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DATE

Thursday, May 7, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Sean Duffy
  • President — Wei-Li Shao
  • Chief Financial Officer — Steven Cook

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TAKEAWAYS

  • Revenue -- $78 million, a 42% increase, with GLP-1 Care Track adoption and multi-condition penetration as contributing factors.
  • Total Members -- 1,025,000, representing 51% growth and a 139,000 net member increase compared to prior year, driven by broad-based cardiometabolic suite gains.
  • Adjusted EBITDA -- $1 million, a $5 million improvement over last year and positive in the most cost-intensive quarter.
  • GAAP Net Loss -- Narrowed to $3 million, compared to a $9 million loss in the same quarter last year.
  • Gross Margin -- 62% on a GAAP basis and 64% non-GAAP, both 4 percentage points higher, with operating efficiencies from AI-enabled care and platform leverage noted as drivers.
  • Balance Sheet -- $212 million in cash and cash equivalents and no outstanding debt, following early repayment of the term loan in 2025.
  • Full-Year Revenue Guidance -- Raised to $322 million–$330 million, up from the previous $312 million–$322 million range, citing continued commercial momentum and sustained enrollment effectiveness.
  • Full-Year Adjusted EBITDA Guidance -- Increased to $14 million–$20 million from $7 million–$15 million, with the new low end matching the prior high end.
  • GLP-1/Pharmacy Benefit Manager (PBM) Partnerships -- New agreements announced with Optum Rx and Eli Lilly's Employer Connect; the company now has relationships with all three leading PBMs, giving access to 80% of prescription claims and most commercially insured lives.
  • Enrollment Drivers -- Omada-led outreach generated higher enrollment rates than employer-led efforts, with enhancements in email and direct mail driving significant conversion gains, especially in diabetes and hypertension.
  • AI Integration -- AI-assisted tools for care delivery, engineering, and operations contributed to reduced administrative costs and increased productivity, with platforms like OmadaSpark and Meal Map yielding measurable increases in member engagement, such as a 16% relative lift in weekly active meal tracking among new members.
  • Commercial Additions -- New customer wins include large national employers such as L.L.Bean, QuikTrip, and Breakthru Beverage, plus expansions in the public sector and regional health systems, broadening Omada’s channel coverage.
  • GLP-1 Care Track Outcomes -- Company’s latest clinical analysis indicated members lost 1.8x total weight and twice the body fat versus a control group over 12 weeks, while maintaining lean muscle mass.
  • Gross Profit per Member Dynamics -- As longer-tenured members increase, blended revenue per member moderates while gross profit per member rises due to lower ongoing costs after the first year.
  • Cholesterol Program -- Closed several off-cycle deals with large enterprise and jumbo clients, indicating early market traction as part of cardiometabolic expansion.

SUMMARY

Omada Health (OMDA 9.33%) reported its highest first-quarter results to date, with revenue, member count, gross margin, and adjusted EBITDA at record levels for the first quarter.

The company achieved national PBM coverage and introduced GLP-1 prescribing capabilities, expanding its sales pipeline across multiple benefit models and solidifying its presence in the employer and health plan segments. New platform enhancements, AI-driven operational efficiencies, and robust enrollment and engagement strategies generated improved profitability and member outcomes, leading to a raise in both revenue and adjusted EBITDA guidance for the year. Management highlighted ongoing investments in clinical infrastructure, commercial partnerships, and broadened capabilities as key to sustaining long-term margin and growth trajectory.

  • Omada’s membership base showed a structural shift, with a higher proportion of users in year two and beyond, positioning the company for greater margin accretion.
  • GAAP and non-GAAP operating expenses fell by approximately 5 percentage points as a share of revenue, reflecting scaling benefits and disciplined expense management.
  • Prescribing-based revenue from recent partnerships is expected to contribute materially starting in 2027 due to benefit cycle timing, not 2026.
  • The company’s AI-driven automation in engineering and care delivery is expected to further improve operating leverage as adoption matures.
  • Management cited a minor rise in device shipping costs related to the Iran conflict, estimating a $1 million full-year impact, with plans to pre-purchase inventory as a partial hedge.
  • Multi-condition membership close rates remained strong, cited as stable in the 40%-50% range, with ongoing attachment across conditions.
  • The cholesterol program saw interest from large clients and was cited as driving more off-cycle deal closings than previous product launches.

INDUSTRY GLOSSARY

  • GLP-1: Glucagon-like peptide-1 receptor agonist; a class of medications for type 2 diabetes and obesity, increasingly used as part of weight-management programs.
  • PBM: Pharmacy Benefit Manager; an intermediary managing prescription drug benefits between insurers, pharmacies, and manufacturers.
  • Cardiometabolic Suite: Integrated set of care programs targeting conditions such as diabetes, hypertension, cholesterol disorders, and obesity.
  • OmadaSpark: Omada’s proprietary AI-powered behavioral coaching and nutrition engagement platform.
  • Meal Map: An Omada digital tool for meal and nutrition tracking, leveraging AI for feedback and personalized recommendations.

Full Conference Call Transcript

Sean Duffy: Thank you, Craig. Good afternoon, everyone, and thank you for joining us. Q1 2026 was a milestone quarter for Omada. Here is 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 behavior platform that includes OmadaSpark and Meal Map; and 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 detail 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 benefit managers, who serve most commercially insured lives and process 80% of prescription claims.

And 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. And critically, our GLP-1 capabilities remain the tip of the spear for sales conversations 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 continued 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. And 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. And 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 benefit 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 rich cardiometabolic data assets, tens of millions of care team interactions and billions of data points across weight, diabetes, hypertension 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. And 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 seat belt 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 one chronic condition, and over half have 2 or more chronic conditions. And 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.

Wei-Li Shao: Thanks, Sean. As Sean shared, we crossed the milestone of 1 million total members. We ended Q1 with 1,025,000 million total members, up 51% year-over-year. This is 139,000 net new members in Q1 '26 compared to 107,000 in Q1 '25. 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. Two 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 continued 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 3 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.

And 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, QuikTrip 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. 9 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-1s 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 3 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% to 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. It also includes our work with Lilly's direct-to-employer offering, which provides employers with another option for transparent net cost for Zepbound and allows them 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. And Omada is building exactly that clinical infrastructure, connecting programs, prescribing and support into a unified platform to help maximize the benefits of GLP-1 investments. Now 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 1.8x the total weight and twice 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.

Steven Cook: 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 revenue grew 6% sequentially over Q4.

The strength of these results, combined with the 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 '25. On a non-GAAP basis, gross margin was 64%, up from 60% in Q1 '25. 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 remained 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 want to flag briefly is the minor impact we have seen thus far from the conflict in Iran, which modestly increased 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 upfront 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 Omada 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 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 toward profitable growth. On prior calls, we 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 percentage 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 '25 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.

This strong start to the year has led to an improved full year adjusted EBITDA outlook that I'll discuss in a moment. Our strengthened 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 to $330 million, up from our prior range of $312 million to $322 million. For adjusted EBITDA, we expect a range of $14 million to $20 million, up from a prior range of $7 million to $15 million.

At the midpoints, revenue guidance represents approximately 25% growth year-over-year and adjusted EBITDA reflects a nearly 3-fold 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 2 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 Omada 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 a 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.

Sean Duffy: 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. And 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.

Operator: [Operator Instructions] Our first question comes from Craig Hettenbach at Morgan Stanley.

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

Wei-Li Shao: Craig, Wei-Li 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. And so 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 to their PBM or their health plan.

And then those who have yet started -- have not yet provided coverage for GLP-1s but are actually wanting to, and that represents at least half the marketplace. And so what we're seeing across the spectrum is really interest in 2 categories. Again, the PBM provided solutions, they're diverse. They meet certain market needs. And then 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 part of an option within the Lilly Employer Connect program. And so we'll begin building pipe there. And then obviously, Optum Rx as well as the relationship with CVS Caremark that we mentioned last year. So 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.

Sean Duffy: And Craig, this is Sean here. So 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. And we think that's strategic because it is a dynamic market. You find employers that want to cover, you find employers that can't and the flexibility in our solutions allows us to address all of these segments.

Craig Hettenbach: Very helpful. And then just as my follow-up, any update on just the multi-condition sales? Kind of how that's trending and implications to the operating leverage in the business?

Wei-Li Shao: Yes. Thanks, Craig. Wei-Li here. In terms of the 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, consistent strategy for us. We have shared in previous earnings calls that our multi-condition close rates or attach rates are on average between 40% to 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.

Operator: Our next question comes from Constantine Davides at Citizens.

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

Wei-Li Shao: Yes. Constantine, Wei-Li here. Thanks for the question. 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. And the way I would describe that is basically 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. And 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.

So 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. So you'll find a complement of our cardiometabolic as well as MSK programs available in addition to GLP-1. So 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 3 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. So what do I mean? So 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 I -- 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. And then the third order of business, of course, was Q1 this year is to deploy those deals. And 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. So 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.

Operator: Our next question comes from Richard Close at Canaccord Genuity.

Richard Close: 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? And is it the employers are giving the member essentially a certain amount of money to purchase the drug directly and then you're essentially getting paid by the employer for the companion program? Just help us better understand that.

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

Wei-Li Shao: Yes. Thanks, Sean. Let me follow through in terms of how it works. Obviously, Lilly would be the definitive body to talk about the entire program, but I certainly can talk about how it relates to Omada. The Lilly Employer Connect program is a solution that is outside the PBM, it's a carve-out. And employers will opt into the 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 and the Employer Connect program is to be able to access a net transparent cost or price for Zepbound. And then 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 and 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 need 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 a significant amount or a few segments in that buyer selection.

And so I think I'd cap it off by saying, as Sean just said, to reinforce that, we're proud and privileged to be able to be part of the Lilly Employer Connect program, but 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.

Richard Close: Okay. Very helpful. And then we've been hearing a lot more of employers in the face of these rising costs historically have waited to implement programs with January, the new benefit year. But we've been increasingly hearing that they need to do something now. So 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.

Wei-Li Shao: Yes. Richard, I take your question to me not just about GLP-1s, but writ large in the category and what's 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, yes, 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.

Now 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. But we know that the pipeline is building nicely in that regard across the portfolio of benefit design solutions. So I think there's stuff there yet to be seen. But 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 a 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.

And so we find that also to be increasing in activity and is certainly contributing to pipe build. But again, too early to call as to whether or not that's going to 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.

Operator: Our next question comes from David Roman at Goldman Sachs.

David Roman: 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 going to be flat over time? Is that going to go up as we look at an increased number of multi-condition contracts? I'm just trying to make sure I understand the direction of travel that you were pointing us to on that dynamic.

Steven Cook: Yes, David, great to hear from you, and thank you so much for the question. For some of the prepared remarks, this is really the output of 2 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. And as a result of that, what you have happened is you see a little bit more moderated revenue contribution into those second, third and fourth years.

But 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. And as such, they're driving -- 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. But first, from 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 directed at both of those internally, and we will potentially be able to uplift ARPU in the back half of this year, if not more into 2027.

David Roman: Very helpful. And then 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 a number of smaller participants that are out there?

Steven Cook: Yes. 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. And then on our guidance raise of $9 million, we're carrying forward $6 million of incremental EBITDA. So flowing through 2/3 of the revenue beat down to the bottom line as well. But that said, look, we said -- we did what we said we were going to 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 going to 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.

Sean Duffy: And David, maybe I can take the back of the question there. We have communicated the primary engine of growth for Omada is going to be focused on organic. I mean we like the capabilities we have, large end markets. I think Richard's comments on the employer dynamism summarized really what we're feeling at the level of the buyer here. 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 buying market. And we do have capabilities to sell multi-product. And so of course, we'll keep an open mind, but be selective relative to anything inorganic.

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

Sean Dodge: 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? And can you kind of frame for us maybe how much?

Steven Cook: No, that's exactly right. You hit the nail on the head. So gross margins are going up in year 2. 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 going to the second, third and fourth year in aggregate. And so on a margin profile, it is accretive. On a gross profit dollar perspective, it does step down in the second and third years.

Sean Dodge: Okay. And then 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 e-mail conversion rates you all were able to drive in 2025, you talked about 24% improvement in that metric. How does that compare to what you're able to do in years prior? And then maybe how does that compare to what you hope to achieve in 2026? I guess, how much do you think you can continue to increment up your conversion rates in any given year?

Wei-Li Shao: Yes. Thanks, Sean. I appreciate that, and I appreciate the reference to prior discussions we've all had regarding our efforts in enrollment rate, yield rate improvements. But for the others, just to rehash, each year, we go through an extensive process, usually commencing in the middle part of the year after we've seen 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. And each year for the last several years, we've been able to improve our yield rate significantly. And 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 e-mail as well as frequency, duration of campaigns and so on and so forth. And we are seeing what we had expected, which is increased enrollment yield rates in Q1. We certainly, at this particular point, not disclosing numerically what it is because we really need to see what Q2, Q3, Q4 and the remainder looks like. But 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.

Operator: Our next question comes from Elizabeth Anderson at Evercore ISI.

Ayush Vyas: This is Ayush on for Elizabeth. Building on some of the prior questions that were asked, on your last call, you did compose 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 kind of get to that higher margin?

Steven Cook: Yes. You hit the nail on the head. You got 2 of the 3. So we're obviously really happy with the Q1 results. 64% non-GAAP gross margin is the highest in the company's history. So we have direct near-term sight into hitting our long-term target at 70% plus on an annualized basis. And we are going to 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're using -- we have a ton of examples internally on really impactful use cases that are making our care teams more efficient. And so we're really excited with what we're seeing there.

Operator: Our next question comes from Saket Kalia at Barclays.

Carly Buecker: You have Carly on for Saket. Sean or Wei-Li, maybe for you. I'd love to touch on some of the AI-related solutions you've developed like the nutritional AI assistant and Meal Map, which I think you've embedded into your program. What kind of feedback have you gotten from customers and end 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?

Wei-Li Shao: Yes. Thank you for the question. It's such an exciting moment in software, and stating the obvious, the software velocity and the code creation at Omada has certainly increased. And our customers are driving value from that and our ability to create more new things for them, but you've highlighted some of their members -- some of the value our members have experienced as well. And each and every day, we really push the frontier of the intersection between what models can do and what people can do. And we've seen really heartening data with the tools we've rolled out.

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

Now they ask our nutritional education tool, which we've fine-tuned over 3 million foods that has context on that person's clinical status, their dietary preferences, et cetera. So 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. And 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 so we can embed AI really throughout.

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

Stanislav Berenshteyn: Maybe going back to Optum Rx first, 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? I just want to get your thoughts on that.

Wei-Li Shao: Yes. Stan, 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 are 2 others that were preexisting inside the Weight Engage Optum Rx program, and that makes us obviously the third addition there, too, as well. I think what's important about the Optum Rx opportunity is a few-fold. First is that it represents 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. And that's important. But it's not just about GLP-1s.

Alongside that, we now have the opportunity through this relationship to expand the utilization and uptake of the rest of our cardiometabolic programs as well. So it's really a GLP-1 plus expansive cardiometabolic opportunity for us, which obviously we like, and we see that as a major value proposition advantage for our buyer segments out there. That's number one. Number two, the Optum Rx relationship 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 a market that is associated with more than 70% of all patients covered by those PBMs in the United States, 80% of all commercial prescriptions are adjudicated by those 3. And so it represents an incredible material opportunity for us to realize going forward. And of course, all sites and efforts are on doing that. And we like that too as well, because 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 2 PBMs, it's an opportunity for us to significantly diversify our business over time.

Stanislav Berenshteyn: That's helpful. I appreciate the color. Just as my follow-up, I just want to go back to the prepared remarks regarding the Omada-led outreach, improving member adoption rates. Just 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?

Wei-Li Shao: Yes. 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 2x to 3x better yield rate.

And 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 it 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. And so 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.

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

Ryan MacDonald: Congrats on a nice quarter. Wei-Li, maybe first for you. As you think about the new Optum Rx program and the Lilly direct-to-employer program, I think as you mentioned before, you're not sort of the only vendor within these programs. So 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? And 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?

Wei-Li Shao: Yes. Great question. And 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. And 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 at a very, very low co-pay.

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. So you have people and employers across the entire spectrum. So back to your question about mind share and share of 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 coverage decision for your employees, not having to worry about what the best clinical option is because Omada is the clinical backbone in a range and 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. So that really is the predominant strategy to create mind share and share of voice. And 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, very much to enable and partner very, very closely with their sales forces, which of course, number in the hundreds and thousands, as mentioned before. And so really by that, we were able to extend presence and extend share of voice, and we have a number of enablement meetings coming up to drive that. 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 going to execute like crazy on that, as you might imagine.

Rounding out your last question in terms of Lilly. That's probably a question you'd want to ask Lilly in terms of what commercial resources they're putting behind advertising that and marketing that. But 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.

Ryan MacDonald: Appreciate all the color there, Wei-Li. And Steve, 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 past 1 year. How much of an uplift are we talking about in terms of the improvements off of that 55% number? And then are there any specific programs you would call out where you're seeing sort of the greatest improvements in 1-year plus retention rates?

Steven Cook: Yes, absolutely, Ryan. I think the first most important point here is just our ongoing success with multi-condition traction. So 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 time frame. So we're actually observing some members in really their fourth and even their fifth year in a modest tenure. And so 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%. We'll potentially release that data in the upcoming Investor Day and share some updated color from that perspective.

Operator: Our last question comes from Gene Mannheimer at Freedom Holdings.

Eugene Mannheimer: Congrats on a 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? And then 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?

Wei-Li Shao: Yes, 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 of 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 each year from an annual standpoint. But suffice it to say, the momentum and frothiness of the GLP-1 marketplace continues. In terms of our 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% to 70% depending on the population you're looking at. So naturally, when we talk about our cardiometabolic programs to our employer audience, they naturally gravitate towards the cholesterol program. 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.

We since added to that list of deals closed, including a few more enterprise clients as well as 2 large jumbo clients, one in the multi-industry -- industries segment as well as energy and natural resources segment for several hundred thousand additional lives as well as some other enterprises. It's worthy to note that pursuant to the interest that I talked about with cardiometabolic, with cholesterol, these obviously were closed off cycle, which I think is a reflection of the value proposition in the marketplace.

Operator: 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.