Omada Health Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2026

Key Takeaways

  • Positive Sentiment: Record Q2 performance: Revenue rose 43% year over year to $88 million, while GAAP gross margin expanded to 73%, net income reached $5 million, and adjusted EBITDA rose to $11 million.
  • Positive Sentiment: Omada ended the quarter with approximately 1.1 million members, up 45% year over year, supported by broad growth across diabetes, hypertension, GLP-1, prevention, and weight-health programs. Members also remained in active treatment nearly 10% longer, while cost of revenue per member declined more than 10%.
  • Positive Sentiment: Commercial momentum remains strong, including new employer wins, expanding PBM channels, a cholesterol launch with a major retailer, and an HCSC expansion covering an additional 1.5 million lives that is expected to begin contributing revenue in the first half of 2027.
  • Positive Sentiment: Management raised full-year 2026 guidance to $334 million-$340 million of revenue and $21 million-$27 million of adjusted EBITDA, citing Q2 strength and visibility into the second half.
  • Neutral Sentiment: CEO and co-founder Sean Duffy will become Executive Chair on January 1, 2027, with President Wei-Li Shao succeeding him as CEO; management characterized the transition as planned and emphasized continuity, while noting that second-half revenue growth and EBITDA margins will moderate because of seasonality and ongoing investments.
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Earnings Conference Call
Omada Health Q2 2026
00:00 / 00:00

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Operator

Good day. Thank you for standing by. Welcome to the Omada Health second quarter 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. 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.

Craig Gracey
Craig Gracey
VP and Chief Accounting Officer at Omada Health

Thank you. Good afternoon. Welcome to Omada Health 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 listed in our press release and in the risk factors found in our filings with the SEC. Actual results could differ materially. We assume no obligation to update these forward-looking statements. With that, I'll turn the call over to Sean.

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Thank you, Craig. Good afternoon, everyone. 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, 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.

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Seven 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, 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. That's the people we served.

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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. 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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 positioned 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 in 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

We also deepened our footprint inside customers we already serve. The expansion I'm most excited to talk about this quarter is with the 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 long-standing partner we can expand with over time as we prove our results across successive programs. Second, the fully insured component is embedded at the benefit level, which means members can enroll directly without a downstream employer sales cycle.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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 continued to meaningfully outpace our prevention and 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Our next major inflection comes with the 2027 benefit cycle, where we expect millions of Americans will get the opportunity to enroll with Omada and receive treatment. 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 Meal Map 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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.

Steve Cook
Steve Cook
CFO at Omada Health

Thank you, Wei-Li. Hello, everyone. Q2 was 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.

Steve Cook
Steve Cook
CFO at Omada Health

Revenue growth in our Diabetes and Hypertension Programs continued 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.

Steve Cook
Steve Cook
CFO at Omada Health

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.

Steve Cook
Steve Cook
CFO at Omada Health

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 tenured 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 four percentage points as a percentage of revenue from 73%-69%. On a non-GAAP basis, they fell approximately six percentage points from 68%-62%.

Steve Cook
Steve Cook
CFO at Omada Health

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 that it can continue to support operating leverage as we look toward 2027 and beyond. GAAP net income for Q2 was more than five million, compared with a GAAP net loss of approximately five 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.

Steve Cook
Steve Cook
CFO at Omada Health

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 strength and 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.

Steve Cook
Steve Cook
CFO at Omada Health

We are raising full year revenue guidance to $334 million-$340 million, up from the prior guidance of $322 million-$330 million. At the midpoint, this represents approximately 30 percentage point revenue growth compared with 2025. We are raising full year adjusted EBITDA guidance to $21 million-$27 million, up from prior guidance of $14 million-$20 million. At the midpoint, this represents an improvement of approximately $18 million compared with 2025, or roughly four times our 2025 result. 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.

Steve Cook
Steve Cook
CFO at Omada Health

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

Operator

Thank you very much. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Craig Hettenbach of Morgan Stanley. Craig, your line is open.

Craig Hettenbach
Craig Hettenbach
Analyst at Morgan Stanley

Yeah, thank you. Congrats, Wei Li and Sean on this transition here. I wanted to start with just the AI efficiencies. Very strong gross margin performance year-over-year. Steve, as you mentioned, kind of gives you confidence into longer-term outlook. 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?

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Hey, Craig. This is Sean here. Thanks for the congratulations. Thrilled for Wei Li here. On AI, as we've shared in prior calls, it continues to be a source of leverage, an important driver. This is both how we support our care teams and the member experience as well, ranging from smarter tooling to 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. Just to punctuate some of the results we shared, highlighting that the cost of revenue per member is down over 10%. Per Wei Li's remarks, members have stayed active in Omada nearly 10% longer than a year ago. This is an area where we'll continue to press forward, and we believe it's starting to show up in the numbers.

Craig Hettenbach
Craig Hettenbach
Analyst at Morgan Stanley

Great. 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?

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Yeah. Hi, Craig. Thanks for the question. Yeah, we've been working successfully with some of the top PBMs in the country now for years, so I'd like to think 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 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 closely with the sales teams of the PBMs and also for the health plans. 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

The second thing that I think is important is also the product market fit of our products. We sit squarely in the center of almost every health benefits discussion because of our presence in GLP-1s and of course, in the broader conversation around cardiometabolic disease still being a major cost driver for almost every employer in America. 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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

Craig Hettenbach
Craig Hettenbach
Analyst at Morgan Stanley

Great. Thanks so much.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Ryan MacDonald of Needham & Company. Ryan, your line is open.

Ryan MacDonald
Ryan MacDonald
Analyst at Needham

Hi. Thanks for taking my questions and congrats on a great quarter and congrats, Wailey, 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 to want to double down on that last point, Wailey, about sort of the diversity of your pipeline, because I think sometimes within the investment community, Omada gets just bucketed into sort of, hey, it's just a GLP-1 beneficiary and this is a temporary sort of decision-making process. 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 partners that's making sort of a broader cardiometabolic health discussion sort of top of mind right now?

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Yeah. 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. It's always top of mind. You overlay obviously, the demand and the pull around GLP-1s. It's just amplifying the front of mind conversation around cardiometabolic.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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. 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. We've really tailored a number of those solutions to meet the number of different needs that are out there in the GLP-1 marketplace. 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?

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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. 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. That's resonating among our customer base quite a bit. 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've brought in CVS, Optum Rx, the full complement of our cardiometabolic programs, as well as our GLP-1 programs.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Most recently, as we announced in our earnings press release, the expansion with HCSC. Channel diversification also has been important, and that's a lead indicator for revenue diversification. All of that is materializing in our pipeline that we're going to be converting in H2. We're feeling good about how that sets us up for 2027.

Steve Cook
Steve Cook
CFO at Omada Health

Look, Ryan, I would just add, 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. These are some of our highest priced products. These members stay in program the longest. They have the longest duration. 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.

Ryan MacDonald
Ryan MacDonald
Analyst at Needham

I appreciate that important call out there, Steve. Maybe as a follow-up for you. 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 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. 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. Thanks.

Steve Cook
Steve Cook
CFO at Omada Health

Yeah, no, absolutely happy to provide some color there. Q2 is obviously a fantastic quarter for us. Per some of the prepared remarks and what Wei-Li said this, 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, 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 2025, 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.

Steve Cook
Steve Cook
CFO at Omada Health

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. 2026 represents a more normal cadence for us from a seasonality perspective.

Operator

Thank you very much. One moment for our next question. Our next question comes from the line of Saket Kalia of Barclays. Saket, your line is open.

Analyst at Barclays

Hi, you have Kalia on for Saket. Thanks for taking our question here, and congrats to both Sean and Wade Lee. 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 longer term?

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Yeah. This is Sean. 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. 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% MA. Plenty of white space. The expansions that we've announced, as we've shared before, are really customer driven. 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. The change is what we've created in the form of between-visit care that leverages technology, efficient care services, unique experiences. That's led to the expansions.

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

As I shared on our first earnings call this year, 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. All sights are of course on laying the foundations to capitalize that, not only in the back half of this year, but over the course of next year.

Analyst at Barclays

Awesome. Thanks so much.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Richard Close of Canaccord Genuity. Richard, your line is open.

Richard Close
Richard Close
Analyst at Canaccord Genuity

Yes, thanks for the questions. Sean, congratulations. Wade Lee, congratulations as well. Sean, I hope we see you around in the future.

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Thank you, Richard.

Richard Close
Richard Close
Analyst at Canaccord Genuity

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. Obviously, it sounds like you're not going to have as pronounced jumps here this year. 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? Maybe the GLP-1 suite for you guys has taken a little bit of a breather compared to last year in terms of growth?

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Yeah. Hi, Richard. This is Wade Lee. Let me address that from a market standpoint and what we're hearing. 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. Across our book of business, we're seeing both those situations occurring. It's hard to predict and probably not the right thing to do because everybody's just making their decisions right now, we'll have to see where that falls by the end of the year.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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 come in 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. We feel 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. That's really in two ways.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

The first one is that with the launch of our GLP-1 FlexCare program, as well as our partnership with the Lilly Employer 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 direct to consumer or other direct channels and doing cash pay. We're seeing quite a bit of interest in that particular area because there's an opportunity by supporting them clinically, the employer 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

We're really in this situation, Omada is, where we've got product market fit in either situation, we feel like we're hedged from an opportunity standpoint, 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. We remind them, of course, that we have a whole host of cardiometabolic programs that, Richard, you're familiar with, that oftentimes they're considering in those cases because their employees still need support regardless of their coverage decision on GLP-1s.

Richard Close
Richard Close
Analyst at Canaccord Genuity

Okay, thanks. 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, is it more internal development or M&A, like we saw with another company earlier this week?

Sean Duffy
Sean Duffy
Co-founder and CEO at Omada Health

Yeah. Richard, we've shared before, 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. Whether we seize those ideas or stay consistent is kind of our choice. 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. 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. We're addressing, as it stands, enormous populations at a critical moment of need for the market.

Richard Close
Richard Close
Analyst at Canaccord Genuity

Thank you. Congrats.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Thanks. Richard, maybe I just tag on to that. You asked a little bit about our roadmap. 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 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, look, things have definitely not settled. It's still dynamic out there. I think we all know that. 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.

Richard Close
Richard Close
Analyst at Canaccord Genuity

All right. Thank you very much.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Sean Dodge of BMO Capital Markets. Sean, your line is open.

Chris Charlton
Chris Charlton
Analyst at BMO Capital Markets

Hi. This is Chris Charlton on for Sean here. Thanks for taking our questions, and congrats to both Wei-Li and Sean. Can you maybe walk us through some of the dynamics with the updated EBITDA guidance? Your margin for the quarter was around 12%, but the midpoints of guidance would apply around a 7% margin for the back half of the year. Some moderation there. 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. Is there any EBITDA 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.

Steve Cook
Steve Cook
CFO at Omada Health

No, you're spot on. There's kind of two main things happening. As we 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. We hired roughly 50 people across the first quarter, across go-to-market, across R&D. Those folks generally started with a mid-quarter convention 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. 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. Overall, this is expected. This is part of our normal business cadence, and we're really working to set ourselves up for a strong start to 2027 and derive ROI on those investments.

Chris Charlton
Chris Charlton
Analyst at BMO Capital Markets

Great. That's super helpful. 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? Thanks.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Yeah. Hi, this is Wayley. In terms of the pricing 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." That's kind of how it's positioned. I think the most important thing to consider about cholesterol in terms of the opportunity, there's the price and the ARPU of it, 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 at the primary care level.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

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. Their 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 confirming more total ROI for that particular patient profile for a company.

Chris Charlton
Chris Charlton
Analyst at BMO Capital Markets

Okay, great. Thanks again, and congrats on the quarter.

Operator

Thank you very much. One moment for our next question. Our next question comes from the line of David Larsen of BTIG. David, your line is open.

David Larsen
David Larsen
Analyst at BTIG

Hi. Congratulations on the good quarter. Can you maybe talk a little bit more about your relationships with the big PBMs? 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 in-sell opportunity. 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? Thanks very much.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Yeah, sure. This is Wade Lee. 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 the % of revenue of 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 in health plans insofar as we contract with them for provider services. In this particular case, across the three PBMs, all of our cardiometabolic programs, like diabetes, Diabetes Prevention, Hypertension, MSK, cholesterol, since we launched it earlier this year, is often not in those contracts, but certainly, we're seeking to upsell that in. That's how the contractual nature of it.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Now, the actual sales motion, if you were wondering about it, is similar to as we do with health plans. We partner with the account executives at the PBM level to raise awareness within their client books of business. We go to market with them, we create outreach to them. We close deals together, much like we would in other relationships we have. We do the deployment. 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. That's generally how we create membership through those channels. As it relates to reporting, the answer is yes to your question. 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.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

What you can expect from us is a number of reports that characterize, for instance, how is deployment going, what's the penetration, the enrollment rate, what are members doing inside the application, how are they engaging with their care teams? As the business builds, obviously the number of employees we're helping grows. 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. That's a little bit how we work with the PBMs and how we report.

Steve Cook
Steve Cook
CFO at Omada Health

Yeah, just to add 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. We continue to see broad-based traction across all of our product sets, with GLP-1s being a key driver of that growth.

Operator

Thank you very much. One moment for our next question. Our last question comes from Elizabeth Anderson of Evercore ISI. Elizabeth, your line is open.

Analyst at Evercore ISI

Hey, guys. This is Ayush on for Elizabeth. Thanks for taking my question. On the HCSC expansion, adding about those one and a half 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? On the retailer cholesterol deployment, is that account new to Omada entirely, or is that an existing multi-condition client adding cholesterol?

Wei-Li Shao
Wei-Li Shao
President at Omada Health

Hi, Ayush. This is Wade Lee. 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. There's no downstream sales cycle that's required for employers. It's a faster return in terms of deployment. What can we expect? We're working busily with HCSC to set that up and to have that deployed. We should see revenue start hitting the books throughout H1 of next year and obviously ongoing from that point in time.

Wei-Li Shao
Wei-Li Shao
President at Omada Health

As it relates to cholesterol, we announced that earlier in the year 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. 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. 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. 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.

Operator

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

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