Omada Health, Inc. 10-K

Item 8. Financial Statements OMADA HEALTH, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per-share data) As of December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 222,036 $ 76,392 Accounts receivable, net (1) 34,585 23,417 Inventory 4,486 3,296 Deferred commissions, current 3,539 3,017 Prepaid expenses and other current assets (2) 8,288 6,937 Total current assets 272,934 113,059 Property and equipment, net 7,942 5,625 Operating lease right-of-use asset - 447 Deferred commissions, non-current 8,711 9,214 Intangible assets, net 2,414 4,263 Goodwill 13,240 13,240 Other assets 165 5,044 Total assets $ 305,406 $ 150,892 Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) Current liabilities Accounts payable (3) $ 10,276 $ 4,168 Accrued expenses and other current liabilities (4) 40,392 29,840 Operating lease liability, current - 415 Deferred revenue (5) 25,058 19,530 Total current liabilities 75,726 53,953 Long term debt - 29,771 Warrant liabilities, non-current - 2,252 Other liabilities, non-current - 285 Total liabilities 75,726 86,261 Commitments and contingencies (Note 7) Redeemable convertible preferred stock, $ 0.001 par value per share; no shares and 120,689 shares authorized as of December 31, 2025 and December 31, 2024, respectively; no shares and 118,219 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively; aggregate liquidation preference of $ 0 and $ 455,588 as of December 31, 2025 and December 31, 2024, 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 December 31, 2025 and December 31, 2024, respectively; 58,429 and 8,157 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 58 8 Additional paid-in capital 686,366 59,555 Accumulated deficit ( 456,744 ) ( 443,966 ) Total stockholders’ equity (deficit) 229,680 ( 384,403 ) Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 305,406 $ 150,892 (1) Includes amounts from a related party of $ 22.8 million and $ 13.2 million as of December 31, 2025 and December 31, 2024, respectively. (2) Includes amounts from a related party of $ 0.3 million and $ 0.1 million as of December 31, 2025 and December 31, 2024, respectively. (3) Includes amounts from a related party of $ 1.0 million and $ 0 as of December 31, 2025 and December 31, 2024, respectively. (4) Includes amounts from a related party of $ 4.9 million and $ 2.2 million as of December 31, 2025 and December 31, 2024, respectively. (5) Includes amounts from a related party of $ 18.8 million and $ 13.2 million as of December 31, 2025 and December 31, 2024, respectively. The accompanying notes are an integral part of these consolidated financial statements. 91 Table of Contents OMADA HEALTH, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per-share data) Year Ended December 31, 2025 2024 2023 Revenue Services (1) $ 241,043 $ 157,789 $ 114,531 Hardware (2) 19,167 12,011 8,253 Total revenue 260,210 169,800 122,784 Cost of revenue Services (3) 51,839 42,520 36,735 Hardware 37,432 24,403 16,078 Total cost of revenue 89,271 66,923 52,813 Gross profit 170,939 102,877 69,971 Operating expenses Research and development (4) 40,683 35,923 33,738 Sales and marketing (5) 90,044 68,053 66,249 General and administrative (6) 52,184 42,555 35,981 Total operating expenses 182,911 146,531 135,968 Operating loss ( 11,972 ) ( 43,654 ) ( 65,997 ) Other income (expense), net Interest expense ( 2,534 ) ( 4,506 ) ( 4,705 ) Interest income 5,305 805 5,775 Loss on debt extinguishment ( 2,109 ) - ( 1,536 ) Change in fair value of warrant liabilities ( 1,468 ) 218 ( 1,048 ) Total other expense, net ( 806 ) ( 3,483 ) ( 1,514 ) Loss before provision for income taxes ( 12,778 ) ( 47,137 ) ( 67,511 ) Provision for income taxes - - - Net loss and comprehensive loss $ ( 12,778 ) $ ( 47,137 ) $ ( 67,511 ) Net loss per share - basic and diluted $ ( 0.35 ) $ ( 6.11 ) $ ( 9.52 ) Weighted-average shares outstanding - basic and diluted 36,639 7,721 7,091 (1) Includes amounts from a related party of $ 157.7 million, $ 88.0 million and $ 62.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. (2) Includes amounts from a related party of $ 12.1 million, $ 6.5 million and $ 4.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. (3) Includes amounts from a related party of $ 5.0 million, $ 3.4 million, and $ 2.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. (4) Includes amounts from a related party of $ 2.2 million, $ 1.7 million and $ 1.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. (5) Includes amounts from a related party of $ 26.1 million, $ 15.2 million and $ 10.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. (6) Includes amounts from a related party of $ 1.5 million, $ 1.1 million and $ 1.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. The accompanying notes are an integral part of these consolidated financial statements. 92 Table of Contents OMADA HEALTH, INC. CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands) Year Ended December 31, 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, 2022 118,129 $ 448,777 6,977 $ 6 $ 36,140 $ ( 329,318 ) $ ( 293,172 ) Issuance of Series A redeemable convertible preferred stock upon exercise of warrants 90 257 - - - - - Issuance of common stock upon exercise of stock options - - 411 1 1,754 - 1,755 Share-based compensation expense - - - - 8,816 - 8,816 Net loss and comprehensive loss - - - - - ( 67,511 ) ( 67,511 ) 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 - - 769 1 3,328 - 3,329 Share-based compensation expense - - - - 9,517 - 9,517 Net loss and comprehensive loss - - - - - ( 47,137 ) ( 47,137 ) 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 - - 1,614 2 9,725 - 9,727 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 - - - - - Issuance of common stock upon settlement of restricted stock units, net - - 56 - ( 359 ) - ( 359 ) Cashless exercise of all outstanding common stock warrants - - 35 - 642 - 642 Share-based compensation expense - - - - 13,139 - 13,139 Net loss and comprehensive loss - - - - - ( 12,778 ) ( 12,778 ) Balance as of December 31, 2025 - $ - 58,429 $ 58 $ 686,366 $ ( 456,744 ) $ 229,680 The accompanying notes are an integral part of these consolidated financial statements. 93 Table of Contents OMADA HEALTH, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net loss $ ( 12,778 ) $ ( 47,137 ) $ ( 67,511 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization 5,491 4,803 4,448 Share-based compensation 12,955 9,420 8,740 Loss on debt extinguishment 2,109 - 1,536 Loss on disposal of property and equipment 8 2 151 Amortization of debt issuance costs 285 389 416 Non-cash operating lease expense 447 728 683 Change in fair value of warrants 1,468 ( 218 ) 1,048 Provision for credit losses (1) 1,189 1,760 452 Amortization of deferred commissions 3,339 2,643 1,799 Changes in operating assets and liabilities Accounts receivable (2) ( 12,357 ) ( 8,805 ) ( 5,337 ) Inventory ( 1,190 ) 318 ( 74 ) Prepaid expenses and other current assets (3) ( 1,409 ) ( 1,853 ) ( 1,490 ) Deferred commissions ( 3,510 ) ( 6,422 ) ( 3,699 ) Other non-current assets 251 409 213 Accounts payable (4) 6,289 399 ( 286 ) Operating lease liabilities ( 415 ) ( 783 ) ( 716 ) Accrued expenses and other current liabilities (5) 10,552 5,343 8,342 Deferred revenue (6) 5,528 4,645 1,442 Other non-current liabilities - 180 105 Net cash provided by (used in) operating activities 18,252 ( 34,179 ) ( 49,738 ) Investing activities Purchases of property and equipment ( 1,322 ) ( 596 ) ( 416 ) Capitalized internal-use software costs ( 4,510 ) ( 3,267 ) ( 2,505 ) Net cash used in investing activities ( 5,832 ) ( 3,863 ) ( 2,921 ) Financing activities Proceeds from issuance of Midcap term facility - - 30,963 Payment of Midcap term facility issuance costs - - ( 1,805 ) Repayment of Perceptive term facility - - ( 30,000 ) Proceeds from exercise of stock options 9,368 3,329 1,755 Payment of deferred offering costs ( 4,283 ) ( 4,538 ) ( 111 ) Repayment of Midcap term facility principal ( 30,963 ) - - Payment of debt extinguishment costs ( 1,430 ) - ( 623 ) Proceeds from initial public offering, net of underwriting discounts and commissions 160,532 - - Net cash provided by (used in) financing activities 133,224 ( 1,209 ) 179 Net increase (decrease) in cash and cash equivalents 145,644 ( 39,251 ) ( 52,480 ) Cash and cash equivalents at beginning of period 76,392 115,643 168,123 Cash and cash equivalents at end of period $ 222,036 $ 76,392 $ 115,643 (1) Includes changes in related party balances of $ 0.5 million, $ 0.2 million and $ 0.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. (2) Includes changes in related party balances of $ 9.1 million, $ 5.3 million and $ 3.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. (3) Includes changes in related party balances of $ 0.2 million, $ 0.1 million and 0 million for the years ended December 31, 2025, 2024, and 2023, respectively. (4) Includes changes in related party balances of $ 1.0 million, $ 0 million and $ 0 million for the years ended December 31, 2025, 2024, and 2023, respectively. (5) Includes changes in related party balances of $ 2.7 million, $ 0.7 million and $ 0.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. (6) Includes changes in related party balances of $ 5.7 million, $ 3.9 million and $ 2.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. OMADA HEALTH, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information Cash paid during the period for: Interest $ 2,420 $ 3,854 $ 4,095 Supplemental disclosure of noncash investing and financing activities Share-based compensation expense capitalized in internal-use software 184 97 76 Unpaid deferred offering costs included in accounts payable - 131 23 Unpaid property and equipment included in accounts payable 16 65 26 Net share settlement of redeemable convertible preferred stock warrant in connection with Series A warrant exercise - - 257 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 3,227 - - Net share settlement of common stock warrant liability 647 - - Conversion of redeemable convertible preferred stock in connection with initial public offering 452,113 - - The accompanying notes are an integral part of these consolidated financial statements. 94 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The 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. 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 consolidated balance sheets as of December 31, 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 December 31, 2025, after the elimination of intercompany transaction balances, assets of the consolidated VIE totaled $ 0.8 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. 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 95 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 8 for additional information). Use of Estimates The preparation of 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 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 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, intangible assets and goodwill, the valuation of deferred tax assets, and 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. 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 11 for additional information). 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 December 31, 2025 and December 31, 2024 or 10% or more of revenue for the years ended December 31, 2025, 2024 and 2023 were as follows: Accounts Receivable, net Revenue As of December 31, Year Ended December 31, 2025 2024 2025 2024 2023 Partner A 21 % 29 % 32 % 36 % 36 % Partner B 45 % 28 % 33 % 19 % 19 % Partner A and Partner B are each affiliates of The Cigna Group (refer to Note 10 for additional information). 96 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Concentration of Supply Risk The Company’s hardware consists primarily of finished goods that are sourced from various vendors. Additionally, the Company utilizes a limited number of suppliers to provide the data connectivity for its connected devices. Quality, performance, or connectivity failures of the products or changes in the vendors’ financial or business condition could disrupt the Company’s ability to supply quality products to its members and thereby have a material adverse impact on its business, financial condition, and results of operations. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit in banks and highly liquid investments, including money market funds, purchased with an original maturity of three months or less. 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. Accounts Receivable, Net The Company’s accounts receivable are uncollateralized and are derived from customers and channel partners within the United States (“U.S.”), most of which are large self-insured enterprises, health plans, or PBMs. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. Accounts receivable includes amounts unbilled related to services provided during the period but not billed until subsequent to period end. The Company regularly monitors collections and payments from customers and channel partners and maintains an allowance for credit losses for estimated losses resulting from the inability of customers or channel partners to make required payments. Management estimates its allowance for credit losses by considering factors such as historical credit loss experience and current conditions, such as the length of time accounts receivable are past due, customer and channel partner payment histories, and any specific customer or channel partner collection issues identified, current market conditions which may affect customer or channel partner financial condition, and reasonable and supportable forecasts of future credit losses. The Company writes off accounts receivable against the allowance when management determines a balance is uncollectible and no longer actively pursues collection of the receivable. Inventory Inventory consists of purchased connected third-party devices, including scales, blood glucose monitors, and blood pressure monitors. Inventory is stated at the lower-of-cost or net realizable value. Inventory cost is determined on a 97 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS weighted-average cost method, which approximates the actual cost on a first-in first-out basis. Net realizable value is the estimated selling price of the Company’s products in the ordinary course of business, less reasonably predictable costs of disposal and transportation. The carrying value of inventory is reduced for estimated excess and obsolete inventory. Excess and obsolete inventory reductions are determined based on assumptions about market and economic conditions, technology changes, new product introductions, and changes in strategic direction and are included in hardware cost of revenue in the accompanying consolidated statements of operations and comprehensive loss. Property and Equipment, Net Property and equipment is stated at cost less accumulated depreciation. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the respective assets, which is generally three years . Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the lease term . Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development, and costs related to development of web-based products are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Capitalized internal-use software costs are amortized on a straight-line basis over an expected useful life of three years and are included in property and equipment, net, on the consolidated balance sheets. For the years ended December 31, 2025 and 2024, the Company capitalized $ 4.7 million and $ 3.4 million, respectively, for software acquired, developed, and modified to meet internal requirements. Amortization expense related to capitalized internal-use software was $ 3.0 million, $ 2.2 million and $ 1.7 million during the years ended December 31, 2025, 2024, and 2023, respectively. Goodwill and Other Long-Lived Assets Goodwill represents the excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination. Goodwill amounts are not amortized. Goodwill is tested for impairment annually on the last day of each fiscal year or whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company operates as a single operating segment which is deemed to be its only reporting unit. Management has the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the Company is less than the carrying amount, including goodwill. If it is determined that it is more likely than not that the fair value of the Company is less than the carrying amount, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The Company also has the option to bypass the qualitative assessment and perform the quantitative assessment. No goodwill impairments were recorded in the years ended December 31, 2025, 2024 and 2023. Long-lived assets, such as property and equipment, right-of-use assets, and finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated. If the carrying amount exceeds the undiscounted cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds its fair value. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. No long-lived assets were determined to be impaired in the years ended December 31, 2025, 2024 and 2023. Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of permanent equity because while it is not mandatorily redeemable, redemption is contingent upon the occurrence of certain events that are not solely within the Company’s control. The Company has not adjusted the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because it is uncertain whether or when a deemed liquidation event 98 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS would occur that would obligate the Company to pay the liquidation preferences to holders of shares of redeemable convertible preferred stock. Subsequent adjustments of the carrying values to the liquidation preferences will be made only when it becomes probable that such a deemed liquidation event will occur. Redeemable Convertible Preferred Stock and Common Stock Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The Company has issued redeemable convertible preferred stock and common stock warrants which are classified as a liability on the consolidated balance sheets because the redeemable convertible preferred stock warrants are freestanding financial instruments that may require the Company to transfer assets upon exercise, and the common stock warrants contain a term that may require adjustment to the exercise price. The liability associated with each of these warrants was initially recorded at fair value upon the issuance date of each warrant and is subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liabilities are recognized in the consolidated statements of operations and comprehensive loss. The warrant fair values will continue to be adjusted until the earlier of the expiration or exercise of the warrants. The Company uses the Black-Scholes option-pricing model, which incorporates assumptions and estimates, to value the redeemable convertible preferred stock and common stock warrants. Stock volatility is estimated based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The dividend yield is estimated at 0 % based on the expected dividend yield as the Company does not anticipate paying any cash dividends in the foreseeable future. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the consolidated financial statements. Legal costs incurred in connection with loss contingencies are expensed as incurred. Revenue Recognition The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods and services. Under ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when, or as, a performance obligation is satisfied. The Company generates revenue primarily by providing access to virtual care programs to customers’ members, which is referred to as services revenue. The services revenue is recognized over the period the Company is obligated to perform services for that member. The Company’s customers are business entities, such as health plans and self-insured employers, that have contracted with the Company to offer the virtual care programs to their covered lives. Covered lives, such as employees or their covered dependents, that are enrolled in a program are referred to as members. In the virtual care programs, Care Teams implement clinically validated behavior change protocols over the term of the program for individuals living with chronic conditions, such as cardiometabolic conditions, or living with MSK conditions. Cardiometabolic virtual care programs are also supported by one or more connected third-party devices, which are provided to the members upon enrollment in the programs. The Company accounts for each member enrollment as a separate contract under ASC 606. The Company’s agreements typically provide a termination for convenience by either party, with a notice period generally ranging from 30 to 180 days. The Company typically bills for its services monthly, in arrears, and the transaction price is net of sales tax collected. 99 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The Company sells to its customers through its direct sales force and through its channel partners. Channel partners include PBMs and health plans that have commercial relationships with the Company’s customers. Pursuant to the Company’s agreements with channel partners, some channel partners receive an administrative or marketing fee for their services, and the Company engages directly with its customers with respect to the provision of its services. The Company’s customer acquisition teams work directly with customers on onboarding and enrollment processes for new members. While health plans are customers for their fully insured populations, they also serve as distribution channels to self-insured entities that contract with the Company through its relationship with the health plan. For cardiometabolic programs, the transaction price includes monthly fees which are either activity-, outcome-, or milestone-based fees, as applicable, for the respective member service period and may include an upfront member enrollment fee. Variable consideration related to the activity-, outcome-, or milestone-based fees is estimated at contract inception for the non-cancelable term (ranging from 30 to 180 days) to the extent a significant reversal in revenue will not occur. The Company uses the expected value method, primarily relying on its history, to estimate variable consideration, including service-level agreements and performance guarantees based on clinical outcomes. Changes to estimated variable consideration were not material for the periods presented given the relatively short non-cancelable term. Reassessments of variable consideration may occur as historical information changes. The estimated transaction price allocated to services is recognized over time during the non-cancelable term as a stand-ready obligation. Contracts that include upfront enrollment fees generally contain a material right related to the discounted renewal option. The allocated value for that right is recognized upon exercise over the estimated benefit period, typically 12 months. Monthly service fees earned after the non-cancelable contract term are recognized over the period for which the Company is obligated to perform services for that member. The Company recognizes the sale of third-party connected devices associated with its services as a separate performance obligation when control transfers, which is generally upon shipment to the member. Associated shipping and handling fees are included in cost of revenue and are recognized as activities to fulfill the promise to transfer the good. Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on observable, if available, prices for those related services when sold separately. When such observable prices are not available, the Company determines SSP based on information such as pricing objectives and strategies, taking into consideration market conditions and other factors, including customer size, volume purchased, market and industry conditions, product-specific factors, and historical sales of the deliverables. The Company applies the practical expedient to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. As of December 31, 2025 and 2024, the Company’s future performance obligations beyond one year were not material. 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 reclassified to accounts receivable, net when the rights become unconditional. As of December 31, 2025 and December 31, 2024, the Company had $ 0.6 million and $ 0.5 million short-term contract assets, respectively, included in prepaid expenses and other current assets in the consolidated balance sheets. 100 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Deferred Commissions Sales commissions are generally considered incremental and recoverable costs of obtaining a contract with a customer or channel partner. Capitalized commissions are amortized based on the transfer of goods or services to which they relate, typically over five years . The Company determines the period of benefit by taking into consideration the terms of contracts with customers and channel partners, contract renewal rates, its technology, and other factors. Amortization of deferred commissions is recorded as sales and marketing expense in the consolidated statements of operations and comprehensive loss. Deferred commissions as of December 31, 2025 and 2024 were $ 12.3 million and $ 12.2 million, respectively, consisting of costs to obtain contracts net of accumulated amortization. The Company recorded amortization expense for deferred commissions of $ 3.3 million, $ 2.6 million, and $ 1.8 million during the years ended December 31, 2025, 2024, and 2023 respectively. 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 December 31, 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 years ended December 31, 2025 and 2024, respectively, the Company recognized revenue of $ 19.5 million and $ 14.9 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 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 $ 0 and $ 4.8 million of IPO costs were deferred and capitalized as of December 31, 2025 and 2024, respectively. Cost of Revenue Cost of revenue consists of expenses that are directly related to or closely correlated to the delivery of our virtual care programs and member support. Cost of services revenue include salaries, share-based compensation expense, employee bonus and benefits, data server management expense, hosting costs, connectivity fees for cellular devices, and the amortization of capitalized internal-use software and developed technology. Costs of hardware include salaries, share-based compensation expense, employee bonuses and benefits, equipment costs, shipping and logistics costs, and provisions for excess and obsolete inventory. Research and Development Costs The Company’s research and development (“R&D”) expenses support its efforts to add new features and content to its programs and to ensure the reliability and scalability of its virtual care platform. R&D costs include salaries, share-based compensation expense, employee bonus and benefits, hosting costs, and allocation of shared general corporate expenses primarily related to technology. R&D costs are expensed as incurred. Sales and Marketing Expenses Sales and marketing expenses consist of personnel costs including salaries, share-based compensation expense, employee bonuses and benefits, commissions for the Company’s sales and marketing teams, reseller fees, promotional marketing materials, and advertising costs. Sales and marketing expenses also include costs for third-party consulting services and the allocation of shared general corporate expenses primarily related to technology. Advertising costs are expensed as incurred and are included in sales and marketing expense in the accompanying consolidated statements of operations and comprehensive loss. Advertising costs during the years ended December 31, 2025, 2024 and 2023 were $ 0.6 million, $ 0.5 million, and $ 0.8 million respectively. 101 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS General and Administrative Expenses General and administrative expenses consist of personnel costs including salaries, share-based compensation expense, employee bonuses and benefits related to the Company’s finance, legal, compliance, human resources, and administrative teams, software and infrastructure costs, professional fees, and the allocation of shared general corporate expenses primarily related to technology. Stock-Based Compensation The Company recognizes stock-based compensation on awards granted under two Equity Incentive Plans, which are described in more detail in Note 9. The Company measures compensation expense for all share-based awards based on the estimated fair value of the award on the grant date. The Company’s equity incentive plan provides for the granting of stock options, restricted stock units (“RSUs”), and restricted stock awards to employees, consultants, officers, and directors. The fair value is recognized as expense over the requisite service period, which is generally the vesting period of the respective awards. RSUs The fair value of each RSU is based on the fair value of the Company’s common stock, which is traded on the Nasdaq, on the date of grant. Stock Options The Company determines the fair value of stock options issued to employees on the date of grant using the Black-Scholes option pricing model which is impacted by the estimated fair value of the Company’s common stock, as well as changes in assumptions regarding a number of highly complex and subjective variables. These variables are summarized as follows: Fair value of common stock – After the Company’s IPO, the fair value of the stock options is determined using the closing price of the Company’s common stock. Prior to the IPO, as the Company’s common stock was not yet publicly traded, the fair value of the common stock underlying the Company’s share-based awards was determined by the Company’s board of directors, with input from management and the assistance of a third-party valuation firm. These inputs included, but were not limited to (i) contemporaneous third-party valuations of common stock; (ii) the rights and preferences of the Company’s preferred stock relative to common stock; (iii) the lack of marketability of common stock; (iv) developments in the business; and (v) the likelihood and timing of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions. In determining the fair value of the Company’s common stock prior to the Company’s IPO, the fair value of the Company’s business was determined using various valuation methods, including combinations of the income approach (discounted cash flow method) and the market approach (public company market-multiple method) with input from the Company. The income approach involves applying an appropriate risk-adjusted discount rate to projected cash flows based on forecasted revenue and costs. The market approach estimates value based on a comparison of the Company to comparable public companies in a similar line of business. From the comparable companies, a representative market-value multiple was determined, which was applied to the Company’s operating results to estimate the enterprise value of the Company. Once the enterprise value was determined under the market approach, the Company derived the equity value of the Company and used the option-pricing model to allocate that value across the various classes of securities to arrive at the fair value of the common stock. Following the Company’s IPO, there is an active market for its common stock which is utilized to measure the fair value of the Company’s underlying shares. Expected volatility – Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since the Company does not have sufficient trading history of its common stock, it estimates the expected volatility of its stock options at their grant date by taking the weighted-average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options. 102 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Expected term – Expected term represents the period over which the Company anticipates share-based awards to be outstanding. For awards with the standard 90-day exercise period, the Company uses the simplified method to calculate the expected term estimate based on the options’ vesting term and contractual terms. Under the simplified method, the expected life is equal to the average of the share-based award’s weighted-average vesting period and its contractual term. For those awards with an extended post-termination exercise period, the Company calculates the expected term based on the options’ vesting term, tenure of the employee upon grant, and contractual terms. Risk-free interest rate – The risk-free interest rate used is based on the implied yield in effect at the time of grant of U.S. Treasury securities with maturities similar to the expected term of the stock options. Expected dividend yield – The dividend yield is zero as the Company has not declared or paid any dividends to date and does not currently expect to do so in the future. The Company accounts for forfeitures when they occur. For share-based awards that are modified, a modification of the terms of a share-based award is treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus any incremental value of the modification to the award. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss as well as other changes in stockholders’ deficit which includes certain changes in equity that are excluded from net loss. To date, the Company has not had any transactions that are required to be reported in comprehensive loss other than the net loss incurred from operations. For the years ended December 31, 2025, 2024 and 2023, there was no difference between comprehensive loss and net loss. Income Taxes The Company is subject to income taxes in the United States and various state jurisdictions. Significant judgment is required in determining the Company’s provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. The Company accounts for income taxes using the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. The Company recognizes the tax effects of an uncertain tax position only when it is more likely than not that the position will be sustained upon examination based on its technical merits. The amount recognized is the largest amount of tax benefit that is more likely than not to be realized upon settlement with the relevant taxing authority. Loss Per Share Basic earnings (loss) per share (“basic EPS”) is calculated by dividing income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share (“diluted EPS”) adjusts basic EPS for the impact of potentially dilutive shares using the treasury stock method. Potentially dilutive shares include outstanding stock options, non-vested RSUs, and purchase rights granted under the ESPP. In periods in which there is a loss, potentially dilutive securities are not included in the calculation of diluted EPS as their impact would be anti-dilutive. 103 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its ASC or other standard-setting bodies. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recent Accounting Pronouncements 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 enhances income tax disclosure by requiring additional disaggregation of the effective tax rate reconciliation and expanded disclosures related to income taxes paid. The amendments are effective for public business entities for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis.. Early adoption is permitted. The Company adopted the provisions of ASU 2023-09 on a prospective basis effective January 1, 2025. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows; however, it resulted in expanded and modified income tax disclosures, including changes to the presentation of the effective tax rate reconciliation. In May 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326), which lets entities estimate credit losses on trade receivables and contract assets using adjusted historical loss data and, optionally, exclude expected recoveries. The update is effective for fiscal years beginning after December 15, 2025 (early adoption permitted) and is applied prospectively without a preferability assessment for non-public entities adopting after the effective date. The Company adopted the provisions of ASU 2025-05 on a prospective basis for the fiscal year ended December 31, 2025 and such adoption did not have a material impact on its consolidated financial statements and disclosures. New Accounting Pronouncements Not Yet Adopted 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 consolidated financial statement disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) and Website Development Costs (Subtopic 350-50): Modernization of Guidance for Internal-Use Software. The update streamlines the cost-capitalization model for internal-use software by redefining project stages, focusing capitalization on costs incurred after “significant development uncertainty” is resolved, and eliminating the standalone website-development guidance. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual periods; early adoption is permitted. Entities may apply the guidance prospectively or use a modified transition approach that records a cumulative-effect adjustment at adoption. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities. Early adoption is permitted. The requirements will be applied 104 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS prospectively with the option for retrospective application. The Company is currently evaluating the impact of the new standard on its consolidated financial statement disclosures. 3. Fair Value Measurements The following table presents information about the Company’s financial assets measured at fair value on a recurring basis based on the fair value hierarchy as follows (in thousands): As of December 31, 2025 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents Money market funds $ 206,018 $ - $ - $ 206,018 Total $ 206,018 $ - $ - $ 206,018 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 6 and Note 8 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 December 31, 2025. The Company’s previously outstanding common stock warrants were cashless exercised on July 18, 2025 into shares of the Company’s common stock (see Note 8 for additional information). The following tables present the quantitative information regarding Level 3 fair value measurements of the warrant liabilities: 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 % 105 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table sets forth a summary of changes in fair value of Level 3 liabilities (in thousands): Balance as of December 31, 2023 $ 2,470 Remeasurement of warrant liabilities ( 218 ) Balance as of December 31, 2024 2,252 Remeasurement of warrant liabilities 1,468 Cashless exercise of redeemable convertible preferred stock warrants ( 3,078 ) Cashless exercise of outstanding common stock warrants ( 642 ) Balance as of December 31, 2025 — 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. Goodwill and Intangible Assets Goodwill As of December 31, 2025 and 2024, goodwill was $ 13.2 million. No goodwill impairments were recorded during the years ended December 31, 2025 and 2024 or to date. Intangible Assets, net Intangible assets with finite lives consisted of the following as of December 31, 2024 and 2025 (in thousands): As of December 31, 2025 2024 Customer relationships $ 265 $ 265 Trademarks 1,255 1,255 Developed technology 12,288 12,288 Total intangible assets 13,808 13,808 Less: Accumulated amortization ( 11,394 ) ( 9,545 ) Total intangible assets, net $ 2,414 $ 4,263 Amortization expense of intangible assets was $ 1.9 million, $ 2.0 million, and $ 2.0 million during the years ended December 31, 2025, 2024, and 2023, respectively. The weighted-average remaining useful life of the developed technology as of December 31, 2025 was 1.4 years. The customer relationships and trademarks were fully amortized as of December 31, 2025. Estimated future amortization expense as of December 31, 2025 is as follows (in thousands): Year Ending December 31, 2026 $ 1,756 2027 658 2028 and thereafter — Total future amortization expense $ 2,414 106 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. Consolidated Balance Sheet Components Accounts Receivable, Net Accounts receivable, net consists of the following (in thousands): As of December 31, 2025 2024 Billed accounts receivable $ 13,563 $ 9,483 Unbilled accounts receivable 22,182 15,919 Allowance for credit losses ( 1,160 ) ( 1,985 ) Total accounts receivable, net $ 34,585 $ 23,417 A rollforward of the Company’s allowance for credit losses is as follows (in thousands): As of December 31, 2025 2024 Balance at beginning of period $ ( 1,985 ) $ ( 630 ) Provision for credit losses, net ( 1,189 ) ( 1,760 ) Other adjustments and write-offs 2,014 405 Balance at end of period $ ( 1,160 ) $ ( 1,985 ) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): As of December 31, 2025 2024 Prepaid software licenses $ 3,940 $ 3,022 Other prepaid expenses 1,536 797 Contract assets 638 502 Short-term deposits 284 476 Other current assets 1,890 2,140 Total prepaid expenses and other current assets $ 8,288 $ 6,937 Inventory Inventory is comprised of finished goods inventory. There was no reserve for excess and obsolete inventory recorded as of December 31, 2025 and December 31, 2024. 107 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Property and Equipment, net Property and equipment, net consist of the following (in thousands): As of December 31, 2025 2024 Computer equipment and software $ 2,875 $ 2,211 Furniture and fixtures - 762 Capitalized internal-use software 16,888 12,195 Leasehold improvements - 829 Property and equipment, gross 19,763 15,997 Accumulated depreciation and amortization ( 11,821 ) ( 10,372 ) Property and equipment, net $ 7,942 $ 5,625 Depreciation expense of $ 0.7 million, $ 0.6 million and $ 0.7 million was recognized during the years ended December 31, 2025, 2024, and 2023, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): As of December 31, 2025 2024 Accrued compensation and employee benefits $ 24,545 $ 21,118 Accrued sales and use taxes 7,787 5,128 Accrued referral and administration fees 3,711 2,247 Accrued professional service fees 789 270 Accrued connectivity fees 301 269 Other accrued expenses 3,259 808 Total accrued expenses and other current liabilities $ 40,392 $ 29,840 6. Financing Arrangements The Company’s financing arrangements consists of the following (in thousands): As of December 31, 2025 2024 Term loan $ - $ 30,000 Revolving line of credit - 963 Debt issuance costs, net - ( 1,192 ) Long term debt $ - $ 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 108 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS “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 “Perceptive Credit Agreement”). The MidCap Term Facility was interest-only for 48 months. At the end of the initial interest-only period, the Company could elect to extend the interest-only period an additional 12 months if the Company met a certain trailing 12-month revenue level (the “Minimum Net Revenue”) and no event of default has occurred and was continuing. The MidCap Credit Agreement also included 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 was calculated as a percentage of the Company’s outstanding accounts receivable and inventory balances (“Availability”). The Company was required to maintain a minimum drawn balance on the MidCap Revolving Facility of no less than 20 % of Availability, or was 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 was June 1, 2028. Interest was 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 7.0 %, subject to a floor of 2.5 %. Interest on the MidCap Revolving Facility was charged at the sum of Adjusted SOFR, plus 4.0 %, subject to a floor of 2.5 %. Both interest rates were reset monthly. The effective interest rate for the years ended December 31, 2025 and 2024 on the MidCap Term Facility was 10.0 % and 14.3 %, respectively, and 8.4 % and 12.0 %, respectively, on the MidCap Revolving Facility. A fully nonrefundable origination fee of 1.0 % 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 paid 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 paid 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 paid an unused line fee of 0.5 % 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. Following the debt extinguishment there were no debt issuance costs classified in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 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, was 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 included customary covenants for a facility of this type, including monthly reporting requirements and, at any time that liquidity was 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 contained various covenants that limit the Company’s ability to, among 109 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 July 31, 2025, the Company was in compliance with its financial covenants. Interest expense related to amortization of the debt discount for long-term debt for the years ended December 31, 2025 and 2024 was $ 0.3 million and $ 0.4 million, respectively, and is included in interest expense. On July 31, 2025, the Company used a portion of its IPO proceeds and 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. The repayment of the MidCap Term Facility and the MidCap Revolving Facility was accounted for as a debt extinguishment. The consideration used to extinguish the MidCap Term Facility and the MidCap Revolving Facility and the carrying value of the debt instruments (including unamortized debt issuance costs) resulted in a loss on early extinguishment of debt of $ 2.1 million included in loss on debt extinguishment within our consolidated statements of operations. 7. 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 consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. Accordingly, the Company had no liabilities recorded for these provisions as of December 31, 2025 and 2024. Other Commitments Other contractual commitments primarily consist of technology and cloud services related to the Company’s daily business operations. As of December 31, 2025, future minimum payments under the Company’s non-cancellable purchase commitments, for the years ended December 31, were as follows (in thousands): 110 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2026 5,325 2027 2,544 2028 753 2029 - Thereafter - Total $ 8,622 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. On July 31, 2025, the Company fully repaid outstanding amounts under the MidCap Term Facility and MidCap Revolving Facility. 8. Redeemable Convertible Preferred Stock 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 December 31, 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 December 31, 2025 2024 Redeemable convertible preferred stock — 39,406 Redeemable convertible preferred stock warrants — 259 Outstanding RSU's 928 — Common stock warrants — 43 Common stock options outstanding 10,874 11,069 Common stock shares available for future grants 3,973 3,294 Shares available for purchase under the ESPP 1,121 — Total shares of common stock reserved 16,896 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 December 31, 2025, no shares of redeemable convertible preferred stock were outstanding. Information relating to the Preferred Stock is as follows (in thousands, except per-share amounts): 111 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2024 Original Issue Price per Share Shares Authorized Shares Issued and Outstanding Carrying Value Aggregate Liquidation Preference Series A $ 0.5342 12,027 12,005 $ 6,547 $ 6,413 Series B 1.1828 19,724 19,445 22,932 23,000 Series C 3.1631 15,386 15,386 48,540 48,667 Series C-1 3.7423 13,358 13,358 49,800 49,990 Series D 5.0365 22,330 21,230 106,704 106,925 Series D-1 5.9952 4,504 4,504 26,922 27,002 Series E 5.9952 33,360 32,291 187,589 193,591 120,689 118,219 $ 449,034 $ 455,588 Significant rights and preferences of the redeemable convertible preferred stock prior to the Company’s IPO were summarized as follows: Dividend Rights Series A, Series B, Series C, Series C-1, Series D, Series D-1, and Series E redeemable convertible preferred stockholders were entitled to receive noncumulative dividends prior and in preference to dividends declared on common stock at a rate of $ 0.0321 , $ 0.0710 , $ 0.1897 , $ 0.2245 , $ 0.3022 , $ 0.3597 , and $ 0.3597 , respectively, per annum per share. Dividends were payable only when and if declared by the Company’s board of directors. No dividends were paid with respect to the common stock during any calendar year unless dividends in the total amount of the annual dividend rate for each such series of redeemable convertible preferred stock shall have first been paid or declared and set apart for payment to the holders of each such series of redeemable convertible preferred stock, respectively, during that calendar year. Payments of any dividends to the holders of each such series of redeemable convertible preferred stock shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences. Such dividends were not mandatory, and no rights or interest accrue to the holders of each such series of redeemable convertible preferred stock if the Company failed to declare or pay dividends in any calendar year. To date, no dividends have been declared or paid. Conversion Rights Each share of Series A, Series B, Series C, Series C-1, Series D, Series D-1, and Series E redeemable convertible preferred stock was convertible at the stockholders’ option at any time into a number of shares of common stock determined by dividing the Original Issue Price (“OIP”) by the then-current conversion price for such series. The initial conversion price was the original issue price and is subject to adjustment for broad-based anti-dilution, stock splits, stock dividends, and other equivalent adjustments. Each share of redeemable convertible preferred stock would have been automatically converted into common stock at the conversion rate at the time in effect for such series of redeemable convertible preferred stock immediately upon the earlier of: (1) immediately prior to the closing of the Company’s sale of its common stock in a firm commitment underwritten public offering in which the per-share purchase price was at least $ 17.9856 (subject to appropriate adjustment) and the proceeds received by the Company (less underwriting discounts and commissions) were not less than $ 75.0 million and the Company’s common stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange (a “Qualified Public Offering”); or (2) the date, or the occurrence of an event, specified by vote or written consent or agreement of the holders of at least 52 % of the then-outstanding shares of the Company’s redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis); provided that no shares of Series D redeemable convertible preferred stock were converted pursuant to this clause (2) unless the holders of a majority of the then-outstanding shares of Series D redeemable convertible preferred stock vote or provide a written consent or agreement in favor of such conversion; and provided further that notwithstanding the foregoing, other than a conversion 112 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS pursuant to this clause (2) in connection with the Company’s sale of its common stock in a firm commitment underwritten public offering that is not a Qualified Public Offering, (i) no shares of Series C or Series C-1 redeemable convertible preferred stock were converted pursuant to this clause (2) unless the holders of at least 60 % of the then-outstanding shares of Series C or Series C-1 redeemable convertible preferred stock, voting together as a single class and on an as-converted basis, vote or provide written consent or agreement in favor of such conversion, and (ii) no shares of Series E redeemable convertible preferred stock were converted pursuant to this clause (2) unless the holders of a majority of the then-outstanding shares of Series E redeemable convertible preferred stock vote or provide written consent or agreement in favor of such conversion. Liquidation Rights In the event of any liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the redeemable convertible preferred stock were entitled to receive, prior and in preference to any distribution to the holders of common stock, an amount per share equal to the sum of the applicable OIP for such series of redeemable convertible preferred stock, together with any declared but unpaid dividends. If, upon such occurrence, the proceeds thus distributed among the holders of the redeemable convertible preferred stock were insufficient to permit the payment of such holders of the full aforesaid preferential amounts, then the entire proceeds legally available for distribution would have been distributed pro rata, on an equal priority, pari passu among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount that each such holder was otherwise entitled to receive. Voting Rights The holder of each share of redeemable convertible preferred stock had the right to one vote for each share of common stock into which the redeemable convertible preferred stock could then be converted. The holders of Series A (of at least 55 % of the outstanding Series A redeemable convertible preferred stock), Series B (of a majority of the outstanding Series B redeemable convertible preferred stock), and Series C (of at least 60 % of the outstanding Series C redeemable convertible preferred stock), voting as a separate class, were entitled to elect one director of the Company each provided that at least 20 % of the originally issued shares of the applicable series remain outstanding. The holders of Series C-1 and Series E redeemable convertible preferred stock were entitled to elect one director of the Company provided that at least 25 % of the originally issued shares of the applicable series remain outstanding. The holders of common stock, voting as a separate class, were entitled to elect three directors of the Company. The holders of redeemable convertible preferred stock and common stock, voting together as a single class and on an as-if-converted to common stock basis, were entitled to elect any remaining directors of the Company. Redemption Rights The holders of the redeemable convertible preferred stock had no voluntary rights to redeem shares. The redeemable convertible preferred stock had deemed liquidation provisions which required the shares to be redeemed upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (a “Liquidation Event”). Although the redeemable convertible preferred stock was not mandatorily or currently redeemable, a deemed Liquidation Event could have constituted a redemption event outside the Company’s control. Therefore, all shares of redeemable convertible preferred stock had been presented outside of permanent equity. The Company recorded all shares of redeemable convertible preferred stock at their respective issuance price less issuance costs on the dates of issuance. The carrying values of the Company’s redeemable convertible preferred stock had not been accreted to their redemption values as the Liquidation Event was not considered probable of occurring. Subsequent adjustments of the carrying values to redemption values would have been made only if and when it became probable the redeemable convertible preferred stock became redeemable. 113 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 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 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 Common Stock Warrants 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. As of December 31, 2024, the Company had outstanding warrants to purchase shares of the Company’s common stock that were classified as liabilities. The change in fair value for the for the year ended December 31, 2025 resulted in a loss of $ 0.4 million, for the year ended December 31, 2024 was a gain of less than $ 0.1 million, and for the year ended December 31, 2023 was a loss of $ 0.1 million. On July 18, 2025, the Company’s outstanding common stock warrants were cashless exercised resulting in the issuance of 35,467 shares of common stock. Redeemable Convertible Preferred Stock Warrants In May 2015, the Company issued warrants to purchase a total of 118,363 shares of Series B redeemable convertible preferred stock at an exercise price of $ 1.1828 per share in conjunction with other borrowings under the loan and security agreement with SVB. These 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. These warrants were concluded to be a liability 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 of these warrants was recorded as warrant liabilities and debt discount upon issuance. The debt discount was fully amortized upon the debt being repaid in August 2017. 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. In May 2020, the Company issued warrants to purchase a total of 660,000 shares of Series D redeemable convertible preferred stock at an exercise price of $ 5.0365 per share in conjunction with the Perceptive Credit Agreement. These warrants will be automatically exercised under the cashless exercise method upon the expiration date of the warrant, upon completion of a Qualified Initial Public Offering, or upon an acquisition of the Company. These warrants were concluded to be a liability 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 of these warrants was recorded as warrant liabilities and debt discount upon issuance. 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. 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 114 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS redeemable convertible preferred stock warrants for the year ended December 31, 2025 resulted in a loss of $ 0.2 million, for the year ended December 31, 2024 resulted in a gain of less than $ 0.1 million, and for the year ended December 31, 2023 resulted in a loss of $ 0.1 million. The change in fair value of Series D redeemable convertible preferred stock warrants for the year ended December 31, 2025 was a loss of $ 0.8 million, for the year ended December 31, 2024 resulted in a gain of $ 0.2 million and for the year ended December 31, 2023 resulted in a loss of $ 0.7 million. Following the closing of the IPO, no redeemable convertible preferred stock warrants were outstanding. There were no common stock warrants outstanding as of December 31, 2025. 9. 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 or is settled in cash 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 June 4, 2025. 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. As of December 31, 2025, 3,973,135 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 June 4, 2025, 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 115 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 December 31, 2025, the first offering period under the 2025 ESPP had not commenced. Stock Options The Company measures compensation expense for all share-based payment awards based on the estimated fair values on the date of the grant. The fair value of stock options granted with standard 90-day post-termination exercise periods is estimated using the Black-Scholes option pricing model. The following weighted-average assumptions were used to calculate the fair value of employee option grants: Year Ended December 31, 2025 2024 2023 Expected dividend yield 0 % 0 % 0 % Risk-free interest rate 3.66 % - 4.42 % 3.52 % - 4.48 % 3.52 % - 4.93 % Expected volatility 53 % - 70 % 68 % - 69 % 67 % - 68 % Expected term (in years) 5.89 - 6.07 5.0 0 - 6.05 5.19 - 6.06 A summary of stock option award activity under the 2011 Plan and 2025 Plan is as follows (in thousands, except years and per-share data): Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2024 11,069 $ 6.94 6.8 $ 13,942 Granted 1,947 10.73 Exercised ( 1,596 ) 6.22 Canceled and forfeited ( 546 ) 7.50 Outstanding as of December 31, 2025 10,874 $ 7.69 6.4 $ 88,095 Vested and exercisable as of December 31, 2025 7,645 $ 7.12 5.5 $ 66,236 When stock options are exercised, the Company’s policy is to issue previously unissued shares of common stock. The intrinsic value of a stock option is calculated as the difference between the per-share exercise price of the underlying stock option and the estimated per-share fair value of the Company’s common stock at the measurement date. The total intrinsic values of stock options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 15.8 million, $ 3.2 million, and $ 1.2 million, respectively. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2025, 2024, and 2023 was $ 10.73 , $ 5.93 and $ 4.31 per share, respectively. The total grant date fair value of stock options vested during the years ended December 31, 2025, 2024, and 2023 was $ 15.9 million, $ 8.3 million and $ 8.2 million, respectively. As of December 31, 2025, there was approximately $ 18.0 million of total unrecognized compensation costs related to unvested stock options, which is expected to be recognized over the weighted-average period of 2.6 years using the straight-line method. The Company has not granted any stock options since the third quarter of 2025. Restricted Stock Units 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 2025, the Company began issuing RSUs to certain employees and directors under the 2025 Plan. 116 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A summary of unvested shares as of December 31, 2025 is as follows (in thousands, except per share information): Restricted Stock Units Weighted-Average Grant Date Fair Value Unvested as of December 31, 2024 — $ — Granted 1,001 20.03 Vested 76 19.27 Canceled/Forfeited — — Unvested as of December 31, 2025 925 $ 20.09 The aggregate fair value of RSUs that vested was $ 1.5 million, $ 0 million and $ 0 million during the years ended December 31, 2025, 2024, and 2023, respectively. The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2025, 2024, and 2023 was $ 20.03 , $ 0 , and $ 0 , respectively. As of December 31, 2025, there was approximately $ 17.3 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3.5 years. Stock-based Compensation Expense A summary of share-based compensation expense recognized in the consolidated statement of operations and comprehensive loss is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Services cost of revenue $ 169 $ 219 $ 87 Research and development 2,228 1,713 1,585 Sales and marketing 3,918 2,602 2,180 General and administrative 6,640 4,886 4,888 Total share-based compensation expense $ 12,955 $ 9,420 $ 8,740 The Company capitalized $ 0.2 million, $ 0.1 million and $ 0.1 million of share-based compensation expense related to internal-use software development costs during the years ended December 31, 2025, 2024, and 2023, respectively. 10. 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 consolidated balance sheets, consolidated statements of operations and comprehensive loss, and consolidated statements of cash flows, affiliates of The Cigna Group made payments to the Company of $ 157.6 million, $ 89.9 million and $ 63.3 million during the years ended December 31, 2025, 2024, and 2023, respectively. Additionally, the Company made payments to affiliates of The Cigna Group of $ 23.4 million, $ 17.2 million, and $ 13.1 million during the years ended December 31, 2025, 2024, and 2023, respectively. 11. 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. 117 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 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 years ended December 31, 2025, 2024, and 2023 consisted of the following (in thousands): Year Ended December 31, 2025 2024 2023 Revenue $ 260,210 $ 169,800 $ 122,784 Cost of revenue (1) 89,271 66,923 52,813 Employee compensation (2) 129,036 111,221 105,646 Other segment items (3) 54,681 38,793 31,836 Consolidated net loss $ ( 12,778 ) $ ( 47,137 ) $ ( 67,511 ) (1) Depreciation and amortization included in cost of revenue was $ 5.0 million, $ 4.2 million and $ 3.8 million for the years ended December 31, 2025, 2024 and 2023, 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 and for the years ended December 31, 2025, 2024 and 2023 . 12. Income Taxes The Company’s losses before provision for income taxes during each period relate entirely to operations within the United States. The Company did not record a provision for income tax expense or benefit for the years ended December 31, 2025 and 2024 due to recurring losses and the maintenance of a full valuation allowance on its deferred tax assets. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, including to the treatment of research and development expenditures under Section 174, modifications to the business interest expense limitation, and updates to other business tax provisions. Certain provisions are effective beginning in 2025, while others are phased in through 2027. The Company has reflected the applicable provisions of the OBBBA in its income tax provision for the year ended December 31, 2025. In particular, the Company elected to recover previously capitalized domestic research and development expenditures ratably over 2025 and 2026 pursuant to newly enacted Section 174A. State conformity has been considered in material jurisdictions for purposes of determining the income tax provision. The Company has adopted Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, on a prospective basis for the year ended December 31, 2025. See Note 2. Significant Accounting Policies - Adoption of New Accounting Standards for additional details on the adoption of ASU 2023-09. The provision (benefit) for income taxes differs from the amount that would result by applying the federal income tax rate to income before income taxes, as follows (in thousands, except percentages): 118 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2025 Amount Percent U.S. federal statutory tax rate $ ( 2,437 ) 21.0 % State and local income taxes, net of federal income tax effect — — % Federal R&D tax credits ( 2,418 ) 20.8 % Stock compensation ( 137 ) 1.2 % Other 501 ( 4.3 ) % Change in valuation allowance 3,866 ( 33.3 )% World wide changes in unrecognized tax benefits 625 ( 5.4 )% Total $ — — % As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows: Year Ended December 31, 2024 2023 Statutory rate 21.0 % 21.0 % State tax 4.3 % 4.3 % Credits 4.6 % 2.3 % Stock compensation ( 1.7 ) % ( 2.0 ) % Other ( 0.2 ) % ( 0.3 ) % Change in valuation allowance ( 27.8 ) % ( 25.8 ) % Total — % — % Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of the temporary differences and carryforwards that give rise to deferred tax assets and liabilities consists of the following (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 88,612 $ 79,341 Credit carryforwards 17,220 14,876 Fixed assets 85 287 Share-based compensation 2,741 1,751 Operating lease liability — 102 Interest carryforwards 1,087 1,593 Section 174 research and development capitalization 8,889 17,526 Other accruals and reserves 7,369 6,376 Total deferred tax assets 126,003 121,852 Deferred tax liabilities: Intangible assets ( 2,222 ) ( 2,233 ) Operating lease right-of-use asset — ( 110 ) Deferred costs ( 3,048 ) ( 3,015 ) Total deferred tax liabilities ( 5,270 ) ( 5,358 ) Valuation allowance ( 120,733 ) ( 116,494 ) Deferred taxes, net of valuation allowance $ — $ — 119 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS In determining the need for a valuation allowance, the Company reviewed both positive and negative evidence pursuant to ASC 740, Income Taxes, including current and historical results of operations, future income projections, and potential tax planning strategies. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2025, which limits the Company’s ability to rely on subjective evidence such as its projections for future growth. Based on this evaluation, the Company concluded that it is not more likely than not that its’s deferred tax assets will be realized and, accordingly, a full valuation allowance has been recorded as of December 31, 2025, 2024, and 2023. A reconciliation of the beginning and ending amount of the valuation allowance is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Valuation allowance, beginning of period $ ( 116,494 ) $ ( 103,517 ) $ ( 86,334 ) Additions ( 4,239 ) ( 12,977 ) ( 17,183 ) Valuation allowance, end of period $ ( 120,733 ) $ ( 116,494 ) $ ( 103,517 ) As of December 31, 2025, 2024, and 2023 the Company had tax net operating loss carryforwards and tax credit carryforwards as follows (in thousands): Year Ended December 31, 2025 2024 2023 Net operating loss carryforwards, federal $ 358,221 $ 317,173 $ 306,885 Net operating loss carryforwards, state 219,928 206,626 203,782 Tax credit, federal 15,802 13,384 10,616 Tax credit, state 8,802 7,933 7,056 As of December 31, 2025, the Company had $ 358.2 million of federal and $ 219.9 million of state net operating loss carryforwards available to offset future taxable income. Carryforwards generated in tax years ended December 31, 2017 and prior will expire in varying amounts beginning in 2031 for federal and state purposes. Carryforwards generated in the tax year ended December 31, 2018 and future years do not expire for federal purposes. As of December 31, 2025, the Company had federal and state research and development tax credits of $ 15.8 million and $ 8.8 million, respectively. If not utilized, the federal research and development credits will expire in 2031. The California research and development credits can be carried forward indefinitely. The Company’s ability to utilize the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code and similar state tax laws. In the event the Company should experience an ownership change, as defined, utilization of its net operating loss carryforwards and tax credits could be limited. As of December 31, 2025, the total amount of unrecognized tax benefits, excluding interest and penalties, was $ 6.0 million, none of which would impact the effective tax rate if recognized. The Company’s policy is to include interest and penalties with its provision for income taxes. For the year ended December 31, 2025, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate any significant changes to its unrecognized tax positions within the next twelve months. A reconciliation of the beginning and ending amount of the Company’s unrecognized tax benefits during the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands): 120 Table of Contents OMADA HEALTH, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2025 2024 2023 Balance, beginning of period 5,173 4,262 $ 3,528 Increases related to current year tax positions 803 911 791 Lapse of the applicable statute of limitations — — ( 57 ) Reductions for tax positions of prior years ( 19 ) $ — $ — Balance, end of period $ 5,957 $ 5,173 $ 4,262 The Company files tax returns in the U.S. federal and California tax jurisdictions. The federal and state income tax returns from inception to December 31, 2021 remain subject to examination. 13. Net Loss Per Share Attributable to Common Stockholders The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net income (loss) per share of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed. The holders of the Company’s redeemable convertible preferred stock would be entitled to dividends in preference to common stockholders, at specified rates, if declared. Such dividends are not cumulative. Any remaining earnings would be distributed among the holders of redeemable convertible preferred stock and common stock pro rata on an as-converted basis. The holders of the Company’s redeemable convertible preferred stock are not contractually obligated to participate in the Company’s losses. Refer to Note 8 for further details on the redeemable preferred stock conversion at the IPO. Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method. For periods in which the Company reports net losses, diluted net loss per common share is the same as basic net loss per common share, because all potentially dilutive securities are anti-dilutive. For the calculation of diluted net loss per share, net loss per share attributable to common stockholders for basic net loss per share is adjusted by the effect of dilutive securities, including awards under the 2011 Plan and 2025 Plan. Diluted net loss per share attributable to common stockholders is computed by dividing the resulting net loss attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding. For the years ended December 31, 2025, 2024, and 2023, the Company’s potentially dilutive shares relating to stock options, RSUs, redeemable convertible preferred stock, redeemable convertible preferred stock warrants, and common stock warrants were not included in the computation of diluted net loss per share as the effect of including these shares in the calculation would have been anti-dilutive. Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2025 2024 2023 Numerator: Net loss attributable to common stockholders $ ( 12,778 ) $ ( 47,137 ) $ ( 67,511 ) Denominator: Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 36,639 7,721 7,091 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.35 ) $ ( 6.11 ) $ ( 9.52 ) As the Company was in a loss position for the years ended December 31, 2025, 2024, and 2023, 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 December 31, 2025 2024 2023 Redeemable convertible preferred stock on an as-converted basis - 39,406 39,406 Common stock options outstanding 10,874 11,069 10,216 RSUs outstanding 928 - - Redeemable convertible preferred stock warrants on an as-converted basis - 259 259 Common stock warrants - 43 43 Total 11,802 50,777 49,924 13. Subsequent Events The Company has evaluated the impact of events that have occurred subsequent to December 31, 2025, through the date the consolidated financial statements were filed with the SEC. Based on this evaluation, other than as recorded or disclosed within these consolidated financial statements and related notes, the Company has determined that there are no material subsequent events that would require recognition or disclosure. 121 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.