0001628280-26-032875
SEC filingOmada Health's Q1 2026 revenue surged 42% YoY to $78.0M, with gross margin expanding 430 bps to 62.4%, sharply narrowing net loss to $3.0M from $9.4M.
Omada Health delivered a strong first quarter, with total revenue growing 42% year-over-year to $78.0 million, driven primarily by a 51% increase in average total members. Services revenue, the largest component, rose 41% to $69.6 million, while hardware revenue increased 55% to $8.5 million. Gross profit climbed 53% to $48.7 million, outpacing revenue growth as gross margin expanded 430 basis points to 62.4%. The margin improvement reflects strategic Care Team efficiency initiatives and expanded use of supporting technologies, which lowered personnel costs per member.
Operating loss narrowed to $4.8 million from $8.4 million in Q1 2025, with operating expenses growing 33% versus a 42% revenue increase, demonstrating operating leverage. Research and development expenses rose 44% to $12.7 million, sales and marketing 33% to $26.8 million, and general and administrative 24% to $14.0 million. Net loss improved to $3.0 million from $9.4 million, benefiting from higher interest income ($1.8 million vs. $0.5 million) and the elimination of warrant liability losses. Diluted loss per share was $0.05, compared to $1.15 in the prior year, reflecting the increased share count from the June 2025 IPO.
As of March 31, 2026, Omada held $211.8 million in cash and cash equivalents, down from $222.0 million at year-end 2025, primarily due to operating cash usage. Total assets were $302.8 million, down slightly from $305.4 million. The company has no debt outstanding after repaying the MidCap term and revolving facilities in July 2025. Stockholders' equity increased to $234.1 million from $229.7 million at December 31, 2025, driven by stock option exercises and share-based compensation.
Accounts receivable net rose to $40.0 million from $34.6 million, with related party amounts increasing to $25.8 million. Deferred revenue grew to $29.4 million from $25.1 million, reflecting higher upfront payments for member enrollments.
Net cash used in operating activities was $11.8 million for the quarter, an improvement from $16.1 million in Q1 2025. The net loss of $3.0 million included non-cash charges of $7.5 million (depreciation/amortization of $1.5 million, share-based compensation of $4.2 million, amortization of deferred commissions of $1.0 million, and provision for credit losses of $0.8 million). Changes in operating assets and liabilities consumed $16.3 million, driven by increases in accounts receivable and decreases in accrued expenses.
Capital expenditures totaled $1.6 million, primarily for capitalized internal-use software. Free cash flow was negative $13.4 million, consistent with the company's growth phase. Financing activities provided $3.1 million, mainly from stock option exercises.
Management highlighted that revenue growth was driven by an increase in total members, partially offset by lower average fees per member. Gross margin expansion was attributed to strategic efficiency initiatives in Care Teams and technology support. The company continues to invest in research and development and sales/marketing to capture market opportunities, particularly in GLP-1 companion programs and multi-condition expansion.
Omada faces seasonality, with higher enrollments in Q1 and Q2 increasing upfront costs. Customer concentration remains a risk, with two affiliates of The Cigna Group representing 66% of revenue. No quantitative forward guidance was provided, but management emphasized long-term growth in core business and selective investments in platform enhancement.
Omada operates as a single reporting segment. Share-based compensation expense totaled $4.2 million, up from $2.8 million in Q1 2025. The company had 3.75 million outstanding RSUs and 10.1 million stock options as of March 31, 2026. Deferred revenue of $29.4 million is expected to be recognized over the next twelve months. Purchase commitments for technology and cloud services amount to $9.9 million through 2028. The company identified a material weakness in internal control over financial reporting but is implementing remediation measures. No income tax provision was recorded due to valuation allowance. There were no subsequent events requiring adjustment.