Evercore ISI analyst Elizabeth Anderson added Omada Health (OMDA) to the firm’s “Tactical Outperform” list as the firm updates estimates and makes several tactical calls in the Healthcare Technology & Distribution group ahead of Q3 earnings season. The firm keeps an Outperform rating and $27 price target on Omada shares. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confi ...

The approach defies the restrictive weight loss paradigm, with early results indicating increased meal tracking and member engagement1 with new real-time, personalized nutrition guidance SAN FRANCISCO, Oct. 01, 2025 (GLOBE NEWSWIRE) -- Omada Health (Nasdaq: OMDA), the virtual between-visit healthcare provider, launches Meal Map, a new nutrient-categorization tool that combines AI-powered instant feedback with human care teams to help members in its cardiometabolic programs understand the nutrient quality of ...

Group 1 - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1] - The goal is to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Company Overview - Omada is positioned as a "between-visit provider," addressing the needs of the 156 million Americans with chronic diseases who are often limited to a visit-by-visit healthcare model [4]. Leadership Insights - Sean Duffy, Co-Founder and CEO of Omada, emphasizes the company's mission to improve chronic disease management beyond traditional clinical visits [4]. Market Context - The discussion takes place following Omada's IPO and its first quarterly earnings report, indicating a significant moment for the company as it seeks to establish its presence in the health tech sector [3].

Omada Health FY Conference Summary Company Overview - **Company**: Omada Health (NasdaqGS:OMDA) - **Industry**: Health Technology - **Focus**: Digital health solutions for chronic disease management, including prediabetes, obesity, diabetes, hypertension, and musculoskeletal care [4][5] Key Financial Highlights - **Q2 Revenue**: $61 million, representing a **49% year-over-year growth** [6] - **Customer Base**: Over **2,000 customers**, including employers, health plans, integrated health systems, and PBMs [5] - **Membership**: **752,000 members** as of the end of Q2 [5] - **Market Penetration**: - **14%** in self-funded lives - **9%** in fully insured lives - **1%** in Medicare Advantage [9][10] Core Business Strategies - **Multi-Condition Approach**: Over **31%** of customers engage with Omada across multiple conditions, enhancing customer retention and satisfaction [8][43] - **Growth Algorithm**: Focus on expanding into self-insured, fully insured, and Medicare Advantage markets, leveraging existing payer relationships [9][10] - **GLP-1 Care Track**: A new program aimed at supporting members on GLP-1 medications, showing promising results in weight maintenance post-discontinuation [11][12][13] Competitive Differentiators - **Comprehensive Care Model**: Omada combines technology with personalized care, termed "compassionate intelligence," to enhance member engagement and outcomes [17][18] - **Research and Trust**: The company has published **30 peer-reviewed studies**, establishing credibility and trust in its solutions [18] - **Operational Efficiency**: The care delivery platform allows for scalability without proportional increases in costs, enabling the company to serve more members effectively [34][35] Technology and Innovation - **AI Integration**: Omada is leveraging AI to improve member experience, including nutritional advice and care team efficiency, resulting in **20% efficiency gains** in pilot data [25][28] - **Omada Spark**: A new capability that enhances member engagement through personalized insights and support [25][26] Market Trends and Opportunities - **Rising Demand for Chronic Disease Management**: The increasing focus on metabolic diseases and chronic conditions is creating opportunities for Omada to expand its market presence [39][41] - **Cost Pressures**: Employers are seeking solutions to manage rising healthcare costs, making Omada's offerings more attractive [41][42] Financial Outlook - **Long-Term Gross Margin Target**: Aiming for **70%+ gross margin** through increased multi-condition traction and improved marketing effectiveness [31] - **Revenue Growth**: Expected to grow **40%** this year, with a focus on operational leverage and cost control [33] Investor Insights - **Market Positioning**: Omada's model is positioned as a provider that delivers care rather than just technology solutions, differentiating it from competitors [55] - **Billing Structure**: Contracts with covered entities allow Omada to bill into medical spend, enhancing its financial viability [55] Conclusion Omada Health is well-positioned in the health tech industry, focusing on chronic disease management through innovative digital solutions and a comprehensive care model. The company's strong growth trajectory, combined with its commitment to research and operational efficiency, presents a compelling investment opportunity.

Core Insights - Omada Health's analysis indicates that 63% of members maintained or continued to lose weight one year after discontinuing GLP-1 medications, challenging the assumption of inevitable weight regain post-medication [1][2][3] - The average weight change among members was only 0.8% after one year, significantly lower than the typical 11-12% weight gain observed in clinical trials without lifestyle support [2][4] Group 1: Analysis Findings - The retrospective analysis involved 816 members and tracked weight change at 6, 9, and 12 months post-GLP-1 discontinuation, showing consistent weight maintenance with minimal average changes of 0.03% at 6 months and 0.6% at 9 months [2][4] - Omada's program emphasizes the importance of lifestyle support, including behavioral guidance and connected devices, to help members maintain weight loss after stopping GLP-1s [3][4] Group 2: Implications for Employers - The findings suggest that Omada's program can help employers manage rising costs associated with GLP-1 medications by preventing wasted healthcare dollars and ensuring effective weight maintenance [3][4] - Omada Health's approach aims to deliver lasting value to both members and customers by supporting weight loss and maintenance throughout the GLP-1 journey [3][4] Group 3: Company Overview - Omada Health is a virtual-first healthcare provider focused on improving health outcomes and containing healthcare costs, with over a decade of experience and more than 30 peer-reviewed publications [5][6] - The company serves over 2,000 customers, including health plans, health systems, and employers, ranging from small businesses to Fortune 500 companies [5][6]

Core Insights - Omada Health's virtual physical therapy program for musculoskeletal conditions demonstrates lower healthcare utilization and costs compared to in-person physical therapy, indicating a potential for cost-effectiveness over time [1][2][3] Group 1: Company Overview - Omada Health is a virtual-first healthcare provider focused on chronic conditions, including musculoskeletal issues, diabetes, and hypertension, with over a decade of experience and 30 peer-reviewed publications [6][7] - The company has a diverse customer base exceeding 2,000, including health plans, health systems, and employers from small businesses to Fortune 500 companies [7] Group 2: Study Findings - The study revealed that patients using Omada's virtual physical therapy program had median savings of over $100 per member per month in the first six months, with gross savings exceeding $1,000 at both six and 12 months [3] - The return on investment (ROI) for the program was calculated at 1.8 times at both six and 12 months, highlighting its financial benefits for employers and health plans [3] Group 3: Industry Context - Musculoskeletal conditions affect over 50% of adults in the U.S. and cost the healthcare system over $420 billion annually, surpassing costs associated with diabetes and heart disease [2] - Barriers to accessing physical therapy include geographic limitations, provider availability, and insurance coverage restrictions, which can lead to increased downstream costs [2]

Company Overview - Omada Health is a virtual-first healthcare provider focused on improving lifelong health through clinically-validated behavior change protocols for conditions such as diabetes, hypertension, prediabetes, and musculoskeletal issues [2] - The company has over a decade of experience and data, supported by 29 peer-reviewed publications demonstrating its clinical and economic results [2] - Omada serves more than 2,000 customers, including health plans, health systems, and employers ranging from small businesses to Fortune 500 companies [2] Corporate Culture and Recognition - Omada Health has established a strong work culture, earning the distinction of being an officially certified Great Place to Work [3] - The company is recognized as an industry leader and was the first virtual provider to join the Institute for Healthcare Improvement's Leadership Alliance, emphasizing its commitment to complementing primary care providers [3] Upcoming Events - Members of Omada Health's senior management will participate in the Morgan Stanley 23rd Annual Global Healthcare Conference on September 9, 2025, at 5:35 pm ET, with a webcast available online [1]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited financial statements show a significant cash increase post-IPO, strong revenue growth, and a narrowing net loss, reflecting the conversion of preferred stock [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a substantial increase in assets and a shift to positive stockholders' equity, driven by IPO proceeds Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $223,146 | $76,392 | | Total current assets | $271,105 | $113,059 | | Total assets | $302,971 | $150,892 | | Total current liabilities | $57,988 | $53,953 | | Total liabilities | $88,757 | $86,261 | | Total stockholders' equity (deficit) | $214,214 | $(384,403) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company achieved strong revenue growth and a significantly narrowed net loss in Q2 2025, demonstrating improved operational efficiency Statement of Operations Summary (in thousands, except per-share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $61,371 | $41,212 | +49% | $116,334 | $76,307 | +52% | | Gross Profit | $40,306 | $24,834 | +62% | $72,206 | $42,182 | +71% | | Operating Loss | $(4,344) | $(10,037) | +57% | $(12,740) | $(28,030) | +55% | | Net Loss | $(5,311) | $(10,692) | +50% | $(14,759) | $(29,661) | +50% | | Net Loss Per Share | $(0.24) | $(1.40) | +83% | $(0.98) | $(3.92) | +75% | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) Stockholders' equity became positive due to the IPO proceeds and the conversion of all redeemable convertible preferred stock - The company received net proceeds of **$151.6 million** from its Initial Public Offering (IPO) in Q2 2025[30](index=30&type=chunk) - In connection with the IPO, all outstanding redeemable convertible preferred stock, valued at **$452.1 million**, was converted into common stock[30](index=30&type=chunk)[84](index=84&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations improved, and financing activities, driven by IPO proceeds, substantially increased total cash reserves Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,260) | $(28,748) | | Net cash used in investing activities | $(2,499) | $(1,826) | | Net cash provided by (used in) financing activities | $162,513 | $(898) | | **Net increase (decrease) in cash** | **$146,754** | **$(31,472)** | - The company received **$160.5 million** in proceeds from its IPO, net of underwriting discounts and commissions, during the first six months of 2025[33](index=33&type=chunk)[209](index=209&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key events including the IPO, a reverse stock split, significant customer concentration, and a subsequent debt repayment - The company completed its IPO on June 9, 2025, raising net proceeds of **$151.6 million** after deducting underwriting discounts and offering expenses[44](index=44&type=chunk) - A **one-for-three reverse stock split** of the company's common stock was effected on May 27, 2025[43](index=43&type=chunk) - Two significant channel partners, both affiliates of The Cigna Group, accounted for **32% and 33% of revenue**, respectively, for the three months ended June 30, 2025[49](index=49&type=chunk) - As a subsequent event, on July 31, 2025, the company fully repaid its outstanding MidCap Term Facility and MidCap Revolving Facility debt, with principal and accrued interest balances of **$31.0 million** and **$0.4 million**, respectively[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong revenue and member growth, improved gross margins from efficiency initiatives, and a strengthened liquidity position following the IPO and subsequent debt repayment [Overview and Business Model](index=30&type=section&id=Overview%20and%20Business%20Model) Omada provides virtual care programs for chronic conditions via a B2B2C model, serving over 752,000 members as of June 30, 2025 - Omada offers virtual care programs for cardiometabolic conditions, musculoskeletal (MSK) conditions, and provides support for members taking GLP-1 agonists[110](index=110&type=chunk)[113](index=113&type=chunk) - The company operates on a B2B2C model, selling primarily to employers, health plans, and PBMs[112](index=112&type=chunk)[121](index=121&type=chunk) - Total members enrolled reached over **752,000** as of June 30, 2025[114](index=114&type=chunk) [Key Factors Affecting Performance](index=33&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Performance hinges on acquiring and retaining customers, expanding program adoption, and driving member enrollment and engagement - Key growth strategies include acquiring new customers and channel partners, retaining existing relationships, and expanding the number of programs used by each customer[126](index=126&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Member enrollment and engagement are crucial for revenue, as most customer fees are based on these metrics, and some contracts include performance guarantees tied to clinical outcomes or cost savings[130](index=130&type=chunk)[131](index=131&type=chunk) [Key Metric](index=34&type=section&id=Key%20Metric) The primary performance metric, Total Members, grew 52% year-over-year to 752,000 as of June 30, 2025 Total Members Growth | As of | Total Members | | :--- | :--- | | June 30, 2024 | 496,000 | | March 31, 2025 | 679,000 | | June 30, 2025 | 752,000 | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q2 2025 revenue grew 49% YoY to $61.4 million, with gross margin improving to 65.7% due to operational efficiencies Revenue Comparison (in thousands) | Period | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $61,371 | $41,212 | $20,159 | 49% | | **Six Months Ended June 30** | $116,334 | $76,307 | $40,027 | 52% | Gross Profit and Gross Margin Comparison | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | | | | Gross Profit (in thousands) | $40,306 | $24,834 | | Gross Margin | 65.7% | 60.3% | | **Six Months Ended June 30** | | | | Gross Profit (in thousands) | $72,206 | $42,182 | | Gross Margin | 62.1% | 55.3% | - Gross margin expansion was primarily driven by lower personnel costs per member due to strategic efficiency initiatives and the use of supporting technologies for the Care Team[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was significantly enhanced by $151.6 million in net IPO proceeds, enabling the full repayment of its $31.0 million debt facility post-quarter - As of June 30, 2025, the company's principal sources of liquidity were cash and cash equivalents of **$223.1 million**[197](index=197&type=chunk) - The company completed its IPO on June 9, 2025, receiving net proceeds of **$151.6 million**[202](index=202&type=chunk) - On July 31, 2025, the company fully repaid its outstanding debt under the MidCap Term Facility and MidCap Revolving Facility, totaling **$31.0 million** in principal[203](index=203&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are identified as interest rate fluctuations affecting its cash and debt, and inflation impacting operating costs - **Interest Rate Risk:** The company is exposed to interest rate risk from its cash equivalents and its variable-rate financing arrangements, though a hypothetical 10% change was not expected to have a material impact[221](index=221&type=chunk) - **Inflation Risk:** The company believes that inflation is impacting customer spending decisions and could increase its own costs for labor, sales, marketing, and cloud hosting, potentially harming results if not offset by price increases[222](index=222&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective due to material weaknesses in internal control over financial reporting, with a remediation plan underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2025, due to ongoing material weaknesses in internal control over financial reporting[223](index=223&type=chunk) - The material weaknesses relate to: (i) inadequate segregation of duties, (ii) insufficient personnel with appropriate technical accounting knowledge, and (iii) inadequate formalized financial close and reporting processes[225](index=225&type=chunk) - A remediation plan is underway, which includes hiring additional resources, implementing new controls, and formalizing business processes[226](index=226&type=chunk)[231](index=231&type=chunk) [Part II - Other Information](index=53&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently party to any **material legal proceedings**[233](index=233&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its history of net losses, customer concentration, competition, regulations, and internal control weaknesses - **Financial and Operational Risks:** The company has a history of net losses and may not achieve or maintain profitability, with growth dependent on managing expansion effectively and retaining customers[238](index=238&type=chunk)[240](index=240&type=chunk) - **Customer Concentration Risk:** A substantial portion of sales comes from or through a limited number of customers and channel partners, with affiliates of **The Cigna Group** being particularly significant[260](index=260&type=chunk) - **Regulatory and Compliance Risks:** The business is subject to extensive healthcare regulations, including HIPAA, state privacy laws, consumer protection laws, and state laws prohibiting the corporate practice of physical therapy[345](index=345&type=chunk)[347](index=347&type=chunk)[361](index=361&type=chunk) - **Internal Control Risk:** The company has identified and is remediating **material weaknesses** in its internal control over financial reporting related to segregation of duties, technical expertise, and formalized processes[237](index=237&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=107&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details the use of its $151.6 million in net IPO proceeds, a portion of which was used to repay outstanding debt - The company completed its IPO on June 9, 2025, receiving net proceeds of approximately **$151.6 million** after deducting underwriting discounts and offering expenses[440](index=440&type=chunk) - A portion of the net proceeds from the IPO was used to repay outstanding borrowings under the MidCap Credit Agreement[442](index=442&type=chunk) [Defaults Upon Senior Securities](index=108&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - Not Applicable[444](index=444&type=chunk) [Mine Safety Disclosures](index=108&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not Applicable[445](index=445&type=chunk) [Other Information](index=108&type=section&id=Item%205.%20Other%20Information) No director or officer trading plans were adopted, modified, or terminated during the quarter - No director or officer trading plans under Rule 10b5-1 were adopted, modified, or terminated during the quarter[446](index=446&type=chunk) [Exhibits](index=109&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the report, including governance documents and required officer certifications - The report includes an index of all exhibits filed, such as corporate governance documents, material agreements, and required CEO/CFO certifications[448](index=448&type=chunk)[449](index=449&type=chunk)[450](index=450&type=chunk)

Financial Data and Key Metrics Changes - Total members increased by 52% year over year to 752,000 [4][17] - Revenue rose by 49% year over year to $61 million [5][34] - GAAP gross margin improved to 66% from 60% year over year, while non-GAAP gross margin reached 68% [5][35] - GAAP net loss narrowed to $5 million compared to $11 million in Q2 2024 [5][39] - Adjusted EBITDA loss was $200,000, significantly improved from a $7 million loss in Q2 2024 [5][39] Business Line Data and Key Metrics Changes - Member growth was driven by strong sales of GLP-1 offerings and multi-condition adoption [17][34] - The GLP-1 CareTrack program showed significant growth, contributing to overall member increases [53][54] Market Data and Key Metrics Changes - The total addressable market is estimated to be over $135 billion, with only 14% penetration in self-insured lives and 1% in Medicare Advantage [13][22] - Existing health plan partners cover approximately 156 million lives, representing a significant growth opportunity [22][23] Company Strategy and Development Direction - The company focuses on a multi-condition platform rather than point solutions, which has become a key differentiator [20][31] - Innovation is a strategic pillar, with recent launches like Omada Spark, an AI agent for member support [24][28] - The company aims to leverage AI to enhance member engagement and operational efficiency [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing momentum and the potential for growth in the GLP-1 landscape [66][88] - The company is focused on balancing growth and profitability, with strategic investments planned for the second half of the year [66][67] Other Important Information - The company ended Q2 with cash and equivalents of $223 million, a significant increase from $59 million in Q1 2025 [40] - Total debt was $31 million, which was paid off after the quarter [41] Q&A Session Summary Question: How is technology being leveraged to scale the platform? - Management highlighted the integration of AI technologies to enhance member experience and care team efficiency, with positive early data on member engagement [44][48] Question: What is the current status of the GLP-1 CareTrack program? - The program is experiencing significant growth, although it still represents a minority of total membership [53][54] Question: What is driving member growth? - Growth is attributed to successful upselling, improved outreach productivity, and the effectiveness of multi-channel marketing [60][62] Question: How does the company balance growth and profitability? - The company plans to make targeted investments while maintaining a focus on profitability, especially in the GLP-1 and AI sectors [66][67] Question: What is the competitive landscape like? - The company sees strong engagement and clinical outcomes as key differentiators in a competitive market, with a focus on proactive care and clinical evidence [75][76]