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Omada Health, Inc. (OMDA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong top-line and margin expansion: revenue $61.37M (+49% YoY), GAAP gross margin 65.7% (+540 bps YoY), and adjusted EBITDA nearly breakeven at -$0.16M, reflecting operating leverage and improved care delivery efficiency .
  • Versus S&P Global consensus, Omada beat across the board: revenue $61.37M vs $55.45M*, EPS (Primary) -$0.051* vs -$0.126*, and EBITDA -$2.99M* vs -$5.26M*; note S&P EPS and EBITDA definitions differ from GAAP/adjusted EBITDA reported in the 8-K .
  • Guidance introduced for FY 2025: revenue $235–$241M and adjusted EBITDA loss of $9–$5M, signaling confidence in scaling GLP-1 companion programs and multi-condition adoption .
  • Strategic catalysts: accelerating GLP-1 companion traction via two of the largest PBMs, launch of OmadaSpark AI to enhance member engagement and care team productivity, and post-quarter debt repayment to reduce interest expense and remove covenants .

What Went Well and What Went Wrong

What Went Well

  • 49% revenue growth and 66% GAAP gross margin, with adjusted EBITDA improving to -$0.16M—driven by member growth (+52% YoY to 752K) and operating leverage; management: “strong margin improvements, and continued progress toward profitability” .
  • GLP-1 companion success via PBMs and robust outcomes (higher persistence; weight loss maintained post-discontinuation), reinforcing differentiation and ROI narrative .
  • AI initiatives (OmadaSpark) launched in May: food imaging/macronutrient estimation and motivational interviewing agent; care team tools showed pilot productivity and engagement benefits (23% less time; +7pp substantive replies) .

What Went Wrong

  • Hardware gross loss persists (revenue $4.41M vs. cost $8.39M), dragging consolidated gross margin despite strong services profitability .
  • Sales & marketing expenses elevated (+48% YoY on adjusted basis) due to higher channel administrative fees and lack of prior-year one-time reversals; near-term profitability constrained .
  • Cash flow from operations remained negative ($13.26M outflow in 1H), with free cash flow at -$15.76M; though IPO proceeds bolstered liquidity, core FCF still a watch-item .

Financial Results

MetricQ2 2024Q1 2025Q2 2025 ActualQ2 2025 Consensus
Revenue ($USD)$41.21M $54.963M $61.371M $55.451M*
Net Income ($USD)-$10.692M -$9.448M -$5.311M —
GAAP Diluted EPS ($USD)-$1.40 -$1.15*-$0.24 -$0.1257*
GAAP Gross Margin (%)60.3% 58.0% 65.7% —
Adjusted EBITDA ($USD)-$6.786M -$4.218M -$0.161M -$5.264M*
Adjusted EBITDA Margin (%)-16.5% -7.7% -0.3% —

Notes:

  • Significant beats: Revenue and EPS (Primary) and EBITDA vs S&P Global consensus; definitional differences for EPS/EBITDA vs GAAP/adjusted presented in 8-K.
  • Values marked with * retrieved from S&P Global.

Segment revenue and cost mix:

SegmentQ2 2024Q2 2025
Services Revenue ($USD)$38.351M $56.960M
Hardware Revenue ($USD)$2.861M $4.411M
Services Cost ($USD)$10.759M $12.673M
Hardware Cost ($USD)$5.619M $8.392M
Total Gross Profit ($USD)$24.834M $40.306M

Key KPIs and balance sheet:

KPIQ2 2024Q2 2025
Total Members496K 752K
Net New Members (Q2)—73K
YTD Net New Members—180K
Cash & Equivalents—$223.1M
Deferred Revenue$19.53M $25.53M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY 2025N/A (first public year)$235M–$241M Introduced
Adjusted EBITDA ($USD)FY 2025N/A-$9M to -$5M Introduced

Post-quarter capital structure update: term loan and revolver repaid on July 31, 2025 ($31.0M principal + $0.4M interest), eliminating covenants and reducing future interest expense .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology (OmadaSpark; care team tools)Seasonality commentary and platform leverage noted; margins typically lowest in Q1 Launch of OmadaSpark; early care team pilot results (23% time reduction; +7pp substantive replies) Accelerating deployment; measured upside underwriting
GLP-1 Companion ProgramsCore cardiometabolic focus; GLP-1 ramp underway via PBMs (implied from platform expansion) Strong traction; persistence 94% (12w), 84% (24w); 12.1% WL at 24w; maintained WL post-discontinuation on average Strengthening adoption; broadening via PBMs
Macro/Tariffs/Selling SeasonTypical H2 selling season; pipeline visibility from channel partners No material delays; heavy demand for GLP-1 companion; watch H2 conversion Neutral-to-positive pipeline sentiment
Product Performance & ARPU MixMulti-condition platform scaling; ARPU tied to product mix GLP-1 priced above prevention/weight, below HTN/diabetes; minority mix for now Mix shift can lift ARPU over time
Margin Seasonality/LeverageQ1 gross margin typically lowest; sequential step-up thereafter GM 65.7% (+540 bps YoY, +770 bps QoQ); leverage from scale and tooling Improving trajectory; disciplined underwriting
Regulatory/Legal/ChannelScale via PBMs, health plans; accreditations and evidence base Expanded PBM listings; CVS relationship launched; strong outcomes underpin sales Expanding distribution and credibility

Management Commentary

  • CEO Sean Duffy: “49% year-over-year revenue growth, strong margin improvements, and continued progress toward profitability.” Emphasized mission of “between-visit care” blending “compassionate intelligence” with AI to bend chronic disease curves .
  • President Wei-Li Shao: Strategy anchored on innovation (GLP-1 CareTrack, OmadaSpark), programs that work (clinical outcomes), and multi-condition platform driving scale and upsell; highlighted 73K net new Q2 members and 180K YTD .
  • CFO Steve Cook: Operating leverage evident—49% revenue growth vs 28% OpEx growth; GAAP gross margin 66% (vs 60% prior-year); adjusted EBITDA margin improved to -0.3%; noted margin seasonality and careful investment posture in AI, GLP-1, and public-company G&A .

Notable quotes:

  • “We believe some of the key drivers of our success in GLP-1 companion support are our member engagement and clinical outcomes results… persistence through 12 weeks 94% and 24 weeks 84%” .
  • “Care teams… were able to spend 23% less time during the first week… with a 7 percentage point increase in substantive member replies” .
  • “Subsequent to the end of the second quarter, we paid off our debt… prudent use of IPO proceeds” .

Q&A Highlights

  • AI scaling: Members-facing AI (food imaging, nutrition agent, motivational interviewing) and care team tooling with measurable efficiency gains; CFO not yet attributing large margin upside in long-term targets until evidence builds .
  • GLP-1 traction & pricing: GLP-1 CareTrack remains minority of mix but growing; priced above prevention/weight health, below diabetes and hypertension—potential ARPU lift as mix shifts .
  • Member growth drivers: Multi-condition adoption, GLP-1 companion momentum, improved outreach productivity (>60% improvement in 2024 carrying into 2025) .
  • Margin progression: Seasonality (Q1 lowest), stair-step higher in Q2; strong setup for H2, though no precise guide provided .
  • Selling season/pipeline: No material decision delays; CVS listing and PBM channels expected to build pipeline, with enterprise motion longer-dated .

Estimates Context

  • Q2 revenue beat: $61.37M actual vs $55.45M* estimate .
  • Q2 EPS (Primary) beat: -$0.051* actual vs -$0.126* estimate; note GAAP net loss per share was -$0.24 as reported in the 8-K .
  • Q2 EBITDA beat: -$2.99M* actual vs -$5.26M* estimate; Omada’s adjusted EBITDA was -$0.16M (different definition) .
  • FY 2025 consensus sits at $253.34M* revenue and -$1.42M* EBITDA; company guidance implies $235–$241M revenue and -$9M to -$5M adjusted EBITDA .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Operating leverage is showing up: revenue growth outpacing OpEx, margins expanding, and adjusted EBITDA approaching breakeven—a constructive setup into H2 seasonality .
  • GLP-1 companion momentum through two major PBMs increases covered lives and creates cross-sell for broader cardiometabolic suite; outcomes data (persistence and post-discontinuation weight maintenance) is a competitive differentiator .
  • AI is an emerging efficiency and engagement lever: near-term productivity gains demonstrated; upside not yet embedded materially in long-term margin targets, offering potential estimate revisions if sustained .
  • Hardware economics remain a drag; continued services-led growth and care team/platform efficiencies should support gross margin trajectory .
  • Liquidity is robust post-IPO with $223M cash; debt repaid post-quarter, reducing interest expense and removing covenants—improves financial flexibility for targeted investments .
  • Near-term trading: revenue/EPS/EBITDA beats and margin expansion are positive catalysts; watch H2 selling season conversion, GLP-1 mix impacts on ARPU, and operating expense discipline .
  • Medium-term thesis: scale via channel partners, multi-condition platform, and AI-enabled care delivery can drive sustainable growth and margin gains; track cash flow improvement and alignment between GAAP/adjusted metrics over time .
Footnotes:
- S&P Global Primary EPS and EBITDA may reflect normalization and definitional differences vs GAAP and adjusted EBITDA as presented in Omada’s 8-K; comparisons to consensus are anchored on S&P Global definitions.

Citations:
Press release and 8-K Q2 2025:
Earnings call transcript Q2 2025 (prepared remarks and Q&A):
Q2 2025 earnings slides and historical quarterly context:

Values marked with * retrieved from S&P Global.