Digital Health IPOs: Hinge Health and Omada Break the Drought, Paving the Way for Future Exits

In a significant development for the digital health industry, Hinge Health and Omada Health have successfully completed their initial public offerings (IPOs) in 2025, ending a prolonged drought in the sector. The successful exits of these two companies have captured the attention of investors, analysts, and industry observers, potentially signaling a resurgence in the public investor market for digital health firms.

IPO Strategies and Market Readiness

Both Hinge Health and Omada Health emphasized the importance of meticulous preparation and operational maturity in their journey to becoming public companies. Daniel Perez, CEO of Hinge Health, revealed that his company operated as if it were public for two years prior to its IPO, including conducting mock earnings calls to ensure readiness.

"We told our management team, what we told the company overall, is that we needed four straight quarters of 'beat and raise' just to ensure we're better," Perez stated during a panel discussion at the HLTH conference. This approach underscores the critical need for predictability and forecast ability in business operations before pursuing an IPO.

Sean Duffy, co-founder and CEO of Omada Health, echoed similar sentiments, stressing the importance of introspection and business readiness over market timing. "As I reflect, I would say 80% of the questions I get about IPO timing are, how did you know the markets were ready? And 20% is, how do you know your business is ready? In truth, it should be completely inverted," Duffy remarked.

Financial Performance and Investor Expectations

Both companies reported strong financial metrics leading up to and following their IPOs. Hinge Health, founded in 2014, booked $432 million in revenue for the 12 months ended March 31, 2025, with impressive figures including an 80%-plus gross margin, 117% net dollar retention, and double-digit free cash flow. In its first earnings report as a public company, Hinge reported $139 million in revenue, up 55% year over year.

Omada Health, which launched its initial virtual program in diabetes prevention and weight health in 2012, saw its revenue grow 38% in 2024 to $170 million. In its first quarter as a public company, Omada reported $61 million in revenue, a 49% increase year over year, with a customer base of 2,000 and more than 750,000 total members enrolled in one or more programs.

Public investors are particularly focused on durable revenue growth and free cash flow, according to Perez. "Growth is valued two times more in the public markets than profitability right now," he noted, emphasizing the importance of generating cash to change the tenor of conversations with investors.

AI Integration and Future Outlook

Both Hinge Health and Omada Health are actively incorporating artificial intelligence (AI) into their operations to enhance efficiency and improve care delivery. Perez expressed a bullish outlook on AI's potential in healthcare, predicting that "all non-touch aspects of healthcare will soon be automated by AI."

Hinge Health recently unveiled an AI-based movement analysis tool using computer vision technology and an AI care assistant named Robin for 24/7 support. The company is also exploring M&A opportunities to further enhance its musculoskeletal care technology.

As the digital health sector looks ahead, industry leaders anticipate a "different beast" in the next wave of IPOs. Duffy noted that future companies going public will likely be "fundamentally delivering 'the care' and new care models, more evidence-based models, proven models," which create durable value propositions and revenue streams.

While the successful IPOs of Hinge Health and Omada Health have opened the door for other digital health companies, both CEOs caution that the bar for going public remains high. Companies eyeing public markets will need to demonstrate mature operations, predictable revenues, and a clear path to profitability to attract investor interest in today's competitive landscape.