Omada Health, Inc. 10-Q

Item 1. Financial Statements (unaudited) OMADA HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per-share data, unaudited) June 30, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 223,146 $ 76,392 Accounts receivable, net (1) 33,287 23,417 Inventory 3,469 3,296 Deferred commissions, current 3,453 3,017 Prepaid expenses and other current assets 7,750 6,937 Total current assets 271,105 113,059 Property and equipment, net 6,484 5,625 Operating lease right-of-use asset 65 447 Deferred commissions, non-current 8,552 9,214 Intangible assets, net 3,291 4,263 Goodwill 13,240 13,240 Other assets 234 5,044 Total assets $ 302,971 $ 150,892 Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) Current liabilities Accounts payable $ 7,403 $ 4,168 Accrued expenses and other current liabilities (2) 25,060 29,840 Operating lease liability, current - 415 Deferred revenue (3) 25,525 19,530 Total current liabilities 57,988 53,953 Long term debt 29,966 29,771 Warrant liabilities, non-current 430 2,252 Other liabilities, non-current 373 285 Total liabilities 88,757 86,261 Commitments and contingencies (Note 6) Redeemable convertible preferred stock, $ 0.001 par value per share; no shares and 120,689 shares authorized as of June 30, 2025 and December 31, 2024, respectively; no shares and 118,219 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively, net of issuance costs - 449,034 Stockholders' equity (deficit) Common stock, $ 0.001 par value per share; 750,000 and 181,500 shares authorized as of June 30, 2025 and December 31, 2024, respectively; 57,321 and 8,157 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 56 8 Additional paid-in capital 672,883 59,555 Accumulated deficit ( 458,725 ) ( 443,966 ) Total stockholders' equity (deficit) 214,214 ( 384,403 ) Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 302,971 $ 150,892 (1) Includes amounts from a related party of $ 15.1 million and $ 13.2 million as of June 30, 2025 and December 31, 2024, respectively. (2) Includes amounts from a related party of $ 3.9 million and $ 2.2 million as of June 30, 2025 and December 31, 2024, respectively. (3) Includes amounts from a related party of $ 18.7 million and $ 13.2 million as of June 30, 2025 and December 31, 2024, respectively. See accompanying notes to unaudited condensed consolidated financial statements. 3 Table of Contents OMADA HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per-share data, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue Services (1) $ 56,960 $ 38,351 $ 106,456 $ 70,255 Hardware (2) 4,411 2,861 9,878 6,052 Total revenue 61,371 41,212 116,334 76,307 Cost of revenue - Services (3) 12,673 10,759 25,417 21,055 Hardware 8,392 5,619 18,711 13,070 Total cost of revenue 21,065 16,378 44,128 34,125 Gross profit 40,306 24,834 72,206 42,182 Operating expenses Research and development (4) 10,024 8,987 18,830 17,883 Sales and marketing (5) 22,318 15,191 42,488 32,387 General and administrative (6) 12,308 10,693 23,628 19,942 Total operating expenses 44,650 34,871 84,946 70,212 Operating loss ( 4,344 ) ( 10,037 ) ( 12,740 ) ( 28,030 ) Other expense, net - Interest expense 1,094 1,132 2,168 2,262 Interest income ( 863 ) ( 85 ) ( 1,405 ) ( 614 ) Change in fair value of warrant liabilities 736 ( 392 ) 1,256 ( 17 ) Total other expense, net 967 655 2,019 1,631 Loss before provision for income taxes ( 5,311 ) ( 10,692 ) ( 14,759 ) ( 29,661 ) Provision for income taxes - - - - Net loss and comprehensive loss $ ( 5,311 ) $ ( 10,692 ) $ ( 14,759 ) $ ( 29,661 ) Net loss per share - basic and diluted $ ( 0.24 ) $ ( 1.40 ) $ ( 0.98 ) $ ( 3.92 ) Weighted-average shares outstanding - basic and diluted 21,971 7,649 15,107 7,571 (1) Includes amounts from a related party of $ 36.5 million and $ 21.2 million for the three months ended June 30, 2025 and 2024, respectively and $ 66.4 million and $ 38.6 million for the six months ended June 30, 2025 and 2024, respectively. (2) Includes amounts from a related party of $ 2.6 million and $ 1.5 million for the three months ended June 30, 2025 and 2024, respectively and $ 6.0 million and $ 3.0 million for the six months ended June 30, 2025 and 2024, respectively. (3) Includes amounts from a related party of $ 1.2 million and $ 0.8 million for the three months ended June 30, 2025 and 2024, respectively and $ 2.4 million and $ 1.7 million for the six months ended June 30, 2025 and 2024, respectively. (4) Includes amounts from a related party of $ 0.5 million and $ 0.4 million for the three months ended June 30, 2025 and 2024, respectively and $ 1.0 million and $ 0.8 million for the six months ended June 30, 2025 and 2024, respectively. (5) Includes amounts from a related party of $ 6.6 million and $ 3.6 million for the three months ended June 30, 2025 and 2024, respectively and $ 12.2 million and $ 7.2 million for the six months ended June 30, 2025 and 2024, respectively. (6) Includes amounts from a related party of $ 0.4 million and $ 0.2 million for the three months ended June 30, 2025 and 2024, respectively and $ 0.7 million and $ 0.5 million for the six months ended June 30, 2025 and 2024, respectively. See accompanying notes to unaudited condensed consolidated financial statements. 4 Table of Contents OMADA HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, unaudited) Three and Six Months Ended June 30, 2025 Redeemable Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity (Deficit) Shares Amount Shares Amount Balance as of December 31, 2024 118,219 $ 449,034 8,157 $ 8 $ 59,555 $ ( 443,966 ) $ ( 384,403 ) Issuance of common stock upon exercise of stock options - - 205 - 919 - 919 Share-based compensation expense - - - - 2,883 - 2,883 Net loss and comprehensive loss - - - - - ( 9,448 ) ( 9,448 ) Balance as of March 31, 2025 118,219 $ 449,034 8,362 $ 8 $ 63,357 $ ( 453,414 ) $ ( 390,049 ) Issuance of common stock upon exercise of stock options - - 392 - 2,989 - 2,989 Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and offering costs - - 9,085 9 151,591 - 151,600 Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering ( 118,446 ) ( 452,112 ) 39,482 39 452,073 - 452,112 Automatic cashless exercise of all outstanding Series B redeemable convertible preferred stock warrants 92 493 - - - - - Cashless exercise of all outstanding Series D redeemable convertible preferred stock warrants 135 2,585 - - - - - Share-based compensation expense - - - - 2,873 - 2,873 Net loss and comprehensive loss - - - - - ( 5,311 ) ( 5,311 ) Balance as of June 30, 2025 - $ - 57,321 $ 56 $ 672,883 $ ( 458,725 ) $ 214,214 Three and Six Months Ended June 30, 2024 Redeemable Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Deficit Shares Amount Shares Amount Balance as of December 31, 2023 118,219 $ 449,034 7,388 $ 7 $ 46,710 $ ( 396,829 ) $ ( 350,112 ) Issuance of common stock upon exercise of stock options - - 216 - 988 - 988 Share-based compensation expense - - - - 2,887 - 2,887 Net loss and comprehensive loss - - - - - ( 18,969 ) ( 18,969 ) Balance as of March 31, 2024 118,219 $ 449,034 7,604 $ 7 $ 50,585 $ ( 415,798 ) $ ( 365,206 ) Issuance of common stock upon exercise of stock options - - 113 - 391 - 391 Share-based compensation expense - - - - 2,106 - 2,106 Net loss and comprehensive loss - - - - - ( 10,692 ) ( 10,692 ) Balance as of June 30, 2024 118,219 $ 449,034 7,717 $ 7 $ 53,082 $ ( 426,490 ) $ ( 373,401 ) See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents OMADA HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Six Months Ended June 30, 2025 2024 Operating activities Net loss $ ( 14,759 ) $ ( 29,661 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 2,685 2,296 Share-based compensation 5,674 4,948 Loss on disposal of property and equipment 2 1 Amortization of debt issuance costs 252 193 Non-cash operating lease expense 382 358 Change in fair value of warrants 1,256 ( 17 ) Provision for credit losses (1) 490 489 Amortization of deferred commissions 1,561 1,208 Changes in operating assets and liabilities Accounts receivable (2) ( 10,360 ) ( 9,834 ) Inventory ( 173 ) 1,487 Prepaid expenses and other current assets ( 870 ) ( 495 ) Deferred commissions ( 1,423 ) ( 3,661 ) Other non-current assets 118 210 Accounts payable 1,016 ( 1,170 ) Operating lease liabilities ( 415 ) ( 381 ) Accrued expenses and other current liabilities (3) ( 4,780 ) ( 3,061 ) Deferred revenue (4) 5,995 8,252 Other non-current liabilities 89 90 Net cash used in operating activities ( 13,260 ) ( 28,748 ) Investing activities Purchases of property and equipment ( 586 ) ( 336 ) Capitalized internal-use software costs ( 1,913 ) ( 1,490 ) Net cash used in investing activities ( 2,499 ) ( 1,826 ) Financing activities Proceeds from exercise of stock options 3,908 1,379 Payment of deferred offering costs ( 1,927 ) ( 2,277 ) Proceeds from initial public offering, net of underwriting discounts and commissions 160,532 - Net cash provided by (used in) financing activities 162,513 ( 898 ) Net increase (decrease) in cash and cash equivalents 146,754 ( 31,472 ) Cash and cash equivalents at beginning of period 76,392 115,643 Cash and cash equivalents at end of period $ 223,146 $ 84,171 (1) Includes changes in related party balances of $( 0.3 ) million and $ 0.1 million for the six months ended June 30, 2025 and 2024, respectively. (2) Includes changes in related party balances of $ 1.9 million and $ 5.5 million for the six months ended June 30, 2025 and 2024, respectively. (3) Includes changes in related party balances of $ 1.7 million and $ 0.8 million for the six months ended June 30, 2025 and 2024, respectively. (4) Includes changes in related party balances of $ 5.5 million and $ 5.8 million for the six months ended June 30, 2025 and 2024, respectively. See accompanying notes to unaudited condensed consolidated financial statements. 6 Table of Contents OMADA HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Six Months Ended June 30, 2025 2024 Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 1,824 $ 1,942 Supplemental disclosure of noncash investing and financing activities Share-based compensation expense capitalized in internal-use software $ 82 $ 45 Unpaid deferred offering costs included in accounts payable 2,356 661 Unpaid property and equipment included in accounts payable 59 - Net share settlement of redeemable convertible preferred stock warrant liability in connection with Series B redeemable convertible preferred stock warrant exercise 493 - Net share settlement of redeemable convertible preferred stock warrant liability in connection with Series D redeemable convertible preferred stock warrant exercise 2,585 - Conversion of redeemable convertible preferred stock in connection with initial public offering 452,112 - 7 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Description of Business Omada Health, Inc. (together with its subsidiary and consolidated professional corporation, the “Company” or “Omada”) offers cardiometabolic programs for prediabetes, diabetes, and hypertension; a physical therapy program to address musculoskeletal (“MSK”) conditions; additional support for members taking glucagon-like peptide-1 agonists (“GLP-1”) in its cardiometabolic programs (“GLP-1 Care Tracks”); and behavioral health support across all programs. The Company was incorporated in the State of Delaware in April 2011, and its primary office is located in South San Francisco, California. The Company has a remote-first flexible work policy, which provides support and opportunities for employees to work remotely or in an office. 2. Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of Omada Health Inc., its subsidiary, Physera, Inc., and a professional corporation, Physera Physical Therapy Group, PC (“PPTG” or the “professional corporation”), which was determined to be a variable interest entity (“VIE”) for which Omada is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in the opinion of management, all the adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods but are not necessarily indicative of the results expected for the full year or any other period. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes included in the final prospectus the Company filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), on June 9, 2025 (the “Prospectus”). Variable Interest Entity The Company determines at the inception of each arrangement whether an entity in which the Company has made an investment or in which the Company has other variable interests is considered a VIE. The professional corporation is considered a VIE since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it is considered the primary beneficiary, which is described as having both (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE. The condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024 include assets of the consolidated VIE, which can only be used to settle obligations of the VIE, and liabilities of the consolidated VIE. As of June 30, 2025, after the elimination of intercompany transaction balances, assets of the consolidated VIE totaled $ 0.6 million, and liabilities of the consolidated VIE totaled $ 0.2 million. As of December 31, 2024, after the elimination of intercompany transaction balances, assets of the consolidated VIE totaled $ 0.9 million, and liabilities of the consolidated VIE totaled $ 0.2 million. 8 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Reverse Stock Split On May 27, 2025, the Company amended its restated certificate of incorporation, as amended, to effect a reverse stock split of shares of the Company’s common stock on a one-for-three basis (the “Reverse Stock Split”). The common stock warrants and options to purchase common stock were subsequently adjusted as a result of the Reverse Stock Split. All impacted share and per-share information included in these consolidated financial statements and notes thereto have been retroactively adjusted to give effect to the Reverse Stock Split. In connection with the one-for-three reverse split of the Company’s common stock effected on May 27, 2025, the conversion price for each series of the Company’s redeemable convertible preferred stock was adjusted such that each share of redeemable convertible preferred stock became convertible into one-third of a share of the Company’s common stock. Initial Public Offering On June 9, 2025, the Company completed its initial public offering (the “IPO”) of 9,085,000 shares of its common stock, which includes the exercise in full by the underwriters of their option to purchase from the Company 1,185,000 shares of the Company’s common stock, at a price to the public of $ 19.00 per share. The gross proceeds to the Company from the IPO were $ 172.6 million and the net proceeds amounted to $ 151.6 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A, Series B, Series C, Series C-1, Series D, Series D-1, and Series E redeemable convertible preferred stock, including shares of redeemable convertible preferred stock issued upon the exercise of Series B and Series D redeemable convertible preferred stock warrants, converted into one-third of a share of the Company’s common stock (see Note 7 for additional information). Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expense during the reporting period. The Company’s significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, determining standalone selling price for performance obligations in contracts with customers and variable consideration, the period of benefit for deferred commissions, the fair value of common stock warrants, the fair value of redeemable convertible preferred stock warrants, the valuation and assumptions underlying share-based compensation including the per-share fair value of the Company’s common stock prior to the Company’s IPO, the assessment of useful life and recoverability of long-lived assets, and the valuation of deferred tax assets, reserves for uncertain tax positions. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ from those estimates or assumptions. Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies from the audited consolidated financial statements for the fiscal year ended December 31, 2024, included in the Prospectus. Segment and Geographic Information The Company considers operating segments to be components of the Company in which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM for the Company is the Chief Executive Officer. The CODM reviews financial information on a consolidated basis to make decisions about how to allocate resources and how to measure the Company’s performance. The Company has determined that it has one operating and reportable segment (refer to Note 10 for additional information). 9 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Concentrations of Credit Risk and Significant Customers and Channel Partners Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company holds cash at major financial institutions that often exceed Federal Deposit Insurance Corporation insured limits. The Company manages its credit risk associated with cash concentrations by concentrating its cash deposits in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Historically, the Company has not experienced any losses due to such cash concentrations. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers and channel partners to which the Company makes substantial sales. Significant customers and channel partners are those which represent 10% or more of the accounts receivable balance or revenue for the periods presented. Customers and channel partners that accounted for 10% or more of accounts receivable, net as of June 30, 2025 and December 31, 2024 or 10% or more of revenue for the three and six months ended June 30, 2025 and 2024 were as follows: Accounts Receivable, net Revenue As of Three Months Ended June 30, Six Months Ended June 30, June 30, 2025 December 31, 2024 2025 2024 2025 2024 Partner A 27 % 29 % 32 % 37 % 31 % 37 % Partner B 19 % 28 % 33 % 18 % 32 % 18 % Partner A and Partner B are each affiliates of The Cigna Group (refer to Note 9 for additional information). Fair Value of Financial Instruments Certain financial instruments are required to be recorded at fair value. Other financial instruments, including cash and cash equivalents are recorded at cost, which approximates fair value. Additionally, the carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to their short-term nature. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 inputs: Quoted prices for identical assets and liabilities in active markets. Level 2 inputs: Assets and liabilities based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data. Level 3 inputs: Unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require judgment. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. Contract Assets Contract assets include amounts related to the Company’s enforceable right to consideration for completed performance obligations that cannot be invoiced yet under the terms of the contract. Contract assets relate primarily to hardware revenue that is recognized upon shipment and has not yet been invoiced. The contract assets are transferred to accounts receivable, net when the rights become unconditional. As of June 30, 2025 and December 31, 2024, the Company had $ 0.8 million and $ 0.5 million short-term contract assets, respectively, included in prepaid expenses and other current assets in the condensed consolidated balance sheets. 10 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Deferred Revenue Deferred revenue consists primarily of payments received and accounts receivable recorded in advance of the delivery or completion of the services. Deferred revenue associated with upfront payments for enrollment is generally recognized over the estimated benefit period to the member of twelve months. As of June 30, 2025 and December 31, 2024, deferred revenue was classified as a current liability based on the anticipated recognition period of twelve months or less. During the six months ended June 30, 2025, the Company recognized revenue of $ 15.0 million that was included in the corresponding deferred revenue balance at the beginning of the year. Deferred Offering Costs Deferred offering costs, consisting of legal, accounting, and other fees and costs relating to the IPO are capitalized within other assets on the condensed consolidated balance sheets. The deferred offering costs were offset against the proceeds received by the Company upon the closing of the IPO. At the closing of the IPO, $ 9.0 million of deferred offering costs were reclassified to additional paid-in capital within stockholders' equity (deficit) and $ 4.8 million of IPO costs were deferred and capitalized as of December 31, 2024. New Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The updates in this ASU may be applied on a prospective or retrospective application basis and are effective for annual periods beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of the new standard on its condensed consolidated financial statement disclosures. 3. Fair Value Measurements The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the fair value hierarchy as follows (in thousands): As of June 30, 2025 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market funds $ 207,831 $ - $ - $ 207,831 Total $ 207,831 $ - $ - $ 207,831 Liabilities Warrant liabilities $ - $ - $ 430 $ 430 Total $ - $ - $ 430 $ 430 11 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market funds $ 64,501 $ - $ - $ 64,501 Total $ 64,501 $ - $ - $ 64,501 Liabilities Warrant liabilities $ - $ - $ 2,252 $ 2,252 Total $ - $ - $ 2,252 $ 2,252 Level 3 liabilities that are measured at fair value on a recurring basis consist of redeemable convertible preferred stock warrant liabilities and common stock warrant liabilities associated with warrants issued in connection with the Company’s financing arrangements (refer to Note 5 and Note 7 for additional information). The Company’s previously outstanding Series B redeemable convertible preferred stock warrants were automatically cashless exercised on May 19, 2025, and the Company’s previously outstanding Series D redeemable convertible preferred stock warrants were cashless exercised on June 9, 2025. The shares of Series B and Series D redeemable convertible preferred stock issued in connection with such warrant exercises were subsequently converted into shares of the Company’s common stock in connection with the IPO, on June 9, 2025. Accordingly, no preferred stock warrant liabilities remained outstanding as of June 30, 2025. The fair values of the outstanding common warrants are measured using the Black-Scholes option-pricing model. Inputs used to determine estimated fair value include the estimated fair value of the underlying stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends, and the expected volatility of the underlying stock. The carrying value of long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 5 for additional information). The following tables present the quantitative information regarding Level 3 fair value measurements of the warrant liabilities: As of June 30, 2025 Common Stock price $ 18.30 Exercise price $ 3.24 Remaining term (in years) 2.2 Risk-free interest rate 3.72 % Expected volatility 63 % Expected dividend yield 0 % As of December 31, 2024 Series B Series D Common Stock price $ 3.41 $ 4.55 $ 7.68 Exercise price $ 1.18 $ 5.04 $ 3.24 Remaining term (in years) 1.0 5.4 2.7 Risk-free interest rate 4.21 % 4.38 % 4.27 % Expected volatility 67 % 66 % 66 % Expected dividend yield 0 % 0 % 0 % 12 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The following table sets forth a summary of changes in fair value of Level 3 liabilities (in thousands): Balance as of December 31, 2024 $ 2,252 Remeasurement of warrant liabilities 520 Balance as of March 31, 2025 2,772 Remeasurement of warrant liabilities 736 Cashless exercise of redeemable convertible preferred stock warrants ( 3,078 ) Balance as of June 30, 2025 $ 430 Balance as of December 31, 2023 $ 2,470 Remeasurement of warrant liabilities 375 Balance as of March 31, 2024 2,845 Remeasurement of warrant liabilities ( 392 ) Balance as of June 30, 2024 $ 2,453 The Company recognizes transfers among Level 1, Level 2, and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers. There were no transfers between fair value measurement levels during the periods presented. 4. Consolidated Balance Sheet Components Accounts Receivable, Net Accounts receivable, net consists of the following (in thousands): As of June 30, 2025 December 31, 2024 Billed accounts receivable $ 11,251 $ 9,483 Unbilled accounts receivable 23,454 15,919 Allowance for credit losses ( 1,418 ) ( 1,985 ) Total accounts receivable, net $ 33,287 $ 23,417 A roll forward of the Company’s allowance for credit losses is as follows (in thousands): Three Months Ended June 30, 2025 2024 Balance at beginning of period $ ( 2,103 ) $ ( 738 ) Provision for credit losses, net 141 ( 327 ) Other adjustments and write-offs 544 177 Balance at end of period $ ( 1,418 ) $ ( 888 ) Six Months Ended June 30, 2025 2024 Balance at beginning of period $ ( 1,985 ) $ ( 630 ) Provision for credit losses, net ( 490 ) ( 489 ) Other adjustments and write-offs 1,057 231 Balance at end of period $ ( 1,418 ) $ ( 888 ) 13 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Inventory Inventory is comprised of finished goods inventory. There was no reserve for excess and obsolete inventory recorded as of June 30, 2025 and December 31, 2024. 5. Financing Arrangements The Company’s financing arrangements consists of the following (in thousands): As of June 30, 2025 December 31, 2024 Term loan $ 30,000 $ 30,000 Revolving line of credit 963 963 Debt issuance costs, net ( 997 ) ( 1,192 ) Long term debt $ 29,966 $ 29,771 MidCap Credit Agreement In June 2023, the Company entered into a financing agreement with Physera, Inc., MidCap Funding IV Trust (“MidCap”), as administrative agent, MidCap Financial Trust, as term loan servicer, certain funds managed by MidCap, as lenders, and the lenders, additional borrowers, and guarantors from time to time party thereto (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time , the “MidCap Credit Agreement”) for a senior secured term loan (the “MidCap Term Facility”) in an aggregate principal amount of up to $ 60.0 million, with up to $ 30.0 million available upon the initial closing date and up to $ 30.0 million (the “Second Tranche”) available for draw from October 2024 through March 2025 conditional upon achievement of $ 120.0 million of trailing 12-month revenue (the “Revenue Condition”) and $ 60.0 million liquidity. On March 7, 2025, the Company entered into an amendment to the MidCap Credit Agreement which, among other things, (i) extended the availability of the Second Tranche until December 31, 2025 and (ii) modified the Revenue Condition to require trailing 12-month revenue of $ 165.0 million if the Second Tranche is advanced during the first fiscal quarter of 2025, $ 170.0 million if the Second Tranche is advanced during the second fiscal quarter of 2025, $ 175.0 million if the Second Tranche is advanced during the third fiscal quarter of 2025, and $ 180.0 million if the Second Tranche is advanced during the fourth fiscal quarter of 2025. Upon the initial closing date of the MidCap Credit Agreement, the Company drew down on $ 30.0 million of the MidCap Term Facility and used a portion of the proceeds to repay the outstanding principal balance (including prepayment premium) and accrued interest on a prior credit agreement with Perceptive Credit Holdings, III, LP. The MidCap Term Facility is interest-only for 48 months. At the end of the initial interest-only period, the Company can elect to extend the interest-only period an additional 12 months if the Company meets a certain trailing 12-month revenue level (the “Minimum Net Revenue”) and no event of default has occurred and is continuing. The MidCap Credit Agreement also includes a revolving line of credit facility (the “MidCap Revolving Facility”) allowing for up to $ 20.0 million in revolving borrowings. The availability of the MidCap Revolving Facility is calculated as a percentage of the Company’s outstanding accounts receivable and inventory balances (“Availability”). The Company is required to maintain a minimum drawn balance on the MidCap Revolving Facility of no less than 20 % of Availability, or will be required to pay a fee equal to the MidCap Revolving Facility interest rate on the difference between the amount of revolving loans drawn and 20 % of Availability. Upon the initial closing date of the MidCap Credit Agreement, the Company drew $ 1.0 million on the MidCap Revolving Facility. The maturity date of the MidCap Term Facility and the MidCap Revolving Facility is June 1, 2028. Interest is charged on any outstanding principal of the MidCap Term Facility at the sum of (i) the one-month forward-looking term SOFR, plus 0.10 % (“Adjusted SOFR”), plus 7.00 %, subject to a floor of 2.50 %. Interest on the MidCap Revolving Facility is charged at the sum of Adjusted SOFR, plus 4.00 %, subject to a floor of 2.50 %. Both interest rates are reset monthly. The effective interest rate for the three months ended June 30, 2025 and 2024 on the MidCap Term Facility was 13.4 % and 14.4 %, respectively, and 11.2 % and 12.0 %, respectively, on the MidCap Revolving Facility. The effective interest rate for the six months ended June 30, 2025 and 2024 on the MidCap Term Facility was 13.4 % and 14.4 %, respectively, and 11.3 % and 12.3 %, respectively, on the MidCap Revolving Facility. 14 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) A fully nonrefundable origination fee of 1.00 % of the $ 60 million MidCap Term Facility ($ 0.6 million) was paid upon the effective date of the MidCap Credit Agreement. The Company was also required to pay all of the lender legal fees and out-of-pocket expenses totaling $ 0.7 million. Additionally, an annual administrative fee of 0.25 % of the amount borrowed under the MidCap Term Facility is due annually. At the time of final payment of the MidCap Term Facility, the Company will pay a fee of 3 % on the amount borrowed under the MidCap Term Facility. A fully nonrefundable origination fee of 0.5 % of the $ 20 million MidCap Revolving Facility ($ 0.1 million) was paid upon the closing of the MidCap Credit Agreement. The Company shall pay a collateral management fee of 0.5 % per annum on the outstanding balance of the MidCap Revolving Facility, payable monthly in arrears. Additionally, the Company will pay an unused line fee of 0.50 % per annum of the average unused portion of the MidCap Revolving Facility, payable monthly in arrears. The Company incurred other debt issuance costs of $ 0.4 million related to other fees paid to the lender and legal fees incurred by the Company. In connection with the March 7, 2025 amendment to the MidCap Credit Agreement, the Company incurred debt issuance costs of $ 0.2 million. As the Company has not borrowed against the Second Tranche modified in the amendment, the debt issuance costs are classified in prepaid expenses and other current assets in the condensed consolidated balance sheets as of June 30, 2025. With respect to any prepayment of all or any portion of the outstanding principal amount of MidCap Term Facility, or permanent reduction of the commitments under the MidCap Revolving Facility, a prepayment premium or deferred revolving origination fee, as applicable, will be due as follows: 3 % if prepaid or reduced, as applicable, before June 1, 2024, 2 % if prepaid or reduced, as applicable, between June 2, 2024 and June 1, 2025, and 1 % if prepaid or reduced, as applicable, thereafter. The MidCap Credit Agreement includes customary covenants for a facility of this type, including monthly reporting requirements and, at any time that liquidity is less than 1.50x the outstanding principal balance of the MidCap Term Facility, a financial covenant to maintain minimum trailing 12-month net revenue levels specified in the MidCap Credit Agreement. The MidCap Credit Agreement also contains various covenants that limit the Company’s ability to, among other things: sell, transfer, lease, or dispose of its assets subject to certain exclusions; create, incur, assume, guarantee, or assume additional indebtedness, other than certain permitted indebtedness; encumber or permit liens on any of its assets other than certain permitted liens; make restricted payments, including paying cash dividends on, repurchasing or making distributions with respect to any of its capital stock; make specified investments; consolidate, merge with, or acquire any other entity, or sell or otherwise dispose of all or substantially all of its assets; and enter into certain transactions with its affiliates, in each case, subject to certain exceptions, baskets, and thresholds set forth in the MidCap Credit Agreement. As of June 30, 2025 and December 31, 2024, the Company was in compliance with its financial covenants. Interest expense related to amortization of the debt discount for long-term debt for the three months ended June 30, 2025 and 2024 was $ 0.1 million and $ 0.1 million, respectively, and for the six months ended June 30, 2025 and 2024 was $ 0.2 million and $ 0.2 million, respectively, and is included in interest expense. The Company believes that it is probable that it will meet the Minimum Net Revenue and will elect to extend the interest-only period for an additional 12 months. The future maturities of the financing arrangements in aggregate as of June 30, 2025 are as follows (in thousands): Remainder of 2025 $ - 2026 - 2027 - 2028 30,963 Total future payments 30,963 Less: Unamortized debt issuance costs ( 997 ) Total financing arrangements $ 29,966 15 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) On July 31, 2025, the Company fully repaid outstanding amounts under the MidCap Term Facility and MidCap Revolving Facility (see Note 13 for additional information). 6. Commitments and Contingencies Legal Matters From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not presently a party to any such litigation the outcome of which, the Company believes, if determined adversely to the Company, would individually, or taken together, have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition. Indemnification In the ordinary course of business, the Company includes in its agreements indemnification provisions of varying scope and terms pursuant to which it agrees to indemnify customers, channel partners, suppliers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. The term of these indemnification provisions generally survive the termination of the agreements indefinitely. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. No demands have ever been made upon the Company to provide indemnification under such agreements, and there are no claims under those indemnification terms that the Company is aware of that could have a material effect on the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, or condensed consolidated statements of cash flows. Accordingly, the Company had no liabilities recorded for these provisions as of June 30, 2025 and December 31, 2024. Other Commitments Other contractual commitments primarily consist of technology and cloud services related to the Company’s daily business operations. As of June 30, 2025, future minimum payments under the Company’s non-cancellable purchase commitments, for the years ended December 31, were as follows (in thousands): Remainder of 2025 $ 4,177 2026 5,060 2027 2,409 2028 703 2029 - Thereafter - Total $ 12,349 The purchase obligation amounts do not represent the entire anticipated purchases in the future but represent only those items for which the Company is contractually obligated. The majority of the Company’s goods and services are purchased as needed, with no unconditional commitment. For this reason, these amounts do not provide an indication of the Company’s expected future cash outflows related to purchases. In addition to the amounts above, the repayment of outstanding amounts under the MidCap Credit Agreement in an aggregate principal amount of $ 31.0 million is due on June 1, 2028. Refer to Note 5 for further information regarding the MidCap Credit Agreement. On July 31, 2025, the Company fully repaid outstanding amounts under the MidCap Term Facility and MidCap Revolving Facility (see Note 13 for additional information). 16 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 7. Mezzanine and Stockholders’ Equity (Deficit) Common and Preferred Stock In connection with the closing of its IPO, on June 9, 2025, the Company’s restated certificate of incorporation was amended and restated to authorize 750,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share. No shares of preferred stock were outstanding as of June 30, 2025. The total shares of the Company’s common stock reserved for issuance on an as-converted basis are as follows (in thousands): As of June 30, 2025 December 31, 2024 Redeemable convertible preferred stock — 39,406 Redeemable convertible preferred stock warrants — 259 Outstanding RSU's 630 — Common stock warrants 43 43 Common stock options outstanding 11,981 11,069 Common stock shares available for future grants 10,419 3,294 Shares available for purchase under the ESPP 1,121 — Total shares of common stock reserved 24,194 $ 54,071 Redeemable Convertible Preferred Stock The Company previously issued shares of redeemable convertible preferred stock. Immediately prior to the closing of the IPO on June 9, 2025, all 118,218,801 shares of the Company’s Series A, Series B, Series C, Series C-1, Series D, Series D-1, and Series E redeemable convertible preferred stock, excluding shares issued upon the exercise of Series B and Series D convertible redeemable preferred stock warrants disclosed below, converted into an aggregate of 39,406,221 shares of the Company’s common stock (after adjusting the conversion ratios of the redeemable convertible preferred stock to give effect to the Reverse Stock Split), and such shares of redeemable convertible preferred stock were cancelled, retired, and eliminated from the shares of stock that the Company is authorized to issue and shall not be reissued by the Company. Following the IPO and as of June 30, 2025, no shares of redeemable convertible preferred stock were outstanding. 17 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Redeemable Convertible Preferred Stock and Common Stock Warrants The Company previously issued common and redeemable convertible preferred stock warrants in connection with certain notes payable and debt financing transactions. Common stock warrants outstanding as of June 30, 2025 and redeemable convertible preferred stock warrants and common stock warrants outstanding as of December 31, 2024 are as follows (in thousands, except for per share data): As of June 30, 2025 Stock Series Date Issued Expiration Date Exercise Price Per Share Number of Shares Fair Value Common August 29, 2017 August 29, 2027 $ 3.24 43 $ 430 Total $ 430 As of December 31, 2024 Stock Series Date Issued Expiration Date Exercise Price Per Share Number of Shares Fair Value Series B May 20, 2015 May 19, 2025 $ 1.18 118 $ 273 Series D May 18, 2020 May 18, 2030 $ 5.04 660 1,751 Common August 29, 2017 August 29, 2027 $ 3.24 43 228 Total $ 2,252 In August 2017, the Company issued warrants to purchase common stock in conjunction with a loan and security agreement with Silicon Valley Bank (“SVB”). The number of shares that the holder may purchase is equal to 43,420 and is related to a borrowing under the agreement. The warrants will be automatically exercised under the cashless exercise method upon the expiration date of each respective warrant or upon a cash or public acquisition. The warrants issued allow SVB to acquire shares of common stock at an exercise price of $ 3.24 per share and expire ten years after issuance. These warrants were concluded to be liabilities accounted for at fair value, using the Black-Scholes pricing model, on the date of issuance with subsequent remeasurements recorded in earnings. The fair value on the date of issuance was recorded as warrant liabilities and debt discount. The debt discount was fully amortized upon the debt being repaid in May 2020. The change in fair value for the three and six months ended June 30, 2025 resulted in a loss of $ 0.1 million and a loss of $ 0.2 million, respectively, and for the three and six months ended June 30, 2024 was a gain of less than $ 0.1 million and a loss of $ 0.1 million, respectively. As of December 31, 2024, the Company had outstanding warrants to purchase shares of the Company’s Series B and Series D redeemable convertible preferred stock that were classified as liabilities. The change in fair value of Series B redeemable convertible preferred stock warrants for the three and six months ended June 30, 2025 resulted in a loss of $ 0.1 and a loss of $ 0.2 million, respectively, and for the three and six months ended June 30, 2024 resulted in a gain of less than $ 0.1 million and a loss of less than $ 0.1 million, respectively. The change in fair value of Series D redeemable convertible preferred stock warrants for the three and six months ended June 30, 2025 was a loss of $ 0.6 million and a loss of $ 0.8 million, respectively, and for the three and six months ended June 30, 2024 was a gain of $ 0.3 million and gain of $ 0.1 million, respectively. On May 19, 2025, the Company’s outstanding Series B redeemable convertible preferred stock warrants were automatically cashless exercised upon expiration resulting in the issuance of 92,194 shares of Series B redeemable convertible preferred stock, which subsequently converted into 30,731 shares of common stock immediately prior to the closing of the IPO. On June 9, 2025, the Company’s Series D redeemable convertible preferred stock warrants were cashless exercised resulting in the issuance of 135,143 shares of Series D redeemable convertible preferred stock which subsequently converted into 45,047 shares of common stock immediately prior to the closing of the IPO. Following the closing of the IPO, no redeemable convertible preferred stock warrants were outstanding. 18 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 8. Share-Based Compensation 2011 Equity Incentive Plan Pursuant to the terms of the 2025 Plan (as defined below), any shares subject to outstanding options originally granted under the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) that terminate, expire, or lapse for any reason without the delivery of shares to the holder thereof shall become available for issuance pursuant to awards granted under the 2025 Plan. In connection with the effectiveness of the 2025 Plan, the 2011 Plan terminated, and no further awards will be granted under the 2011 Plan. However, all outstanding awards will continue to be governed by their existing terms. 2025 Equity Incentive Plan In connection with the IPO, the Company’s board of directors adopted, and its stockholders approved, the 2025 Incentive Award Plan (the “2025 Plan”), which became effective on the day prior to the effectiveness of the Company’s Registration Statement on Form S-1. Under the 2025 Plan, 5,045,541 shares of the Company’s common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock-based awards. The number of shares initially reserved for issuance pursuant to awards under the 2025 Plan will be increased by (i) the number of shares represented by awards outstanding under the 2011 Plan (“Prior Plan Awards”) that become available for issuance under the applicable counting provisions following the effective date of the 2025 Plan and (ii) an annual increase on the first day of each calendar year beginning in calendar year 2026 and ending in calendar year 2035, equal to the lesser of (A) 5 % of the shares of the Company’s common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by the Company’s board of directors; provided, however, that no more than 15,136,624 shares of common stock may be issued upon the exercise of incentive stock options (“ISOs”). Terms of stock awards, including vesting requirements, are determined by the Company’s board of directors or by a committee authorized by the Company’s board of directors, subject to provisions of the 2025 Plan. The term of any stock option granted under the 2025 Plan cannot exceed ten years . Generally, awards granted by the Company vest over four years , but may be granted with different vesting terms. In conjunction with the effectiveness of the 2025 Plan, the 2011 Plan terminated, and no further awards will be granted under the 2011 Plan, although all outstanding awards under the 2011 Plan will continue to be governed by their existing terms. As of June 30, 2025, 10,419,368 shares were available for future issuance pursuant to the 2025 Plan. 2025 Employee Stock Purchase Plan In connection with the IPO, the Company’s board of directors adopted, and its stockholders approved, the 2025 Employee Stock Purchase Plan (the “2025 ESPP”), which became effective on the day prior to the effectiveness of the Company’s Registration Statement on Form S-1, with an initial reserve of 1,121,231 shares of the Company’s common stock. The 2025 ESPP allows eligible employees to purchase shares of the Company's common stock at a discount through payroll deductions of up to 15 % of their compensation, subject to plan limitations. Such payroll deductions will be expressed as a whole number percentage, and the accumulated deductions will be applied to the purchase of shares of common stock on each purchase date. However, a participant may not purchase more than 666 shares of common stock in each offering period and may not subscribe for more than $ 25,000 in fair market value of shares of common stock (determined at the time the option is granted) during any calendar year. The ESPP administrator has the authority to change these limitations for any subsequent offering period. Unless otherwise determined by the Company's board of directors, employees are able to purchase shares at 85 % of the lower of the fair market value of the Company's common stock on the first date of an offering or on the purchase date. The length of the offering periods under the ESPP will be determined by the plan administrator and may be up to 27 months long. The number of shares of the Company's common stock reserved for issuance under the 2025 ESPP will automatically increase on January 1 of each year for a period of ten years , beginning on January 1, 2026 and continuing through December 31, 2035, by the lesser of (i) 1 % of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 6,727,388 shares of common stock may be issued under the ESPP. The shares reserved for issuance under the ESPP may be authorized but unissued shares or reacquired shares. As of June 30, 2025, the first offering period under the 2025 ESPP had not commenced. 19 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Stock-based Compensation Expense A summary of share-based compensation expense recognized in the condensed consolidated statement of operations and comprehensive loss is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Services cost of revenue $ 33 $ 53 $ 71 $ 105 Research and development 528 465 1,023 797 Sales and marketing 884 635 1,614 1,367 General and administrative 1,385 926 2,966 2,679 Total share-based compensation expense $ 2,830 $ 2,079 $ 5,674 $ 4,948 As of June 30, 2025, there was approximately $ 22.8 million of total unrecognized compensation costs related to unvested stock options, which is expected to be recognized over the weighted-average period of 3.0 years using the straight-line method. The Company’s RSUs vest based on the terms in the grant agreements and generally vest ratably over a period of between one and four years from the vesting commencement date. During the three and six months ended June 30, 2025, the Company issued 630,000 restricted stock units with weighted-average grant date fair value of $ 18.85 per share. As of June 30, 2025, there was approximately $ 11.6 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3.6 years. Secondary Stock Transactions Certain former employees sold no shares and less than 0.1 million shares of the Company’s common stock during each of the three months ended June 30, 2025 and 2024, at purchase prices in excess of the then-current fair market value to existing investors of the Company, respectively. During the six months ended June 30, 2025 and 2024, certain former employees sold 0.2 million and 0.5 million shares of the Company’s common stock, respectively, at purchase prices in excess of the then-current fair market value to existing investors of the Company. As a result, the Company recorded $ 0 and less than $ 0.1 million in share-based compensation expense during the three months ended June 30, 2025 and 2024, respectively, and $ 0.4 million and $ 1.0 million in share-based compensation expense during the six months ended June 30, 2025 and 2024, respectively, for the excess of the purchase price paid by these investors over the fair value of shares sold. 20 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 9. Related Party Commercial Arrangements with Cigna and its Affiliates The Company’s customers, channel partners, and vendors include affiliates of The Cigna Group, which beneficially owns more than 5 % of the Company’s outstanding capital stock through Cigna Ventures, LLC. The Company has entered into agreements with these affiliates that, among other things, provide for the provision of the Company’s programs to eligible individuals covered by these affiliates and, in certain cases, for the provision of services by such affiliates in connection with the administration of the Company’s programs. The Company also has agreements with these affiliates for the provision of certain benefits provided to the Company’s employees. Pursuant to these agreements, in addition to the amounts disclosed in the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, and condensed consolidated statements of cash flows, affiliates of The Cigna Group made payments to the Company of $ 35.8 million and $ 21.5 million during the three months ended June 30, 2025 and 2024, respectively, and $ 66.8 million and $ 40.7 million during the six months ended June 30, 2025 and 2024, respectively. Additionally, the Company made payments to affiliates of The Cigna Group of $ 6.2 million and $ 4.6 million during the three months ended June 30, 2025 and 2024, respectively, and $ 11.0 million and $ 8.2 million during the six months ended June 30, 2025 and 2024, respectively. 10. Segment Reporting The Company has one operating and reportable segment, which includes all virtual care program product offerings. The CODM manages the allocation of resources and assesses performance at the operating segment level. The CODM reviews information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM assesses performance and decides how to allocate resources based on components reported on the condensed consolidated statement of operations including consolidated net loss. The CODM uses net loss to evaluate the return on assets and to determine investment opportunities related to development of new virtual care service offerings, new technologies, and platform enhancements. The CODM also uses net loss to monitor budget versus actual results. The Company’s segment net loss and significant expenses for the three and six months ended June 30, 2025 and 2024, consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 61,371 $ 41,212 $ 116,334 $ 76,307 Cost of revenue (1) 21,065 16,378 44,128 34,125 Employee compensation (2) 32,194 26,824 60,914 54,671 Other segment items (3) 13,423 8,702 26,051 17,172 Consolidated net loss from operations $ ( 5,311 ) $ ( 10,692 ) $ ( 14,759 ) $ ( 29,661 ) (1) Depreciation and amortization included in cost of revenue was $ 1.2 million and $ 1.0 million for the three months ended June 30, 2025 and 2024, respectively, and $ 2.4 million and $ 2.0 million for the six months ended June 30, 2025 and 2024, respectively. (2) Employee compensation is part of research and development, sales and marketing and general and administrative expenses and includes salaries, share-based compensation expense, sales commissions, employee bonuses, benefits, and other employee related expenses. (3) Other segment items include third-party consulting services and professional services, software and infrastructure, hosting, marketing and advertising, and other income and other expenses. All of the Company’s long-lived assets were located in the U.S., and all revenue was earned in the U.S. as of December 31, 2024 and for the three and six months ended June 30, 2025 and 2024. 11. Income Taxes The Company’s geographical distribution of its losses before provision for income taxes during each period relates to the U.S. The Company did not record a provision for income tax expense or benefit for the three and six months ended June 30, 2025 and 2024. 21 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 12. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Numerator: Net loss attributable to common stockholders $ ( 5,311 ) $ ( 10,692 ) $ ( 14,759 ) $ ( 29,661 ) Denominator: Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 21,971 7,649 15,107 7,571 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.24 ) $ ( 1.40 ) $ ( 0.98 ) $ ( 3.92 ) As the Company was in a loss position for the three and six months ended June 30, 2025 and 2024, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per-share calculations because they would have been anti-dilutive were as follows (in thousands): As of June 30, 2025 2024 Redeemable convertible preferred stock on an as-converted basis - 39,406 Common stock options outstanding 11,981 11,069 RSUs outstanding 630 - Redeemable convertible preferred stock warrants on an as-converted basis - 259 Common stock warrants 43 43 Total 12,654 50,777 13. Subsequent Events The Company has evaluated subsequent events for recognition and measurement purposes through August 8, 2025, which is the date the condensed consolidated financial statements were available to be issued. On July 31, 2025, the Company fully repaid outstanding amounts under the MidCap Term Facility and MidCap Revolving Facility with the principal and accrued interest balances of $ 31.0 million and $ 0.4 million, respectively, ahead of their contractual maturity on June 1, 2028. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the impact on its consolidated financial statements. 22 Table of Contents