Omada Health Q3 FY2025 earnings call

Innovation

• Introduced OmadaSpark, an AI-powered agent interacting with members alongside human coaches. Launched Meal Map, an AI-driven nutrition experience combining instant nutrient feedback and personalized guidance from care teams.
• Announced prescribing for anti-obesity medications within the GLP-1 Care Track as a planned option for clients, aiming to support the complexity of medication optimization alongside lifestyle support.

Programs that work

• GLP-1 Care Track members who stopped GLP-1 medications but stayed in the Omada program largely maintained their weight, with 63% maintaining or continuing to lose weight 1 year after discontinuation. Published 30th peer-reviewed manuscript on Omada for joint and muscle health program showing members using virtual physical therapy had lower medical utilization and costs.

Multi-condition platform

• Continued growth in multi-condition adoption, with 75% of customers from a large new channel partner choosing to offer multiple Omada programs, and expansion with a consultant partner to provide Omada's full cardiometabolic suite to employers representing ~110,000 benefit-eligible employees

Total members climbed 53% year-over-year to 831,000. Revenue grew 49% year-over-year to $68 million. GAAP gross margin reached 66% with non-GAAP at 68%, both up sharply from Q3 last year. We tightened the bottom line, reducing our net loss to $3 million versus $9 million in Q3 '24. And for the first time, we delivered a positive adjusted EBITDA quarter with Q3 landing at $2 million compared with a $5 million loss at Q3 a year ago. The revenue contribution comes from various segments including the growth in GLP-1 Care Track members and multi-condition program adoption.

Revenue

• Expect 2025 revenue in the range of $251.5 million to $254.5 million, up from a prior range of $235 million to $241 million.

Adjusted EBITDA

• Expect 2025 adjusted EBITDA in the range of negative $2 million to breakeven, up from a prior range of negative $9 million to negative $5 million. The midpoint of this range reflects an improvement compared to 2024.

Q: Congrats on the great results. Can you spend a few minutes just talking about prescribing of GLP-1 around, one, the fulfillment price? Will you actually be fulfilling the drug? Will it be -- they'll be bringing the coupon or the prescription to the pharmacy? Just if you can talk about this new initiative that you have today and how that will play out.

A: Yes. Certainly, Lisa, this is Sean. Thank you for the question. Good to hear your voice. Let me just first share, we're very excited about this. We view it as a next evolution of our GLP-1 Care Track. So let me just describe a little bit more on the why behind prescribing, and we can answer some of the tactical details you highlighted here. First and foremost, any time we do something new to Omada, we listen to customers, we listen to members. And at the customer level, they're seeing what we're seeing and what we highlighted in the opening remarks, which is a new era of obesity therapeutics, different medicines, different form factors, different price points. And this creates a new need to support our clients and our members with managing the complexity of medication optimization alongside the lifestyle support that they know Omada to be great at. So we think this creates a new world where Omada can serve to support the right GLP for the right person to deliver additional client and member value, and that's really germane to the mission to bend the curve. Specific to some of the tactics, actually, this will be an integrated experience within the Omada care program, but these will not be compounded meds. They'll be branded meds fulfilled by the pharmacy of the member's choice, and it will be an enterprise model working specifically with clients and plans. And I don't know, Wei-Li, you have anything to comment on top.

Q: Just as a quick follow-up there. I mean, we saw Trump making an announcement on TrumpRx talking about GLP-1s in roughly the $149 range. Should I be thinking that you're going to have the opportunity to offer these at a pretty substantial discount?

A: Look, on the announcement, we believe that today's announcement is really a neat moment and perhaps a transformational moment for the field of obesity. And it's almost a serendipitous that it occurred on the day that we launched a prescribing solution because as shared, we've been looking toward a world with different meds, different price points, perhaps even different price points at different doses with different indications. That world creates a lot of complexity for buyers. That world creates an opportunity to simplify that for buyers and members. And so that's germane to the news we announced today. And we're thrilled by it. I mean, at the end of the day, lower prices enables broadened access. And we think that's a great thing for the world and are really heartened with seeing that news.