0001628280-25-050622
SEC filingOmada Health's Q3 2025 revenue grew 49% to $68.0M, driven by 53% member growth, and net loss narrowed to $3.2M from $9.2M, reflecting operating leverage.
Omada Health reported strong top-line growth in Q3 2025, with total revenue of $68.0 million, a 49% increase from $45.5 million in the same period last year. The growth was driven primarily by a 53% increase in total members to 831,000, reflecting successful enrollment from new and existing customers. Services revenue (93% of total) grew 50% to $62.9 million, while hardware revenue rose 49% to $5.1 million, tracking member acquisition.
Gross profit surged 58% to $45.1 million, and gross margin expanded 3.5 percentage points to 66.3%. Management attributed the improvement to Care Team efficiency initiatives and scaling of supporting technologies. Operating loss narrowed significantly from $8.5 million to $2.5 million, and net loss improved from $9.2 million to $3.2 million. Diluted EPS was ($0.06) versus ($1.18) a year ago, reflecting the increased share count after the June 2025 IPO.
As of September 30, 2025, Omada held $198.6 million in cash and cash equivalents, up from $76.4 million at year-end 2024, driven by $151.6 million in net IPO proceeds. The company fully repaid its MidCap credit facility (term loan and revolver) in July 2025, eliminating $31.0 million in principal and extinguishing long-term debt entirely. Total liabilities decreased to $70.1 million from $86.3 million, and stockholders' equity swung from a deficit of $384.4 million to positive $217.3 million, primarily due to the conversion of redeemable convertible preferred stock and the IPO. Accounts receivable net increased to $41.4 million from $23.4 million, largely from related-party balances with Cigna affiliates.
Operating cash flow for the nine months ended September 30, 2025 was -$3.1 million, a significant improvement from -$27.7 million in the prior year. The improvement reflects a smaller net loss and favorable working capital changes, particularly a $7.6 million increase in deferred revenue and $7.8 million in accrued expenses. Capital expenditures and capitalized software totaled $4.5 million. Free cash flow (operating minus investing) was -$7.6 million for the nine-month period, compared to -$30.6 million in 2024. The company's liquidity position is strong post-IPO, with no debt outstanding.
Management highlighted that revenue growth was driven by member expansion, with total members reaching 831,000 as of September 30, 2025. Gross margin expansion was aided by efficiency initiatives in the Care Team and the use of message support tools. Operating expenses increased 28% year-over-year as the company invested in sales and marketing and public company infrastructure. Sales and marketing expenses rose 31% to $22.9 million, reflecting higher channel partner fees. The company expects to continue investing in growth, though it did not provide specific forward guidance. Key risks include customer concentration (76% of revenue from top five health plan/PBM partners), material weaknesses in internal controls (under remediation), and dependence on third-party manufacturers in China.
The company operates as a single reportable segment. Related-party transactions with Cigna affiliates represented significant portions of revenue and receivables. Share-based compensation was $3.5 million in Q3 2025, up from $2.2 million. The company recorded a $2.1 million loss on debt extinguishment upon repaying the MidCap facility. No goodwill impairment or material legal proceedings were noted. The effective tax rate was zero due to a full valuation allowance. The company had 11.4 million common stock options outstanding and 0.7 million RSUs as of September 30, 2025.