OMDA

Day, thank you for standing by. Welcome to the Omada Health First Quarter 2026 earnings 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 will need to press star one one on your telephone. You will hear an automated message advising 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, Chief Accounting Officer, Investor Relations.

Thank you. Good afternoon. Welcome to Omada Health first 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 SEC filings. 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.

Thank you, Craig. Good afternoon, everyone, and thank you for joining us. Q1 2026 was a milestone quarter for Omada. Here's our financial snapshot compared to a year ago. 42% revenue growth with a lower net loss and positive adjusted EBITDA, with a higher gross margin and a guidance raise. Our business is largely driven by four growth levers. Let me explain the importance of each. Expanding reach, the total lives with benefits coverage for our programs through channel and employer relationships. Increasing enrollment, how effectively we convert those covered lives into multi-condition members. Deepening engagement through advancements in our member experience, including our AI-powered food and behavioral platform that includes OmadaSpark and Meal Map. Operational efficiency, the AI clinical model and operational investments designed to improve outcomes and margins as we scale. I'll walk through the headlines across all four levers.

Wei-Li will then take you inside the platform into the operational and commercial details behind reach, enrollment, and engagement. Steve will walk through the financial picture, including our updated outlook, and I'll come back at the end to bring it all together. The headline of the quarter is reach. In Q1, we saw the new investments in our GLP-1 capabilities begin to demonstrate traction. Omada is proud to join Optum Rx's Weight Engage portfolio to help employers expand responsible, clinically supported access to GLP-1 and other anti-obesity medications through their existing pharmacy benefit manager. This collaboration marks Omada's first offering of prescribing capabilities within a PBM channel, reflecting our shared commitment to improving coordinated care for employers and members. Omada now has relationships with the nation's leading pharmacy benefits managers, who serve most commercially insured lives and process 80% of prescription claims.

Today, we announced that Omada is joining Eli Lilly and Company's Employer Connect to offer our GLP-1 Care Track, also including prescribing capabilities directly to employers. Across these announcements, Omada can now meet employers where they are, whether they are already covering GLP-1s, exploring coverage for the first time, or looking for a lower cost alternative through an employer-defined contribution model. Critically, our GLP-1 capabilities remain the tip of the spear for sales conversions across the broader Omada platform, which is driving growth across the full cardiometabolic suite. Turning to enrollment. In Q1, our total members grew 51% year-over-year, crossing 1 million for the first time in our history, a direct result of our expanded reach and our relentless iteration in enrollment marketing effectiveness.

We continue to see strong enrollment across our GLP-1 services, but importantly, across the full suite of our cardiometabolic services like hypertension and diabetes. On engagement. Member engagement continued to deepen this quarter as we scaled our nutrition experience with continued advancements in OmadaSpark and Meal Map. On efficiency. We narrowed our GAAP loss significantly and delivered positive adjusted EBITDA in Q1, which is historically our most cost-intensive quarter, showing the operating leverage we committed to demonstrating. Behind that result is AI showing up across our business in a structural way. In care delivery, our tooling now summarizes member data and surfaces potential next actions for care team review, reducing the administrative burden on our care teams. In engineering, AI-assisted development has accelerated our product velocity and the ability to say yes to new customer needs.

Across operations and member support, we are converting routine manual processes into automated workflows that create capacity without adding cost. Taken together, these investments are not only improving the member and care team experience today, we believe they are beginning to provide a foundation for a structural tailwind to margins. The reason we have scaled this way, adding channels, adding conditions, adding capabilities like prescribing without breaking stride, is that each new relationship, each new capability plugs into a complex system that promotes a positive, durable network effect for Omada and differentiates us from our competitors.

Part of what underpins our commercial success is a large set of relationships that we have built over the past 15 years. Omada has worked to build institutional trust with many of the nation's largest employers, health plans, and PBMs, embedding our programs in benefits designs, clinical workflows, and compliance processes to create integrated partnerships that we believe many of our partners have come to rely upon. Our clients are not paying us to make their business more efficient. They are not buying software or SaaS seats. They are paying us to improve the health of their members and provide measurable outcomes in diabetes, hypertension, cholesterol, weight health, and MSK.

We have worked thoughtfully for years investing in areas like clinical sophistication, regulatory and privacy compliance, and information security to meet the exacting standards of these partners, not as a software vendor, an automated tool, or a consumer wellness solution, but instead as a HIPAA-covered entity and a recognized provider of true healthcare. We also have a rich cardiometabolic data set, tens of millions of care team interactions, and billions of data points across weight, diabetes, hypertension, and musculoskeletal health. This data advantage is a reflection of our scale and operating history and helps us rapidly improve our care. We have published 30 peer-reviewed studies and maintain third-party accreditations from organizations like NCQA and URAC, evidencing our ability to meet their exacting standards and further differentiating our clinical, regulatory, and compliance capabilities.

We have designed our own co-intelligent care model that combines human coaching with AI tools to deliver personalized care at scale using our unique data to power functional AI workflows for members and care teams, not just model benchmarks. That combination of enterprise-grade distribution, extensive data, clinical and accreditation depth, proven and published outcomes, and a care model refined over more than a decade of real-world deployment, that is the durable position that we work to maintain and to widen quarter after quarter. Before I turn it over to Wei Li, I want to ground this in the lives of the people we serve. One member recently shared, "I've been using the Omada app for years, and it truly changed my life. Through better choices, discipline, and consistency, I've lost over 60 pounds. I don't need a seatbelt extender on planes anymore. My toes don't tingle.

I make better choices without feeling restricted. For years, I thought food was my best friend. It was comfort. It was coping. Now I see it for what it is, fuel for the life I'm building. Exceptional stories like that are why Omada exists. 3 in 4 American adults have at least 1 chronic condition, and over half have 2 or more chronic conditions. The healthcare system still organizes much of their care around limited clinical touchpoints. Omada puts the space between those visits at the center of care. With that, over to Wei Li.

Thanks, Sean. As Sean shared, we crossed the milestone of 1 million total members. We ended Q1 with 1,025,000 total members, up 51% year-over-year. This is 139,000 net new members in Q1 2026 compared to 107,000 in Q1 2025. Importantly, growth was broad-based across the cardiometabolic suite. We saw strong year-over-year growth in our hypertension and diabetes programs, reinforcing that our momentum extends well beyond GLP-1 offerings. Multi-condition close rates remain strong. 2 complementary drivers are amplifying this growth. First, enhancements to our enrollment experience converted more eligible members across email and direct mail, with particularly strong gains in diabetes and hypertension. Second, we continue to transition a majority of our accounts to Omada-led outreach, which is generating enrollment rates higher than non-Omada-led accounts.

Turning to our commercial progress, this quarter, we made meaningful strides expanding our channel and customer relationships. We now have relationships with all three of the nation's largest pharmacy benefit managers and are deepening our presence across the GLP-1 ecosystem. As Sean mentioned, we are proud to have joined Optum Rx's Weight Engage portfolio. In addition to GLP-1 care, Omada's prevention and weight health, hypertension, and musculoskeletal programs are available for Optum Rx clients to purchase. As an independent program administrator in Eli Lilly and Company's Employer Connect, we plan to support employers seeking direct GLP-1 access by pairing our clinical support and behavioral coaching model. Employers will be able to offer their members transparent, clinically guided access to anti-obesity medications alongside Omada's wraparound care.

In the quarter, we also added several large, nationally recognized private employers as customers, including L.L.Bean, Kwik Trip, and Breakthru Beverage, alongside additional public sector and regional health system wins. Together, these new and expanded relationships meaningfully extend our reach and further multi-condition penetration while giving us access to a broader and more diverse set of covered lives across PBM, health plan, and employer channels. We are still in the early innings of serving many of these newly covered populations, which can take multiple sales cycles to build into. GLP-1s have not just driven demand for medication. They have expanded how many employers think about cardiometabolic care more broadly. Whether or not they choose to cover these therapies, we find that employers are increasingly prioritizing weight and metabolic health and looking for solutions that can support their populations. This shift has played directly to our strengths.

This reflects a fundamental reality. Nine out of 10 people taking GLP-1s for obesity are also managing at least one other chronic condition. Since launching our GLP-1 Care Track, we have supported more than 150,000 members as of the end of 2025. Building proof points for our wraparound care model. Let me walk you through how our offerings map to the different ways employers approach GLP-1 benefits. For employers already covering GLP-1 through one of our PBM partners, our GLP-1 Care Track delivers companion care, including behavioral coaching, support with side effect management, and other clinical support alongside the pharmacy drug benefit. This is now available through the three largest PBM channels.

Our GLP-1 Care Track can also help sustain outcomes after discontinuation, with data showing just 0.8% average weight change one year after stopping therapy compared to 11%-12% regain in key clinical trials without ongoing support. For employers seeking clinically managed prescribing, as GLP-1 therapies evolve, employers need support navigating medication selection and titration across benefit designs intended to improve outcomes and manage cost. Prescribing is a natural extension of our model, and we are excited about our first offering of prescribing capabilities with Optum Rx. Given annual enrollment cycles, we expect revenue contribution from prescribing offerings to build more meaningfully in 2027. For employers not yet covering GLP-1s who want an alternative to traditional coverage, we can support direct-to-employer pathways that give them a more flexible way to begin offering access with more predictable costs.

That includes Omada GLP-1 Flex Care, which combines clinical evaluation, prescribing support, behavioral coaching, and ongoing virtual care while eligible members access medication through vetted cash pay channels. Also includes our work with Lilly's direct-to-employer offering, which provides employers with another option for transparent net costs for Zepbound and allows to define contribution levels, creating a predictable cost structure for obesity medications. For members discontinuing GLP-1 therapy who need ongoing support, we provide behavioral coaching, clinical guidance, and multi-condition care. In published results, members who remained engaged with our care track largely sustained their outcomes at 12 months. This is where the full value of the platform becomes clear, supporting members not just during medication use, but across their broader health journey. The strategic takeaway is this: GLP-1s have increased both the demand for and the complexity of cardiometabolic care.

Employers need a partner who can navigate that complexity across coverage models, clinical needs, and member journeys. Omada is building exactly that clinical infrastructure, connecting programs, prescribing, and support into a unified platform to help maximize the benefit of GLP-1 investments. Turning to our evidence base. Our newest clinical analysis announced last month demonstrates that Omada members in our GLP-1 Care Track on average lost 1.8 times the total weight and 2 times the body fat while preserving their lean muscle mass compared to a control group over a 12-week period. This is a clinically meaningful result that we believe matters to employers seeking to justify spending on GLP-1 medication. Without structured lifestyle and clinical support, employers may end up paying for poor results, funding high pharmacy spend on medication that is not providing the durable outcomes their employees seek.

These results, combined with our established body of 30 peer-reviewed studies and insights from supporting 2 million members over the past 15 years, have continued to differentiate Omada in competitive evaluations. Taken together, our expanding commercial relationships, broadening GLP-1 capabilities, and growing body of evidence reinforce a simple point. Omada is becoming part of the connective tissue between how employers buy, how members engage, and how outcomes are delivered across the digital cardiometabolic landscape. With that, I'll turn it over to Steve.

Thank you, Wei-Li. Hello, everyone. Q1 was the strongest first quarter in Omada's history on members, on revenue, on gross margin, and on adjusted EBITDA. Over the past year, we have been building capabilities to position Omada for durable growth, prescribing infrastructure, AI-empowered care delivery, and an expanding set of GLP-1 and cardiometabolic solutions. Revenue was $78 million, up 42% year-over-year, driven by strong GLP-1 Care Track adoption, increased multi-condition penetration across our cardiometabolic suite, and continued progress in enrollment effectiveness. As discussed in last quarter's call, Q4 2025 included approximately $2 million of revenue related to a one-time transaction that did not recur in Q1. Adjusting for that item, Q1 grew 6% sequentially over Q4.

The strength of these results, combined with early traction we are seeing across our new commercial relationships, gave us the conviction to raise full year guidance, which I will walk through in a moment. Turning to gross profit, the leverage in our business continued to show as we delivered strong year-over-year gross margin expansion. Our GAAP gross profit was $49 million in Q1, representing a GAAP gross margin of 62%, up from 58% in Q1 2025. On a non-GAAP basis, gross margin was 64%, up from 60% in Q1 2025. As we've shared, Q1 has historically been our lowest gross margin quarter due to higher enrollment volume and the related care team and device costs. The underlying drivers remain strong. Efficiency gains from our self-built care team platform, AI-powered tools that enhance care team productivity, and the operating leverage inherent in our multi-condition model.

As a result, we see a path to continued gross margin expansion over time, and we believe there is a path to exceed our current long-term target of 70% annual gross margin. One item I wanna flag briefly is the minor impact we have seen thus far from the conflict in Iran, which modestly increased the device-related cost of revenue due to increased shipping costs. This has not been material to Q1, and we currently estimate the full year impact at roughly $1 million. We are also evaluating selectively pre-purchasing certain devices to incur shipping costs up front as a further hedge against volatility. Let me walk through the unit economics. Total members is our headline metric, but it is a composite of members at different stages with different economic profiles, and that composition is key to understanding our business.

Historically, the shape of the member curve has been largely consistent. In year 1, revenue per member has generally been at its highest because enrollment, devices, and initial care activities are concentrated in that period. In years 2 and 3, revenue per member has historically stepped down as members move into streamlined longer-term care, but gross margin per member has stepped up as care delivery costs are meaningfully lower once the front-loaded first year activities are behind us. The member relationship has generally become more profitable on a unit basis as it matures, even as the revenue line moderates. The takeaway in this quarter is a positive structural shift in our member base. Members have stayed with the model longer, and each successive enrollment year has been larger than the one before it. 2025 most of all.

Together, those dynamics mean a structurally higher share of our total members sits in year 2 and beyond entering 2026. That puts near-term pressure on blended revenue per member by design while lifting typical longer-term gross profit per member, the more accretive phase of the curve. This is a good outcome for the business without any change to per program pricing or contract terms. We expect gross profit per member to remain a strength of our model and aim for it to expand further over time as new channel partnerships, our GLP-1 care options, and our prescribing programs layer incremental economics into the existing member base. Moving to operating expenses, our approach is unchanged. Invest responsibly behind key opportunities and continue driving towards profitable growth.

On prior calls, we've mentioned our investments into prescribing capabilities, and it's now clear these investments are aligned to serve our new agreement with Optum Rx. While building these capabilities, we also demonstrated operating expense leverage in the quarter. On a % of revenue basis, both GAAP and non-GAAP operating expenses declined approximately 5 percentage points year-over-year. That leverage is the output of 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. The other driver, and an increasingly important one, is AI. We are not evaluating the leverage opportunity from AI in only one area of the company. The opportunity reflects a deliberate company-wide evaluation of AI tooling across every function.

As AI adoption deepens, we believe it can become a tailwind to operating leverage and margin expansion as we look towards 2027 and beyond. Our GAAP net loss narrowed to $3 million compared to $9 million in Q1 2025, and adjusted EBITDA was $1 million, an improvement of $5 million year-over-year. Delivering positive adjusted EBITDA in our historically highest cost quarter reflects the structural scalability of our model playing out. The strong start to the year has led to an improved full-year adjusted EBITDA outlook that I will discuss in a moment. Our strength and profitability profile has continued to a strong balance sheet as well. We ended Q1 with cash and cash equivalents of $212 million and continue to carry no debt, having fully repaid our term loan ahead of schedule in 2025.

Now let me turn to our outlook. We are raising our full-year revenue guidance to $322 million-$330 million, up from our prior range of $312 million-$322 million. For adjusted EBITDA, we expect a range of $14 million-$20 million, up from a prior range of $7 million-$15 million. At the midpoints, revenue guidance represents approximately 25% growth year-over-year, and adjusted EBITDA reflects a nearly threefold improvement compared to 2025. For both revenue and adjusted EBITDA, the low end of the new guidance range is approximately at the high end of our previous range, reflecting the strength of the quarter and our improved outlook for the year.

The raise reflects two drivers, continued commercial momentum across our channel and PBM partnerships and sustained enrollment effectiveness across the cardiometabolic suite. We believe the new and expanded commercial relationships, along with the record number of planned new program launches, position our model well for durable growth, more diversified revenue, and increasing profitability. Several of those programs and relationships are still in the early stages of commercial ramp, and we do not expect them to contribute materially to revenue in 2026. However, we are in the active selling season for 2027, and that is where we expect these relationships to begin converting to revenue. We believe our growth rate and margin trajectory together demonstrate the financial profile of a durable, high-quality growth business with clear line of sight to the next wave of revenue from new programs and expanded commercial relationships.

With that, I'll turn it back to Sean for some closing remarks before we open it up for questions.

Thank you, Steve. Let me bring it together. Less than a year ago, we stood in front of you as a newly public company with a bold set of ambitions. We said we would invest responsibly in GLP-1 capabilities and AI, demonstrate operating leverage, and prove that clinical quality and scale are not fundamentally at odds. We feel we have delivered on those commitments every quarter since, and Q1 2026 is the latest proof point. Today, we have over 1 million total members. We have significantly expanded our commercial reach. We have an expanding multi-condition platform that includes prevention and weight health, GLP-1 support, diabetes, hypertension, cholesterol, and musculoskeletal care.

We have an evidence base of 30 peer-reviewed studies and a growing body of real-world data that powers our differentiated use of AI and helps us demonstrate ROI to customers. We have a financial profile that has tracked meaningfully ahead of where consensus expected us to be at this point in our journey as a public company. Our 2026 plans include rolling out more new offerings than in any year in the history of our company. The foundation is built. We believe the market is responding, and our team has the ambition to expand our impact from here. With that, we will open it up for questions.

Thank you. Our first question comes from Craig Hettenbach at Morgan Stanley.

Thank you. Wei-Li, nice to see you stay close to your former employer. GLP-1 developments are moving fast. You outlined a bunch of these. Can you just touch on where you're seeing the most interest from current and prospective customers?

Yeah. Hi, Craig. Wei-Li Shao here. Good to hear your voice. Thanks for the question. In terms of where the market is moving as it relates to interest from customers for GLP-1s, we're really seeing it kind of spread fairly evenly across the spectrum. Maybe it's worth kind of reminding people what that spectrum is. You can basically look at the GLP-1 marketplace from an employer standpoint split into 2 buckets. The first one is those that have leveraged the various number of GLP-1 benefit design solutions through their PBM or their health plan. Then those who have not yet provided coverage for GLP-1s, but are actually wanting to, that represents, you know, at least half the marketplace.

What we're seeing across, you know, the spectrum is really interest in two categories. Again, the PBM provided solutions, they're diverse, they meet certain market needs. Also a new segment that's taking a look at alternatives that include different benefit design solutions, different defined benefit contributions, and so on and so forth. This year is, from our perspective, the year where employers will take a look at all these different solutions, determine which one makes sense, and they'll be experiencing a wider range of benefit design solutions to meet what we see as a very diverse and wide-ranging set of needs. Having said all that, we are building traction in our GLP-1 Flex Care program. Obviously, we've just now become a part of an option within the Lilly Employer Connect program.

We'll begin building pipe there. Obviously, Optum Rx as well as the relationship with CVS Caremark that we mentioned last year. We're really seeing kind of even table growth in our pipeline across all those relationships, and we see that as reflecting the, again, diverse and wide range needs from GLP-1 coverage options across the employer landscape.

Craig, this is Sean here. Just to pile on top. To summarize the strategy, Omada endeavors to have a version of our GLP-1 solution that meets whatever version of your strategy sits in. We think that's strategic because it is a dynamic market. You find employers that wanna cover, you find employers that can't, and the flexibility in our solutions allows us to address all of these segments.

Very helpful. Just as my follow-up, any update on just the multi-condition sales, kind of how that's trending, and implications for the operating leverage in the business?

Yeah. Thanks, Craig. Wei-Li Shao here. In terms of multi-condition sales, we continue to build momentum in that direction. As you know, others know, that's been a long-standing strategy for us, system strategy for us. We have shared in previous earnings calls that, you know, our multi-condition close rates or attach rates are on average between 40%-50%. That hasn't changed. We continue to see that, which we think is a good lead indicator and reinforcer of the strategy and the momentum we will continue to experience in multi-condition sales.

Got it. Thank you.

Our next question comes from Constantine Davides at Citizens.

Thanks. Just on the PBM partnerships you've announced. Obviously, ESI is furthest along, but I'd love to understand what's similar or leverageable from one PBM relationship to another. You know, as you look at Caremark ramping up and soon Optum, what nuances require a little bit of learning or heavy lifting on your part?

Yeah. Konstantin, Wei-Li here. Thanks for the question. You know, in general, if you're referring to the go-to-market motion with each of the PBMs, if that's the question, I would say in general, the approach is similar directionally. The way I would describe that is basically, you know, we partner with their sales teams, their account executives. They oftentimes number in the thousands, which helps us expand our share of voice and selling footprint out in the marketplace. We're certainly doing that across CVS Caremark, Optum Rx. We've begun doing that now, of course, as you might expect, and of course, ESI or Evernorth. That part is similar and is a scalable motion for us given the enablement is similar and we can do that.

The other one that is similar, of course, is multiple of our products are available through each and every one of those channels. You'll find the complement of our cardiometabolic as well as MSK programs available in addition to GLP-1. That too is similar as well. The other one that I think would be reliably similar across them, which again speaks to the scale of the opportunity across all three, is that the sales motion and sales cycle is similar from a timing and what it would take, and they actually feather and layer on top of each other. What do I mean? Obviously, we've had a longer standing relationship with ESI and Evernorth. That's a mature business. It continues to grow nicely. We build pipe.

Last year we announced CVS Caremark and, at that time when we announced that, I said our first order of business is to build pipe. We did that. Our second order of business in the back half of the year was to close deals. We did that too as well. The third order of business, of course, was Q1 this year, is to deploy those deals. We've got now thousands and thousands of new members coming into our business through the CVS channel. We expect and certainly plan to do the similar thing with Optum Rx. We'll follow that same first, second, third order of business with material gains and contribution from Optum Rx predominantly beginning in Q1 of next year.

Our next question comes from Richard Close at Canaccord Genuity.

Yes, congratulations. I'm curious on the Lilly announcement, direct to employer, how that specifically works. What's the, I guess, program offering you're offering? Is it the employers are giving, you know, the member essentially a certain amount of money to, you know, purchase the drug directly and then, and then you're essentially getting paid by the employer for the companion program? Just help us better understand that.

Yeah, Richard, this is Sean. Let me just characterize which segment that sits in, and then I'll pass it to Wei-Li Shao for the detail there. The Lilly direct program is for the employers that do not cover GLP-1s. It's a, you know, similar category as our GLP-1 Flex Care, and so it offers the chance for those employers to give their employees, you know, something. And although in that instance, they're not paying for the med, they can create an employer a specific benefits contribution, you know, to the med.

Yeah. Thanks, Sean. Let me follow through on terms of how it works. You know, obviously Lilly would be the definitive body to talk about the entire program, but I certainly can talk about it, how it relates to Omada. You know, the Lilly Employer Connect program is a solution that is outside of PBM. It's a carve-out. Employers will opt into Lilly Employer Connect solution and as part of that, have the option to actually engage and utilize Omada should they actually choose Omada as their clinical backbone. If they do, there are 3 components.

The first one is the clinical part of it, which is a scaled offering of our GLP-1 prescribing solution seamlessly married up to our GLP-1 Care Track, which is our lifestyle wraparound solution. The second one is through Lilly in the Employer Connect programs, to be able to access a net transparent cost or price for Zepbound. The third is, as you mentioned, an option for employers to actually reduce the out-of-pocket cost for the GLP-1, in this case, Zepbound, through a defined benefit contribution. Employers, in partnership with the different administrators on the platform could pick the level that they want to do so.

All in all, the goal is to provide an alternative to because again, the needs for coverage and how they want to do coverage and how employers choose to do that, the needs are diverse and wide-ranging, and this represents an opportunity to meet, you know, a significant amount, or a few segments in that buyer selection. I think I'd cap it off by saying, as Sean just said, to reinforce that, you know, we're proud and privileged to be able to be part of the Lilly Employer Connect program.

It really is about a bigger portfolio strategy and allowing employers to opt into a number of different potential benefit design solutions knowing that Omada is the clinical backbone in the one they would choose.

Okay. Very helpful. You know, we've been hearing a lot more of employers in the face of, you know, these rising costs, you know, historically have waited to implement programs, you know, with January, the new benefit year. We've been increasingly hearing that, you know, they need to do something now. I'm curious what you're hearing, what you're thinking about, like the opportunity for intra-year launches. Just any update there would be helpful.

Yeah, Richard, I take your question to mean not just about GLP-1s, but writ large, in the category and what its impact to Omada is. I'll speak to GLP-1s first, then I'll speak to the broader cardiometabolic sector, obviously that we lead in. On GLP-1s, yeah, I mean, it's true, there are a number of employers that have made their benefit design solution decision, some of which obviously are rolling them out, some of which are kind of waiting and watching and evaluating this year. Suffice it to say, I think a lot of employers, regardless of their solution, are accelerating their decision-making process, meaning they're engaging in that process sooner in the year than they normally do.

Whether or not that leads to an acceleration for off-cycle closed deals, we're too early in the year to be able to see that. We know that the pipeline is building nicely in that regard across the portfolio benefit design solution. I think there's stuff there yet to be seen, certainly the conversations would be more active than typical, I guess is the way I would put it. Across the cardiometabolic suite, because GLP-1s is kind of the gateway to our broader cardiometabolic discussion to support clinically those employees that are not taking a GLP-1, that is kind of riding the coattails of the GLP-1 discussion. We find that also to be increasing in activity and is certainly contributing to pipe build.

Again, too early to call as to whether or not that's gonna lead to more off-cycle builds. Where we do see our off-cycle deals, where we do see more off-cycle deals coming through, is when we're launching actually new programs. For instance, we announced our cholesterol program last year. We are seeing more off-cycle deal closes sooner in the year than we normally would have for a product that may be for a few years.

All right. Thank you.

Our next question comes from David Roman at Goldman Sachs.

Thank you. Good afternoon, everybody. Steve, I wanted just to come back to your commentary around pricing, and I don't know if the right metric is revenue per member. Is that a metric that are you suggesting is gonna be flat over time? Is that gonna go up as we look at an increased number of multi-condition contracts? I'm trying to make sure I understand the direction of travel that you're pointing us to on that dynamic.

Yeah, David, great to hear from you. Thank you so much for the question. You know, per some of the prepared remarks, this is really the output of two features in the business that we actually believe to be beneficial. The first is that we're just improving churn, and we're having members stay with us longer into their second, their third, and even their fourth year of Omada tenure. As a result of that, what you have happen is, you see a little bit more moderated revenue contribution into those second, third, and fourth years. What's most important there is those carry very little incremental cost as most of the cost is front-loaded into the first year of their engagement. As such, they're some of our highest margin members in our total member base.

We do expect that to be relatively flat for the rest of this year, in line with Q1. First, with the prepared remarks, we still have remaining upside across continuing to execute on some of our prescription opportunities, driving engagement initiatives. We have internal motions, direct to both of those internally and will potentially be able to uplift ARPU in the back half of this year, if not more into 2027.

Very helpful. As we think about the profitability profile, clearly you've hit an inflection here earlier than you had expected. How are you thinking about on a go-forward basis, opportunities to drop profitability to the bottom line, but also where there might be the potential to reinvest, whether that's organically or even inorganically, given the scope of your distribution and just the number of smaller participants that are out there?

Yeah, we think both Q1 and our full year guidance reflect this dynamic. On a $4 million top line beat, we dropped $4 million of EBITDA to the bottom line. On our guidance raise of $9 million, we're carrying forward $6 million of incremental EBITDA. Flowing through two-thirds of the revenue beat down to the bottom line as well. With that said, you know, look, we said we did what we said we were gonna do. We did invest in the back half of Q4 as well as into Q1, into standing up this prescribing capability and launching Optum Rx, and we believe that's gonna give us the ability to drive durable revenue at really attractive margins in the years to come.

That's going to be ongoing dialogue where we're going to be looking at abilities to invest in key responsible areas that are going to benefit us in the future.

David, maybe I can take the back of the question there. You know, we have communicated the primary engine of growth for Omada is gonna be focused on organic. I mean, we like the capabilities. We have large end markets. I think Richard's comments on, you know, the employer dynamism to say summarize about really what we're feeling at the, you know, at the level of the buyer here. You know, that being said, you do highlight something that we think is a great competitive advantage for Omada, which are large scale distribution channels to a complex risk-averse, you know, buying market. We do have capabilities to sell multi-product.

You know, of course, you know, we'll keep an open mind, you know, but be selective relative to anything inorganic.

Great. Thanks so much.

Our next question comes from Sean Dodge at BMO Capital Markets.

Yeah, thanks. Good afternoon. Maybe, Steve, just going back to your comments, again, just on the member curves and how revenue and margins develop as the enrollment cohorts mature. Just to make sure I understand, you said revenue declines in year 2, but gross margins go up. If we think about that in terms of gross profit dollars on a per member basis, how do the absolute dollars per member compare in year 2 to year 1? Is that also up, if you can kind of frame for us maybe how much?

No, that's exactly right. You hit the nail on the head. Gross margins are going up in year two. The absolute gross profit dollars do go down on a total basis because we're just recognizing overall less revenue as those folks go into their more mature years, go into the second, third, and fourth year in aggregate. On a margin profile, it is accretive. On a gross profit dollar perspective, it does step down in the second and third years.

Okay. Thanks for the clarification there. Maybe just on the enrollment conversion rates. Wei-Li, you talked before about the work you're constantly doing to optimize those. You're always experimenting with different messages and content and channels. Maybe just to put it in context, the improvement in email conversion rates you all were able to drive in 2025, you had talked about 24% improvement in that metric. How does that compare to what you were able to do in years prior, and maybe how does that compare to what you hope to achieve in 2026? I guess, you know, how much do you think you can continue to increment up your conversion rates in any given year?

Yeah. Thanks, Sean. Appreciate that, I appreciate the reference to prior discussions we've all had regarding our efforts in enrollment rate, yield rate improvements. For the others, just to rehash, you know, each year we go through an extensive process, usually commencing in the middle part of the year after we've seen, you know, the H1 results and response rates, an extensive set of A/B testing, so on and so forth. We've pretty much got this engine down pretty good. Each year for the last several years, we've been able to improve our yield rate significantly. You know, the range is varied anywhere from the low side of 20% to the upside of 60%.

We certainly did that and repeated that process last year, across both direct mail, other multi-channel things, including email, as well as frequency, duration campaigns, and so on and so forth. We are seeing what we had expected, which is increased enrollment yield rates in Q1. We certainly, at this particular point, and I'm disclosing numerically what it is because, you know, we really need to see what Q2, Q3, Q4, and the remainder looks like. We have optimism to believe that the majority of what we're seeing in Q1 should be carrying through for the rest of the year based upon the results we've seen so far.

Okay. great. Thanks again, and congratulations on the great start to the year.

Our next question comes from Elizabeth Anderson at Evercore ISI.

Hey, guys. This is Ayush on for Elizabeth. Thanks for taking my question. Building on some of the prior questions that were asked, on your last call, you decomposed gross margin as a combination of multi-condition mix and care team labor optimization. Earlier you mentioned the potential to grow beyond the 70% long-term gross margin target. Is that mainly coming from the condition mix or labor optimization, or is it sort of a mix of both? Could you maybe just put some rough weights around that, and how you kinda get to that higher margin? Thanks.

Yeah. You hit the nail on the head. You got two of the three. We're obviously really happy with the Q1 results. 64% non-GAAP gross margin is the highest in the company's history. We have direct near-term sight into hitting our long-term target of 70%+ on an annualized basis. We are gonna be conducting our Investor Day later this year in September in New York, where we likely will revisit our long-term gross margin target and potentially lift it from there. The only other one that you missed was AI. That's where we're investing significantly, and that's why we're gaining additional confidence that we can actually push gross margin beyond 70% in the future.

We have a ton of examples internally on really impactful use cases that are making our care teams more efficient. We're really excited with what we're seeing there.

Our next question comes from Saket Kalia at Barclays.

Hi, you have Carly on for Saket. Thanks for taking our question here. Sean or Wei-Li Shao, maybe for you, I'd love to touch on some of the AI-related solutions you developed, like the nutritional AI assistant and Meal Map, which I think you've embedded into your programs. What kind of feedback have you gotten from customers and users so far? Are you starting to see those features drive more activity in the app, or is that more of a longer-term opportunity?

Yeah, no, thank you for the question. I mean, it's such an exciting moment, you know, in software. You know, I'm stating the obvious. The software velocity and the code creation, you know, at Omada has certainly increased. You know, our customers are deriving value from that and our ability to create more new things for them. You've highlighted some of the value our members experience as well. You know, each and every day, we really push the frontier of the intersection, you know, between what models can do and what people can do. We've seen really heartening data, you know, with the tools we've rolled out.

I mean, with Meal Map, as a for instance, we've seen nearly a 16% relative lift in the weekly active meal tracking among new members. For those, where their job is to track and they're working with their care teams on doing that, just makes it easier. You get a lift. Equally, the speed upon which, you know, a model can get back to our members on something specific is just really incredible. I mean, in yesterday's world, if a member, you know, wanted, say, a recipe, they might ask their care team member, they might pull from one of our libraries.

Now they ask, you know, our nutritional education, you know, tool, which we've fine-tuned over 3 million foods that has context on that person's clinical status, their dietary preferences, you know, et cetera. It's, you know, it's great. The way we look at it is every single product manager across Omada is really thinking through an AI-first lens on how they can embed AI in whatever surface area they're working on. This is an area where we're blessed in that we've built every single piece of the care team platform ourselves, the member experience ourselves, we can embed AI really throughout.

Awesome. Thanks so much.

Our next question comes from Stan Berenshteyn at Wells Fargo Securities.

Yes. Hi. Thanks for taking my questions. I'd love for you to elaborate on the scope of this partnership. I'm curious, are there any other vendors besides Omada offering similar solutions here? Just wanna get your thoughts on that.

Yeah. Hey, Sam. Wei-Li here. Regarding Optum Rx, kind of, a little bit more detail around that and your question about are there any other vendors there? There are 2 others that were preexisting inside the Weight Engage Optum Rx program, and that makes this obviously the 3rd edition there as well. I think what's important about the Optum Rx opportunity is a fewfold. First, is that it represents, you know, our first large-scale deployment around GLP-1 prescribing married seamlessly up to our GLP-1 Care Track, which is the lifestyle support program for GLP-1s. That's important, but it's not just about GLP-1s. Alongside that, we've now have the opportunity through this relationship to expand the utilization and uptake of the rest of our cardiometabolic programs as well.

It's a really a GLP-1 plus, expansive cardiometabolic opportunity for us, which obviously we like, and we see that as a, as a major value proposition advantage for, our buyer segments out there. That's number 1. Number 2, the Optum Rx relationship, you know, singularly is important, but in aggregate from a portfolio strategy is very, very important, in the sense that, obviously it's kind of like the last puzzle piece, to crack the Big 3. And together now, the Big 3 across those PBMs, we have the ability to, tangibly and materially realize, you know, a market that is associated with, you know, more than 70% of all patients covered by, those PBMs, in the U.S. 80% of all commercial prescriptions are adjudicated by those 3.

It represents an incredible material opportunity for us to realize going forward, and of course, all sights and efforts are on doing that. You know, and we like that too as well 'cause again, it feathers in on top of the CVS Caremark announcement we had last year as well. The third and last point is that with the addition of Optum Rx and of course, as I just mentioned, the other two PBMs, it's an opportunity for us to significantly diversify our business over time.

That's helpful. I appreciate the color. Just as my follow-up, I just wanna go back to the prepared remarks regarding the Omada-led outreach improving member adoption rates. Just, you know, if I think about benefit managers that oftentimes want to have control of the channel between themselves and their employees, if we think about the totality of your covered lives, what percentage of those lives do you have the capability to pursue directly using this strategy? Thanks.

It is true in general, Stan, that if you were to ask any generalized or generic digital health or virtual care company out there, do their clients prefer to do their own deployments, I think the general response would be yes. I think that is increasingly not the response you would get from Omada Health. We have worked over the years to demonstrate to our employee base or employer client base that when we lead the enrollment, of course, in partnership with them, but lead the enrollment efforts, you get about 2 to 3 times better yield rate.

The overwhelming majority of our clients like that because their mission is aligned with ours, which is helping as many of their employees as possible across the various programs that we deploy with them. In terms of your other part of your question in terms of, I think, was just overall, like Omada-led outreach penetration across our client base, suffice it to say, it's not 100%, but it's the majority. While we're being increasingly successful year over year over year, moving our clients over to Omada-led outreach, we're not done yet, but it's the majority of our clients at this time.

Wonderful. Appreciate the call. Thank you.

Our next question comes from Ryan MacDonald at Needham & Company.

Thanks for taking my questions. Congrats on a nice quarter. Wei-Li Shao, maybe first for you. As you think about the new Optum Rx program and the Lilly direct to employer program, I think you, as you mentioned before, you're not sort of the only vendor within these programs. As you join them, can you just talk about sort of the allocation of resources from a go-to-market and a marketing perspective to sort of ensure that you're getting sort of mind share within those large populations? How much help are you getting from Lilly or do you expect to get from Lilly and Optum Rx as you sort of ramp those efforts there?

Yeah, great question. Maybe I'd frame it this way, is that you've heard Sean and I talk about our portfolio strategy for GLP-1s as it relates to benefit design, solution options for the employer. That's really the strategy to get the share of voice and the mind share of employers. The reason is the following: when you step back and you look at the landscape today, there is a wide and diverse set of needs that employers have because every employer, for lack of better words, is in their own financial what they can afford situation related to GLP-1 coverage. Some have a different strategy to provide them, you know, at a very low copay. Others have a strategy that says, "Hey, listen, we're in a different financial situation.

We can't afford as much, and we need a defined benefit contribution plan where we pay only 10% of the monthly GLP-1 cost. You have people and employers across the entire spectrum. Back to your question about mind share and share voice, how do you get it? Well, our strategy allows us to get it because no matter where you are on that spectrum, our strategy is to make sure that we are plugged in and part of that various and diverse set of benefit design solutions so that you, as an employer, can concentrate on what is financially the best cover decision for your employees, not having to worry about what the best clinical option is because Omada is the clinical backbone in a range, in number of solutions across that spectrum.

That affords us to be at the table and be called at the table when employers are considering making a GLP-1 solution because we know that we're essentially in a number of different benefit design solutions. That really is the predominant strategy to create mind share and share voice. We're seeing that work because we're building pipe across the various benefit design solutions that we talked about here on this earnings call. The second piece is that our go-to-market for Optum Rx, as it is with other health plans as well as other PBMs, is very much to enable and partner very closely with their sales forces, which of course number in the hundreds and thousands as mentioned before.

Really by that, we were able to extend presence and extend share of voice. We have a number of enablement meetings coming up to drive that. That's a, that's a recipe and that's a strategy that's worked well for us. We have no reason to believe that it won't be a durable model for us, and we're gonna execute like crazy on that, as you might imagine. Rounding out your last question in terms of Lilly, you know, that's probably a question you'd wanna ask Lilly in terms of what commercial resources they're putting behind advertising that and marketing that.

We're proud to be part of that platform and certainly as we talk to employers, and lay out the spectrum of benefit design solutions that are available to them, rest assured we will definitely be putting that up there, because it's receiving great interest.

Appreciate all the color there, Wei-Li Shao. Steve Cook, maybe a follow-up for you. Obviously great to see the improved retention rates and the longer duration that you're seeing there. I think historically you've talked about sort of about 55% or so of members sort of stay on, you know, past one year. How much of an uplift are we talking about in terms of, you know, the improvements off of that 55% number? Are there any specific programs you would call out where you're seeing sort of the greatest improvements of in one year plus retention rates? Thanks.

Yeah, absolutely, Ryan. I think the first most important point here is just our ongoing success with multi-condition traction. We've added more diabetic and hypertensive members for those chronic conditions. Those members just tend to stay in program significantly longer. Again, recall we launched those programs in the 2019, 2020 timeframe, so we're actually observing some members in really their 4th and even their 5th year in Omada's tenure. That's a big driver of where we're seeing some of the uplift there. We haven't exactly calibrated it to be apples to apples with the 55 and the 50. I will potentially release that data in the upcoming Investor Day and share some updated color from that perspective.

Awesome. Thanks.

Our last question comes from Gene Mannheimer at Freedom Capital Markets.

Thanks. Good afternoon and congrats on the good start to the year. A lot of good information here. Did you call out how many total members are now on GLP-1s, and do you break that out across your original Care Track versus the new Flex Care pathway? My follow-up on that would just be, can you or would you provide an update on your cholesterol program and whether that's still targeted for availability next year? Thank you.

Yeah, Gene, Wei-Li here. We disclosed just by way of reminder to folks, that through the end of 2025, we had brought in a total membership around 150,000 or so. We've not yet disclosed Q1 in terms of at the product level offering, which includes of course our GLP-1 Care Track. We're likely to do so, you know, each year from an annual standpoint. Suffice it to say, the momentum and frothiness of the GLP-1 marketplace continues. In terms of cholesterol program, I think your question was about the same in terms of what the uptake and traction looks like there.

We're encouraged and primarily, also not surprised, because as we know, when you have diabetes, hypertension, obesity or are at risk of diabetes, some or one of the above, the likelihood that you have unfortunately high cholesterol is very, very high, anywhere from 40%-70%, depending on the population you're looking at. Naturally, and when we talk about our cardiometabolic programs to our employer audience, they naturally gravitate towards the cholesterol program. You know, last year, when we announced late in the year the launch of the cholesterol program, we basically had closed a couple of clients, one of which was a very large retail customer, over 300,000 global employees.

Um, we since added, uh, to, uh, to that list of deals closed, including, uh, you know, uh, a few more enterprise clients as well as two large jumbo clients, uh, one in the, uh, multi-industry, uh, indu-industries, uh, segment, uh, as well as, uh, energy and natural resources segment, uh, for, uh, several hundred thousands additional lives as well as some other enterprises. It's worthy to note that, um, uh, pursuant to the interest that I talked about, uh, with cardiometabolic, with cholesterol, uh, these obviously, uh, were closed off cycle, uh, which I think is a reflection of the value proposition in the marketplace.

Great. Thank you.

This concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Omada Health Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Allan Kells, Vice President, Investor Relations. Please go ahead.

Thank you. Good afternoon. Welcome to Omada Health's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Sean Duffy, our Co-Founder and CEO; Wei-Li Shao, President; and Steve Cook, our CFO. Before we begin, I'd like to note that we'll 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 available on our website. We'll also be making 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, and we assume no obligation to update these forward-looking statements. With that, I'll turn the call over to Sean.

Good afternoon, everyone, and thank you, Allan. 2025 was a milestone year for Omada. We became a public company, delivered 53% revenue growth for the year and achieved GAAP profitability for the first time in Q4. We also significantly outperformed initial expectations from the time of our IPO and we believe we are entering 2026 with momentum, with ambition and with a clear plan for what's next. Here are the highlights from Q4 and the full year. Total members reached 886,000 at year-end, up 55%, compared to 2024. Revenue grew 58% in Q4 and 53% for the full year to $260 million. Gross margins expanded to record levels. We achieved our first quarter of positive GAAP net income in Q4 at $5 million, and we delivered positive full year adjusted EBITDA of $6 million. We believe these results reflect the impact of strong market tailwinds, combined with a decade of investments. Omada's technology and operational platform, our clinical programs, our peer-reviewed research, productive distribution channels and more than a decade of rich and unique data are strongly suited for this exact moment, for when customer demand for chronic care solutions, a rapidly evolving GLP-1 marketplace and AI-driven innovation converge. We believe that 2025 demonstrated how we can capture that momentum. But the real story is at the level of the person we're supporting as a GLP-1 Care Track member recently told us. "The Omada program in collaboration with my doctor and the use of GLP-1 meds has been life-changing. I learned real skills needed to lose weight and be healthy for a lifetime. The beauty of the Omada plan was that I did not just jump in with all of these changes on day 1. The plan guided me to focus on different lessons each week and then select a goal for the coming week. When I was stuck, my coaches were there to make suggestions and help guide me along the way, knowing that someone cared and they took the time to check my meal log and comment about a recipe or a new meal idea I put together that looks good, helped me feel that I was not doing it alone." Stories like that get to the heart of what we do. Omada is on a mission to bend the curve of obesity-related disease. 40% of adults have obesity and nearly 2/3 have at least one cardiometabolic risk factor such as obesity, diabetes, hypertension or cardiovascular disease. We believe the health care system is structurally unable to address this at scale without a fundamentally different care model. A person's disease trajectory is determined largely outside the doctor's office through nutrition, movement, sleep medications and care plan adherence. Yet the broader health care system still organizes around infrequent 15-minute visits. Omada puts the space between those visits at the center of care through an integrated multi-condition care model refined over more than a decade. We've built a member experience that brings together care teams, AI, connected devices and a custom care platform designed for quality at scale. We've expanded into a multi-condition platform spanning weight health, diabetes, hypertension, musculoskeletal care, GLP-1 companion care, GLP-1 prescribing and our newly launched cholesterol program, giving employers the convenience of a single partner for multiple highly prevalent conditions. We've accumulated a large and growing body of peer-reviewed evidence and accreditations, which we believe is a key reason, employers and health plans choose Omada. We help the market understand that Omada delivers true clinical quality health care, which enables us to contract and bill as a health care provider, allowing our fees to be treated as medical spend. We've established thousands of customer relationships across a broad web of distribution channels, spanning an estimated more than 25 million covered lives and in operating for over a decade, we've amassed a robust and unique data set, tens of millions of care team messages and billions of data points that underpin our product, strengthen our AI capabilities and allow us to innovate more quickly on the back of significant scale. These investments form the foundation of everything ahead. They allow us to look through the windshield with optimism, ambition and excitement. 2025 served as a significant launch pad for our next chapter. And I want to touch on 3 areas where we're particularly proud. First, we believe 2025 was the year we solidified our position as a leader in enterprise GLP-1 companion care, while reinforcing that our opportunity expands well beyond GLP-1s. Employer demand to maximize the value of their GLP-1 investment and reduced waste drove significant adoption of our GLP-1 Care Track. As we've scaled to over 150,000 members on GLP-1, we've seen what we believe these members need most, support to stay on therapy, manage side effects, build sustainable habits and maintain results if and when they discontinue. Our results have shown that GLP-1 Care Track members on average achieved greater weight loss, compared with published real-world evidence and critically largely maintained their weight on average, 1 year after discontinuing GLP-1 therapy. These outcomes challenge the narrative of inevitable weight rebound and underscore the power of behavior change layered on top of medication. In November, we announced our GLP-1 prescribing capability. As the landscape grows more complex with oral and injectable options, variant doses and emerging maintenance therapies, employers are asking us to help them navigate it all. Adding prescribing strengthens our position by helping ensure that the right member is on the right medication at the right time while also delivering lifestyle support designed to improve outcomes and minimize waste. At the same time, the broader spotlight on GLP-1 has increased attention on cardiometabolic disease overall. Because Omada supports weight health with or without GLP-1s and helps members manage diabetes, hypertension and now cholesterol, we've also seen strong growth among members not on GLP-1s. For customers that choose not to cover GLP-1s, our weight health programs support their employees, and new options like our GLP-1 Flex Care, creates flexible path for employers to offer meaningful support even when they are not in a position to afford the medicines. Second, we made meaningful progress with AI in 2025, and I am particularly excited about our potential for AI innovation going forward. We've embedded AI throughout Omada. For members, we launched OmadaSpark, our AI-powered assistant that works alongside human coaches for real-time nutritional support, motivational challenges and habit building. We launched that in Q2 of last year and followed with enhancements in Q4 with Meal Map, an AI-driven experience focused on food quality, not just calories. For our care teams, AI-enabled tools like summarization let coaches spend less time on administration and more time on personalization. And 100% of our engineers are equipped with AI-assisted coding tools to improve development speed and output. What makes AI at Omada different from a typical software business is what sits underneath. In caring for members, we've received tens of millions of care team messages, billions of data points and more than a decade of specific clinical outcomes, comprising what we believe is one of the most exciting cardiometabolic data sets in digital health. That data can improve our AI tools and overall member experience such that interactions with today's members make the experience better for tomorrow's. The last area I'm proud of in 2025 is our commercial success. As Wei-Li will share, in 2025, we closed significant additional covered lives, which we believe positions us well going forward. Our between-visit care model and multi-condition platform continue to resonate as we closed contracts in the second half of 2025. Employers and health plans increasingly see the advantage of working with a single scaled evidence-based partner and our year-end results reflect buyers leaning into that vision. In 2026, we plan to maintain our focus on the pillars that power Omada's growth, expanding covered lives through new customers and channel partnerships increasing enrollment effectiveness, so that more eligible people become active members and driving deeper engagement and retention through AI in a continually improving member experience. Across these pillars, we're expanding capabilities. GLP-1 prescribing, cholesterol and GLP-1 Flex Care, greater personalization in content through AI and the use of AI to drive efficiency across engineering, operations and care delivery. These investments are intentionally designed to balance growth and profitability as we continue to move toward our long-term ambition of 20% plus percent adjusted EBITDA margins. We accomplished a great deal in 2025 for Omada's mission, and we are entering 2026 with bold ambitions to bend the curve of disease. That's what we're here for, and that's why we do what we do. With that, I'll hand things over to Wei-Li.

Thanks, Sean, and hello, everyone. I'm proud of our teams and what they accomplished in 2025. It's an exciting time to be at Omada, and I'm pleased to walk through our results and progress. As Sean shared, we ended the year with 886,000 members, up 55% year-over-year. This includes 55,000 net new member additions in Q4, nearly double the net adds in Q4 of 2024. For the year, we added 314,000 net new members, compared to 182,000 in 2024. Growth continues to be driven by both multi-condition adoption and demand for our GLP-1 support capabilities, which together position Omada as a broad integrated partner for cardiometabolic care. We also benefited from improvements in marketing effectiveness, which drove higher enrollment rates across both new and existing customers. Key performance drivers in 2025 included estimated covered lives grew by more than 5 million, and we ended the year with over 25 million estimated eligible lives with strong performance across multiple channels, including the successful launch of a large new channel partner. Our e-mail enrollment rate improved significantly with the average percentage of a customer's population that receives our outreach and then enrolls increasing by 24% year-over-year. Member engagement remains strong as well. As of December 2025, more than 55% of our members in their 12-month of cardiometabolic programs still engaged with the platform at least once during the month and more than 50% of members in their 24th month engaged at least once during the month. Our focus on outcomes also remains consistent across our programs. Taken together, we strengthened funnel conversion at multiple layers, which gives us confidence heading into 2026. We ended the year having supported over 150,000 members on GLP-1s, adding more than 100,000 in 2025 alone. And as Sean mentioned, we continue to see growth beyond GLP-1s across our cardiometabolic suite. Substantial white space remains and our penetration across combined self-insured and fully insured lives is below 10% with a total addressable market that we estimate at over $138 billion. We have also been pleased to see developments in government-funded health care such as the passage of the Prevent Diabetes Act, which cemented Medicare coverage for virtual diabetes prevention programs. And while it's early and details are still developing, we are closely watching emerging programs like balance and access models for CMS. This government activity reinforces that virtual first prevention is increasingly recognized as essential to expanding access to quality care. Our strategy is organized around 3 pillars: Innovation, programs that work and our multi-condition platform. The results we delivered in 2025 are a direct reflection of progress across each. Beyond the AI capabilities Sean described, our innovation agenda in 2025 extended across several additional fronts. With respect to GLP-1 prescribing, since sharing our plans, we've had many discussions with interested customers and channel partners who are looking for help managing GLP-1 complexity. As GLP-1s evolve across oral and injectable forms, different doses and new mechanisms, employers need to manage switching, titration and benefit design in ways that improve ROI, not just increased spend, prescribing is a natural extension of our model, allowing Omada to act as a GLP-1 value maximizer across the entire journey from informing prescription decisions to supporting members on therapy to safely discontinuing medication when appropriate. We look forward to providing updates as we build out this capability. In addition to prescribing, we also have plans to support more flexible GLP-1 access models, including the GLP-1 Flex Care option we announced today. The need for alternative GLP-1 benefit in design solutions is underappreciated and we believe this could represent a significant opportunity. The GLP-1 market for large commercially insured employers is currently split, roughly 45% covering GLP-1s for obesity and roughly 55% that don't. Within this segment that covers, 2 of the country's largest PBMs have built GLP-1 solutions that include or offer Omada programs. One offers employers financial reassurance through a spend guarantee. And Omada has been a successful partner in that solution. The other expanded its GLP-1 offerings last year and Omada programs are an option there as well. But the 55% that aren't covering GLP-1s needs something different before moving from waiting and watching to confidently covering. That's where GLP-1 Flex Care comes in. It gives employers a structured way to connect eligible employees with clinical evaluation, prescribing and ongoing medical oversight for GLP-1 alongside Omada's lifestyle and behavioral support. Employers pay for the doctors' visits, labs and behavioral support, employees purchase branded GLP-1s out-of-pocket through credible cash pay channels. We believe the future for GLP-1 coverage will include multiple benefit design solutions addressing diverse employer needs, including robust clinical services, broad GLP-1 access, lifestyle support and financial reassurance. Our strategy is to be part of that spectrum, so employers can access the clinical benefits of our programs regardless of the benefit design they choose. We've also recently expanded our cardiometabolic offerings by adding a cholesterol program. This is a risk area that is often underserved in traditional cardiometabolic offerings despite the fact that up to 70% of adults with obesity have high cholesterol. Evidence from our existing programs has shown that virtual behavior first interventions can drive an average 39-point reduction in total cholesterol in 4 months among participants with diabetes and high cholesterol. Omada for cholesterol will build on that foundation, connecting behavior change, lab awareness and ongoing guidance from clinical specialists to cholesterol risk becomes visible and actionable within everyday life. We recently completed an initial commercial launch with a large enterprise customer that has more than 300,000 employees and then we expect a broader rollout in 2027. In summary, our innovation allows us to broaden how we support the management of cardiometabolic risk, leverage AI as a differentiator and deepen our relevance across a wide range of benefit strategies, making Omada a more flexible long-term partner for employers and health plans. Our second pillar is programs that work. Solutions grounded in evidence and behavior change science that deliver measurable durable outcomes. In 2025, we expanded our body of research on GLP-1 support. One analysis showed that members in our GLP-1 Care Track, who discontinued medication, largely maintained their weight 1 year later with an average weight change of only 0.8%, compared to 11% to 12% average weight regain reported in key clinical trials without ongoing lifestyle support. A separate analysis found that members in our enhanced GLP-1 Care Track who remained in the program and persisted on the medication for 12 months, achieved average weight loss of 18%, compared to 12% in real-world evidence without structured support. We also published our 30th peer-reviewed manuscript, focused on our joint and muscle health program, which showed that patients using a modest virtual physical therapy have lower total health care utilization and reduced MSK related costs and encounters on average at 6 and 12 months, compared to in-person PT even after accounting for program costs. These results demonstrate that our human-led digitally enabled model can drive outcomes that matter to members and customers. Our third pillar is the power of our multi-condition platform relative to Point Solutions. Customers increasingly recognize the advantage of working with a single scale partner across multiple conditions. Our ability to support obesity and weight health, diabetes, hypertension, cholesterol and MSK conditions, and GLP-1 care as 1 provider continues to be a key differentiator and the growth across our cardiometabolic suite reflects this. Revenue from our weight health program, which increasingly includes members on GLP-1s for weight loss, grew more than 50%, and revenue from both our diabetes and hypertension programs grew at rates 45% or more year-over-year. That broad-based growth across conditions reflects employers and health plans leaning into Omada as their integrated cardiometabolic partner, not just a single condition solution. In summary, our progress across innovation, programs that work, and our multi-condition platform helped to drive our strong 2025 results and provide tangible proof that customers are buying into this vision. We believe we're well positioned for 2026 and beyond. And with that, I'll turn it over to Steve.

Thank you, Wei-Li. Hello, everyone. I'll walk through our Q4 and full year 2025 results, discuss the key drivers and provide our outlook for 2026. Let me start with top line results. Members grew 55% year-over-year to 886,000. Revenue in Q4 was $76 million, up 58% year-over-year. For the full year, revenue was $260 million, up 53% compared to 2024. The primary factors driving growth include a broad industry focus on cardiometabolic conditions, deeper penetration of multi-condition customers strong adoption of our GLP-1 programs and more effective enrollment campaigns. As these strong results in macro trends feed into our business model, they are creating a durable, visible revenue stream with meaningful operating leverage, which I'll discuss in a moment. I'd also like to note that in Q4, we had a onetime transaction that resulted in approximately $2 million of additional revenue, gross profit and adjusted EBITDA. While relatively small and immaterial to full year results, I wanted to note it for any impact on sequential modeling from Q4 to Q1. Turning to gross profit. We saw significant margin expansion in both Q4 and the full year. Q4 GAAP gross profit was $54 million, up 67% year-over-year with GAAP gross margin of 71% versus 67% in the prior year. For the full year, GAAP gross profit was $171 million, up 66% and GAAP gross margin was 66% versus 61% in 2024. Q4 adjusted gross profit was $55 million, up 65%, compared to Q4 '24, and adjusted gross margin reached 73% in Q4, an all-time high and a 320 basis point improvement year-over-year, demonstrating our ability to operate above our long-term 70% plus adjusted gross margin target for the first time. For the full year, adjusted gross profit increased 64% to $176 million outpacing our 53% revenue growth by 11 points and driving adjusted gross margin up 450 basis points over 2024 to 68% in 2025. Over the past 4 years, we've nearly quadrupled revenue and expanded adjusted gross margins by more than 1,600 basis points, a trajectory that underscores the leverage in our business. This has been driven by our growing member base and multi-condition expansion with spreads fixed costs across a larger revenue base as well as care team efficiencies enabled by our platform, AI-powered tools and optimized staffing models. We believe these drivers can continue contributing margin expansion as we pursue our long-term target of 70% plus full year adjusted gross margins. Moving to operating expenses. We continue to demonstrate strong leverage below the gross profit line. Q4 GAAP operating expenses increased 28% year-over-year to $50 million, for the full year, GAAP operating expenses were up 25% to $183 million. Adjusted operating expenses grew 27% to $47 million in Q4 and 24% for the full year to $170 million. That 24% annual growth supported 53% revenue growth with strong operating leverage across all 3 operating expense lines. Key drivers included scale from our channel partnerships and B2C go-to-market approach, sales force leverage from selling multiple conditions with 1 sales force, R&D efficiency from a flexible program architecture and spending discipline as we work towards sustained profitability. Our steadfast commitment and multiyear focus on achieving profitability paid off in 2025 as we reached positive adjusted EBITDA a full year ahead of expectations, a milestone driven by financial discipline, strong growth and the operating leverage I've just described. We're proud of this accomplishment. Notably, Q4 also marked our first quarter of GAAP net income profitability. Specifically, we delivered GAAP net income of $5 million in Q4, which was a $13 million improvement, compared to a net loss of $8 million in Q4 of 2024. For the full year, GAAP net loss was $13 million, an improvement of $34 million, compared to a loss of $47 million in 2024. Adjusted EBITDA in Q4 was $8 million with an 11% margin, an improvement of $12 million and 18 margin points compared to a loss of $4 million and a negative 7% margin in Q4 '24. We Full year adjusted EBITDA was $6 million with a 2% margin, an improvement of $35 million and 19% margin points compared to a loss of $29 million and a negative 17% margin in 2024. Notably, we converted 40% of incremental revenue to the adjusted EBITDA line in 2025, which continues to highlight the scalability of our business. To wrap the discussion of our P&L, I'd like to provide some additional perspective. After we went public in June, initial consensus estimates were approximately $222 million of revenue and a $19 million adjusted EBITDA loss for 2025. We delivered $260 million of revenue and $6 million of adjusted EBITDA, with the positive adjusted EBITDA occurring a year ahead of projections. We're pleased with that performance, and we believe it reflects our strong market position, solid execution and the strength of our business model. Specific to our balance sheet, we ended 2025 with $222 million of cash and cash equivalents, up from $199 million at the end of Q3. We generated positive operating cash flow for the full year, a significant milestone. We have no debt outstanding having repaid our $30 million credit facility earlier in 2025. This gives us a strong financial position to invest in initiatives aimed at driving incremental growth and ROI while also maintaining flexibility. As for our guidance, we expect 2026 revenue in the range of $312 million to $322 million, with the midpoint reflecting 22% growth over 2025. We expect 2026 adjusted EBITDA in the range of $7 million to $15 million with the midpoint reflecting a $5 million increase compared to last year. Similar to our 2025 performance, our 2026 guidance is significantly above initial post-IPO consensus expectations. With our revenue midpoint approximately $50 million higher and adjusted EBITDA approximately $15 million higher, reflecting continued strong execution. Let me provide context on how we've approached guidance and on our growth trajectory. Our guided revenue of 22% at the midpoint comes on top of a 53% growth year that included a strong first wave of GLP-1 adoption and significant commercial momentum. This is an exceptional baseline to build from. We built our guidance, starting with our year-end base of 886,000 members and over 25 million estimated covered lives. Then we layer in historical enrollment conversion rates and observed engagement and retention trends with no significant improvement assumed. This allows us to anchor to what we consider our more highly visible level of revenue. Just as important is what's not in the guide. We have not embedded meaningful contributions from GLP-1 prescribing, GLP-1 Flex Care or our cholesterol program, and we have not assumed further improvement in enrollment conversion rates or significant revenue from contracts not yet signed. Our adjusted EBITDA guidance reflects the revenue outlook combined with the investments we've discussed. If we achieve revenue upside, we would expect a portion to contribute to a stronger adjusted EBITDA. We believe this approach reflects appropriate prudence for initial guidance and positions us to build on our track record of execution. Stepping back from the specifics of our guidance, we believe the most important story is the quality of our growth in 2025. As I shared, we converted 40% of incremental revenue to EBITDA. We achieved our first quarter of GAAP profitability, and we generated positive cash flow for the year. We continue to believe in the long-term scalability and profitability of our business. In closing, we are very pleased with our 2025 results, which reflected outperformance across all key metrics. Looking ahead, we believe our market position, strategic investments and scalable business model position us well for durable profitable growth. With that, we'll open the call for questions.

[Operator Instructions] Our first question comes from David Roman with Goldman Sachs.

Steve, I really appreciate the detail on the guidance basis as you think about 2026. So maybe I could just push you a little bit on the assumptions there. And very specifically, I just want to make sure that we're hearing the outlook correctly that effectively the guidance contemplates only contribution from the existing business and not necessarily some of the new opportunities -- and if that is the case, I just want to make sure that we're not misreading this, and it looks like the guidance suggests some of the base business starting to hit a wall or markedly decelerates. So just to make sure that we're interpreting that correctly, and that's how you're intending to frame the guidance.

Yes, David, thank you for the question. Firstly, we're obviously extremely proud of the results in 2025 per some of the prepared remarks, growing 53% in 2025 was well ahead of expectations. And when we look back at your commitments from just 6 months plus ago during the IPO, we're trending meaningfully above that path at $50 million ahead on revenue and $15 million ahead on EBITDA. So we're carrying a tremendous amount of momentum, and we're a full year ahead of expectations that we set at that time. It's also worth noting that from the get-go, we have been communicating externally that we intend to grow this business for the foreseeable future at least a minimum commitment of 20-plus percent. And we think that the guidance reflects commitment against those projections. As we think about some of the inputs there, you're exactly -- you're correct in that we're basing it off of 886,000 exit members we're looking back. We're coming through all of our historical trends on enrollment rate conversion, on engagement rate and assuming that there's no material improvement across those metrics throughout the course of the year. We have a lot of internal investments and initiatives focused on improving those metrics to the extent we're able to capitalize on those throughout the course of the year, that would be incremental revenue compared to our guide. And then per some of your commentary, we spent some time in talking about our prescribing capabilities, GLP-1 Flex Care cholesterol. These are also not materially in our guidance numbers. Are we going to be launching a lot of those in market this year and as those gain market traction, and we have more of our customers purchasing those, those will be reflected in potential upside to the guide.

Super helpful. And maybe just a follow-up. As you kind of think about the -- what you've observed and February from conversions off of the 2025 -- sorry, excuse me, 2026 selling season. Can you just give us some flavor of maybe a little more detail how that tracked? And then how we should think about just the cadence of revenue and profitability throughout the year to make sure we have the phasing of the year, correct.

This is Wei-Li. Let me talk a little bit about how we close the end of the year and to the extent that I can cast a little bit of high-level color on what we've seen this year in just the first couple of months. We're pretty pleased with how we closed the end of the selling season. I mean, we're up over 5 million additional eligible covered lives across our business. We've also seen continued momentum in terms of multi-condition product sales. And as mentioned earlier, last year, we improved our enrollment rate yield, our enrollment rate performance, more than 20%, 24% to be precise. And so we're pleased with the overall funnel developments, if you want to put it that way, or funnel conversion improvements, and as mentioned by Steve, that's going to be carried on into how we think about this year's performance. I won't go into too much quantitative characterization of January and February. But suffice it to say that things are tracking, and we like what we see there. As you might expect, as it is every year, the additional covered lives that we closed in the prior year, oftentimes are going live at the beginning of the year, it's the heavy enrollment season. and that certain pattern or that seasonality certainly exists too as well.

And David, I'll just add a little bit of color on some of the revenue and the EBITDA progression per your question. We do expect -- we had an extremely strong Q4. We saw 11% sequential growth quarter-over-quarter. That's stronger compared to what we've observed historically. If you looked at 2024, we only saw a 5% increase there. So we don't expect as big of a jump on Q4 revenue -- on Q1 revenue basing off of where we exited the year, and we also did have that onetime $2 million adjustment, which we don't intend to repeat going through the year. So Q1 should roughly be -- expect to be flat relative to Q4 win accounting for that $2 million, and then we'll sequentially grow revenue throughout the course of the year. And then as you're aware, Q1 is our largest net new enrollment volume quarter. It carries additional costs associated with increased device shipments as well as increased cost for our care teams as there's more labor in the first quarter. And then we'll steadily climb out of that as we go throughout the year, improving gross margin and improving EBITDA margin throughout the remainder of the year.

Our next question comes from Sean Dodge with BMO Capital Markets.

I just want to start maybe understanding a little bit better the mechanics of the new GLP-1 Flex Care program. It sounds like the existing GLP-1 Care Track, but now just building connections for the member to get a script and actually buy the drug. Does building that in, does that change the economics of the program for you at all? Do you get compensated for facilitating those connections? Or is this just more about kind of broadening the appeal and kind of the utility, the program to more employers.

Thank you Sean. This is Sean here. Happy to talk about Flex Care. Let me just start with the characterization on the segments, in the employer market specific to GLP-1s for obesity because there are 2 primary groups. The first is those who cover. So that's roughly 45% of the market. They cover GLP-1s for obesity. Historically, when we talked about our Care Track, that's who that was targeted toward. Those are folks who want to maximize the value of that investment. It's actually a bigger segment. And that's -- roughly 55% of the large employers and those that just do not cover GLP-1s for obesity yet. But equally, they do want a way to support their employees. And that is what the GLP Flex Care solution is targeted toward because it gives these employers a structured model, where, yes, for your comments, they do pay Omada and would pay Omada more for the GLP-1 Flex Care offering because that includes clinical evaluation, prescribing lab ordering and Omada lifestyle and behavioral support while eligible employees can purchase the branded GLPs out of pocket through vetted cash pay channels, of course, with a focus on accessing the lowest available price. So this, in turn, allows that segment of the market to still offer their employees a chance for high-quality GLP-1 care with strong oversight without immediately taking on that full drug spend risk.

That's super helpful. And then, Wei-Li, you mentioned having improved enrollment yield. I think you said 24% last year, so driving significant efficiencies on the marketing front. Is there anything you can -- anything more you can share on just like how you've been able to do that? I think you mentioned AI is playing a role there. And then just maybe how much runway you see being left when it comes to driving kind of incremental margin or marketing efficiencies?

Yes, sure, Sean. Let me address that. In terms of how we were able to achieve that -- as you and others may recall, we do a lot of digital marketing. And as a result of that, we actually have the ability to do dozens if not hundreds of A/B tests. Those A/B tests can switch out concepts, creative, language, call to action, you name it, across the spectrum of what one would think about optimizing in our campaign outreach. And so that certainly is a component of that, and we did that last year. We did that in 2024. We did that in 2023. We're going to do it again in 2026. And we still think that there's runway to optimize those campaigns in that outreach. The other component, of course, is a multichannel component. And when we say multichannel or omnichannel, we mean about digital signage on-site at an employer, especially if they have a large distribution center with a large warehouse, for instance, employees that are on site. And then other forms, including direct mail, other types of flyers, so on and so forth. And even in those particular channels, we can then optimize, again, the frequency, how often we send, what is the depth of the content, the copy, the creative. And then we can actually look across entire campaigns and how we define a campaign is really a combination of all those things in a multichannel approach to understand how we stack them on each other. And so there's multiple dimensions upon which we can actually optimize and improve yield rates or employee enrollment rate. And we think, again, that there's still a runway to improve that in 2026, and that certainly is on the docket for us to do so.

Our next question comes from Craig Hettenbach with Morgan Stanley.

Sean, just going back to AI, plenty of debate on the impact, including potential disruption to business models. So against the backdrop of some of the concerns in the marketplace, where do you see Omada is most insulated? And what are some of the things you're doing to benefit from AI as opposed to be disrupted?

Craig, thank you for the question. It is one that I and we think about a lot. Pulling that beyond Omada, I believe we are on the frontier of just a remarkably innovative moment in the history of health care. And this is the moment where, in our view, it's being propelled by AI. And so against that, there are a number of things that, I think, frankly, any innovative company can do, that these include leveraging AI coding assistance, using AI to improve member support using exciting frontier models within their app. So Omada is doing these. We're already seeing signs of how this impacts the business on a day-to-day basis, our members on a day-to-day basis, and that is, of course, an important part of ongoing improvements to margin. That being said, those are perhaps table stakes. I mean yes, there is one thing that we believe that is true today and will be true tomorrow. And that is the value of unique data sets that, in many cases, take years to build. We have tens of millions of care team conversations, hundreds of millions of biometric data points and billions of real-world data points. And so what that allows us to do and what we're excited is allows us to customize and personalize care in a way that's unique and in a way that's valuable. So it will take time to prove this out, and it will take time because we are in health care. We're regulated. We have devices, hardware, a supply chain, a complex web of distribution relationships and we're dealing with people's lives, which we take very seriously. So when I'm asked that question, I don't tend to view it as if AI will disrupt health care or disrupt Omada, rather, I view it as a question of who is going to build it in the right way in health care. And I believe we have the unique foundations to do just that here at Omada.

Helpful. And as a follow-up, I wanted to focus in on just the hypertension/diabetes programs. I feel like they tend to get overshadowed just by all the excitement and interest in GLP-1. So -- can you talk about the traction you're seeing in those programs and just how you see the runway for growth in the coming years?

Yes. Craig, this is Wei-Li, and you get extra points for asking a non-GLP-1 question. So I appreciate that. Yes, we've always said that the GLP-1 moment is actually a cardiometabolic moment, insofar as meaning that the discussion is a gateway into the broader cardiometabolic kind of condition question and challenge that our customers face. And in fact, when you look at the cardiometabolic landscape, the overwhelming majority of people who suffer from those conditions are not taking a GLP-1. So it actually represents a TAM that is as, if not larger than the current GLP-1 accessible market. So what does that mean in terms of our performance. We've always said from the get-go that a pillar of our strategy is to understand and realize that people who suffer from, let's say, obesity, also have diabetes, also have hypertension. As we all know, and that's why we provide a multi-condition platform. In multi-condition sales continues to be something that is strategically important and a huge strategic focus for us. And we talked about our progress on that. It continues -- we continue to make progress on that, and we're happy with that. But maybe a way to talk about the results in our portfolio products is that we saw strong growth, not only across our cardiometabolic suite, but across the individual programs. And so prevention or weight health, obesity grew more than 50% in both diabetes and hypertension grew 45% or more year-over-year. And we think that breadth of growth really reflects the customers increasingly using Omada as their integrated cardiometabolic partner excuse me, and not just for a single condition. So we're seeing growth in summary, in both diabetes and hypertension, almost directionally similar to the overall growth rate that we saw last year overall in revenue.

Our next question comes from Ryan MacDonald with Needham & Company.

Congrats on a quarter. Steve, maybe first for you, just so as we're thinking through the 2026 guidance. So obviously, you mentioned sort of no material changes or improvements in sort of enrollment yields and rates from there. So should we sort of take the guidance as sort of you grew covered lives 25% on a year-over-year basis. And so if you assume that sort of same conversion rate that sort of member count grows about that 25% rate. And then you see then some declines in average revenue per member. And if that's the case, can you help us understand what you're seeing from a program mix perspective that may be driving sort of this continued sort of ARPU declines.

Yes, absolutely right. Happy to provide some color there. Again, per some of the prior comments, just to recalibrate on what's in our baseline assumptions. It's just starting with that 886,000 members and then layering on some historical assumptions around enrollment conversion as well as engagement rate. I think the easiest way to think through the modeling next year is that ARPU stays relatively flat. Historically, it's been roughly just shy of $300 per ending member. And so -- and then building up your total member base off of that growing roughly in line with revenue guidance at 22%. What's important is what's not in the guide. And we talked a little bit about this, all which have the ability to drive incremental ARPU throughout the year. The first being some of the new product categories we're entering to the extent we're able to layer on GLP-1 Flex Care prescribing cholesterol. These are all accretive to ARPU throughout the year. we are creating internally some investments around driving more engagement through increased product and feature enhancement. The longer we can keep folks in program that also has the ability to drive additional ARPU with a little incremental cost as we go throughout the year. So the really way to just take the basis is to grow the member count by 22% and keep revenue roughly flat.

Super helpful. I appreciate the finer point on that. And then maybe a secondary question for Wei-Li or Sean. Earlier this week, we had a benefits conference and what the conversation really standard around sort of for this year was -- so this idea that your average employee benefits portfolio is about 28 different point solutions today and that the conversation is really around in the current budgetary environment with health care costs continuing to rise at accelerating rates, as more of a consolidation, looking to see where there are duplicate solutions and then optimizing for outcomes, would love to know if this is something you're seeing sort of in the early stages of the 2026 selling season and how maybe this could potentially favor your multi-condition platform relative to sort of individual point solutions providers.

Yes, Ryan, thank you for the question. I mean if you serve as a Head of Benefits and were on LinkedIn, you'd have about 50 messages a week coming in from point solution providers, and that does grow tiring, and that's a message we hear frequently about. And it's one that we respond to. It's been a recurring theme that customers love the fact that they can get quality care across multiple care areas from Omada. We see that across our portfolio suite. And even we see that within GLP-1s, where one buyer is one buyer. And equally, they recognize that tomorrow's strategy specific to their GLP-1s may not be the same as today's. And so we are thrilled with that. In fact, I think we have a proof of concept of this approach right in front of us in cholesterol. We announced Omada for cholesterol. That's a natural extension of our cardiometabolic suite. We like that. High cholesterol often, as shared in the remarks, coexists with obesity, diabetes hypertension. And one of the reasons that we got excited to do it is we heard about it from our largest customers who said, this is a clinical area where I care about. Omada, we trust you, we'd love if we could work together on it. And then we're starting out of the gate with a customer lined up there for Omada for cholesterol.

And if I were just to tag on a little bit to that and add and what really drove that particular situation, and we're seeing is repeated across a number of opportunities is exactly what you mentioned around a fatigue around single-point solutions, imagining somebody who suffers from obesity, diabetes, hypertension and now, of course, some dyslipidemia or high cholesterol, they could be on as many 4 different applications in the consolidation into one multiproduct company, Omada, that has proven evidence-based results and outcomes and ROI, certainly is attracted to buyers, and we're seeing that play through, which is why we continue to see momentum in multiproduct sales and growth across the portfolio of programs. The last bit I would also mention is that we happen to be in the actual therapeutic areas or disease areas that HR benefits company CEOs, CFOs understand are actually the biggest drivers of their health care spend cardiovascular events, cholesterol, heart attacks, diabetes, obesity, MSK, they always register small company, big company always to the top of the top 5, top 6 areas that are driving spend. And so as employers and benefit solution providers decide to consolidate away from "you said 28 different point solution providers". They're obviously going to think about Omada, they're going to think about multi-condition platforms, but they're also going to think about those providers that are in the sweet spots that are driving most of their year-over-year health care spend and it happens to be the ones we're in.

Our next question comes from Elizabeth Anderson with Evercore ISI.

Kind of think about improving gross margins. Steve, obviously heard what you said about the contribution to gross margins from the $2 million, but still improved quite nicely even without that. So can you talk about that and how you see those flowing through into 2026. I understand that, obviously, you guys have seasonality that will impact particularly the 1Q numbers, but just sort of how to think about that incrementally? And then if there's any more color you can provide on sort of what that adjustment was in the fourth quarter, that would also be super helpful.

Yes. Maybe I'll start there with the adjustment in the fourth quarter. We did have a $2 million onetime true-up. This was a negotiation that was cascading throughout the year with one of our larger partners. We also resolved that in the fourth quarter and as such, released that revenue. If we had negotiated it and resolved it earlier in the year, you would have seen that revenue recognized ratably throughout the course of the year. We don't expect that to recur on a go-forward basis. With regard to gross margin, again, tremendously proud of our performance in Q4, hitting 73% gross margin. As we've communicated consistently, our terminal annualized target continues to be 70% plus. So we believe Q4 really demonstrates our ability to hit to March towards that target in the long term. Two main drivers here: the first being ongoing traction with multi-condition customers. So the more diabetes and hypertension revenue that we drive through, those are coming through at our -- those are our highest priced products. And they drive incremental gross margin dollars and gross profit dollars for us. That was a large contributor. And then the second piece is just more cost efficiencies, and that came in 2 forms. The first is us just continuing to optimize our labor costs across our care teams. We've experimented with dozens of staffing models, and we really feel like we fine-tune that over the course of the past several years, which led to additional margin expansion as well as some of the prepared remarks, us continuing just to use AI and using a contact summarization, making our care teams more effective and more efficient. And we're going to be planning to roll some of those -- that momentum throughout the course of the next year. and we envision 2026 being another key stepping stone on our path to getting to a 70-plus percent gross margin.

Our next question comes from Stan Berenshteyn with Wells Fargo.

First on retention dynamics, I know you commented that they're pretty steady over 12 and 24 months. I'm curious whether the new products of OmadaSpark and Meal Map, whether they've demonstrated any measurable improvement in engagement that you can point to?

Yes. Thanks a lot, Stan. Wei-Li here. Let me take this one around OmadaSpark. So we launched this in the first half of last year and then fast forward with some enhancements to OmadaSpark. And so we're proud of that, and it allows our members to essentially have a nutritional AI assistant. Food is such an important part of the behavior change process. And then, of course, the Meal Map allows individuals to either dictate their food, snapshot their food with their camera, log their food in a number of different ways and then the nutritional density of the food is actually registered very accurately and then that information then translates into what meaningful changes can they make. And so I kind of recourse all of that because you can imagine the value that numbers have in seeing this knowing that nutrition in food and food quality and nutritional density is such an important part of generating a positive outcome, not just in obesity and weight health, but across diabetes, hypertension and now cholesterol and believe it or not, even in MSK as well. We're encouraged by the early results, members who interact with a lot of Spark, our health AI assistant, along with Meal Map demonstrating higher levels of ongoing engagement. And in fact, because they are returning to the app more frequently compared to those who haven't yet used the tools. And so we're seeing that lift. Now specifically, the Meal Map, which is the part and parcel of understanding what you eat, and then matching the behavior change. We're also seeing meaningful lifts in actual food tracking behavior, which is one of our strongest predictors of sustained weight management. And so all of these, of course, drive more activity with the app. And because we bill based upon activity for the majority of our business, we do believe over the long haul, and over time that this should potentially create some meaningful improvement in terms of financial performance.

And then I just want to follow up on the cover lives. I think you mentioned 25 million. That's about 5 million incremental from your prior disclosures. Can you share with us what is the mix of self-insured versus fully insured within those 5 million that you onboarded.

Yes, sure. Right. So of the 5 million that we closed, the way to think about it and characterize that is that it was driven by strength across multiple commercial channels and across the product portfolio. So it wasn't densely concentrated in 1 significantly over the other. But if you were to look at the mix, our PBM channel is the largest contributor followed by strong performance in our self-insured, fully insured and ASO business.

[Operator Instructions] Our next question comes from Richard Close with Canaccord Genuity.

Great and all the success this year. Sean, maybe on GLPs, welcome your perspective on how you think about GLP prices coming down and how that impacts the growth opportunity for Omada, I do think there's some fears out there as those prices come down, maybe demand for programs like Omada gets impacted?

Yes, Richard, thank you for the question. It's certainly an important one. And within that, it's also important to share that the way our accounts and customers view Omada is not a cost on top of their medication spend, but rather a value maximizer of their decision to cover GLP-1s for obesity. And so again, right now, the accounts that cover GLP-1s for obesity, it's roughly 45% of the market. They know the cost of that decision and what they're after is reduced waste. And so Omada Care Tracking capabilities allow us to support them across the entire journey from helping inform prescription decisions with our new prescribing capabilities to supporting realized outcomes well on therapy and, of course, to safely discontinue when appropriate. And so net, relative to the price of the meds, we believe these lower price points actually have the potential to increase GLP-1 utilization, which increases access to the medicines and thus, increases the need for Care Track services like Omada. And equally, for the market where employers say, look, I just can't afford these meds, I mean that's where a new GLP-1 Flex Care offering comes in, and that's the 55% of the employer market segment specific to GLP-1s.

And then, Steve, maybe as a follow-up. I think you mentioned all the new programs are accretive. Can you put that into perspective in terms of ARPU?

Yes. That's a great question. We have priced across prescribing cholesterol and our GLP-1 Flex Care above our current rates. So for cholesterol, specifically, that's roughly priced in line with hypertension. But as we view -- as we observe more customers in taking these products, these all have the potential to uplift ARPU above where our current run rates are at $300 per year per average member. So as we get more traction in market, again, these are very nascent products. We're just starting out with them. We'll be able to provide more specific guidance on the exact measure of uplift that we're observing as we get traction with some clients.

And our final question comes from Carly Buecker with Barclays.

You have Carly on for Saket here. If we look back to 2018, when Omada launched its diabetes and hypertension programs, can you walk us through what the adoption curve looks like for those programs over time as we think about kind of a parallel to help frame the launch of the cholesterol program. How long did it take to roll out the diabetes and hypertension modules more broadly? And when did you start to see adoption really pick up steam and drive incremental revenue?

Yes, I can start because again, those are good examples of how we love to innovate, which is on the back of really listening deeply to customer needs and ask and ideally finding kind of a one or multiple marquee customers to start the innovation journey with you. And so that was a couple of long-standing customers that had said, you know what, Omada, we love what you do in prevention in obesity and weight health. Would you consider diabetes? And so that started the journey. And then we did highlight the growth rates which are comparable to prevention, which I think is a statement on how that journey has gone. And so we're hoping to rinse and repeat with, of course, cholesterol, hoping to rinse and repeat with that same process of listening intently on things like GLP-1 prescribing GLP-1 Flex Care because we know based on how those grow, how they can be accretive over time. But I don't know, Wei-Li, if you have any comments on top of what I've shared.

Yes. The only thing I would share on top of would be kind of qualitative and just imagining kind of the intent of the question. That was 6, 7 years ago in the Omada that was then in 2018. We're a very, very different Omada today. Our capabilities are far more evolved across the entire conversion funnel, starting with closing lives with channels and then employers and, of course, enrollment rate and engagement and so on and so forth, activation through the members. All that to say to me that I think what would have taken us 3, 4 years to eventually sell through a payer or PBM and then build a book of business to employers and then begin to enroll, I think we've gotten better at that. I know we've gotten better at that. And so we certainly think that we can beat those time curves in terms of full-scale adoption. The last thing I'd also remind everyone to as well is that our approach over the last few years in innovating and expanding new programs has not really just been looking at TAM, but as Sean mentioned, really listening to our customers and oftentimes, the trigger for us which accelerates adoption is actually when a customer says, "Boy, if you do this, we'll buy it." and we're seeing that reflected with our cholesterol program where a large customer came to us and said, hey, we're seeing this being a cost driver in our health care spend. We'd love to partner with you all, and we built that and immediately win in contracting and launched that customer earlier this year. And so the approach there is as such.

And then last thing here. So just stepping back, what's fun is if you look at all these launches, we believe they really add up. I mean, between GLP-1 prescribing, GLP-1 Flex Care, Omada for Cholesterol, as I reflect on the journey we've been on, we are on pace to roll out more new offerings in 2026 than in any year in the history of our company. And so what this translates into, of course, is the opportunity set, translates into new ways to support specific customer needs and we believe a solid foundation for durable growth.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.