Omada Health, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from management’s expectations as a result of various factors, including, but not limited to, those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Overview Our mission is to bend the curve. Our hope is that, one day, tomorrow’s epidemiologists will notice a bend in disease curves, wonder what might be happening, and conclude that part of that impact has been Omada. As part of that mission, we strive to inspire and enable people to make lasting health changes on their own terms. We launched our initial program in diabetes prevention and weight health in 2012, with the goal of showing that a virtual program could achieve the same clinical results as its in-person archetype. Today, we offer cardiometabolic programs for prediabetes, diabetes, hypertension, and high cholesterol; a physical therapy program to address musculoskeletal (“MSK”) conditions; additional support for members taking glucagon-like peptide-1 agonists (“GLP-1”) in our cardiometabolic programs (“GLP-1 Care Tracks”); and behavioral health support across all programs. As of March 31, 2026, we had over 1,025,000 total members enrolled in one or more programs, surpassing one million total members for the first time. Our virtual care programs are rooted in evidence and combine relationship-based, human-led clinical care with purpose-built technology. We call this approach Compassionate Intelligence. Our Care Teams, composed of health coaches, select relevant specialists, and licensed physical therapists, depending on the program, deliver healthcare to our members within the scope of their credentials. Our prescribing capability also incorporates third-party licensed obesity care providers for prescribing anti-obesity medications (“AOMs”) and related medication management, expanding the ways in which we can support customers and channel partners across a broader range of GLP-1 access models. Omada Care Teams are supported by our proprietary Care Team Platform that is purpose-built to magnify the impact of our Between-Visit Care model and drive operational excellence in a trusted and secure way. Broadly, our integrated technology platform supports activities across the entire lifecycle of our work with customers, channel partners, and members: from benefit eligibility confirmation and enrollment outreach to application and member onboarding, device management and fulfillment, member-facing tools and applications, Care Team tools, data capture and storage, and platform and billing infrastructure. The investments in our technology and Care Team Platform have enabled us to scale and serve over two million members since launch, while maintaining the ability to deliver an exceptional member experience, with high clinical quality and consistency. Key Factors Affecting Our Performance We believe that our future growth, success, and performance are dependent on many factors, including those set forth below. While these factors present significant opportunities for us, they also represent the challenges that we must successfully address in order to grow our business and improve our results of operations. Acquisition of New Customers and Channel Partners We believe there is substantial opportunity to further grow our base of customers and channel partners in our large addressable market. Historically, we have relied on a limited number of customers and channel partners, including employers, health plans, pharmacy benefit managers (“PBMs”), health systems, and government entities, for a substantial portion of our total sales. Our customers include employers that cover our programs for their employees and their dependents and health systems that cover our programs for patients, among other types of customers. In addition, our channel partners, which include certain of the health plans, PBMs, and other entities that we work with, operate as resellers of our programs to their employer customers or other end customers, which can limit an end customer’s ability to continue purchasing our programs if the customer no longer works with a particular channel partner. Some of the health plans and PBMs we work with as channel partners also cover our programs directly, for a portion of their own members, as our customers. 17 Table of Contents We seek to grow our business by acquiring more covered lives across multiple buyer categories: selling to new customers and channel partners as well as expanding within our existing channel partners to new lines of business. Our diverse go-to-market strategy affords us flexibility to pursue growth via multiple distinct channels, including across PBM, health plan, and employer pathways, and through new channels and in lines of business where we have yet to place significant focus, such as Medicare Advantage. Customer and Channel Partner Retention Our ability to increase revenue depends on maintaining and deepening relationships with customers and channel partners over time, driving both renewal revenue and expansion revenue as customers and channel partners add new programs to provide to their member base. We have invested and plan to continue to invest across our data, analytics, operations, and customer success capabilities to build the infrastructure that supports our go-to-market approach. Program Expansion within Existing Customer Base We believe that the ability to grow the relative amount of revenue that we generate from existing customers is a key driver of long-term growth. We have seen significant expansion over time as existing customers and channel partners have added our newer programs, such as Diabetes, Hypertension, and Cholesterol, and we remain focused on driving multi-program adoption as a key growth lever. We believe that increased customer focus on GLP-1s and weight health may also support broader adoption of our cardiometabolic offerings over time. There is still opportunity to continue multi-condition expansion. Member Enrollment Having served over two million members since launch, there is still significant opportunity to enroll more members. We are focused on achieving higher enrollment rates by helping more customers and channel partners adopt our enrollment outreach best practices, including enabling Omada-led enrollment outreach campaigns, implementing strategies to reach individuals with known risk, and evaluating new enrollment strategies and channels. Member Engagement and Outcomes Member engagement in our programs and the clinical outcomes and cost savings of our offerings affect the market acceptance and adoption of our programs. Most of our customers pay fees to us based on member enrollment and/or engagement with our programs, and our contracts generally may provide that we are obligated to repay a portion of our fees if our programs fail to deliver certain member engagement targets, clinical outcomes, or cost savings. We are focused on continuing to provide engaging content and tools, foster meaningful personal connections, and demonstrate positive clinical outcomes for our members. Investments in Growth We expect to continue to focus on long-term growth of our core business, while selectively investing in areas that enhance our platform, programs, or operations. Though our focus remains on continued progress in our current care areas, we monitor the needs of our customers and channel partners, and we believe we are well positioned to respond to their requirements organically or, where appropriate, to add new capabilities through partnerships and potential acquisitions. Key Metric We monitor the following key metric to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. 18 Table of Contents Total Members A member is a person who is enrolled in one of our virtual care programs and that generated a billing event in the preceding 12 months. We believe growth in the number of members is a key indicator of the performance of our business for both investors and management as we monitor the performance of our business, as members primarily drive services revenue. The number of members depends, in part, on our ability to successfully market our services to new customers and channel partners, our ability to sell additional programs to existing customers and channel partners, and our ability to promote awareness of our programs among covered individuals and to encourage their enrollment. As of March 31, 2026 2025 Total Members 1,025,000 679,000 Key Components of Results of Operations Revenue We generate services revenue from our customers by providing access to our virtual care programs in which our Care Teams implement clinically validated behavior change protocols for individuals living with prediabetes and weight management issues, diabetes, and hypertension (collectively referred to as “cardiometabolic” conditions) and MSK conditions over the term of the program. Our MSK program generally includes a fixed, upfront consultation fee and an additional fee for members that opt in to a physical therapist-guided treatment plan. We use a number of pricing models for our cardiometabolic programs. In general, our legacy pricing models for cardiometabolic programs may include a fixed, upfront enrollment fee and include variable monthly fees which are based on either outcomes or milestones for the respective member service period. In general, our latest pricing models for cardiometabolic programs are based on the respective member’s level of activity in the program. Each month, members that have completed a minimum number of qualifying activities during an agreed-upon backward-looking measurement period are considered billable members. The length of the measurement period and the qualifying activities may vary based on negotiations with customers and channel partners. Most activity measurement periods are defined as the preceding three or six months, and in most cases, members are considered active if they complete three activities during that period, such as logging in or interacting with the Omada mobile app, sending messages to Omada Care Team members, or recording metrics such as weight, blood pressure, or blood glucose values. The price for Omada for Diabetes and Omada for Hypertension is generally higher than the price for Omada for Prevention & Weight Health to account for the higher costs of delivering those programs, including additional included devices and increased Care Team support appropriate for those conditions. We typically bill for our services monthly, in arrears. We recognize a portion of revenue upfront upon hardware delivery or initial consultation and the remaining revenue over the period members have access to our virtual care programs. In general, among our members in cardiometabolic programs, members in Omada for Diabetes and Omada for Hypertension remain active and enrolled in our programs for longer periods than members in Omada for Prevention & Weight Health. In addition to the overall number of members, our quarterly revenues reflect the mix of members enrolled in our various programs and the pricing models for these programs. Sales from or through our top five health plan and PBM partners, including any sales to these entities as customers and sales through these entities as channel partners, represented 78% and 73% of our revenue for the three months ended March 31, 2026 and 2025, respectively. 19 Table of Contents 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 March 31, 2026 and December 31, 2025 or 10% or more of revenue as of and for the three months ended March 31, 2026 and 2025 were as follows: Accounts Receivable, net Revenue As of Three Months Ended March 31, March 31, 2026 December 31, 2025 2026 2025 Partner A 27 % 21 % 33 % 31 % Partner B 37 % 45 % 33 % 29 % Each of these health plans or PBMs are affiliates of The Cigna Group. 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 includes salaries, share-based compensation expense, bonuses, benefits, travel, and meals and entertainment expenses (collectively, “personnel costs”), data server management expense, hosting costs, connectivity fees for cellular devices, and the amortization of capitalized internal-use software and developed technology. Cost of hardware revenue includes equipment costs, shipping and logistics costs, and provisions for excess and obsolete inventory. Most of the devices delivered in connection with our programs are manufactured in the Dominican Republic and China and may be manufactured in other international markets in the future, and we expect that the prices of these devices may increase as a result of recent tariffs and any new or increased tariffs in the future. In addition, the war in Iran has resulted in modest increases to device-related costs to date due to increased shipping costs. Gross Profit and Gross Margin Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Gross profit and gross margin have been and will continue to be affected by various factors, including the acquisition of new customers and channel partners, renewals of existing agreements, sales of additional programs to our existing customers, the mix of programs covered by our customers and channel partners and members enrolled in those programs, the timing of members enrolling in our programs, the costs associated with third-party data server management and third-party hosting services, costs of hardware, economies of scale, and the extent to which we introduce new features or functionality or expand our Care Teams and hire other additional personnel. Operating Expenses Our operating expenses consist of research and development (“R&D”), sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of operating expenses. Operating expenses also include professional and consulting services and the allocation of shared general corporate expenses primarily related to technology. Research and Development Our R&D expenses support our efforts to add new features and content to our programs and to ensure the reliability and scalability of our virtual care platform. R&D expenses consist primarily of personnel costs and the allocation of shared general corporate expenses primarily related to technology. R&D costs are expensed as incurred. We expect to make continued investments in our virtual care platform in connection with our future growth. Sales and Marketing Sales and marketing expenses consist of personnel costs, commissions for our sales and marketing teams, administrative and marketing fees that we pay to channel partners for their services, 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. 20 Table of Contents The sales and marketing teams are responsible for growing and maintaining our relationships with customers and channel partners and increasing enrollments. General and Administrative General and administrative expenses consist of personnel costs for our 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. We expect general and administrative expenses to increase in absolute dollars as we grow our operations and incur additional expenses associated with operating as a public company. Increased expenses as a result of operating as a public company include expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and other third-party consulting services. Other Income (Expense), Net Interest Income Interest income consists of income earned on our cash and cash equivalents. Interest Expense Interest expense consists of interest costs associated with our debt financing, including amortization of debt issuance costs. Change in Fair Value of Warrant Liabilities We classify our redeemable convertible preferred stock warrants and common stock warrants as liabilities on our condensed consolidated balance sheets. We remeasure the warrant liabilities to fair value at each reporting date and recognize changes in the fair value of the warrant liabilities in our consolidated statements of operations. We adjusted the warrant liabilities for changes in fair value until the exercise of the redeemable convertible preferred stock warrants and common stock warrants. Provision for Income Taxes We are subject to income taxes in U.S. federal, state, and local jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized. We account for uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740-10, Accounting for Uncertainty in Income Taxes . We recognize the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and only in an amount more likely than not to be sustained upon review by the tax authorities. Interest and penalties related to uncertain tax positions are classified in the condensed consolidated financial statements as income tax expense. As of December 31, 2025, the Company remains subject to examination by U.S. federal and state taxing authorities for all tax years since inception, as net operating loss carryforwards remain subject to adjustment. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, including changes to the treatment of research and development expenditures under Section 174 of the Internal Revenue Code of 1986, as amended (the “Code”), modifications to the business interest expense limitation, and updates to depreciation rules, among others. Certain provisions are effective beginning in 2025, while others are phased in through 2027. Under the OBBBA and newly enacted Section 174A of the Code, taxpayers may accelerate the recovery of previously capitalized domestic research and development expenditures that remained unamortized as of 2025, either 21 Table of Contents entirely in 2025 or ratably over 2025 and 2026. We have elected to recover these costs ratably over 2025 and 2026 and recognized a deduction of approximately $36.1 million in 2025 to such expenditures. Certain state jurisdictions have not conformed to the OBBBA or have adopted different approaches to the treatment of expenditures under Section 174 of the Code. We have considered the impact of state conformity in material jurisdictions for purposes of determining its income tax provision. The ultimate tax treatment of these items will be finalized upon the filing of our income tax returns. Other provisions of the OBBBA, including changes to bonus depreciation and international tax rules, did not have a material impact on our consolidated financial statements due to taxable losses, a full valuation allowance on deferred tax assets, or inapplicability to our operations. Results of Operations The following table sets forth our results of operations for each of the periods presented: Three Months Ended March 31, 2026 2025 (in thousands) Revenue Services $ 69,594 $ 49,496 Hardware 8,454 5,467 Total revenue 78,048 54,963 Cost of revenue Services (1)(2)(3) 14,449 12,744 Hardware 14,906 10,319 Total cost of revenue 29,355 23,063 Gross profit 48,693 31,900 Operating expenses Research and development (1)(3) 12,697 8,806 Sales and marketing (1)(2)(3) 26,787 20,170 General and administrative (1)(3) 13,990 11,320 Total operating expenses 53,474 40,296 Operating loss (4,781) (8,396) Other income (expense), net Interest expense (18) (1,074) Interest income 1,829 542 Change in fair value of warrant liabilities - (520) Total other income (expense), net 1,811 (1,052) Loss before provision for income taxes (2,970) (9,448) Provision for income taxes - - Net loss and comprehensive loss $ (2,970) $ (9,448) (1) Includes share-based compensation expense as follows: Three Months Ended March 31, 2026 2025 (in thousands) Cost of services revenue $ 62 $ 38 Research and development 739 495 Sales and marketing 1,438 730 General and administrative 1,970 1,581 Total share-based compensation expense $ 4,209 $ 2,844 (2) Includes amortization of intangible assets as follows: Three Months Ended March 31, 2026 2025 (in thousands) Cost of services revenue $ 439 $ 439 Sales and marketing — 63 Total amortization of intangible assets $ 439 $ 502 (3) Includes depreciation and amortization as follows: Three Months Ended March 31, 2026 2025 (in thousands) Cost of services revenue $ 980 $ 741 Research and development 32 18 Sales and marketing 36 27 General and administrative 21 45 Total depreciation and amortization (i) $ 1,069 $ 831 (i) Depreciation and amortization includes depreciation of property and equipment and amortization of capitalized internal-use software costs. 22 Table of Contents Percentage of Revenue Data Three Months Ended March 31, 2026 2025 (as a percentage of revenue) Revenue Services 89 % 90 % Hardware 11 10 Total Revenue 100 100 Cost of revenue Services 19 23 Hardware 19 19 Total cost of revenue 38 42 Gross profit 62 58 Operating expenses Research and development 16 16 Sales and marketing 34 37 General and administrative 18 21 Total operating expenses 68 74 Operating loss (6) (16) Other income (expense), net Interest expense — (2) Interest income 2 1 Change in fair value of warrant liabilities (1) Total other income (expense), net 2 (2) Loss before provision for income taxes (4) (18) Provision for income taxes — — Net loss and comprehensive loss (4) % (18) % Comparison of the Three Months Ended March 31, 2026 and 2025 Revenue Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Services $ 69,594 $ 49,496 $ 20,098 41 % Hardware 8,454 5,467 2,987 55 % Total revenue $ 78,048 $ 54,963 $ 23,085 42 % Total revenue increased by $23.1 million, or 42%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. 23 Table of Contents Services revenue increased by $20.1 million, or 41%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven b y an increase of $24.1 million related to growth in total members due to acquisition of new customers and channel partners, sales of additional programs to our existing customers and continued progress in enrollment effectiveness , with the average number of total members during the three months ended March 31, 2026 increasing by 51% compared to the average for the three months ended March 31, 2025. The increase was partially offset by a $3.8 million aggregate decrease in average fees per member. Hardware revenue increased by $3.0 million, or 55%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a 51% increase in total members, reflecting new members enrolled in our programs compared to the prior-year period, which directly drove the number of devices that we delivered. Cost of Revenue Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Services $ 14,449 $ 12,744 $ 1,705 13 % Hardware 14,906 10,319 4,587 44 % Total cost of revenue $ 29,355 $ 23,063 $ 6,292 27 % Total cost of revenue increased by $6.3 million, or 27%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Cost of services revenue increased by $1.7 million, or 13%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $0.9 million increase in personnel costs related to our Care Teams, reflecting additional care activities in onboarding the higher number of new members enrolled in our programs compared to the prior-year period, and a $0.6 million increase in technology infrastructure expenses . Cost of hardware revenue increased by $4.6 million, or 44%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a 51% increase in total members, reflecting new members enrolled in our programs compared to the prior-year period, which drove new devices, supplies, and fulfillment costs, which include tariffs, compared to the prior period. Gross Profit and Gross Margin Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Gross profit $ 48,693 $ 31,900 $ 16,793 53 % Gross margin 62.4 % 58.0 % 4.3ppt Gross profit increased by $16.8 million, or 53%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, driven by a 51% increase in total members and by a decrease in personnel costs per total member needed to support enrolled members as a result of strategic efficiency initiatives such as improving the effectiveness of our Care Team interventions and Care Team time management (“Care Team efficiency initiatives”), as well as the expanded use of supporting technologies, such as tools that can surface helpful templates for our Care Team’s consideration in frequently recurring scenarios (“Care Team message support”). Gross margin expanded by 4.3 percentage points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The expansion of gross margin was primarily driven b y lower personnel costs per total member needed to support enrolled members as a result of Care Team efficiency initiatives as well as the expanded use of supporting technologies, such as tools for Care Team message support. 24 Table of Contents Operating Expenses Research and Development Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Research and development $ 12,697 $ 8,806 $ 3,891 44 % Research and development expenses increased by $3.9 million, or 44%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $3.5 million increase in personnel costs related to an increase in headcount and a $0.4 million increase in technology infrastructure expenses. Sales and Marketing Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Sales and marketing $ 26,787 $ 20,170 $ 6,617 33 % Sales and marketing expenses increased by $6.6 million, or 33%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $2.7 million increase in administrative and marketing fees that we paid to channel partners for their services in support of our member enrollments, a $2.1 million increase in personnel costs related primarily to an increase in headcount, a $1.2 million increase in other marketing programs and sales commissions, and a $0.6 million increase in third-party consulting and professional services. General and Administrative Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) General and Administrative $ 13,990 $ 11,320 $ 2,670 24 % General and administrative expenses increased by $2.7 million, or 24%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $2.4 million increase in personnel costs related to an increase in headcount and a $0.4 million increase in business insurance expenses, partially offset by a $0.5 million decrease in professional and outside services costs. Other Income (Expense), Net Interest Expense Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Interest Expense $ 18 $ 1,074 $ (1,056) (98) % Interest expense decreased by $1.1 million, or 98%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to the extinguishment of our financing arrangements with MidCap Funding IV Trust on July 31, 2025, as discussed in “Liquidity and Capital Resources” below. 25 Table of Contents Interest Income Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Interest Income $ 1,829 $ 542 $ 1,287 237 % Interest income increased by $1.3 million, or 237%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by interest earned from the increase in cash and cash equivalents from IPO proceeds. Change in Fair Value of Warrant Liabilities Three Months Ended March 31, 2026 2025 $ Change % Change (in thousands, except percentages) Change in fair value of warrant liabilities $ — $ 520 $ (520) (100) % The change in fair value of warrant liabilities decreased by $0.5 million, or 100%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by the cashless exercise of the convertible preferred stock and common stock warrants during the year ended December 31, 2025. Trends Seasonality We typically close a higher percentage of sales to new customers, as well as renewals or expansions with existing customers, in the second and third quarters, aligning with benefits enrollment schedules and allowing us to launch our products at the start of the following year. This seasonality generally leads to higher new member enrollment in the first and second quarters, resulting in increased Care Team costs to support the newly enrolled members. These higher new member enrollments also require shipments of new devices to newly enrolled members in the same quarter of enrollment or the beginning of the following quarter and increased hardware revenue in those periods. These increased costs result in lower overall gross margins in those quarters and there is typically a decrease in these costs in subsequent quarters. After the effects of these early program costs of new enrollments, increases in the number of members will generally be reflected in increased revenue in subsequent quarters as services revenue is generally recognized in arrears after the provision of our virtual care programs begins. Obesity and Weight Management The obesity and weight health market is rapidly evolving, with a surge in GLP‑1 adoption creating a broader spotlight on obesity and cardiometabolic disease more generally. As these medications draw significant attention—and cost—employers and health plans are under increasing pressure to balance access with affordability, making it difficult for many to offer broad GLP‑1 coverage. In this environment, we believe Omada is well positioned to support customers across a range of coverage strategies: for those that cover GLP‑1s, our GLP‑1 companion programs are designed to help enhance medication effectiveness and durability; for those that do not, our proven prevention and weight health program, together with our broader cardiometabolic offerings, provides an evidence‑based path to improving weight and metabolic health without relying on expensive drugs. As a result, increased focus on GLP‑1s has contributed to demand for our solutions among both employers that cover these medications and those that do not. In addition, we recently announced the capability to prescribe GLP-1 therapies and other AOM as an extension of our GLP-1 support offerings, reflecting our proactive approach to evolving care models and meeting customer needs, while continuing to innovate on traditional care protocols. Liquidity and Capital Resources Since our inception, we have financed our operations primarily through proceeds from issuance of our redeemable convertible preferred stock and common stock, debt financing agreements, and cash generated from the sale of our products and services. On June 9, 2025, we completed our IPO and received proceeds of approximately $151.6 million, 26 Table of Contents after deducting underwriting discounts and commissions and offering expenses. As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $211.8 million and working capital of $200.7 million. Cash and cash equivalents are composed of cash held in sweep accounts, checking accounts, and money market funds. Our principal use of cash is to fund our operations and invest in R&D to support our growth. We have generated significant losses from operations and negative cash flows from operating activities in the past, as reflected in our accumulated deficit of $459.7 million as of March 31, 2026. We believe that our current cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements, however, will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and R&D expenditures, the continuing market acceptance of our products and services, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and on acceptable terms, our business, results of operations, and financial condition could be materially and adversely affected. In June 2023, we entered into a financing arrangement 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 available for draw from October 2024 through March 2025 and a revolving line of credit facility (the “MidCap Revolving Facility”). On July 31, 2025, we used a portion of the IPO proceeds to fully repay 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. Cash Flows The following table summarizes our cash flows for the periods presented: Three Months Ended March 31, 2026 2025 (in thousands) Net cash used in operating activities $ (11,834) $ (16,118) Net cash used in investing activities $ (1,557) $ (1,249) Net cash provided by financing activities $ 3,120 $ 372 Operating Activities Our largest source of operating cash flows is cash collections from our customers who purchase access to our programs for their members. Our primary use of cash in operating activities is for personnel and related expenses, marketing expenses, and third-party hosting and software costs. We have incurred negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from the sale of redeemable convertible preferred stock and common stock, and proceeds from debt financing arrangements. Net cash used in operating activities during the three months ended March 31, 2026 of $11.8 million was the result of a $3.0 million net loss , adjusted for $7.5 million of non-cash adjustments and $16.3 million of net cash outflow from changes in operating assets and liabilities. The non-cash adjustments consisted primarily of $4.2 million of share-based compensation expense, $1.5 million of depreciation and amortization expense, $1.0 million of amortization of deferred commissions, and a $0.8 million increase in the provision for credit losses. The net cash outflow from changes in operating assets and liabilities was primarily the result of a $9.2 million decrease in accrued expenses and other current liabilities, a $6.2 million increase in accounts receivable, a $2.2 million increase in deferred commissions, a $2.1 million decrease in accounts payable, a $1.5 million increase in prepaid and other current assets, and a $0.1 million increase in other non-current assets, partially offset by a $4.3 million increase in deferred revenue and a $0.7 million decrease in inventory. Net cash used in operating activities during the three months ended March 31, 2025 of $16.1 million was the result of a $9.4 million net loss, adjusted for $6.4 million of non-cash adjustments and $13.0 million of net cash outflow from changes in operating assets and liabilities. The non-cash adjustments primarily consisted of $2.8 million in share-based 27 Table of Contents compensation expense, $1.3 million of depreciation and amortization expense, $0.7 million of amortization of deferred commissions, $0.6 million in provision for credit losses, $0.5 million in fair value of warrant liabilities, $0.2 million of amortization of operating lease right-of-use assets, and $0.1 million of amortization of debt issuance costs. The net cash outflow from changes in operating assets and liabilities was primarily the result of a $8.4 million decrease in accrued expenses and other current liabilities, a $6.5 million increase in accounts receivable, a $1.2 million increase in deferred commissions, a $0.6 million increase in prepaid and other current assets, and a $0.2 million decrease in operating lease liabilities, partially offset by a $3.3 million increase in deferred revenue, a $0.3 million decrease in inventory, and a $0.3 million increase in accounts payable. Investing Activities Net cash used in investing activities during the three months ended March 31, 2026 of $1.6 million was the result of capitalized internal-use software costs of $1.5 million and purchases of property and equipment of $0.1 million. Net cash used in investing activities during the three months ended March 31, 2025 of $1.2 million was the result of purchases of property and equipment of $0.3 million and capitalized internal-use software costs of $0.9 million. Financing Activities Net cash provided by financing activities for the three months ended March 31, 2026 of $3.1 million was the result of $3.2 million of proceeds from the exercise of stock options, partially offset by $0.1 million of taxes paid related to net share settlement of equity awards. Net cash provided by financing activities for the three months ended March 31, 2025 of $0.4 million was the result of $0.9 million of proceeds from the exercise of stock options, partially offset by $0.5 million of payments for deferred offering costs. Contractual Obligations and Other Commitments Purchase commitments . Our unconditional purchase commitments primarily consist of technology and cloud services related to our daily business operations. As of March 31, 2026, we had $4.4 million of unconditional purchase commitments due in 2026 and $5.5 million due in 2027 and thereafter. The purchase obligation amounts do not represent the entire anticipated purchases in the future but represent only those items for which we are contractually obligated. The majority of our goods and services are purchased as needed, with no unconditional commitment. For this reason, these amounts do not provide an indication of our expected future cash outflows related to purchases. See Note 5 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Indemnification Agreements In the ordinary course of business, we include in our agreements indemnification provisions of varying scope and terms pursuant to which we agree 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 us, 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 we could be required to make under these arrangements is not determinable. No demands have ever been made upon us to provide indemnification under such agreements, and there are no claims under those indemnification terms that we are aware of that could have a material effect on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. As a result, we believe the fair value of these agreements is minimal. In addition, we have entered into separate indemnification agreements with our directors and certain officers and other employees that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, and employees. 28 Table of Contents Emerging Growth Company Status We qualify as an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include: (i) being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this Quarterly Report on Form 10-Q; (ii) reduced disclosure about our executive compensation arrangements; (iii) not being required to hold advisory votes on executive compensation or to obtain stockholder approval of any golden parachute arrangements not previously approved; (iv) an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and (v) an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on the financial statements. We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO; (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this Quarterly Report on Form 10-Q. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. Additionally, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption, and therefore, while we are an emerging growth company, we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies. As a result of this election, our unaudited condensed consolidated financial statements may not be comparable to those of other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. Critical Accounting Policies and Estimates Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures as of the date of the financial statements, as well as reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected. There have been no material changes to our critical accounting policies and estimates as described in our Annual Report. Recently Issued Accounting Pronouncements Adopted For more information on recently issued accounting pronouncements, see Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information. New Accounting Pronouncements Not Yet Adopted For more information on new accounting pronouncements not yet adopted, see Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information. 29 Table of Contents