10-Q · May 8, 2026
Omada Health reported strong Q1 2026 results, achieving a revenue of $78 million, a 42% increase year-over-year, and matching the consensus EPS estimate with a loss of -$0.05. Management highlighted robust growth driven…
Earnings analysis · 10-Q
OMDA earnings analysis
Filed August 7, 2026 · Our reading of the company's report
The latest report
Omada delivered strong Q2 execution, with revenue up 43% year over year to $87.835 million, gross margin expanding 7 percentage points to 73%, and diluted EPS improving to $0.08 from $(0.24). Growth was supported by a…
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Omada delivered strong Q2 execution, with revenue up 43% year over year to $87.835 million, gross margin expanding 7 percentage points to 73%, and diluted EPS improving to $0.08 from $(0.24). Growth was supported by a 45% year-over-year increase in average members and continued enrollment expansion, while operating income turned positive at $3.549 million. However, cash flow remained negative, receivables and customer concentration are elevated, and the material weakness in internal controls remains unresolved.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.08
- Segment
- Services revenue: $80.692 million, up 42% year over year; hardware revenue: $7.143 million, up 62% year over year.
- Segment
- The company has one operating and reportable segment: virtual care program product offerings.
What stood out
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Revenue growth remained strong
Second-quarter revenue was $87.835 million, up $26.464 million, or 43%, from $61.371 million in Q2 2025, and exceeded the provided consensus estimate of $80.400 million by approximately 9.2%.
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Gross margin expanded materially
Gross profit increased 58% year over year to $63.787 million, while gross margin expanded to 73% from 66%, a 7-percentage-point improvement. Management attributed the improvement primarily to Care Team efficiency initiatives and supporting technologies.
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Profitability turned positive
Operating income improved to $3.549 million from a $4.344 million operating loss in the prior-year quarter, moving operating margin to approximately 4.0% from negative 7.1%. Net income was $5.294 million versus a $5.311 million net loss, and diluted EPS improved to $0.08 from $(0.24).
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Membership growth accelerated
Total members increased to approximately 1.091 million at June 30, 2026 from 752,000 at June 30, 2025. Management said services growth was primarily driven by new customers and channel partners, additional programs within existing accounts, and improved enrollment effectiveness.
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Strong liquidity and no debt
Cash and cash equivalents remained substantial at $221.712 million, while the company reported working capital of $219.4 million and no outstanding debt after repaying $31.0 million of principal under the MidCap Term Facility in July 2025.
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Operating cash burn improved
Six-month operating cash usage improved to $7.827 million from $13.260 million in the prior-year period. Capital investment was $3.221 million, consisting of $2.997 million of capitalized internal-use software and $0.224 million of property and equipment purchases.
What to watch
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Material weakness remains unresolved
The company’s disclosure controls and procedures were not effective as of June 30, 2026 because of a continuing material weakness in financial close and reporting controls. The company also reported an accumulated deficit of $454.420 million, despite Q2 net income of $5.294 million.
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Heavy customer concentration
Customer concentration increased the exposure to a small number of counterparties: the top five health plan and PBM partners represented 79% of Q2 revenue, while two Cigna-affiliated partners represented 31% and 33% of revenue and 15% and 56% of accounts receivable, respectively.
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Receivables pressured cash flow
Accounts receivable increased to $56.573 million from $34.585 million at December 31, 2025, including a $1.189 million six-month provision for credit losses. The resulting $23.177 million increase in receivables was the largest operating working-capital use in the first half.
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Tariff and supply-chain pressure
Hardware cost of revenue increased 35% year over year to $25.345 million in the first half, faster than the 58% increase in hardware revenue on a dollar basis. Management cited tariffs, fulfillment costs, and modest shipping-cost increases related to the war in Iran.
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AI and regulatory execution risk
The company uses AI technologies, including OmadaSpark and Meal Map, and disclosed risks from inaccurate or harmful outputs, data privacy, cybersecurity, regulatory scrutiny, and increased investment requirements. Capitalized internal-use software costs were $2.997 million in the first half, indicating ongoing platform investment.
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Continued cash-burn risk
Operating cash flow remained negative at $(7.827) million for the first six months, and free cash flow was approximately $(11.048) million after $3.221 million of investing outflows. Management expects current cash of $221.712 million to fund operations for at least the next 12 months, but noted that future capital needs depend on growth spending and potential acquisitions.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. The prior company outlook of $322 million to $330 million for FY2026 was not reiterated quantitatively in this filing; outlook may be addressed in the earnings release or call.
Earlier filings 2
10-K · March 6, 2026
Omada Health reports strong 2025 momentum: Q4 revenue of $75.846M and GAAP profitability in the quarter (EPS $0.08), driven by accelerating member growth and product expansion. The company has 886,000 enrolled members…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.