects.

Craig Hettenbach (Morgan Stanley) - Craig Hettenbach (Morgan Stanley)

2026Q2: The presence in GLP-1s and cardiometabolic conditions amplifies product-market fit and discussion... Omada's comprehensive suite... are resonating well with partners. - [Weili Xiao](President)

What factors are driving the strong uptake of the second PBM partner, and how is the first partner influencing this success? - Constantine Davides (Citizens)

2026Q1: For new PBMs like Optum Rx, material revenue contribution is expected to begin in Q1 2027. - [Weili Xiao](President)

Contradiction Point 5

Guidance Assumptions and Growth Trajectory

Q2 guidance implies a deceleration, while Q4 guidance projected steady growth, affecting interpretation of business momentum and future performance.

Ryan McDonald (Needham & Company) - Ryan McDonald (Needham & Company)

2026Q2: The guidance reflects this pattern, with a more measured growth trajectory in H2 as they follow an exceptionally strong first half... - [Steve Cook](CFO)

What are the key assumptions behind the guidance for revenue and member counts in the back half of the year? - David Roman (Goldman Sachs)

20260306-2025 Q4: Revenue is expected to be flat sequentially in Q1 compared to Q4... then grow sequentially throughout the year. - [Wei-Li Shao](President), [Sean Duffy](CEO)

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