Omada Health, Inc. (OMDA) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome. Thank you for being here today. Today marks an important milestone for Omada. I was reflecting back, and it was just over a year ago today that we took the business public right here at the Nasdaq with a very high set of expectations of what we intended to accomplish. And now just over a year later, we've exceeded those expectations in many aspects. At this moment in time, we expected to be at 850,000 members. We're now at 1.1 million. We're supposed to be at 66% gross margin. We're now at 70% gross margin and climbing. But what I want you to take away today is that's -- we're not talking about where we've come from, we're talking about where we're going. Today, you're going to hear about the opportunity that lies ahead of us. We're going to hear from our leadership on specific investments and bets that we're making across our commercial organization, across our product organization, across technology and care delivery, and how we're also leveraging AI across our business. You're also going to hear us raise the bar on ourselves. We're going to be issuing new long-term targets across both gross margin and adjusted EBITDA, which we believe really put us in rarefied air across the digital health care sector. So with that, let's get into it. As always, financial disclaimer. We will be talking about forward-looking statements. So please make sure that you read the disclaimer associated with the presentation. We really felt it was important to not just bring our presenters here today, but bring our entire management team. It really showcases the breadth and overall depth that we have in our leadership. They've helped us get to where we are today, and they're really setting the foundation of where we're going in the future. So let me walk through the run of show today. Sean is going to kick us off. He's going to attempt to distill down 15 years of progress and execution into about 10 minutes. We're then going to go to Wei-Li. Wei-Li is going to talk about where we're going, our future, our vision, and how we're going to capture the market opportunity that's in front of us. I'm going to spend about 20 minutes going through our financial model, about our growth algorithm, about how we're building for the future as well as issuing our new long-term targets. I'm going to pass it off to Britt. She's our VP of Cardiometabolic Care. She's going to talk about our commercial initiatives, how we're going to continue to focus on adding more covered lives as well as continue to focus on improve our enrollment rate. Then I'm going to pass it on to Dr. Tom, to Danika, and to Jennifer. They're going to walk through our clinical strategy, our product road map as well as initiatives that were taking place in our care delivery organization. Finally, we're going to pass it off. We're going to do a customer panel with 2 of our customers. We have representatives from Harris County and from Costco. They're going to talk about how they've deployed Omada within their organization and the success that they've been realizing. And then at the end, save your questions, you can keep all the hardening stuff at the end for Sean, Wei-Li, and I. We'll have a dedicated Q&A session towards the end of the day. So with that, I'd like to turn it over to my friend, my colleague, Sean Duffy, Co-Founder, current CEO for not much longer, but here goes. Thank you.

Awesome. Thank you so much, Steve. Hello, everybody. I got an applause. All right. How about that. So welcome, everybody. Welcome to Omada's first inaugural Investor Day as a public company. We're thrilled to have you here. For those of you who traveled in, thank you for doing so. And for those of you on the webcam, hello. We'll seek to make this as engaging as possible for you even though you're not able to join here in person. So we hope you leave the day with a crisper, more detailed understanding of the business that we all care so much about here at Omada. But equally, we hope you leave with as much energy and enthusiasm for what we plan to accomplish here in the business to drive value for customers, for members, for shareholders alike. And per Steve, most of this will be about the future, but I do want to start with a little walk down memory lane, especially for those of you who are newer to the story. So I founded Omada Health while at Harvard Medical School, and it was against a reality that I saw on a day-to-day basis. And that reality was that traditional health care does not work for chronic disease. I'd watch PCPs with patients that maybe had diabetes, say, here's your script, please come back in 6 months, take your medicines, don't forget to check your sugars, try to lose weight, eat differently, exercise more. And unfortunately, none of that would happen. And each month that went by, these people got sicker and their cost to the system rose. So that became the challenge. And we asked the question, well, it's obvious that the existing care system doesn't work. So what is the right care model? What is the right kind of care for the 156 million Americans suffering from chronic disease. So we sat in the homes of patients. We sat in their living rooms. We listened to their goals, what the health care system offered, unpacked their needs. We studied the literature on care models that have worked in chronic, and we thought deeply about how they could be translated digitally. And the answer was right in front of us. The answer to the right kind of care was that people needed proactive longitudinal care between their doctors' visits. They need the combination of devices, care services, software, they needed a feeling that someone was rooting for them in their corner in their pocket persistently at all moments in time. So that became the marching order. And then we looked at the task ahead. Unfortunately, the existing health care system from a regulatory standpoint, a billing standpoint and a technology standpoint, it is not set up to deliver that care model. And we had to start from scratch, and that is when we founded Omada Health in 2011. We got hard at work building the very first version of Omada's care experience for prevention and weight launching that in 2012. Quickly, I realized that digital health was the underdog, and we needed to earn the trust of the existing health care system, which is a very risk-averse buying market. I knew I had to convince my classmates that were going to be clinicians that are product work. So we began publishing evidence. We spun up a research agenda. And as we produced peer-reviewed evidence, quickly, we began to earn the trust of the system, really beginning with the CDC, where we partner with them on trial designs and evidence generation such that we could earn the place as a fully recognized diabetes prevention program provider. We then took our body of evidence to the American Medical Association and partnered with them. We knew we needed to do this because in order to deliver between visit care, we had to be able to bill as an actual health care provider, but there were no CPT codes for digital providers. We worked with them to create the industry first, the first ever digital-specific CPT code that allowed us to bill through claims as a between visit care provider that was digital, never had been done before. Our trials enabled us to do that. That set the stage for us to bill the real medical spend, actual medical expenditures, not as an invoice into a wellness budget, no different than an HCA, Tenet, a Stanford Hospital, existing providers. We then turned internally. We wanted to make sure we could recruit the very best and build a culture of high ambition, high delivery success, earned many awards organizationally, including earning a place on the Fast Company's most innovative health care list. When you get great talent working on big problems, success compounds and quickly, we earn the right with customers to do more for them, expanding to diabetes, expanding to hypertension. We quickly from there eclipsed to over 1,000 customers and the data set began amassing at over 50 million weight readings, longitudinal readings, watching our patients and our members engage. From there, we expanded into musculoskeletal care. And we kept alongside this the publication engine running. That allowed us to do things like earn the very first NCQA accreditation for a digital company in our space, published the 18th peer-reviewed publication earned URAC MSK accreditation, again, working to find a place to be a proper health care provider within the U.S. health care system. In 2023, started looking at GLPs and hearing the pain points from our customers and deployed our GLP-1 care track, I think ahead of the curve designed to optimize for outcomes while on medicine, optimize for durability while not on medicine and support a very complex decision for our benefits buyers on if they do cover the med, how they should do it. And if they don't cover the med, what can they offer even though they can't afford the medicine at present. These tailwinds compounded and it left us feeling confident to list on the NASDAQ in Q2 2025. And as Steve's highlighted, that's where our leverage has really shown through in Q4 of '25, delivering our first adjusted EBITDA positive quarter. And as shared on the last earnings call, we're in a position now with Omada with more channels, more distribution partners, more customers, more care offerings to offer those customers than ever before in Omada's history. The thing I'm most proud about is over the last 15 years, we have built an asset. That asset has cost hundreds of millions of dollars to build. And that is a full stack between visit care platform because to accomplish those industry first. We had to have a complex care services layer that involved licensure operational complexity, operational precision to scale to the many millions. We had to have a technology stack to be able to sell to very risk-averse enterprise buyers an entire device supply chain to make sure we can fulfill and give our members connected devices that automatically feedback into the Omada platform to guide their care in partnership with their care teams. We built software not just for our members, but we built the entire software for our care team employees because it was obvious that an EMR was not going to cut it for between visit care. Equally, we bill in a different way. We don't use fee-for-service billing. We charge a monthly membership fee that's recurring billed through the CPT code. We had to develop our very own reimbursement infrastructure to be able to bill in this alternative model that's more aligned with customers and members alike. And over the last couple of years laid the foundation for AI infrastructure, which is just so incredibly exciting to watch the impact that it's having internally with our talent, the velocity of ambition, the innovation, but also what it can offer to our members in that intricate dance between AI answers and accountability that people can provide. And that's the platform upon which we stand to achieve our mission of bending the curve. The ambitions at Omada are to see our impact in the nation's epidemiology data. That's what we mean by bending the curve. And we need to do it. We need to do it for people like Heather. Heather is a real Omada member, and I want to go ahead and read what Omada has meant to her. The catalyst for change started with my son looking at old pictures of me and not recognizing that it was me. I was the heaviest I've ever been and couldn't do things that most people find easy like walk up a flight of stairs or walk down the block with my child. That wasn't the image I wanted to portray to my little boy. Recently, I've been able to kick the soccer ball around again. My son tells me how proud he is of me. "Not only did my son get his mom back, he got the best of me, and it was Omada that got me here." Thank you. Thank you for caring. Thank you for supporting me. Thank you for giving me my life back. So the task at hand from here is to create many tens of millions of stories just like that, tens of millions of stories like Heather's. And here to communicate a vision of how we're going to begin to achieve that task. I'd love to welcome no other than Omada's President, my long-standing business partner, Wei-Li Shao, the one and only and soon to be as of January 1, Omada Health Chief Executive Officer. Thank you, Wei-Li.

Well, good afternoon. Excited to see you all. Thanks for coming out to our Investor Day. We're going to cover a number of things, but let me enumerate them out clearly. So first, we're going to dig into our financial model in a detailed way. We're going to outline out the 4 growth drivers behind our go-to-market. We're going to talk a lot about the momentum we're feeling in our commercial engine. And then we're going to dig deep into our clinical rigor, which is the foundation for the advancements in our product technology that is aimed at improving engagement amongst our members and of course, driving scale across care delivery. We're excited to kind of peel back the layers on that for you. But before I do that, I want to talk to you a little bit about why Omada Health matters, the importance that it plays, we believe, not only for ourselves, but also for you, your loved ones, your family, your friends and why we think Omada is actually important for the world. So underlying the problem that Omada is solving with its care solution. At the center of it is the epidemiology and the epidemic of obesity. Oftentimes, we talk a lot within Omada and also with our customers that obesity is a primary disease, meaning that it oftentimes shows up first earlier in the years of your adult life and then gives way to and causes a number of downstream cardiometabolic conditions like diabetes, hypertension, high cholesterol. So it's a precursor. It's primary. It happens first. And the challenge with obesity, of course, is that it's not abating. It's not actually getting less despite the fact that we've had tremendous medical innovation over the last several years. Today, over 40% of adults suffer from obesity. 30% actually not only suffer from obesity, but also have another cardiometabolic condition, again, like high blood pressure, diabetes or high cholesterol. What's more, go out, maybe not even 10 years. And it's expected that despite all the medical advances nearly 50% of adults will have clinical obesity here in the United States. The problem is not getting better, it's getting worse, and it's driving an exorbitant amount and acceleration in health care costs, not only for employers and payers, but also for our members. So there hasn't been a more crucial time for something like Omada than today. Now how does this problem? How does the epidemiology of obesity and the surrounding cardiometabolic conditions manifest itself in the market and the opportunity that we're actually pursuing. So if we take a look at, there's roughly about 255 million people that have some sort of coverage or insurance through the United States. Roughly 200 million have commercial insurance, another 50-plus million or so have Medicare or Medicaid coverage. And of that, 188 million actually suffer from a condition that Omada actually treats. And of that 188 million, there are 99 million people, close to 100 million that actually suffer from at least 2 or more conditions that Omada actually treats. So the problem is profound not only in its severity and long-term nature, but also in its size. But yet year-to-date, Omada has only been able to help a little over 1 million. We have currently about 1 million people that we're actively taking care of. We're certainly proud of that 1 million. It's allowed us to build a scaled business model, a high financially performing model, one that's high growth and also profitable. We've been able to build around this 1 million people, outcomes, return on investment, a brand that's trusted in the marketplace, but yet it's only 1 million out of the 100 million to 200 million people out there that actually represent the opportunity and market for us. It's immense, it's extraordinary, and it's profound in its nature due to the size and scale and scope. Emerging from this market and this challenge and this problem, of course, is a recognition of a singular truth that is also backed up by a preponderance of data. And that data shows that despite all of the investments inside of health care today, our health care system is not set up to actually bend the curve on these chronic conditions or these metabolic diseases. And in fact, it just doesn't work. All the data would show that across the cardiometabolic conditions, things are actually getting worse. So we know we have to do something different, and that's what we set out to actually do. Imagine today in your own lives for me and for you, if you were to take out your cell phone, our digital experiences are just one click away. They're easy. They're easy to understand. They're practical, they're accessible. There could be nothing further from that than health care itself. Health care is hard to navigate. It's full of friction. It's opaque, and it's not understandable. And so that's what we're actually dealing with here today. So to put it in stark terms, we've had this experience. We have to clear our morning schedules, to make an appointment with a doctor. We have to travel an hour or 2 through traffic to go see our doctor. We get there, we wait. And then we talk to 4 other people and discuss the same information with each of them sitting behind the desk, clicking and clacking on 4 different computers. And then we get into the exam room, we wait another 10 to 15 minutes for a visit that only lasts 10 to 15 minutes. And then we go home. We receive an expensive bill that we don't understand for a kind of care that we actually don't love. This is the problem with today's U.S. health care system. So one of the things that I think is underpinning this is what Sean gave a head nod to in his opening remarks. Over 10 years ago, Sean and Adrian, our co-founder, sat in the very homes of our members that we treat today. And they distilled and discovered one salient and insightful truth that all of Omada is grounded on today. And it's the following. When it comes to cardiometabolic diseases and chronic conditions, the problem is not in the doctor's office. It resides in everyday moments of life. The time and space between doctors' moments when life is happening to all of us. Today, primary care doctors, yours, mine, they all have the technology and the tools to actually conduct an office visit, but they have zero influence on what happens in the 8,000-plus hours between doctors' visits where 80% to 90% of all the outcomes for chronic conditions are determined, zero influence. It is that single asymmetrical truth that gave birth to Omada. So imagine you go to your primary care doctor, you have diabetes, it's uncontrolled. What does your doctor tell you do? Take your medication, change your lifestyle, eat less, eat more healthily, move more. They give you a pamphlet and you're on your way. What generally happens after that, your weight slowly creeps up without you knowing it. Your A1c creeps up, your diabetes control gets worse. And what's happening there is you don't know about it because diabetes and other chronic conditions are a silent killer. They are insidious. They decay your health at a slow incremental time and then towards when you get older, it accelerates and quickens in its severity. But you have no visibility to it. You don't know how you're doing. And nobody is watching and therefore, nobody is actually caring for you in between that time when you're living your life. And you go back to your doctor's visit, your primary care doctor, what happens, it's predictable. You've gotten worse, and he or she tells you to do the same thing. The challenge here is that traditional care, is point in time. It exists in micro moments in your life, maybe for a few minutes a year to treat a lifelong chronic situation or disease that you have. Omada is different. We've set to change and upend the way health care is actually done. So imagine you actually now go into the same doctor's office, let's say, you have diabetes, same situation that's uncontrolled. You get the same lecture, the same class of instructions. You leave with the plan, but only this time you enroll in Omada. What happens at that point in time is you receive on your doorstep easily and seamlessly, a series of connected devices, a scale, a continuous glucose monitor, a connected blood glucose meter. You start using it, you're weighing in every day. Your results are easily seen in application. But let's say your weight starts to increase over time. Your coach actually notices. Your coach reaches out to you proactively just to check in to see how you're doing. And she finds that you're actually under a lot of stress and a lot of the positive healthy habits that you've built over time start to decay and wax and wane. Instead, what ends up happening then is your coach says, "Hey, listen, let's work on a small, smart goal, something we know you can achieve. And let's create a mutually accountable plan that we can work towards together." And we set another goal and another goal, the care stacks such that you go back to your primary care and it's a different story and a different outcome. Your diabetes gets controlled. We have replicated this between visit care that is persistently available 24/7 in a longitudinal way in the everyday moments of your life on demand. Our care is daily and it's over time. It's persistent. The concept, if you think about chronic disease and what members and patients are going through is so simple to understand, and it's so simple to understand why the existing health care system doesn't work, but it is radical when compared to how the legacy health care system works today. But we're having success in this model as evidenced by the over 1 million people that we're currently serving today. How do we do it? Underpinning this daily continuous form of care is Omada's innovation flywheel. It's got 4 components. The first one is it's grounded in clinical evidence, meaning that we look at the publication data as well as frontier data, and that serves as the groundwork and foundation for understanding what reliably works and moves the needle on engagement and outcomes. We then take technology and wrap an experience around that digitally and virtually so that it's engaging, elegant, and delightful. We then have human care teams that engage our members to create mutually accountable plans. And then finally, clinical measurement to make sure that we're delivering the outcomes and the ROI we promise to those that we're selling to. And we utilize and aggregate that data, billions of data points now to actually inform the development and discovery and innovation of the next generation of our programs. And that allows us to move this flywheel over and over again to create more and more value, not only for those that buy from us, but also most importantly, the members that rely on us. But we're coming into right now an exceptionally exciting period of time. It's a historic moment, not only because we're gaining traction in the marketplace, but because of something I talk to our customers about, also our fellow Omadans, and I describe it as the convergence of the 3 S curves. So what are they? The first one is medication. Cardiometabolic medications and innovations have come a long way. We're all aware of them, GLP-1s. They have an outsized outcome effect size that we've all seen, and it's exciting in the marketplace. But it doesn't stop there. There are new GLP-1s coming. There's more data coming. And in fact, there are other cardiometabolic GLP medicines, non-GLPs on the horizon that we think to have an outcome effect size on the rest of cardiometabolic diseases that we're excited about. What's interesting about that as medications increasingly have innovated, the demand and ask for Omada has actually increased alongside it. We see it today in the GLP-1 class of medications with weight loss. And the simple reason is this, is that our buyers and our members are understanding and realizing in an accelerated way that when you match up innovative medicines with an innovative form of care like Omada, you get better outcomes, a better experience, and better ROI. The second S-curve, of course, is artificial intelligence and machine learning. Clinicians across the world, across the country are beginning to understand that AI/ML has the ability to actually improve the quality of care and reduce the cost of it. We are seeing the same thing inside of our operation here at Omada. A little bit later today, Danika, our Head of Product, is going to talk to you a little bit about how we're using artificial intelligence inside our program experience to expand and increase the user experience around engagement and outcomes. Jennifer, our Head of Care Delivery is going to talk about how we're using AI/ML to augment the human care delivery experience, thereby lowering the cost of care, not only for us, but also for our customers. The last one is devices and wearables. We are at a tipping point in the marketplace with devices and wearables such that they're reaching ubiquity, mass utilization. What we love about devices and wearables is that it's outputting streams of data that are riding alongside our between visit care model. It is another thing that sits in those 8,000-plus hours in between doctors' visits. And the opportunity to bring in devices and wearables above and beyond what we're doing today to actually augment the insight that we're driving, the prediction in the next best step in the personalization is exciting. So how are we actually taking our innovation model, our go-to-market model? How are we leveraging also these 3 S-curve moments in the marketplace? Well, it can be summarized in a vision around a system of care. What do I actually mean about that? So across the top are the conditions we actually treat. You're aware of them. In the dark boxes, you have metabolic health, cardiovascular health, musculoskeletal health, advanced care. And in the actual ovals, the dark ovals there, the orange reddish ovals you'll see are actually recognizable. You should recognize them. That's currently what we do. There are existing programs, prediabetes, diabetes, obesity, diabetes itself, hypertension, cholesterol, MSK, mobility, and of course, GLP-1, care track and prescribing. Those are the things we do today. What you're going to notice next are the areas in the dotted ovals. These represent product expansion areas or category expansion areas for Omada. It's a head nod to a potential future for us. What's exciting and interesting about what is in the dotted ovals is that every one of these condition expansion areas have been discussed with us proactively by our customer set. And you know from our historical conversations that our strategic approach to program expansion and innovation is to listen to our customers, partner with them to develop the products they want to bend the curves that are important to them. These are the areas. But our vision and our expansion around this system is not limited to just category or condition expansion. It includes lifestyle support tracking, wearables and devices. It also includes a full care cardiometabolic stack. Right now, we order labs and we prescribe GLP-1s. Our customers for now a period of time, they've begun asking us to expand that lab service as well as our prescribing network into other cardiometabolic areas like diabetes, hypertension, and cholesterol with the idea that there's a full cardiometabolic spectrum of care that we can provide. Last but not least, of course, is an AI/ML to expand our capabilities to not only create more sticky programs, but ones that drive more outcomes and engagement. Folks, the challenge with the marketplace right now is that our buyers and our users are inundated by a sea of point solutions, kind of like visually like a number of life rafts just aimlessly floating around in a vast ocean. Our job is not to do that, but to create an integrated system of care focused on cardiometabolic, a full care stack focused on bending the curve of cardiometabolic conditions. We're excited about this vision, and we think it can be real for us. As you can see, we're not really waiting for the future to come to us. We're not waiting for it to arrive. We are hell-bent on actually building it with intention. The way we're going to do this is by pursuing what we have known and have always known true from 15 years ago is that a daily contiguous, persistent, always there form of care is the actual insight to act on. We've built success around it and scale with over 1 million people. And now we're endeavoring a future that includes a more holistic systemic form of care in the form of a cardiometabolic platform. I hope you all are as excited as we are as the potential for Omada going into the future. So with that, I'd like to introduce and bring back our dear friend, Steve Cook, Finance extraordinaire, car enthusiast, also happens to be our CFO. So thank you all very much.

Awesome. Thanks, Wei-Li. I'm going to spend the next 20 minutes walking through our financial model. I'm first going to start with where we've come from, and we're going to bridge to where we're going. We're going to go into more detail on the 4 growth levers that Wei-Li just articulated. And then I'm going to take a moment to update our long-term targets, which I'm also very excited about. So let's get into it. So first, I want to spend some time here. This is going to be a theme you're going to see cascading throughout the rest of the day. It's really important that you're going to hear from all of our leaders on how we're making targeted bets across each one of these initiatives and are core to our growth algorithm going forward. It first starts with our covered lives. We're currently at 25 million. You just saw that donut chart of 188 million. There's a significant amount of market opportunity still in front of us. We just closed 2 of the largest PBMs in the country. We're launching a major expansion with a major health plan, and we have plenty of room to continue to grow and expand our overall covered lives basis. The next is enrollment rate. How effective are we at converting those covered lives into members. Today, we're at 4.4%. We have 1.1 million members on 25 million covered lives. We've made progress here over the past several years, but there's still significant room to grow. You're going to hear Britt go into a lot of detail across both of these. And then almost most importantly is once folks are in the Omada program, how effective are we at keeping them engaged. Our ultimate aim is to make folks healthier. So the longer we can keep folks in program and hitting their milestones interacting with their coaches, we end up keeping them in program longer. They drive more billable months, and that drives more durable revenue for our business. And then the last is efficiency. This kind of has 2 flavors. How are we going to continue to operate the business just executing on core efficiencies, making sure our care delivery teams are staffed efficiently, making sure we're managing OpEx efficiently, and now beginning to deploy AI throughout our entire organization. So you're going to see in the subsequent section that we're going to address all of these in greater detail. Before we go there, I just want to take a moment to kind of articulate where we've come from. Over the past 2.5 years, we've seen significant progress across the P&L. Members have gone from 391,000 to 1.1 million. That's led to a compounded annual growth of 45% over the past 2.5 years, but we haven't just been focused on top line. We've been intent on expanding margins across both gross margin and adjusted EBITDA. Over the past 2.5 years, we've taken gross margin from 60% to 70%, and we've taken adjusted EBITDA from negative 43% to positive 7%, including the last 4 quarters being profitable from an adjusted EBITDA perspective. And then I think almost more importantly was in just over a year ago, the expectations that we set forth in the IPO roadshow. At this moment in time, we expected to be at 850,000 members. We're now at 1.1 million. $251 million in revenue, we're now at $310 million. We're beating non-GAAP gross margin by 4%, currently at 70% on a trailing 12-month basis. And instead of negative 2% adjusted EBITDA, we're now at positive 7%. So now probably what I'm most excited about today is on top of the core execution that we've been able to deploy across some of the top line opportunities and momentum we're seeing, across the opportunities that we're seeing on the cost side of the equation with AI, we're going to take a moment to update our long-term targets. So at the top line, we're going to stay consistent with what we set forth in the IPO to grow the business at a minimum of 20% for the foreseeable future. But we're taking up gross margin from 70% to 80%, and then we're going to flow through that entire raise to EBITDA, taking EBITDA up from 20% to 30%. So how are we going to get there? This is a beautiful piece of our business, especially on the gross margin side of the equation is we have multiple ways to get there. You can think about roughly as half being split between top line and half being split between cost. On the top line opportunities, you're going to continue to see us leverage AI. You've heard of our releases on Omadaspark and Meal Map using AI to make our program more compelling, more engaging. When folks stay in program longer, we're able to bill more months, and that's incremental revenue that drops directly to the bottom line. You're going to hear later from Tom, from Danika, from Jennifer on a specific engagement efforts that we're using to make our products and our features more compelling. You just saw Wei-Li showcase all the future opportunity we have with new adjacent product areas. As we release these, that drives engagement, that drives more time in program, which leads to increased revenue. We're currently in market with Optum with our prescribing product. This is our highest-priced product. You'll see a breakdown shortly here on unit economics. We're going to continue to drive our prescribing product as well as multiproduct penetration. Diabetes and hypertension and selling across a multiple conditions have been a large portion of our success over the past couple of years. And then moving to the cost side. On this side, we're going to keep doing what we've already been doing. Jennifer has been amazing at really incorporating standardized work and workflows across our care delivery organization. We've seen significant amount of progress in making our coaches more efficient just by standardizing overall workflows. We're going to continue to look for supply chain discounts across our device ecosystem, across our shipping partners. As we do more volume through our partners, they're willing to entertain volume-based discounts for us. And I think most importantly is now we're going to continue to leverage AI. We've already had several use cases within our care delivery teams, how we're making them more efficient and really more effective to engage with our members, which ultimately drives better outcomes and more durable economics for our business. The same set of considerations also exist on OpEx. We're looking -- we've stood up an internal AI transformation council. This council is tasked with looking at every function within our company and how we can deploy AI across the entire company in order to make our teams leaner and more effective using the tooling that's becoming available to us. So we're going to continue to deploy AI across our organization in order to hit that 20% -- 30% long-term target. Next, I want to take a moment to really just simplify our financial model and think through the building blocks and how we think about modeling our business. And they all go back to the growth algorithm that we teed up upfront. Today, we're at 25 million covered lives. Our enrollment rate on those covered lives is 4.4%. That's where you get the 1.1 million active members. Trailing 12-month revenue per member is currently $284. That then gets you to our current trailing 12-month revenue of $310 million. So what's most important here is we don't -- there's not a single lever here. We're aiming at all 3 of these levers. We're going to continue to expand covered lives. We're going to continue to drive enrollment rate up, and we're going to continue to focus on increasing revenue per member through engagement efforts. You're going to hear about specific shots on goal across all of these measures later on in the presentation. That then translates into $217 million of gross profit at our current non-GAAP gross margin target of 70%. As we make progress towards that 80% target in the future, you're going to see increased flow-through from revenue to gross profit. And that's what we really like. You're going to hear Jennifer go into more detail on that front. I also want to take some time on something that I think is really important and foundational to our business. Sean mentioned this a little bit earlier. But we're not like the billing models of old. We've seen these billing models of like when you do a PEPM, you charge a 1,000-person employer for their entire population, only a subset of that population uses the service and you have this weird perverse incentive game that you're playing with the service provider and the employer. When we set out to build this company, we want to make sure that we align the incentives across all parties. So at its core form, we only bill if you're actively engaged in our programs. So what that does is it aligns the incentives across our PBM and our health plan partners, across our employer partners, across our members, and across Omada. So when we win, our partners win, and that is a core tenet of how we built this company. Moving forward to our market opportunity and what's in front of us. We went into a little bit of the detail here, but currently, about 3/4 of the American population suffers from a condition that Omada currently supports. As we've gone through time, you saw Sean build into that chart, we've entered new condition areas, not because we were necessarily seeking new TAM, but it was our customers coming to us, asking us to support them across multiple conditions. And as a result of those efforts, today, 33% of our customer base works with across more than one condition. So there's a dual benefit here. First, we can go back to some of our earlier customers. They might be working with us across just one product, and we get to upsell them across our entire cardiometabolic suite. And then our new products, we're starting the majority of our new business in a multiproduct fashion out of the gate. That's adding stickiness, that's adding more penetration within the employers, which has led to the number on the right, which we've consistently had north of 90% plus customer retention over the past 3 years. What that's led to has been a consistent, predictable member build over the past 2.5 years. We're at 391,000 in 2023. We're now at 1.1 million at the end of Q2 2026. And I think underpinning that is actually the diversification within our overall channel and our customer base. Many of you are familiar with how we contract. Two of our largest partners are Cigna and ESI, that's on the left chart. These are the contracting entities that we ultimately pull through. But underneath that, we have thousands of employer clients in fully insured lines of business at the customer layer. So our largest single customer represents 15% of our revenue. But when you get to our fourth largest customer, there's no single customer that makes up more than 2% of revenue. So at the customer layer, we have a tremendous amount of overall diversification across all industry types, across multiple segments, and we feel that we have mitigated our risk from that perspective. And that's just a moment in time. Where we're going, and I think we get -- we've had a lot of inquiry on this topic is, how are you going to be building into some of your newer relationships? So as we've disclosed, we've had multiple years to build into the Cigna and the ESI relationships. These are older relationships where we partnered really closely with these organizations. Sometimes you'll start with a single product, maybe it's prevention in their ASO book of business. As you demonstrate efficacy and success, they underwrite you into fully insured, then they add diabetes. So we've been building into these books for a very long time. And now we're at a new inflection point. We've announced Optum. We've announced CVS. We just announced an expansion with HCSC. These are newer relationships that take multiple years to foster and to build into. On these newer relationships, we're in there with more products. We're starting with multiproduct Optum out of the gate. In the Optum book of business, we have our prescribing capabilities, which is our highest priced product. So if we just execute the same way we have been with our existing book in these new channels, it presents a significant market opportunity for us in the years to come. You're going to hear Britt go into this in more detail. So how has this been translating into overall top line growth? On the revenue side, we've been growing at an average of 45% compounded over the last 2.5 years, starting at $123 million and exiting at Q2 at $310 million. And one feature that we love about our business is that the revenue is highly predictable and highly visible when you get to the end of the year. So when we're exiting a calendar year, when we're looking forward to the next year, roughly 75% of the revenue is highly visible for 2 main reasons. The first is the existing members that you closed in the prior calendar year are recognizing revenue in the following year. And then when we look at our existing employer base, the Costcos of the world, we know at the Costco, at the employer layer, how many new enrollments that they're going to contribute every year. A portion of Costco's population is naturally going to churn out every year. They're going to replace those employees. We get to remarket to a new subset of that population. And we have a decade-plus worth of data understanding how many new enrollments our existing customer base is going to contribute. Then we have the remaining 25%, which is our go get in year. That's what our sales team is going and closing in year and making sure that we hit our overall revenue targets. Then we look how that's translated into member and unit economics. We've consistently maintained revenue per member over the past 2.5 years at that kind of mid-280s mark, exiting Q2 at $284 on a trailing 12-month basis. There are some puts and takes here. On the positive side, what's happening is we've been more successful selling multiproduct. We're selling our GLP-1 care track. That's increasing overall trailing 12-month revenue per member as we are selling more expensive products to our overall employer base. What we've also observed, which is -- which we talked about in some of our earnings calls, is we're actually observing members going into their fourth and fifth year with Omada. So what's happening there is to really make it simple in the first year, a member is often billing 10 to 11 months on average. When they get into their second year, they're billing 5 to 6 months on average. In their third year, they're roughly billing 2 to 3 months on average. So they're not billing as much revenue, but what's most important is these are some of our most profitable members. When you get into that third and fourth year, there's very little incremental cost. You front-loaded the device cost into that first year, you front-loaded the majority of the care delivery cost in that first year. So these are some of our most highly profitable members, which is what you're seeing in the dark orange bar. We went from $157 on average gross profit per member to now $199 gross profit per member. So we want to keep these members in program as long as possible, especially as you go further out along the curve there. Next, I'm just going to walk you through the unit economics at the product level. We do break these out periodically. So if you look on the graph on the right, this is LTV over a 5-year period across our different product types. The numbers above the bars are indexed against prevention. So prevention is indexed at 1.0x, roughly $1,100 over a 5-year period. MSK steps slightly down from there. Cholesterol equal with prevention, hypertension worth 1.1x, diabetes worth 1.9x, and prescribing worth 3.8x. These are gross profit contribution dollars over a 5-year period. Worth noting that all of these products are north of 70% on a gross margin basis, but these are the gross profit dollars. So there's a huge incentive for us to continue to drive more diabetes enrollments, more hypertension enrollments, and more prescribing enrollments because we like the amount of gross profit flow-through that, that creates on the bottom line. And then over on the left, a really cool feature of our business is we're fully paid back at the member level by month 3. You go negative months 1 and 2, you're shipping the devices. Our care teams are spending outsized time upfront, making sure our members are successful on program. You're breakeven by month 3 and then you're gross margin accretive from month 4 through the rest of the member's life cycle. And that's also translated into product diversification over the years. You saw Sean shared that graph earlier about kind of our overall time line and when we've entered new condition areas. So in 2019, all of our revenue was coming from prevention. We entered our first selling season for diabetes and hypertension in 2019. We entered MSK shortly thereafter. And now over 25% of our overall revenue is coming from non-prevention products. We love this because they're higher-priced products. They have more favorable unit economics. They create more stickiness within our accounts. That's what's leading to that 90% customer retention. The more we're able to go and penetrate accounts with multiple products, the higher likelihood that they're going to stay with us long term. This has also led to a significant improvement in member retention. 2.5 years ago, we were at 43% member retention. We're now at 58%. This is so important. When you don't lose a member when they're not dropping out of the bottom of the bucket, that's one less member that you have to replace the following year. So the more we can improve product mix, the more we can continue to improve engagement, keeping folks in program longer, that is a significant benefit to our economic profile. So with that, I just want to wrap with -- again, these are -- you're going to hear in detail the core growth levers across the business. We have specific investments aimed over the next several years and making sure we continue to expand covered lives, continue to improve our enrollment rate, have targeted investments focused on engagement, and are also continuing to use AI across our business to make it more efficient. With that, I want to bring up Britt. Britt has been with Omada for 11.5 years. She is a fountain of knowledge. She's done like half the jobs within this company. So I'm excited for her to share with you today more on the commercial organization.

Thanks, Steve. All right. Good afternoon. I'm Britt. I'm excited to be here with you today. I have had the privilege and the opportunity to get to design and build out Omada's commercial go-to-market engine over the past 11.5 years, as Steve noted. Today, we're going to talk about 4 things. First, I'm going to share with you why we win. Then I'll walk you through how our commercial go-to-market engine works. From there, we'll talk about the progress we've made to date with that commercial engine as well as the incredible white space ahead of us. And finally, we'll talk about one of the most dynamic parts of our market, the GLP-1 market and how we're helping our customers navigate that situation. So with that, let's dive in. If we zoom out for a moment, I think it's important to reflect on where our customers are and what are the pressures they're wrestling with and then therefore, how does that influence how we show up in the market. If you look back, customers are really at an inflection point right now. They are faced with rising costs that have been rising faster than they have in the past 20 years. GLP-1s are a big part of that. Not only are they part of the cost challenge, but they are one of the most sought-after benefits employees are looking for right now, and our customers are really wrestling with how to handle GLP-1s. In addition to that, they're raising the bar and they have higher expectations for the evidence and the proof points that they expect from programs like Omada. As a response to all of these trends, buyers are consolidating. They're asking a smaller number of partners to take on more of the clinical and financial risk of their populations. And this is the context and the backdrop for why we win. In short, we win for 3 main reasons, and I'll walk through each of them. Program breadth. Today, we have a multi-condition platform across prevention and weight, hypertension, diabetes, cholesterol, MSK, we have GLP-1 solutions. Taken together, over 74% of the insured population can be served by the programs we have in place today. 30%, as Wei-Li noted, suffer from 2 or more of these conditions. This is important because that means customers can work with Omada as a one-stop shop across these needs, which also represent one of their top spend challenges, which is the cardiometabolic category. Next is market reach. Over the past 15 years, we have diligently sold and won access to partners, to lines of business across 3 national PBMs, 25 health plans, different lines of business across self-insured, fully insured Medicare Advantage. We have a direct sales motion. We have reseller partners. And all of this is in an attempt to make it easier and faster for customers to choose, buy and implement Omada. Next is buyer trust. Our long-standing commitment to high-quality, transparent research is the backbone of the trust we have with our buyers in the market. We have 32 peer-reviewed manuscripts, 5 clinical accreditations. This is increasingly important in today's environment where buyers are looking to consolidate solutions and put more trust in fewer partners. This graph here is proof that our strategy to win is working. There is no market report that compares to players in our space. And so we think the best thing to look at is global app downloads. You can see here that our growth strategy is working. It's getting better and stronger, and we're outpacing the pack. One of the core strengths of our business is something that we've built diligently over time, which is our go-to-market flywheel. It's repeatable. It's scalable. It aligns value across incentives and value across the value chain. And again, it makes buying fast and easy for our customers. Let me walk you through how this works. Step one, a new employer is sold. Often, that's through a partner. Sometimes that's through our direct sales motion. We launch the employer and members enroll. From there, members get healthier, and that shows up to our customers by way of healthier populations and lower overall costs. Our customers feel that success and our partners do as well. They're motivated to bring us to more of their customers. They're motivated to expand lines of business with us into fully insured and Medicare Advantage. They adopt more of the programs we bring to market, and the flywheel continues. When a partner adopts more of our programs, we're able to sell more employers, we enroll more of those members and so on and so forth. Each of these has a broader ripple effect in the partnership ecosystem as well. Oftentimes, the trend we see is when an employer leaves their health plan or partner, they bring Omada with. This allows our growth to continue to compound. Now I want to double-click into exactly how this motion works because it's important to understand, and you will notice as we go through the rest of the presentation, each of the steps in this process represents a growth lever for us to continue to accelerate the business. Step one, we win a new deal. We win a deal with a PBM or a health plan, and that becomes partner access. Step 2, we sell with those partners to their employer covered lives. When we win those, we call them covered lives. Step 3, depending on how many of our solutions, of our programs a customer adopts, more or less lives within that population become what we call program eligible. If you buy one of our programs, a certain step that is covered. If you buy more, more lives become program eligible. And then from there, we enroll members. There's a few other bits of context about this that are important. One is this cycle takes time. The rule of thumb in health care is that selling partners takes on average 24 months. Then to sell employers through this motion takes another 12 to 18 months. Additionally, I can't underscore how advantageous this motion is, both for our buyers and for Omada. This motion means that customers can avoid a lengthy procurement contracting and implementation process. They can sign up for Omada with a form. They can launch us in a matter of weeks. This is obviously advantageous for Omada, too, because it provides a really scaled way for us to grow the business across employers. Often, when we show success within a given partner and we drive results, a new path to accelerated enrollment opens up. The model I walked through previously is most common for growing our self-insured employer base. That is where employers bear the risk of the financial cost of their populations and they pay the claims. When we show proof, we are often embedded into new lines of business like fully insured. This represents a new bar for complexity. Fully insured and Medicare Advantage lines of business are governed by actuaries. It takes years of results and complex analyses to win these books of business. It creates a really important moat for Omada. In here, the process is streamlined. We skip the step where we sell employers. We get access to a partner. We determine how many lives are eligible based on the programs that partner selects, and we enroll those members. So now that you understand how our main motions work, let's talk about the progress we've made to date and the white space ahead of us. So we're really proud about the significant access in the major deals we've won across the PBM and health plan space. We have 3 of the nation's 3 largest PBMs contracted with Omada. We have over 25 regional and national health plan partners as well as reseller partners. And across these partners, we have over 2,000 customers, representing 28% of Fortune 50 organizations and 23% of Fortune 100. We've achieved significant growth through these partners, over 25 million covered lives across these 2,000 customers. You can see how that breaks down between the lines of business on the left, 19 million self-insured in PBM, 6 million fully insured, and a small but growing slice of business for us in the Medicare Advantage space. On the right, you can see just how these lines of business have grown for us over the past 2 years. So 37% growth in self-insured and 35% in fully insured. We're proud of this growth, but there's a lot of potential for us in the future. You can see in the markets we're in today, nearly 90% of the opportunity is out there for us to go and win and capture. That's 184 million lives across self-insured, fully insured and Medicare Advantage. This is not even to mention future markets and future motions we can expand into. Future markets include government lines of business, Medicare, Medicaid, new motions that help us grow include a direct-to-consumer play as well as continuing to grow our impact with health systems as referral partners. Let's look at this through the lens of the partnerships we've already closed. So we talked about the growth we've seen to date, and this is explained -- this is shown across 5 of our top partners here. On the left are some of our partners that we launched earlier in our tenure. On the right are some of our newer partners. And we've diligently been chipping away at those year-over-year. What's exciting is within these partners, without any additional contracting, we have access to 150 million additional lives that we can win. It takes time to realize the growth and the potential of these partners. We already talked about the buying cycle of 24 months for a partner, 12 to 18 for an employer, but we're confident with the flywheel we've honed as we continue to run these plays, we will grow into some of these newer channels and reach even more potential across our closed book. Another key lever to expanding value within a customer is to add more of our programs. So we have more program eligible lives. This illustration here helps you visualize that. Imagine a customer where we launched just our prevention program. Those lives on the far left in the oranges color represent the population that will be available to us to enroll. As that customer expands to hypertension, cholesterol and diabetes, more of their members become program eligible for Omada. We also have GLP-1 solutions in Care Tracks. One in eight U.S. adults today are on a GLP-1. That's yet another level -- or another lever to enroll this population with programs that would be attractive to them. For customers that deploy our MSK solutions, 100% of the population is eligible for episodic MSK care when they need it. So yet again, another way for us to grow value within the customers we've already sold. Steve mentioned earlier, about 33% of our current contracts today are multiproduct. So you can clearly see the growth potential ahead of us to continue to expand programs within customers. Enrollment is the final step of our commercial engine. This is what helps us ultimately realize value and turn eligible lives into enrolled members that drive revenue in Omada. In order to realize the potential, we've built a scaled multichannel outreach engine that works across a number of channels I'll walk you through now. E-mail is the foundation of our outreach engine. Our optimization efforts over the past few years have driven 30% year-over-year improvement. In the last 2 years alone, we've more than doubled our e-mail conversion rate. And this is really important because every basis point of improvement here directly translates to our revenue without additional acquisition costs. Direct mail and paid media are next. These are channels we can use to promote an even more surround sound approach to get employees aware and to enroll into Omada. Each of these generates the 3x lifetime ROI, meaning for every dollar we invest in these channels, we get 3 in return across that member relationship. And finally, on-site and customer-led. This is important, and I've firsthand seen the importance of this channel, and I'm sure we can all imagine it as well. When a leader at your organization puts their weight and condones something that -- or encourages something that you've invested in as an organization, you pay attention. You read these e-mails from your leaders. The effect here is no different. And that's why we see a 33% lift when our customers' leaders wrap their arms around Omada and promote it within their populations. So each of these individual channels is working. Each are important. Combined, this really helps us realize the potential growth we can within our partners and support as many members that need us. Okay. So we've talked about growth. We've talked about the white space ahead of us. None of this matters unless we're able to have satisfied customers that stay with us. So we're proud to share these results here. As mentioned earlier, we have on our book 3 of the 3 national PBMs. We have 90% retention across our employer customers, 95% retention across our fully insured lives and a 90% customer satisfaction rate, which underscores the value we provide to our customers that makes them retain us. All right. I'm going to switch gears for a bit to talk about something different, which is our GLP-1 business. This part of our business is super near and dear to my heart. I have seen firsthand the impact these unbelievable medications can have of our members. Our members are realizing outcomes they never dreamed of, members -- or outcomes they've never experienced in their lifetime with Omada. I've seen it in my own community. I've seen it in my own family. I'm sure many of you in the audience have witnessed the potential of these medications as well. In short, GLP-1s, and Wei-Li mentioned this earlier, they've been a real tailwind for our business. First and foremost, it's simple. GLP-1s are the #1 problem and challenge our buyers and customers are wrestling with designing a solution set around going into next year. And with that comes Omada. This is a top spend area, and they're looking for Omada to help them develop a strategy that fits their needs. GLP-1s have led to direct opportunities for us to establish new relationships with PBM partners as well as deepen our existing relationships. GLP-1s serve as the front door for our broader cardiometabolic platform. Many times when an employer is designing a GLP-1 strategy, they're not thinking just about GLP-1s. They're thinking about the broader cardiometabolic picture because they know these members struggle with hypertension, struggle with cholesterol, struggle with diabetes and other comorbid conditions. And so when we meet with them, we talk not only about our GLP-1 solutions, but our broader portfolio to figure out how we can support them with the right mix. And then finally, as I already mentioned, these are a transformational tool for our members. This is a really exciting time to take our member outcomes to the next level. And you see the results on the right, 52% year-over-year GLP-1 billings growth and a 14% engagement lift for GLP-1 members versus non. One of the decisions we made early on as the foundational design principle was that we wanted to have solutions in place that can support every employer customer, whether they cover GLP-1s or not. And that's because of the data you see here. Today, 43% of medium to large employers cover GLP-1s on their pharmacy benefit. 57% do not. And I'm sure many of us have seen recent reports, which show that most likely the number on the left will shrink going into next year, the number on the right will increase, and more organizations next year will not be traditionally covering through the pharmacy benefit. So we've designed our solutions as such. Our Care Track and our prescribing can be deployed if your population is covered for GLP-1s or if an employer wants us to route members to one of the cash pay options. And then our core programs are no different. They can be deployed to either set. Additionally, it's been really important for us to design our solutions, our account management strategies, our operations in a way that's very nimble because our customers' decisions and strategies in this category are evolving, and we need to be ready and willing to evolve with them, and that's exactly what we're doing. We invested early and heavily into research and outcomes in the GLP-1 space. We all know through reading the news, the potential of these medications, but we know that, that is not promised. That is not guaranteed. All too often, we see members who stop their medication before reaching their clinical outcomes because they were struggling with side effects, or they come off the medication and they regain all the weight that they fought so hard to lose. And we knew it will be important for us to design programs and put out evidence that show when you pair a GLP-1 with Omada, you can realize those best-in-class durable outcomes. And we knew this will be important for our customers to unlock growth for us in this category. So let me walk you through some of the results we have in market right now. For members taking a GLP-1 with Omada at 12 months, they lose 2x more weight than members taking a GLP-1 without Omada. At 12 weeks, our muscles -- our members have retained 3x as much muscle mass compared to those taking GLP-1s without Omada. Weight regain is a hot topic with our customers. These are expensive investments. And the last thing our customers want to do is invest in them, have people drop off for whatever reason and regain all the weight back. That becomes a wasted investment on their behalf. And so we've designed our programs to help members maintain their weight loss almost entirely out to 12 months. Our members are only regaining 0.8% of the weight they lost on their GLP-1 compared to traditional evidence, which shows 11% to 12% regain at 12 months. And finally, and hot off the press per our press release yesterday is our savings. We are able to show a simulation model that when you pair GLP-1s with Omada as we're able to drive clinical outcomes, that unlocks $11,000 of savings across 5 years for our members. Importantly, at 1 year, this is over $1,400 of savings, which shows a 1:1 -- or a 12-month 1:1 ROI on the investment in the Omada program. And that's a really important bar to meet in today's cost-sensitive buyer market. So in summary, we talked about -- Steve talked about the 4 levers for growth and durability of our business. Our commercial engine really impacts the top 2. Direct and partner sales motions increases our covered lives. We have made significant progress here, and there's even more potential for us to continue to grow into these white spaces. Program expansion within accounts is a huge growth lever for us. Across all of our programs, we can enroll and support up to 74% of U.S. adults covered by the conditions we support. And then enrollment. Multichannel outreach converts our eligible individuals into enrollment with Omada. Our e-mail campaigns are battle tested and our conversion has doubled twice -- has more than doubled in the past 2 years. So next, I'm going to turn it over to my colleagues, Dr. Tom, Danika and Jennifer to walk through our product and technology experience. And we'll start with Tom, who is the brains behind all the clinical outcomes we just reviewed. Thank you so much.

Thanks, Britt. That's -- thank you for the wonderful overview of GLP-1s and the innovation that Omada is doing in that space. It's an honor to be with you today. My name is Tom Tsang. I'm Omada's Chief Medical Officer. So throughout my career, I focus on the challenges in the health care system, cost, quality and patient experience, the triple aims. Today, health plans and employers are seeking comprehensive solutions that can address all 3 domain areas. Now Wei-Li talked about this flywheel. I want to emphasize that it starts with a robust clinical strategy, a strong clinical strategy that's enabled by great technology, delivered by well-trained human-led care teams, with a singular focus really in achieving cost savings and outcomes. So my 2 amazing colleagues, Danika and Jennifer, will be walking through technology and care delivery and how they spin this flywheel. But I want to start off with clinical strategy first. So I'm an internist. I used to practice 3 blocks from here, and I had offices at the Amex building and the Morgan Stanley building as well. And I used to see 25 to 30 patients a day. This is another life when I was a practicing internal medicine doctor that was taking care of cardiometabolic conditions. And these patients came from Wall Street, Chinatown, there are restaurant workers, investment bankers and little grandmothers from Chinatown. The majority of them had cardiometabolic conditions, obesity, hypertension, cholesterol, high blood pressure and diabetes. Now I want to really underscore the enormity of the situation here. [ 155 millions ] Americans with diabetes and prediabetes. 90 million Americans with something called metabolic syndrome, which is a combination of obesity and 2 other cardiometabolic conditions. And when I saw these patients, I saw them maybe about 3, 4 times a year at 10 minutes, 15 minutes of visit. That averages 1 hour a year. That is why it's so critical that we have in-between visit care to support these patients. I couldn't do it. I was part of the system that had all these issues. So that's why we continue to grow our cardiometabolic programs, and we started off with diabetes prevention, and we've grown our portfolio to include other chronic conditions such as hypertension and MSK issues. And each new program builds upon the one before it. The more conditions we treat in one platform, the more covered lives we will reach. And that lifts enrollment and engagement, and engagement increases and lifts our outcomes. So as we treat more conditions, the greater the impact and the greater savings we can generate for our customers. And as we look towards the future, as Britt and Wei-Li mentioned, there are more opportunities and conditions that we can add on, like fatty liver, sleep apnea and many, many more. And as you've heard throughout today, health care is getting more complex and more expensive. And organizations have to decide on who to trust and what solution should be best. Now, Omada has invested tens of millions of dollars over a decade into peer review research while pursuing the best-in-class digital care -- the best-in-class digital clinical care model. This can't be replicated with AI, and it can't be done overnight. And this is how we set the bar for care, which is why in the marketplace, customers choose us. We have more peer review studies and accreditations than our key competitors, 30-plus peer-review studies vetted by external experts, and they review our methodologies and the results before any journal can publish the studies. And we also conducted what we believe at that time was the largest randomized controlled trial of a digital diabetes prevention tool, which is the gold standard on evidence generation. Additionally, our programs have been vetted by external standard setting bodies such as the CDC and NCQA. So this is a high bar for scientific evidence, and the ability to prove our outcomes drives employer trust and confidence, which leads to enrollment and engagement. So after practicing for 15 years, I've seen thousands of patients with cardiometabolic diseases, and I needed to create a sustainable treatment plan that was both engaging and delivers outcomes. I choose the right medicine, give the right advice for the right patient for the right scenario. And what you're seeing in front of you are the outcomes that you would want as a physician. There is no single Heather journey here. And across our programs, members like Heather has achieved a 5.5% reduction in weight loss in our prevention program, a really significant 61% reduction in pain for musculoskeletal issues and demonstrated more loss in body fat while preserving muscle mass in GLP-1 treatment. These outcomes and savings drive our commercial engine. And these are the same reasons why PBMs and customers choose us, over 2,000 customers, by Omada, and we've been able to retain 90% of them. By staying focused on outcomes, Omada has built a reputation as a leading solution in cardiometabolic care. So to summarize, we lead with clinical strategy because we believe that's the best way to achieve outcomes for our members and results for our customers. It's grounded in science. And we set -- and when we set clinical strategy for our programs and services, the results follow better outcomes, more savings. While clinical rigor is the anchor, it's not the whole story. It's the connection between our clinical foundation and our product that truly brings our product to life. And now Danika is talking about technology, and Danika is an avid hiker, but she's really the queen of product. So thank you.

Hi, everyone. I'm Danika Harrison. I'm the Chief Product and Growth Officer. It's an incredibly exciting time to lead product. AI is changing not only how we build, but how quickly we can release product. And I just want to start by saying this is in stark contrast to my very first job in product 28 years ago. Now I'm going to date myself. I was fresh out of Georgetown, and I took a first job at a credit card company called MBNA. And we started there now to level set at the time with your credit card 28 years ago, if you wanted to do anything with your credit card, what did you have to do? You had to pick up the phone and you had to call a human in customer service, and they would answer whatever questions you had. So we wanted to change that. So for 2 years in product, we worked on building something new, their first online banking platform. So after 2 years, we released, are you ready, a website. And that website, you could do 2 things. You could check your balance, which was really exciting. And you could also view your monthly statement on a really new technology that was called the PDF. So that was our big foray. So I think back to that, and I am really glad to be leading product today versus then when we can today release things every few weeks. So what we're going to talk about today is the new innovations that we're launching within our product. And during this presentation, we're going to be talking a lot about engagement. Why does engagement matter? It matters because the more members engage, the better the outcomes are that they're wanting to get with Omada. And also, it matters for us as a company because members who are engaging longer allow us to bill for those members over time. As Tom mentioned, our clinical strategy informs the best way for our members to achieve health outcomes. But again, in order for members to get these outcomes, they have to engage. Every single thing we do within product is designed to drive longitudinal engagement for members as they navigate their health journey. Our technology supports members in a deeply human way as they make the...

Sorry, I was like listening to the webcast.

Okay, we're good. Our technology supports members in a deeply human way as they start -- make the decision to enroll and then begin their journey on discovery and onboarding and then they make the decision to change the behaviors in their lives in order to get better health outcomes. Our experience is so engaging that over 55% of members engage with Omada 12 months into the program. Within our onboarding experience, we immediately engage you and allow you to tell your story. We're going to ask you questions. We're going to learn about your hopes and dreams. We're going to ask you what you tried before, what worked, what didn't work. We allow you to personalize your journey with us by choosing a learning path, identifying goals, understanding your motivation, sharing your preference on how you want to work with a coach. And at the same time that you're going through this digital experience, something arrives in the mail. You might receive a scale or another device to help monitor and track your health. You'll also receive a personalized welcome kit that for the first time, makes the program feel tangible, not just something on your phone. And at the end of this onboarding experience, you have a care team and you have a clear starting point shaped around your personalized life and a program that already feels like it was built just for you. Within our onboarding experience, as with all of our member experiences, we're constantly innovating. Just in the past year, we implemented changes to the landing pages, application and account setup processes that increase application submission rates and conversion by 3% to the application submission rate and over 40% conversion from people who submit their application and then log in. Once you're in our program, you can engage with a multitude of experiences. You can track meals and other health metrics. You can set goals, complete lessons, engage with peers or a community, engage with your coach. And it all starts each day with your personalized homepage. Every single day, we provide you with a suggested focus area. In this example, we're suggesting that you set a new goal centered around nutrition. We walk you through a few quick steps and then your new goal of eating grilled chicken 4 times appears front and center on your home screen. By continuing to optimize our homepage to be more personalized and more engaging, we've recently seen significant lifts in member retention at both 4 and 12 weeks. This early engagement matters because we know that when you're starting a big behavioral change program, you're most likely to drop off early in the program. So we know that members who retain an engagement through this early period are more likely to engage for longer periods of time, which again means they'll stay engaged, they'll get better outcomes. We can also bill for those members over longer periods. And this is just the impact of our homepage alone. The reality is that we have hundreds of different engagement pathways that you as a member can take advantage of. Maybe you want to learn how to boost your gut health by engaging with one of our lessons. Maybe you want to try some new recipes from our 25 ideal dinners, or maybe you want to engage with your group focused on staying active at home, where today, members are talking about how to fit in a quick walk during lunch. Over the past 2 years, we've built a robust nutrition experience that goes well beyond tracking macros that most apps offer. Our nutrition experiences meet you where you are. Maybe you're in the kitchen trying a meal and you want some recipe suggestions. Maybe you're sitting in the car, waiting to pick your kid up from school and you're trying to plan ahead on what you want to make for dinner. We can help you with meals, recipes, remind you how to prepare the food. We can look at the ingredients you have and help you with that next step in your health journey in order to achieve your goals. And as a result of our ongoing innovation and nutrition support, which relies heavily on AI innovation, we have also seen lift in the percentage of members that continue to track meals at week 4. In addition, as we've added prescribing capabilities and expanded our medical care solutions, you can come to Omada for more than ever before. During enrollment, if you indicate that you're interested in medication, you can easily meet with a provider. We'll ask if you're ready to meet and then once you confirm that you are, you're routed to the intake process for your first virtual visit. When you visit your care plan in order to join the video call, you can also receive an e-mail and text reminding you of the call, and then you'll be immediately connected to a provider who has already reviewed your intake forms and is ready to discuss treatment options. Now compare this to a process where you might be waiting weeks to see a provider. After the visit in the app, you can see a summary of that visit with notes and instructions from your provider. You can also see details about your prescription and you can choose a pharmacy for pickup. When you scroll down within your care plan, you can see any lab orders, you can see -- and you can schedule an appointment directly with that lab in order to have those labs done. As all of these members engage with all of these unique experiences, they're generating data, clinical data, engagement data, care team data, all of the data around the personalized interventions. It creates an enormous feedback loop based on billions of data points to optimize our clinical strategy and our care programs in order to drive higher engagement and outcomes over time. And when you think about what this means over Omada's history, we have information about billions of things. For example, even just 163 million meals that have tracked. And we can use that to gain deep insights on how food choices impact health and how our recommendations can impact members' food choices. When you think about this scale, it can't be bought or replicated very easily because we have one connected record, including all of these data points for every single member. And thanks to Sunil, who's in the back of our room. He's our Chief Technology Officer. It's not just our product that leverages amazing AI and technology, our engineering team does as well. Under his leadership, we've been able to ensure that 100% of our software engineers use AI coding tools and agents. What this means is that our engineers are, on average, 15% more productive than they were just 2 years ago. That means we can take on more growth and more capacity without adding anyone to this team or additional OpEx. As we've talked about today, driving engagement, outcomes and efficiency is important not only for our members but for Omada as a company. We've highlighted some of the key features of the product today, but I wanted to take a time to talk about a few things that we've launched recently and what's upcoming in the next few months. So we're going to share a video with you with some of those innovations. [Presentation]

Great. Well, as we wrap up this section, I hope we've been able to share how a member engages with their health journey is really deeply personal. It has to be completely relevant to that unique member's life and their experiences and their personal struggles. Over the last few years, we've been expanding and deepening our platform to create this personalized experience, which has increased engagement among our members in both the short term and the long term. And these investments over time continue our strong track record of strong engagement and outcomes for our members. And so now to wrap up our product section, I'm going to hand it over to Jennifer Becker, our Chief Care Delivery Operations Officer, who comes to Omada with a wealth of health care operations and program development experience. So thank you, Jennifer.

So glad to be here with you today. I have dedicated my entire life to the delivery of health care. Tom shared the story earlier of being a physician who had patients with chronic disease that he saw 4 times a year for an hour at the total -- in total. I have spent my career working alongside Tom in different health care systems, trying to build the systems within legacy health care that actually can provide between care management, and we frankly have not been successful within conventional health care. And so I'm so proud to be here because Omada has this figured out. We're doing it. It is working. Our members love it, and I'm just so proud to be part of this. So thanks for coming today. I'm going to more specifically today, introduce you to who our care team is, what our devices enable. I'll also show you why human relationships are critical to achieving outcomes with Omada's particular member base. We have a unique population that we serve. And I'm also going to introduce you to how we have built an increasingly efficient human-led AI-enabled care delivery system. So behind strong clinical outcomes is a care team that knows our members and remains with them throughout their entire journey. The care team offers proactive one-to-one support that stays with a member for the entirety of their journey with Omada. The care team experience begins with our health coaches like Jessica, you see here, a real health coach, all of whom are certified diabetes prevention program lifestyle coaches. So every Omada member is offered a coach who provides lasting behavior change and lifestyle support. Next, our clinical specialists, all of whom are certified diabetes care and education specialists. They provide medication support and clinical data interpretation for all of our members. Physical activity specialists are certified personal trainers or certified strength and conditioning specialists who work right now with our GLP-1 members. You saw them introduced in the last video that Danika played. Licensed physical therapists provide musculoskeletal clinical care. Prescribers are board-certified providers who prescribe and manage anti-obesity medications, including GLP-1s. And our member services associates are people selected for exceptional customer service skills to provide program and technology support to all of our members. And finally, we have our behavioral health team of licensed clinical social workers who support our member-facing teams behind the scenes. So in addition to the consistent and trusted relationships that our care teams provide, we also provide devices, which you've heard about, which are a foundational component of our care delivery system. We provide members with devices unique to their conditions, capturing strong data that enhances our care team's ability to be effective and deliver clinical outcomes. Most of our devices are cellular by default. So it makes it easy for our members to set up a simple and seamless experience when they unbox their devices, and they just work. They love that. Our data also shows that our devices play a role in engaging our members directly. This is not only clinically important, but it is also motivating for behavior change. So many of our members, for example, say that, that ritual of getting up in the morning and stepping on a scale actually becomes a mindfulness moment for them to engage the behavior change that they have already been talking and -- talking with their coaches about and choosing to become modern members. All right. So this is a really important component of our program. As we have studied our member base, we have learned that building relationships leads to 1.7x greater weight loss, which has greater clinical outcomes. We see that AI alone supports the self-directed, but AI plus human relationship enables durable change that is lasting for everyone else. Only about 2% of our members are who we affectionately call our wellness warriors. Our wellness warriors are people who feel highly self-confident to be able to manage their own health and remain in a healthy lifestyle. Most of our members actually have low confidence in their ability to make and sustain change, and they often experience high levels of frustration and fear. This is where empathy and care and accountability comes in, and it feels different with a human being. That is directly supporting who Omada's members are. That's why we not only have humans in our program, but you have the same humans that stay with you for the entirety of your journey with Omada. Relationship is what makes the difference. So how do we use AI in care delivery because we love AI. But our strategy is to amplify what works for our members, which is the humanity of the care teams, while we continuously optimize our efficiency. We have learned that some tasks are best suited for AI and some tasks are best suited for humans. There's something invaluable about knowing there is a real human expressing real care, and we leave that work to our care team. And we're continuing to offload more and more of the work that doesn't need a human but is better employed through AI or technology. So for example, AI provides context summarization. It provides factual answers and it conducts basic information gathering for our care teams. Our coaches do the moments where the relationship counts. Effective application of AI is a human care force multiplier is what we're learning. So let me give you 2 specific examples. So our care teams are one on very much of an evolutionary journey. The car analogy, our team -- we love this. So we are in the process of supercharging our car. So first, pre-gen AI is where we started, creating a set of data-driven signals that more precisely guided coach action. Second, we now move to post-gen AI process automation, and we have now shipped, for example, 3 instances of member contact summarization, which enhances and speeds up synthesized information for the care team. These have been critical improvements that enable our care team to serve members more precisely and deliver care more impactfully while simultaneously reducing our cost of revenue. And there's more to come. You can see the next car that we have not yet revealed. Okay. So the outcome of this care team evolution is that our care delivery system not only works clinically, but it's strategically improved in efficiency as well. Cost of revenue, as you can see here per member, has gone down from $146 in Q2 of '22 to $111 in Q2 of '24 and $85 Q2 of this year. This has come down at the same time that our member base has more than doubled in the exact same period of time. We strategically use a combination of continuous improvement and operational innovation as our operating baseline, and it comes from a systems approach. It's not just based on a single bet. And I'm going to give you a couple of specific examples of the key levers that we have noted here on the slide. The first is standard work. The best known way to do a task is documented, it is taut and it is measured so that quality and efficiency do not depend on who is on shift. Workload balancing. So capacity flexes with the demand instead of being fixed across all of our member-facing teams. We spend a lot of energy to get that right. Workflow automation. We automate workflows through AI and process automation, both in our product and our third-party operations applications. Innovation and tooling. We build features and tooling through a dedicated care delivery guided product design and engineering team, and we continuously experiment with our already built configurable surfaces, deploying successful experiments fully into our operations. And finally, supply chain optimization. We dynamically route our device manufacturing across multiple global regions and vendors and proactively pivot weeks of supply to absorb geopolitical issues like tariffs and crude oil price spikes. We continuously assess and optimize import lanes for international shipping and last mile strategies for our domestic shipments as well. And as Steve mentioned earlier, roughly half of that new 80% gross margin target will come from cost of revenue. This is our path, and we are already well underway. Okay. So where are we going next? I mentioned supercharged earlier. I kind of let the cat out of the bag. Our same team is becoming supercharged. This is a fundamental building block of how we go from 70% to 80% gross margin. Supercharged care teams is an AI strategy. It's how and why we use and employ AI throughout our care team to amplify and augment the humanity of our care teams because we know that works for our members, replacing low-value human work wherever possible, all while staying laser-focused on driving engagement and outcomes for our member base. And as you saw earlier, we began with data-driven signals, AI synthesized context. We're now getting ready to launch our supercharged care teams, which includes deeper journey summarization, automated escalation triage and audio coaching, driving engagement and outcomes while simultaneously reducing costs and preserving the human relationship that we know actually works. And as you see, our next car that is uncovered, we're still -- we're already working on what's coming next in 2027. So for me, this is like the most powerful slide of this entire presentation, and it's my purpose of being here. This demonstrates the impact that Omada has and creates from the words directly of one of our members, Ajit, a real member -- a real Omada member. So thanks to Ashley, as you can see, Ajit's specialist, and Saharra, Ajit's coach, he reached his target weight. He brought his diabetes under full control, and he completely reversed his hypertension. Now this is not an atypical message. We receive member testimonials all the time. I read every single one of them because it's key data into the operations. And these kinds of messages are prolific about the impact that Omada and our care teams, in particular, are having on our members and the changes that are happening in the lives of our members. It's really quite beautiful. Okay. So 2 key takeaways I would -- I have for you today. First, human-led AI-enabled care matters for Omada's members to drive better engagement and outcomes. That is the secret sauce. And second, we have a proven track record of improving efficiency, and we are well on our way to achieve 80% gross margin. I am confident. With that, we're going to move to a break. So you have 5 minutes, and we'll be -- when you get back, we'll begin with a virtual customer panel, and then you'll take another break, and we'll open up the room to Q&A following that with a group of our team. So thanks so much. Enjoy your break, and we'll see you back in a minute. [Break]

All right. So this next section, we're super excited about them. You've heard from a number of our Omada leaders today talking about the business. But what we thought would be really great is to hear from the people that are actually purchasing and buying our programs and products and how they're seeing it, how they're using it. And so we have no other -- or none other than Sean Duffy. He's going to moderate virtually a panel for us. So we've got Celeste and Sarah joining us. So let's do a little bit of a mission control to the virtual teleconference check. Sean, are you there? Can you hear us?

Perfect. You're really coming in loud and clear, and so excited for the session. I mean it's a privilege that we get on a daily basis to talk to customers, listen to their needs. And we've got 2 incredible representatives of very special customers to Omada. So welcome, Sarah. Welcome, Celeste. Thank you so much for being willing to share your insights with the group here. Maybe we start with just some quick introductions, if you could share your name and role, and maybe in no particular order, Sarah.

All right. Hi. I'm Sarah Acosta. I'm the Director of Benefits and Wellness here at Harris County, Texas and -- which is located in Houston. So we're in the greater metropolitan area of Houston. Thanks.

Awesome. Celeste?

Hello. Celeste Parker, Director of Employee Benefits for Costco Wholesale located in Issaquah, Washington.

Well, wonderful. Again, thank you all so much. And I wanted to start maybe with the fundamental question. Sometimes I describe Omada's competitor as not other digital health companies, but either doing nothing or just trusting the existing health care system. So maybe a broad question, why anything at all? And of course, why Omada? Celeste, maybe I'll start with you. Why put any solution in place at all?

Sure. So we partnered with Omada when point solutions were just starting to surface. So many, many years ago, it was new to Costco and new to a lot of other organizations. And Costco is not first adopters of anything. We like to be very mindful in decisions that we make, especially those that impact the people we're responsible for. So when we started to explore Omada and what they could offer, we were really attracted to the diabetes component. We had seen through claim data that, that was an area that our employees and family members could use additional assistance from. We have a great partnership with our TPA, we've been with them for over 30 years. A lot of the solutions that they come forward with are custom-built for Costco. But even with that, we still felt that this would be a great area to start exploring a point solution for. We definitely see that there's gaps in between seeing your provider, staying adherent to your treatment and your medication, start tackling it from a preventive measure. We saw all of those opportunities, and that's really what made us go and start partnering with Omada. And as far as comparing with other solutions, Omada just came to the table with a solution that seemed the most Costco-ized and seem to be more in the interest of building with us instead of us going exactly with what they had already built.

Wonderful. Thank you. That has been an amazingly long and exciting project. I remember when we first started working with you in California walking into -- actually, every Costco in the area. And just you have seen people getting screened by Omada's program and feeling the engagement. So thank you for that partnership. And maybe, Sarah, over to you. You've been a customer since 2019. Maybe a similar question. Why anything at all in the cardiometabolic space versus just hoping traditional health care supports your employees, and why Omada?

Right. Yes, we've been partners since 2019. And previously, we had a weight management program. And so what was appealing about Omada was that it was evidence-based. It met those parameters for the CDC's diabetes prevention program. And so a lot of that data and just being science-backed was relevant and important to us. And very much like Costco, I mean, diabetes as well as diabetes prevention was very much on our radar as what we were trying to make an impact with. So it was the right fit. It felt -- and it really met our members' needs, meeting what they wanted to focus on weight management and eventually, diabetes.

Amazing. So more recently, we've all collectively grown with each other. More recently, Celeste, we launched cholesterol in partnership with you. And you didn't hear this because you weren't at the investor conference here, but what we always talk about is the most important strategy driver for Omada. It's not our strategy team, but we love our strategy team. It's our customers and listening to their needs, seeing what they see within their populations and thinking, do our capabilities fit those needs, do they not fit those needs, and really using that to drive the innovation agenda. And we're thrilled to launch with Costco, Omada for cholesterol. And maybe just describe how that happened, from your perspective, how can we lean on Omada versus looking elsewhere, and what the need you were solving within your population looked like?

Yes. So we were past with showing how our rich employee benefits plan that has a low premiums, low deductible, low coinsurance, 95% of our employees enrolled. What does that result in? Like are our employees healthier than employers where they don't offer that. So that was challenging to get that type of data. But one of the metrics that we use is we pulled up our biometric screening data and compare that with similar employers and to see how do our employees rank health-wise. And surprisingly, we show that diabetes and hypertension, our employees were ranking really well there. But where we were in the red was cholesterol. Well, that's both interesting and makes sense all at the same time. We have a solution that we've had for well over a decade for 2 of these things and not for one. So let's explore that. And unlike maybe the practice we had in place when we first adopted Omada, we are disciplining ourselves to look at other partners before solidifying a decision. And so we talk to other partners, and then we talk to Omada. And it's always our preference to go with the current supplier, especially one that's been with us for so long, who shows that they can build and deploy exactly what it is that we need. And Omada was very engaging. We had several -- they had several questions. We had several meetings about what would this look like? A lot of people who have high cholesterol might already be in the program. But are there people who just want to tackle cholesterol, people who only have high cholesterol and don't have these other conditions? So really good conversations, and they were able to deploy something that exactly what it is that we needed. And we've only had it for a few months, and we're showing great numbers with that. But that's kind of why it was even presented and how it evolved and how we made our final decision.

I love it. Well, I mean, internally, it's so exciting for us, especially as you shared, to watch really the early data and see such promise there. And maybe another theme from the meeting we've had for you, Sarah, one thing we always talk about is the life of a beneficiary is difficult. And my gosh, to find paths to allow for easier contracting matters to us. It matters to them. You've contracted Omada in different ways through your employer, through health plan, now through the PBM. Maybe just share a little bit color on why the PBM route this time? What did moving between them look like from your side? And what are some of the considerations in working with digital health relative to how you contract?

Right. Yes. So when we first began with Omada, it was through the health plan and that partnership there. And again, seamless lift there. And so when that carrier contract ended and we were moving to the next carrier, they didn't have that solution in place at that time. And so we felt very strongly to continue that programming. And we had so many members that were engaged in the program already, that it made sense to work through a direct contract. So that way, we don't have any gaps or any loss in care for those members going through those different programs. So that was a seamless transition. Of course, we knew well in advance of that contract was terming and moving to the next carrier, that we were able to onboard and do all of those things necessary to make sure there wasn't any hiccups. But I mean, the team there made sure that, that was a seamless transition to the members. They did not even realize the change behind the scenes. And then we had an opportunity. So then our PBM partnered with -- our current PBM partnered with Omada, and that's where we were able to leverage moving back to that type of structure, but through our PBM. And that made more of a financial sense because we had better pricing by going that route and some more available programming, I think, is what became at that time as well. So it's been seamless going between one to the next, to the next. So I think that has been the big plus of this partnership.

Well, yes, it's awesome to hear it. I mean the teams at Omada, of course, have put a ton of work to try to make that experience seamless because no one likes having to switch contracts, especially if it causes implementation problems. So thank you for the partnership there. And maybe turning to a theme that's, again, near dear to our hearts, and that you've already touched on Sarah, but maybe to ask you expand a bit on, is clinical evidence. So I founded the company --well, medical school. It's always been important to us to earn the trust of the enterprise health care market. I knew at some point, I'd have to convince my medical director, med school friends that our solutions worked. Why are solutions with clinical evidence in your eyes preferred? And how does that factor into decisions you make within your benefits program?

Well, that's a very important factor. And especially when we were bringing Omada on board, I had to prove to our leadership at the time that this was the right move and kind of provide some comparisons related to what we were currently in from a weight management program with another point solution. And so to me, it was very obvious, but you're having to take it to leaders that don't work in this space every day. And so that was the biggest piece, is Omada provided that information, that evidence-based backing that was digestible and relevant to the population. So that way, they understood it once we were able to connect the dots for how there'd be a savings, but also that it's -- we know it's going to happen because you've done studies, you've got journals, you've got other things that are going to point to why XYZ leads to this solution and the outcomes that we're looking for.

Amazing. Maybe same question to you, Celeste, and you've already highlighted something that I just love, and that we've been together so long. It's almost an amazing peek of population health experiment and to see the early data that led to Omada show heightened diabetes and hypertension numbers, and then fast forward over a decade, to have those within the norms or below norms relative to your industry is really special. And when you work with companies in your space, how does the evidence factor into your decisions?

Yes. So evidence is a big component without that, right? We can't even consider it. And it's not just evidence that shows impact and utilization, but it's the whole experience. Experience is top priority to us because you can have a great product, right? But if the experience is lousy, people aren't going to proceed further, or they'll hear about it from their coworkers. One thing about Costco is they might not trust the insurance company, right? They might not even trust the direct manager. We hope they do, but they might not. But the one consistent thing they do trust is their coworkers. They all speak the same language here. So if they find out that it was a lousy experience, they're not even going to try it. So that's a big component of what I talk about when I talk about Omada or any program that we have that is going well is, yes, there's these numbers, of course, like we obviously wouldn't be able to proceed if they weren't showing good numbers, but it's the actual experience, and experience includes communication. Are they willing to partner with us to communicate this service and educate our employees about the service in the way that our employees will understand and appreciate? And that's another example of how Omada was able to tailor what they were offering in a way that would make sense for Costco and Costco employees. And because of that, we've been able to maintain good utilization with them.

Yes, I love it. And I mean it's such an adage where if it's not a great experience and nobody joins, then you have no chance for any impact at all, which is something that's super, super important to us in the market. All right. Shifting gears, my wife at this point, she jokes that I don't know any other acronym besides GLPs. So if we were on this panel that I didn't bring up GLPs, it'd be off the norm here. So maybe we'll turn to that. Starting with you, Celeste. To the extent you're able to share, what is the GLP-1 coverage strategy, benefit strategy been like for Costco? Where do you see it going? What are some of the considerations you've been thinking about in processing?

Yes. So Costco, I want to say, left out in that our pharmacy plan had always had an exclusion of weight loss drugs. And so because of that, when GLPs were entered into the marketplace for purposes of weight loss, we didn't see a huge spend in that space. There are a lot of employees and family members that switched their treatment for diabetes over to Ozempic, which is more expensive. So we saw an increased spend there. But we weren't vulnerable to having to cover for weight loss. This is a very fluid area, with both cost and need and supply and demand, all things, very fluid. And so it is something that our employees keep requesting. Costco, like I said, we're not first adopters. We like to really carefully watch things and make sure it makes sense because once we do adopt something, we keep it. We're not going to take a benefit away from our employees. So we -- starting about a year ago, we said, okay, it's -- we're just not there to where we can add it to our pharmacy plan. We're not -- this industry is just not there. It's far too expensive. We don't want to jeopardize adding it and then not being able to sustain it. So then about 1 year, 1.5 years ago, we started entertaining the idea of providing some sort of discount or company subsidy for employees that purchased it directly through the manufacturer. But we held off with that because it seems awkward to influence our employees to go and fill a prescription outside of Costco. We don't do that in our pharmacy plan. So one of the primary manufacturers has worked very well with Costco's pharmacy department. Almost a year ago, they started offering direct-to-consumer pricing to all Costco members. So right there, that was a huge win. Employees being Costco members, they were able to get direct consumer pricing at the cost of the pharmacy. So that's great. And to further that, come January, we're going to subsidize a portion of that. So we will pay for part of that cost for employees that are getting prescribed outside of the diabetes diagnosis. And we're going to encourage, not mandate, but definitely encourage a weight management, lifestyle management program, particularly with Omada. And the reason why is even with us partially subsidizing it, this is still a very large expense to not only Costco but the employee. We are invested in our employees. We want them to make good sound financial decisions for themselves, and covering a good portion of their GLP medication, we want to make sure that they're successful in that. That's an investment for them. And so we are definitely going to encourage participation in Omada's program that specializes in GLPs. We had a lot of conversations with Omada to make sure that this isn't just a weight loss program. It really is tailored to those on GLPs because the makeup of what they need is different than someone who's trying to lose weight without a GLP. So that's our strategy and talk to me in a year, and it will probably be slightly different, very fluid area for sure.

Yes, isn't that true? I mean, in your state and our state every year, you have to just pay a lot of attention to a very, very fast-moving market, and we're going to be honored to bringing our best sell forward and best capabilities forward to support your employees on GLPs. And [indiscernible], Sarah, maybe over to you on the same question. Harris County doesn't cover GLP-1s yet you did decide to implement our enhanced GLP-1 Care Track. What led to that decision, even in the context of not covering the medicines?

Right. Yes. We're very much like Costco, it seems like, because we also have historically excluded drugs for weight loss, and so -- and are very much slow adopters. We like to test the waters first, see what everybody is doing. And so especially in this space, there's so much evolving like you've talked about. And so it's -- we've been receiving pressure like most other employers from our employees to cover it on all levels through surveys, through like just verbally, like people just sharing that to high leadership, expressing that they pay out of pocket for some of this medication and have for the last few years. So it's something that's very much near and dear to even just me just understanding it and being a dietitian even. So it makes sense to at least get ourselves into a space where if we did need to flip that switch, that we would have something or guardrails of some sort put in place. So that way, members, if we were to cover this drug or provide some sort of monetary part of payment for that, that we would have something that's built into Omada already that would give them that ability to make sure that they are getting the best bang of their buck when they are utilizing that GLP-1. So that was really the steps of why we added the enhanced Care Track. And then also, we just know, like you kind of referred to, people are already taking these medications, of course, with the direct-to-consumer programs, compounding pharmacies. We've heard all kinds of stories about things happening. And so ultimately, our employees, they typically are long tenured, and we most likely will see them in retirement. So it's an investment for us to make sure that if they are going down that path on their own, that we're able to provide some support in that space and making sure, again, like if they're financially putting that on themselves, that we're able to help get their best bang out of the buck with that drug.

I love it, love it. And maybe last thing before we move to kind of the wrap-up portion is on the other buzzword in the world, artificial intelligence. And I'm sure, Celeste, you probably have like 15 companies in your LinkedIn inbox right now saying, look, we can just do an AI-only solution, improve the health of everyone automatically in your population. At Omada, we believe, of course, in the intersection and the power between both people and AI. But from your perspective and your seat, as you think of benefit strategies and care strategies, how do you view AI only, people only, kind of the mix? What are some of the factors you've been mulling about relative to your ideal partners?

One of the recipes to a good partnership is that the companies we work with share a lot of the same ethics and philosophies with all things, right, how they treat their workforce, their mission, all the things. But AI is one of them. So Costco's stance on it is we are not scared of AI. We do see a great place for AI, but we are still -- and we are going to remain to be a people company. We serve our members and we serve our employees. And those are people, and we're going to continue to serve them with people. So AI works great to help those people responsible for other people to do their job more effectively. And that's what we would want to see our partners do. There are enhancements for sure, especially administrative enhancements, member experience enhancements, absolutely where AI would be a great fit. But to remove the people, the expertise coming from the people and the people touch, it is not really aligned with how we see AI serving our people. So yes, an AI-only solution doesn't really fit with how we view any program that we would want to offer to our employees.

I mean, per the philosophy point, I mean we, on a daily basis, see this incredible intersection and the power of what people and accountability and emotion and feeling that cared for it can bring as well as these remarkable technologies and how they can better member experience, better stickiness, improve efficiency. It's a world we're both live in. All right. To close this out and wrap up, maybe one final question. So let's say you get a knock on your door and it's a peer, Head of Benefits at a corresponding company, and they're saying, look, I've got this cost and health issue in metabolic disease, diabetes, what is kind of one thing you tell them? Maybe starting with you, Sarah.