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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Chair and Chief Executive Officer - Leslie Trigg Chief Financial Officer - Renee Gaeta Investor Relations - Tina Jacobson Operator: Good day, and thank you for standing by. Welcome to the Outset Medical Q2 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tina Jacobson, Investor Relations. Please go ahead. Unknown Executive: Good afternoon, everyone, and welcome to Outset Medical's Second Quarter 2026 Earnings Call. Today's speakers are Leslie Trigg, Chair and Chief Executive Officer, and Renee Gaeta, Chief Financial Officer. The company issued a news release after the close of the market today, which can be found in the investor section of outsetmedical.com. This call is being recorded and will be archived there as well. All forward-looking statements made during today's call are intended to be protected under the Private Securities Litigation Reform Act of 1995. Outset assumes no obligation to update these statements. For a list and description of the risks and uncertainties associated with the business, please refer to Outset's public filings with the Securities and Exchange Commission, including its latest annual and quarterly reports. With that, I'll open the call to Leslie Trigg. Leslie? Leslie Trigg: Good afternoon, everyone, and thank you for joining us. The second quarter reflected steady execution across revenue, gross margin, operating expense discipline, and cash management. We continue to make meaningful commercial progress while advancing our mission to improve dialysis patient outcomes at a lower cost and with less complexity. We are confident that the impact of that progress will become increasingly evident over time. I'll begin today with financial performance in the second quarter. Revenue of $31.6 million was up 1% year-over-year and up 14% sequentially. Our ongoing margin expansion program delivered a non-GAAP gross margin of 42%, a significant improvement compared to last year. With the solid second quarter results, we are reiterating full year 2026 revenue guidance of $125 million to $130 million. During the second quarter, we completed our highest number of successful new site implementations in several years. At one system with several sites in Texas, our clinical excellence team trained over 100 nurses who, in turn, supported 956 treatments in their first 60 days. Other successful implementations were completed at a new top 10 health system customer for Outset, as well as at hospitals that are part of large regional health systems and post-acute care facilities. What stands out most is what happened after the initial go-live implementation. Outset has established a clinical excellence team focused on helping our customers optimize the clinical, financial, and operational value of their Tablo in-sourcing programs over the long term. Each hospital customer is paired with a clinical excellence team member who works closely with them to identify the outcomes that matter most to their organization and then trends, tracks, and shares the key performance indicators on a regular basis. Tablo's unique data ecosystem powers this process, providing valuable treatment and clinical program insights to our customers. The impact of this structured approach to customer success is reflected in both customer satisfaction and customer expansion. During the quarter, we conducted an independent voice of the customer assessment, and when asked how likely they were to recommend Outset, our customers gave us an average score of 8.8 out of 10. Combined with the measurable results we continue to deliver, this strong level of customer advocacy is central to our forward commercial momentum and high customer retention and creates opportunities for continued growth across our installed base. We're increasingly seeing customers expand their use of Tablo, both by deploying the technology at additional sites across their health systems and by broadening use within existing facilities. A strong customer experience was instrumental in securing a meaningful recent commercial win. We are privileged to have signed a $40 million refresh agreement with HCA Healthcare. The agreement reinforces HCA and Outset's long-term commitment to in-source dialysis, which extends through 2028. After carefully evaluating comparative outcomes, HCA opted to recommit to Tablo, underscoring the clinical and operational value that it continues to deliver across their nationwide system. The agreement provides a meaningful foundation of contracted backlog, enhancing our visibility and supporting revenue predictability. Under the refresh agreement, HCA facilities currently partnering with Outset for in-source dialysis will update their fleet. And importantly, the $40 million value does not include the potential to expand over time into additional HCA facilities not yet equipped with Tablo. This marks our first refresh win, and that's an important milestone as we continue to capitalize on a refresh cycle that, over the next several years, may include roughly 3,000 consoles and up to $150 million in console revenue opportunity. Given customer confidentiality considerations, we're limited in the level of detail we can provide and don't intend to disclose HCA-specific information today or going forward. That said, HCA is a recognized leader in health care, and we believe its continued commitment to Tablo serves as strong validation that, over time, can help support broader adoption across health systems of all sizes. We believe the introduction of the next-generation Tablo system will provide a great opportunity to catalyze customer refresh decisions. Next-gen Tablo combines hardware and software enhancements designed to improve performance and reliability with advanced cybersecurity capabilities that are increasingly crucial for health systems. We're working on the pilot phase now in preparation for a successful broader launch, and we'll continue to share updates as we progress. Reflecting on the quarter's performance from a commercial perspective, the addition of Derek Elliott as our new Executive Vice President of Commercial has marked our next phase of commercial evolution. Over the last several years, we've standardized our sales process, built systems to support it, and refined our go-to-market strategy to create a more disciplined and predictable commercial engine. We're now scaling that foundation to increasingly execute with consistency, conversion, and impact. Our near-term objectives include further infusing the capital sales organization with the right quantity and quality of talent. We're expanding sales coverage to further accelerate our inroads into the top 250 health systems where we believe Tablo can deliver significant impact. We believe we have the right combination of commercial rigor and clinical expertise to guide this next phase. Derek's impact is being reinforced by our Chief Nursing Officer, Brittni McGill, whose first-hand understanding of our customers' pain points and workflows brings an invaluable clinical perspective. We're excited about our commercial and clinical leadership and expect their complementary expertise to position us well to engage health systems, address their most pressing needs, and accelerate customer adoption and conversion. And with that, I will turn the call over to Renee. Renee Gaeta: Thank you, Leslie, and good afternoon, everyone. Total revenue in the second quarter was $31.6 million, up approximately 1% compared to the second quarter of last year. Product revenue was $21.9 million, down 5% against a challenging prior year growth comparison. Console revenue of $9.5 million grew 6% year-over-year, and consumable revenue of $12.4 million was down 12% against a double-digit growth comparison last year. Service and other revenue of $9.7 million grew 17% compared to last year on a strong volume and ASP increases. Recurring revenue, which includes consumables, service, implementation services, and freight, was $22.1 million, down 2% compared to last year. Turning next to the P&L. Please refer to the tables in today's earnings release for a reconciliation of GAAP to non-GAAP measures. Second quarter non-GAAP gross margin was 42.2%, up over 380 basis points compared to last year, and driven primarily by product cost improvements, reduced overhead, and service efficiencies. Product gross margin was 46.1%, down about 280 basis points compared to last year due to a higher mix of console sales within product revenue. And service and other gross margin was 33.4% (sic) [ 32.6% ] up over 2,400 basis points. Gross margin performance reflects strong execution and keeps us on track towards our next milestone of a 50% company-wide gross margin. Moving to operating expenses. Second quarter non-GAAP operating expenses of $25.8 million increased 1% compared to last year, in line with revenue growth. Non-GAAP operating loss was $12.4 million, an improvement of 7% compared to last year. These results reflect continued progress as we work to achieve profitability. Moving to the balance sheet, we ended the quarter with $151 million in cash, cash equivalents, short-term investments, and restricted cash. With ongoing expense discipline and working capital management, cash use was $9.5 million in the second quarter, keeping us on track to use less than $40 million in cash for the full year. Turning to our guidance for 2026, we continue to expect full year revenue of $125 million to $130 million, representing growth of 5% to 9% over last year, with most of the growth expected in the third and fourth quarters. Importantly, our confidence in this outlook is supported by a strong commercial pipeline and the foundational contracted backlog provided by the HCA refresh agreement. With that, I will turn the call back over to Leslie. Leslie Trigg: Thanks, Renee. I'd like to close by thanking everyone on this call for your continued support. While the natural variability of capital sales has made our performance less predictable over the past year, we are confident in our ability to continue strengthening our commercial organization and sales process to improve visibility and predictability. The opportunity ahead of Outset has never been more compelling. With a customer base that now includes all 10 of the largest 10 health systems, all 10 of the largest 10 post-acute providers, and approximately 30% of the top 100 IDNs, we are reshaping how dialysis care is delivered across a large, untapped market that needs better, lower-cost solutions. Over the next few years, we expect several new console growth tailwinds to emerge. First, the refresh cycle. Second, our launch of the next-gen Tablo. Third, our newly formalized customer success team and program, which is designed to expand same-store console and treatment sales, while also driving new site expansion within our existing customer base. Further, we continue to expand our layers of recurring revenue, starting with consumables and service, and buttressed by EMR annual maintenance and implementation services. We're demonstrating traction against a sizable new refresh opportunity, and we're well positioned to capitalize on it, with a next-generation platform and a commercial team strengthened by proven leadership. And Finally, we've built a foundation to support scale with improving gross margin, disciplined expense and cash management, and a clear path to profitability. We have the strategy, the technology, and the team in place to execute consistently and create long-term value, and we look forward to sharing continued progress in the years ahead. With that, we are ready for Q&A. Operator, please open the line. Operator: [Operator Instructions] And your first question today comes from the line of Rick Wise from Stifel. Frederick Wise: It's great to see the quarter, and particularly on the console side. And maybe we can just start there. So console revs at $9.5 million were nicely above, I think, a consensus number, is something like $6.4 million or so. That's really solid outperformance, good to see. Maybe unpack that for us, if you could. How much of that outperformance is tied to the HCA agreement? How much is tied -- how do we break it down between that and the early impact of broadly next-gen Tablo launch versus that first quarter lingering capital order, maybe did it close this quarter or some of it? Or you said, hopefully, Is this a new console run rate or a one-time pull forward? Just help us understand all the moving pieces there. Obviously, it's an important number, and it's good to see. Renee Gaeta: Sure, Rick. This is Renee. I'll take a stab at that and then have Leslie jump in if she has any elements to add. I would say it's sort of all of that, to some extent, one or another. I would say, yes, we are definitely pleased with our Q2 performance. And coming off of the announcement of the HCA refresh, I will provide some color there and that HCA was a part of our Q2 pipeline and a part of our strong console performance during the quarter. Due to customer confidentiality reasons, I'm not going to give much more specifics than that. But that is not to say that we also had new expansion customers, other console placements included. We continue to have a broad range within our pipeline of deal size, and we were glad to see the closed completion of certain of those deals in the quarter. Leslie Trigg: I think that was well said. I would just add that I think this was a quarter when all parts of the business performed as we had expected. And I was very pleased to see the distribution across sort of the 2 big parts of our commercial strategy, which is one, current customer expansion; and two, new customer acquisition. And then you alluded to some of these new tailwinds, new growth that we haven't necessarily had at our back in the past. And I think that some of those new tailwinds, be it the refresh opportunity ahead of us, a new commercial leader, this new very sort of structured and formalized customer success program and team. I think this was sort of the first quarter where we were seeing some green shoots of all of those tailwinds coming into play in a nice way. Frederick Wise: Great. And also, what stood out to me, that you called out, but maybe you could talk about it a little more and help us better understand. Consumable revenue growth was down 9%, steeper than the first quarter's decline. I just want to make sure I'm understanding what that's all about. And to what impact, if at all, is this new systems and volume not quite up yet? Or does HCA or the next-gen launch reverse that trend? Or just -- again just what does it mean and how do we think about the rest of the year from that perspective? Renee Gaeta: Yes, it's a great question, Rick, and a fair one. I would say I would start off with, we are certainly up against a tough comparable from the prior year. 2025 had a really strong Q1 and Q2 on the consumable side, partly driven by the flu season and census in that year, which we have not seen as strong of an impact in 2026. And then, of course, as you might remember, we had some of the ordering cadence volume in 2025, which we believe is now past us. I think when we take a look at understanding that our consumable revenue is going to be driven by ordering timing, we really look down a layer into the device utilization information that we have, and we continue to see strong utilization across our customer segments. And so there is nothing alarming or concerning for us. Again, we're just up against a really hard comp. And then I would say, as we look forward to the back half of the year and when we talk about our guidance as a whole, consumable revenue growth is anticipated to be in line with total revenue expectations for the year. And we hope that those have tailwinds going forward and utilization not only holds up but maybe expands beyond that. Leslie Trigg: The only thing I would add to that, that's maybe important to note, we had just mentioned a second ago in the prepared remarks that we did our largest number of new site implementations over the past several years in this past quarter. That is a reflection -- and I think we had talked about this in a past quarter, that is a reflection of a little bit longer delay that we had seen between console sale and the timing of the actual installation and training of the site. And so we did actually see a lot of this finally flow through Q2 to install and implementation. So we believe that will also lead to more normal order patterns going forward. But to Renee's point, we have sort of exquisite data on utilization because Tablo is transmitting after every treatment, every day, every console, everywhere in the nation. So we can view this on an hour-by-hour and day-by-day basis. So our visibility into actual console utilization is pristine, and we have continued to see very stable utilization, no material changes in Q2. Frederick Wise: Got you. And I'm going to be selfish and ask one more if I could. I'm right in the middle as I look at the year as a whole on a revenue basis. I'm right in the middle of your $125 million, $130 million range. That's my number. You just beat my second quarter number by $2.8 million. Just help me, help us think through -- so one, what do I do with the $2.8 million? Or is -- just help me think about the cadence of the second half is, because of seasonality or anything else? Is the third quarter more in line, or more likely in line with the second quarter performance for some reason? Or it's all going to come home in the fourth? Or I just want to make sure we know what to do with these moving pieces in a thoughtful way. Renee Gaeta: Yes, it's a great question. I would certainly anchor to your comments around there is an element of seasonality within med tech in Q3. I would say that's also driven by census of what's happening in our hospitals, customers, and effectively you looking towards -- certainly Q4 is a stronger quarter for us is how I would sort of frame it that yes, we've kept the full year guide. So that's the full year number that we are targeting towards. And we don't -- while we don't get guidance to the quarters certainly you're thinking about could potentially that be -- Q3 be impacted by some seasonality and we would expect a stronger Q4, that is an appropriate assumption. Leslie Trigg: Also because there's sometimes in Q4, some seasonality -- positive seasonality on the capital sales side, right? For capital equipment businesses like ours, do often see a stronger Q4 as hospitals and health systems spend through budget prior to year-end. Operator: We will now take the next question. And the next question comes from the line of Josh Jennings from TD Cowen. Unknown Analyst: This is Brian here for Josh. On HCA, I'm not sure what constitutes specifics, but can you speak broadly about the phasing of the agreement across the 3 years? I guess my question is really, is it fair to assume that 2027 will likely be the biggest year for revenue recognition from the agreement? Renee Gaeta: Brian, it's a great question. You're not the only one to ask it. I would say we certainly are working very closely with HCA. As you pointed out, it goes all the way through 2028. We have visibility to 2026 and of course, have included our revenue guidance numbers, have factored that in when we reiterated guidance for the year. Beyond that, we look forward to providing 2027 guidance at the appropriate time, and we do that consistently every year. It's effectively at this point not going to speak to how much of that is going to be in '27 or '28. And look, I also look forward to having other agreements, other refresh opportunities that we've now started to highlight and think that we're entering this cycle with our customers as well as continued penetration in existing accounts such that it isn't necessarily one item that we're going to be highlighting or speaking to. We've got a robust pipeline, a robust customer list and dynamics, and plenty of opportunity to penetrate into customers that we have in hand today. Unknown Analyst: Okay, that makes sense. Maybe changing topics to next-gen Tablo, what's been the feedback to date from the initial users? Can you remind us of the milestones you're looking forward to achieve in order to transition to a full launch? Leslie Trigg: Sure, I'm happy to take that. Brian, this is Leslie. So we are working on the pilot phase right now and looking forward to a full launch. I think maybe taking a half step back, philosophically speaking, given the significance of this update, we obviously want to make sure we really, really, really get this right and that the experience out of the gate goes exactly as expected, just given the size of the installed base and the size of the customer base that we support, and we support now Tablo and our team support about 1 million treatments a year. So it's critically important to kind of take a very measured approach to the rollout and focus on doing it well versus quickly. The sales team has started to educate our customers about the benefits and the value. And in terms of the other part of your question about what's the receptivity, we are hearing a lot of enthusiasm. The why behind that enthusiasm. Health systems really are increasingly looking for medical devices that meet FDA's highest cybersecurity bar, as we do. This next-gen release is also packed with a couple of really kind of cool new features and functions that both improve the user experience, the clinician experience, but also day-to-day device performance that we're excited about as well. So we do expect customer receptivity to be high when we progress to full launch, which we're excited to do. In terms of the metrics that we're looking for, obviously, I'm not going to get into a ton of detail just for competitive reasons about that. But we with any new release, whether it's software, hardware, in this case both, we're going to make sure that, as mentioned, the user experience, the user feedback, the performance of the system, and the performance of the update are as absolutely perfect as they can possibly be. So we will be looking to metrics and data coming out of the pilot phase to ensure that it's meeting the mark before we roll it out in full. Operator: That was our final question for today. I will now hand back to Leslie for final remarks. Leslie Trigg: Thank you, and thanks to all of you for joining today. I'd like to close by thanking our customers and our team for the difference that they make every day in the lives of dialysis patients. Thank you again, and have a great evening. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Outset Medical, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Outset Medical wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Outset Medical. The Motley Fool has a disclosure policy. Outset Medical (OM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Revenue: $31.6 million, up 1% year-over-year and up 14% sequentially. Product Revenue: $21.9 million, down 5% year-over-year. Console Revenue: $9.5 million, up 6% year-over-year. Consumable Revenue: $12.4 million, down 12% year-over-year. Service and Other Revenue: $9.7 million, up 17% year-over-year. Recurring Revenue: $22.1 million, down 2% year-over-year. Non-GAAP Gross Margin: 42.2%, up over 380 basis points year-over-year. Product Gross Margin: 46.1%, down about 280 basis points year-over-year. Service and Other Gross Margin: 33.4%, up over 2,400 basis points. Non-GAAP Operating Expenses: $25.8 million, up 1% year-over-year. Non-GAAP Operating Loss: $12.4 million, an improvement of 7% year-over-year. Cash Position: $151 million in cash, cash equivalents, short-term investments, and restricted cash. Cash Use: $9.5 million in the second quarter. Full Year 2026 Revenue Guidance: Reiterated at $125 million to $130 million. HCA Refresh Agreement: $40 million contract extending through 2028. Warning! GuruFocus has detected 3 Warning Signs with OM. Is OM fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Outset Medical Inc (NASDAQ:OM) reported Q2 2026 revenue of $31.6 million, up 14% sequentially and 1% year-over-year, with non-GAAP gross margin improving significantly to 42.2%, up over 380 basis points from last year. The company secured a $40 million refresh agreement with HCA Healthcare, extending their partnership through 2028 and providing a foundational contracted backlog that enhances revenue visibility and predictability. Outset Medical Inc (NASDAQ:OM) completed its highest number of successful new site implementations in several years, including training over 100 nurses at a Texas system that supported 956 treatments in the first 60 days. Customer satisfaction remains high, with an independent voice of the customer assessment yielding an average recommendation score of 8.8 out of 10, driving strong retention and expansion opportunities. The company is on track to use less than $40 million in cash for the full year 2026, ending Q2 with $151 million in cash, reflecting disciplined expense and cash management. Outset Medical Inc (NASDAQ:OM) is well-positioned for future growth with the upcoming Next Generation Tablo System, which includes advanced cybersecurity features and is expected to catalyze customer refresh decisions. The company's customer base now includes all 10 of the largest health systems, all 10 of the largest post-acute providers, and approximately 30% of the top 100 IDNs, underscoring its market penetration. Outset Medical Inc (NASDAQ:OM)'s consumable revenue declined 12% year-over-year in Q2 2026, impacted by a challenging double-digit growth comparison from the prior year and reduced flu season census effects. Product revenue decreased 5% year-over-year, reflecting a higher mix of console sales within product revenue, which pressured product gross margin down about 280 basis points to 46.1%. Recurring revenue, including consumables, service, implementation services, and freight, was down 2% compared to last year, indicating softness in the recurring revenue stream. The company continues to face variability in capital sales, which has made performance less predictable over the past year, despite efforts to improve visibility and predictability. Outset Medical Inc (NASDAQ:OM) reiterated full-year 2026 revenue guidance of $125 million to $130 million, implying most growth is expected in the second half, with Q3 potentially impacted by seasonality and a stronger Q4 anticipated. The HCA refresh agreement's $40 million value does not include potential expansion into additional HCA facilities, and the company is limited in disclosing specifics due to customer confidentiality, which may limit investor visibility. Non-GAAP operating loss was $12.4 million in Q2, though improved 7% year-over-year, indicating the company is still not profitable and relies on continued expense discipline to achieve profitability. Q: Can you unpack the strong console revenue performance in Q2, which came in well above consensus? How much was tied to the HCA agreement versus new customer expansion or other tailwinds?A: Renee Gaeta (CFO): The Q2 console performance was driven by a combination of factors, including the HCA refresh agreement, which was part of the quarter's pipeline, alongside other new expansion customers and console placements. Due to customer confidentiality, we can't provide specific breakdowns, but we saw a broad range of deal sizes close during the quarter. Leslie Trigg (CEO) added that this was the first quarter where all parts of the business performed as expected, with green shoots emerging from new tailwinds like the refresh opportunity, new commercial leadership, and the formalized customer success program. Q: Consumable revenue declined 12% year-over-year. What is driving this decline, and will the HCA agreement or NextGen launch reverse this trend?A: Renee Gaeta (CFO): The decline is primarily due to a tough comparable from 2025, which had a strong flu season and census that boosted consumable sales, as well as some ordering cadence volume that is now behind us. We look at device utilization data, which remains strong and stable across our customer segments, so there is nothing alarming. For the back half of the year, consumable revenue growth is anticipated to be in line with total revenue expectations. Leslie Trigg (CEO) added that Q2 saw the highest number of new site implementations in several years, which should lead to more normal order patterns going forward, and that Tablo's data ecosystem provides pristine visibility into utilization. Q: Given the Q2 beat, how should we think about the revenue cadence for the second half of the year? Should we expect Q3 to be in line with Q2, or will the growth be more heavily weighted to Q4?A: Renee Gaeta (CFO): We are maintaining our full-year guidance of $125 million to $130 million. There is an element of seasonality in MedTech, particularly in Q3, which can be impacted by hospital census. We would expect a stronger Q4, as capital equipment businesses often see a stronger fourth quarter when hospitals spend through budgets prior to year-end. The full-year guidance remains the target, and we don't provide quarterly guidance. Q: Regarding the $40 million HCA refresh agreement, can you speak to the phasing of revenue recognition across the agreement's term? Is it fair to assume 2027 will be the biggest year?A: Renee Gaeta (CFO): We are working closely with HCA on the agreement, which extends through 2028. We have visibility into 2026 and have factored the agreement into our reiterated revenue guidance. We will provide 2027 guidance at the appropriate time, consistent with our annual practice, and won't speculate on the split between '27 and '28. We also look forward to other refresh opportunities and continued penetration of existing accounts, so this isn't a single item we'll be highlighting. Q: What has been the feedback on the Next Generation Tablo System from initial users, and what milestones are needed to transition to a full launch?A: Leslie Trigg (CEO): We are in the pilot phase and taking a measured approach to ensure the rollout is done well, given the size of our install base and the fact that we support about a million treatments a year. The sales team has begun educating customers, and we are hearing a lot of enthusiasm, particularly around the system's advanced cybersecurity features that meet the FDA's highest bar, as well as new features that improve the clinician and user experience. We expect high receptivity at full launch. While we won't disclose specific metrics for competitive reasons, we are monitoring user feedback, system performance, and data from the pilot to ensure it meets our high standards before a broader rollout. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Outset Medical, Inc.? Here are five stocks we like better. Q2 revenue reached $31.6 million, up 1% year over year and 14% sequentially, while Outset Medical reiterated its full-year revenue outlook of $125 million to $130 million. Management expects most growth to come in the third and fourth quarters. Non-GAAP gross margin improved more than 380 basis points to 42.2%, and the non-GAAP operating loss narrowed 7% to $12.4 million. The company ended the quarter with $151 million in cash and expects full-year cash usage below $40 million. Outset signed a $40 million HCA Healthcare refresh agreement extending through 2028, creating contracted backlog and potential additional expansion opportunities. The company estimates the broader refresh cycle could involve about 3,000 consoles and up to $150 million in console revenue over several years. Breakout Momentum Plays You Need to Know About Outset Medical (NASDAQ:OM) reported second-quarter 2026 revenue of $31.6 million, up 1% from a year earlier and 14% sequentially, as the dialysis technology company cited commercial progress, improving margins and a new $40 million refresh agreement with HCA Healthcare. Chair and Chief Executive Officer Leslie Trigg said the company’s second-quarter performance reflected “steady execution across revenue, gross margin, operating expense discipline, and cash management.” Outset reiterated its full-year revenue guidance of $125 million to $130 million, representing anticipated growth of 5% to 9% from 2025. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Outset’s Tablo platform is used by hospitals and other providers to support insourced dialysis programs. During the quarter, the company completed its highest number of successful new-site implementations in several years, according to Trigg. Chief Financial Officer Renee Gaeta said product revenue totaled $21.9 million, down 5% year over year. Console revenue rose 6% to $9.5 million, while consumable revenue declined 12% to $12.4 million against what Gaeta described as a difficult prior-year comparison. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Service and other revenue increased 17% to $9.7 million, supported by higher volumes and average selling price increases. Recurring revenue, including consumables, service, implementation services and freight, was $22.1 million, down 2% from the prior-year period. Non-GAAP gross margin improved to 42.2%, up more than 380 basis points from the second quarter of 2025. Gaeta attributed the improvement primarily to product-cost reductions, lower overhead and service efficiencies. Product gross margin was 46.1%, down about 280 basis points because of a higher mix of console sales, while service and other gross margin rose more than 2,400 basis points to 33.4%. → Ulta's Growth Is Real, But So Are the Risks “Gross margin performance reflects strong execution and keeps us on track towards our next milestone of a 50% company-wide gross margin,” Gaeta said. Non-GAAP operating expenses were $25.8 million, up 1% from a year earlier. The company reported a non-GAAP operating loss of $12.4 million, an improvement of 7% year over year. Outset ended the quarter with $151 million in cash equivalents, short-term investments and restricted cash. Cash use was $9.5 million during the quarter, and Gaeta said the company remains on track to use less than $40 million in cash for the full year. A central development during the quarter was Outset’s signing of a $40 million refresh agreement with HCA Healthcare. The agreement extends HCA’s and Outset’s commitment to insourced dialysis through 2028 and calls for HCA facilities already using Outset’s platform to update their fleets. Trigg characterized the agreement as Outset’s first refresh win and said it provides contracted backlog that improves revenue visibility and predictability. The $40 million figure does not include potential expansion into additional HCA facilities that do not currently use Tablo. Outset believes the refresh cycle could include approximately 3,000 consoles and represent up to $150 million in console revenue opportunity over the next several years. Company executives declined to provide more detailed timing or revenue-recognition expectations for the HCA agreement, citing customer confidentiality. Gaeta said HCA was part of the company’s second-quarter pipeline and contributed to the strong console performance, alongside expansion customers and other console placements. She said Outset has a pipeline containing a range of deal sizes. Management said the decline in consumables reflected comparisons with strong demand in the first half of 2025, when flu season and hospital census levels benefited the business. Gaeta said the company continues to see strong device utilization across customer segments and did not identify any concerning trends. Trigg said a higher number of site implementations in the second quarter reflected a prior delay between console sales and subsequent installations and training. She said those installations should support more normal ordering patterns in the future. One Texas health system trained more than 100 nurses through Outset’s clinical excellence team and supported 956 treatments during its first 60 days, Trigg said. The company also implemented new sites at a top-10 health system customer, hospitals within regional health systems and post-acute care facilities. Outset has established a customer-success program in which hospital customers are paired with clinical excellence team members who track operational, financial and clinical measures. In an independent Voice of the Customer assessment during the quarter, customers gave Outset an average recommendation score of 8.8 out of 10, according to Trigg. The company is also conducting a pilot phase for its next-generation Tablo system. Trigg said the update includes hardware and software enhancements intended to improve performance, reliability, cybersecurity and clinician experience. She said Outset is taking a measured approach to the launch and will evaluate user experience, feedback and system performance before a broader rollout. Outset expects most of its full-year growth to occur in the third and fourth quarters. In response to analyst questions, Gaeta said the company expects the third quarter could be affected by typical medtech seasonality, while the fourth quarter is expected to be stronger. Trigg said Outset’s commercial priorities include expanding sales coverage among the top 250 health systems, growing within existing accounts and pursuing new customer acquisition. She added that the company now serves all 10 of the largest health systems, all 10 of the largest post-acute providers and approximately 30% of the top 100 integrated delivery networks. Outset Medical is a medical technology company specializing in innovations for renal care. The company's flagship offering, the Tablo Hemodialysis System, is designed to streamline and simplify dialysis treatment across acute and outpatient settings. By integrating water purification, dialysate production, and treatment monitoring into a single device, Tablo aims to reduce the complexity and logistical burden traditionally associated with hemodialysis therapy. Tablo's modular design allows for rapid setup and flexible deployment in hospitals, clinics, long‐term care facilities and emergency response scenarios. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Outset Medical Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SAN JOSE, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Outset Medical, Inc. (Nasdaq: OM), a medical technology company pioneering a first-of-its-kind technology to improve clinical outcomes in dialysis with less cost and complexity, today reported financial results for the second quarter ended June 30, 2026. Second Quarter and Recent Highlights Net revenue totaled $31.6 million, an increase of 1% compared to the prior-year period and an increase of 14% sequentially. Recurring revenue, consisting of Tablo consumables and services, was $22.1 million, roughly even with the prior-year period. Gross margin expanded to 42%, an increase of more than 400 basis points compared to the prior-year period. Net cash used during the quarter was $9.5 million, resulting in a total cash, cash equivalents, short-term investments and restricted cash position of $151 million at quarter end. Signed a three-year, $40 million agreement with HCA Healthcare to refresh the existing fleet of Tablo systems across the nation’s largest health system. “Second quarter results reflect continued progress in strengthening the foundation of our business while positioning Outset for the next phase of growth,” said Leslie Trigg, Chair and Chief Executive Officer. “During the quarter, we completed our highest number of successful new site installations in several years. We also signed our first refresh agreement, which enhances backlog visibility and marks an important milestone as we begin to capitalize on a significant refresh opportunity. By reshaping how dialysis care is delivered across a large market that needs better solutions, Outset is well positioned to accelerate adoption, drive long-term growth and advance toward profitability.” Second Quarter 2026 Financial Results Revenue for the second quarter was $31.6 million, an increase of 1% compared to $31.4 million in the second quarter of 2025. Product revenue of $21.9 million decreased 5% from $23.1 million in the second quarter of 2025. Service and other revenue of $9.7 million increased 17% compared to $8.3 million in the second quarter of 2025. Recurring revenue from the sale of Tablo cartridges and service was $22.1 million, compared to $22.5 million in the prior-year period. Gross profit of $13.3 million increased 12% from $11.9 million in the second quarter of 2025. Gross margin was 42.0%, compared to 37.8% in the second quarter of 2025. On a non-GAAP basis, gross margin reached 42.2%, as compared to 38.4% in the second quarter of 2025. Product gross profit was $10.1 million, compared to $11.3 million in the second quarter of 2025. Product gross margin was 46.1%, compared to 48.9% in the second quarter of 2025. Service and other gross profit was $3.2 million, compared to $0.6 million in the second quarter of 2025. Service and other gross margin was 32.6%, compared to 6.9% in the second quarter of 2025. Operating expenses of $29.0 million were roughly even with the prior-year period. Research and development (R&D) expenses were $5.5 million, sales and marketing (S&M) expenses were $12.2 million, and general and administrative (G&A) expenses were $11.4 million. This compared to operating expenses of $28.7 million in the second quarter of 2025, including R&D expenses of $5.3 million, S&M expenses of $14.3 million, and G&A expenses of $9.2 million. Excluding stock-based compensation expense and litigation charges, non-GAAP operating expenses were $25.8 million, including R&D expenses of $4.9 million, S&M expenses of $11.7 million, and G&A expenses of $9.2 million. Net loss was $18.0 million compared to net loss of $18.5 million for the same period in 2025. On a non-GAAP basis, net loss was $14.7 million, which is relatively consistent with the same period in 2025. Total cash, including restricted cash, cash equivalents and short-term investments, was $151.0 million as of June 30, 2026. 2026 Financial Guidance Outset reiterated its 2026 revenue guidance of $125 million to $130 million, a 5% to 9% increase over $119.5 million in 2025. The Company continues to expect non-GAAP gross margin to range between the low-40% to mid-40% range for the full year. Conference Call Details Outset will host a conference call today, August 6, 2026, at 1:30 p.m. PT / 4:30 p.m. ET to discuss second quarter results. Those interested in accessing the live or archived version of the conference call can visit the “Investors” section of the Outset Medical website at https://investors.outsetmedical.com. Those interested in participating in the call via telephone may register online here. Once registered, participants will receive a dial-in number and unique PIN to join the call. Participants are encouraged to register more than 15 minutes before the start of the call. Use of Non-GAAP Financial Measures The Company may report non-GAAP results for gross profit/loss, gross margin, operating expenses, operating margins, net income/loss, basic and diluted net income/loss per share, other income/loss, and cash flows. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, financial measures calculated in accordance with GAAP. As listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release, the Company’s GAAP financial measures include stock-based compensation expense and litigation charges incurred outside of the ordinary course of business in connection with the stockholder class action and relative derivative lawsuits, as disclosed in the Company’s latest annual and quarterly reports. Stock-based compensation is a non-cash expense. In addition, litigation charges related to the above-described matters are excluded because they constitute non-routine litigation costs, arise outside of the ordinary course of the Company’s business, and are not indicative of its recurring operating results or underlying performance trends. As such, management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance and period-to-period comparisons. There are limitations related to the use of non-GAAP financial measures because they are not prepared in accordance with GAAP, may exclude significant expenses required by GAAP to be recognized in the Company’s financial statements, and may not be comparable to non-GAAP financial measures used by other companies. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in Appendix A of this press release. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results and other events may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements include, but are not limited to, statements about the Company’s possible or assumed future results of operations and financial position, including expectations regarding projected revenues, gross margin, operating expenses, capital expenditures, cash use, cash burn, cash position, profitability and outlook; statements about the sufficiency of the Company’s cash balances through cash-flow breakeven; statements regarding the anticipated impacts and benefits of the Company’s cost reduction actions, initiatives to optimize the commercial organization and improve forecasting and order visibility, and restructurings; statements regarding anticipated customer orders, refreshes, expansions or other business opportunities, including the expected closing, timing, size, scope and benefits thereof; statements regarding the Company’s overall business strategy, plans and objectives of management; statements regarding the anticipated launch and timing of product enhancements and new features, as well as new or expanded services, and the expected benefits, performance, and impact thereof; the Company’s expectations regarding the market sizes and growth potential for Tablo and the total addressable market opportunities for Tablo; continued execution of the Company’s initiatives designed to expand gross margins; the Company’s ability to respond to and resolve any reports, observations or other actions by the Food and Drug Administration or other regulators in a timely and effective manner; as well as the Company’s expectations regarding the impact of macroeconomic factors (including changes in tariff or trade laws and policies) on the Company, its customers and suppliers. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results or other events to differ materially from those contemplated in this press release can be found in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission, including its latest annual and quarterly reports. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements speak only as of their date and, except to the extent required by law, the Company undertakes no obligation to update these statements, whether as a result of any new information, future developments or otherwise. About Outset Medical, Inc. Outset is a medical technology company transforming the dialysis experience across the continuum of care with a first-of-its-kind technology. The Tablo® Hemodialysis System, FDA-cleared for use from hospital to home, is trusted by more than 1,000 U.S. healthcare facilities and has enabled millions of treatments delivered by thousands of nurses. Designed to reduce the cost and complexity of dialysis, Tablo combines water purification and on-demand dialysate production into a single, integrated system that connects seamlessly with Electronic Medical Record systems and a proprietary data analytics platform. This enterprise solution empowers providers to develop an in-house dialysis program where they are in control – enabling better operational, clinical, and financial outcomes. Outset is redefining what’s possible in kidney care through innovation, scale, and a relentless commitment to improving the lives of patients and the professionals who care for them. For more information, visit www.outsetmedical.com. Investor [email protected]

Minot Light Capital Partners, an investment management company, released its “Capital Appreciation Fund" Q1 2026 Investor Letter. A copy of the letter can be downloaded here. The fund declined by 2.7% in the first quarter of 2026 due to a sharp macro-driven sector rotation following geopolitical tensions, which triggered inflation fears and rising interest rate expectations. This scenario led to a shift in investor focus toward sectors such as energy, defense, and AI-linked stocks, while the fund’s core exposure to healthcare, consumer, and idiosyncratic industrials lagged. Despite this setback, the firm maintains a constructive long-term outlook, suggesting that the current market volatility and consensus-driven market narratives are creating attractive opportunities in out-of-favor sectors where it continues to find compelling valuations and expects eventual mean reversion to drive future returns. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026. In its first-quarter 2026 investor letter, Minot Light Capital Appreciation Fund highlighted stocks like Outset Medical, Inc. (NASDAQ:OM). Outset Medical, Inc. (NASDAQ:OM) is a medical technology company focused on dialysis systems designed to simplify kidney treatment. The one-month return of Outset Medical, Inc. (NASDAQ:OM) was -11.72% while its shares traded between $3.00 and $21.98 over the last 52 weeks. On May 12, 2026, Outset Medical, Inc. (NASDAQ:OM) stock closed at approximately $3.84 per share, with a market capitalization of about $71.18 million. Minot Light Capital Appreciation Fund stated the following regarding Outset Medical, Inc. (NASDAQ:OM) in its Q1 2026 investor letter: Outset Medical, Inc. (NASDAQ:OM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 22 hedge fund portfolios held Outset Medical, Inc. (NASDAQ:OM) at the end of the fourth quarter, which was 23 in the previous quarter. While we acknowledge the risk and potential of Outset Medical, Inc. (NASDAQ:OM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Outset Medical, Inc. (NASDAQ:OM) and shared the list of most volatile stocks under $5. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years Disclosure: None. This article is originally published at Insider Monkey.

Image source: The Motley Fool. Wednesday, February 11, 2026 at 5 p.m. ET Chief Executive Officer — Leslie Trigg Chief Financial Officer — Renee Gaeta Need a quote from a Motley Fool analyst? Email [email protected] Leslie Trigg: Thanks, Jim. Good afternoon, everyone, and thank you for joining us. 2025 was a year of progress and transformation at Outset Medical, a year where we overcame adversity to emerge with a stronger foundation and even deeper capabilities to help hospitals, health systems, post-acute and home providers improve patient care outcomes at lower cost and with less complexity. During the year, we substantially reduced our cost structure while making significant investments to extend our technology and service leadership. These investments were key to our announcement 2 weeks ago about the FDA clearance of our next-generation Tablo platform. Second, we meaningfully strengthened our team and infused new talent into key leadership roles, in finance, medical affairs and field service. Third, we recapitalized the company with less debt and new capital to fund Outset through cash flow breakeven and beyond. Fourth, we expanded our base of published evidence, demonstrating the significant clinical, operational and financial benefits that can be achieved by in-sourcing with Outset and Tablo. In particular, the clinical value proposition came into clear focus as our customers documented even more evidence of improved clinical outcomes. Fifth, we maintained a very high customer satisfaction or CSAT score, above 95%, for the exceptional customer service we provide. And lastly, we continue to sign new agreements for the in-sourcing of dialysis at new and expansion sites, including at one of the largest national health systems in the country with well over 100 facilities. Tablo is now used at roughly 1,000 acute care sites in the United States. Turning to our financial results for the year, we announced preliminary fourth quarter revenue last month, which came in at the high end of our revised guidance range. At $119.5 million, revenue grew by 5% over 2024 and sets us up for what we anticipate will be an even stronger growth year in 2026. As we have worked toward greater consistency and predictability in our top line results, we continued our steady 5-year expansion of gross margin to finish the year at 39.6% non-GAAP gross margin. Gross margin exiting the year was well above 40%, which keeps us on a trajectory to our next milestone of 50%. Moving to our end markets, I am most proud of the progress we made during 2025 strengthening our partnership and presence with acute and post-acute care providers. We began to see vocal champions emerge throughout our customer base because of the clinical and operational benefits that can be achieved by in-sourcing with Outset. The financial benefits have long been understood and remain a key selling point. In 2025, we saw new momentum from nursing leaders sharing their experiences with improved clinical outcomes as well: lower infection rates, reduced length of stay and higher nurse satisfaction with the dialysis service line that is in-sourced with Outset. Operationally, from gross margin expansion to product innovation, to operating expense performance, we made meaningful progress in 2025 and took strides on our path to profitability. In the past year, we reduced cash usage by $70 million, increased gross margin by more than 500 basis points and continued to narrow our operating loss. Additionally, we made investments in innovation to further extend our technology lead and, just 2 weeks ago, received FDA clearance for the next-generation Tablo platform. This new platform is the first dialysis system cleared under the FDA's 2025 cybersecurity requirements and includes hardware and software enhancements that improve performance and system reliability as well. A 2025 survey of U.S. health care IT and cybersecurity professionals, published in The HIPAA Journal, found that 93% of health care organizations had experienced at least 1 cyberattack in the past 12 months, with an average of 43 attacks per organization annually. Cyberattacks slow patient care, reduce the hospital capacity and create staffing strain. More than 70% of hospitals experiencing a significant cyberattack report direct patient care disruption, which is why health systems now treat cybersecurity as a critical patient safety issue. A dialysis system that meets FDA's most stringent cybersecurity requirements helps protect hospitals by reducing the risk of compromise, limiting the risk of spread and safeguarding patients. We view Tablo's secure-by-design architecture, multilayer authentication and resilience against unauthorized access, as well as its compliance with FDA's rigorous cybersecurity standards, as a significant new competitive advantage. It provides yet another compelling value proposition, on top of cost savings and on top of clinical outcomes improvement, that we believe will be recognized by health systems amid ever-increasing concerns over cybersecurity, continuity of care and patient safety. This clearance is the 10th 510(k) for Outset, building on our track record of innovation in the dialysis market. The next-generation Tablo is also a new foundation from which we intend to innovate further with future enhancements planned, to widen and deepen the moat we have already established in the acute and home market. We are excited for the planned launch toward the end of the second quarter. Turning to our commercial organization, our team executed well in the fourth quarter against many of the largest opportunities in our pipeline. We closed the deal that had shifted out of the third quarter and made meaningful progress on several others. I am proud of the fourth quarter execution our sales leadership team demonstrated and optimistic about the additional strides we can take in 2026. Our strong pipeline is reflective of the benefits that can be achieved by in-sourcing dialysis with Outset's proven technology, expert know-how and exceptional service. And now together with the next-generation Tablo launching this year and a rich roadmap of additional innovations to follow, we expect to drive growth for many years to come. With that, I'll turn it over to Renee for more detail on the year and our guidance for 2026. Renee Gaeta: Thank you, Leslie, and good afternoon, everyone. Revenue in the fourth quarter of $28.9 million consisted of $19.9 million in product revenue, which, as expected, was below $21 million in the fourth quarter of last year. The components of product revenue include console sales, which grew 11% to $6.4 million, and consumable sales of $13.5 million. As we indicated last quarter, consumable sales were lower in the quarter compared to the fourth quarter of last year due to order timing. Consumable revenue did rebound sequentially, just as we had anticipated on last quarter's call based on our Tablo utilization data, growing nearly 11% over the third quarter. We were very active during the quarter to tighten up our forecasting methodology for treatments, which now includes closer collaboration with our largest customers on their ordering patterns. I believe we have made improvements to better predict treatment demand, and we will continue to monitor Tablo utilization and ordering data as we hone our approach. Service and other revenue of $9 million grew 6% from $8.5 million in the prior year period. Recurring revenue from the sale of Tablo consumables and service was $22.5 million, again growing sequentially, as we anticipated on last quarter's call, but down from the fourth quarter of 2024 due to customer ordering patterns that resulted in a strong fourth quarter in the prior year. Next, I will walk through our gross margin and operating expenses for the quarter. Please refer to the tables in today's earnings release for a reconciliation of GAAP to non-GAAP measures. Non-GAAP gross margin expanded more than 500 basis points from last year, reaching 42.9% for the quarter, even with another 130 basis-point headwind from the under-absorption of manufacturing overhead. Excluding the manufacturing headwind, we would have seen non-GAAP gross margin closer to the mid-40% range. Product gross margin increased 640 basis points year-over-year to 50.7%, from 44.3% in the fourth quarter of 2024. This marks the first time product gross margin has exceeded 50%. Service and other gross margin was 25.6%, growing 470 basis points from 20.9% in the fourth quarter of 2024. This progress keeps us right on our path to the next milestone of 50%. Moving to operating expenses. Non-GAAP operating expenses declined nearly 4% to $25.7 million, compared to $26.6 million in the fourth quarter of 2024. Non-GAAP operating loss was $13.3 million, 14% below the operating loss of $15.5 million in the prior year period. Non-GAAP net loss of $15 million was 22% lower than $19.3 million in the fourth quarter of 2024. These positive results reflect our drive to profitability. Moving to our balance sheet, we ended the quarter with $173 million in cash, cash equivalents, short-term investments and restricted cash. We used approximately $9 million in cash during the quarter. To close out the full year of 2025, we reported revenue of $119.5 million, a 5% increase over 2024. Product revenue was $84.8 million, a 5% increase over $81 million in 2024. Service and other revenue was $34.7 million, a 6% increase over $32.7 million in 2024. And recurring revenue was $88.7 million, also a 6% increase over $83.9 million in 2024. Non-GAAP gross margin for the year increased 400 basis points to 39.6%, or 41.1% excluding the impact of manufacturing under-absorption. For the full year, the under-absorption headwind was 150 basis points, right on our forecast, and will have a diminishing effect in 2026. Non-GAAP operating expenses in 2025 were $97.8 million, a 19% reduction from $120.7 million in 2024. Non-GAAP net loss was $65.4 million, a 31% decline compared to $94.8 million in 2024. Turning to our guidance for 2026, we expect revenue to be in the range of $125 million to $130 million, a 5% to 9% increase over 2025. In terms of revenue timing, we expect the first quarter to be roughly flat to the fourth quarter of 2025, and then stepping up through the rest of the year. For non-GAAP gross margin, we expect to be in the low to mid-40% range. A higher console mix would move gross margin lower in the range just as a higher mix of consumables would move gross margin to the higher end of the range. We expect the manufacturing under-absorption that was a headwind in 2025 to attenuate as we move through 2026. Finally, we anticipate continued operating leverage this year with operating expense growth at roughly half the rate of expected sales growth. In terms of cash use, we expect Q1 to be our highest cash use quarter for the year due to planned investments in inventory and manufacturing. On a full year basis, the combination of revenue growth, gross margin expansion and expense discipline will enable us to use less cash in 2026 than the $46 million we used in 2025. With that, I will turn the call back to Leslie for closing comments. Leslie Trigg: Thanks, Renee. I want to close by reiterating that we operate in 2 large end markets where we remain the clear technology leader. Tablo consoles have performed more than 3 million cumulative treatments. And what is even more astounding is the depth and the breadth of our data repository. There are now more than 8 trillion data points in our cloud platform, which helps fuel our analytics and innovation engines, improves the customer experience and ultimately enhances patient care. We're gaining scale with significant growth runway ahead through hundreds of master sales and service agreements already in place and a pipeline of new customer opportunities. All of this progress sets a powerful foundation for value creation over the long term. Providers, including many of the largest health systems in the country, are realizing the advantages that in-sourcing with Tablo can deliver. Our team is differentiated by its expertise and an unwavering commitment to our customers and the patients they serve. I expect we will demonstrate that commitment again in 2026 as we drive growth and move ever closer to profitability. With that, I think we are ready for Q&A. Operator, please open the lines. Operator: [Operator Instructions] One moment for the first question today, which will be coming from the line of Marie Thibault of BTIG. Marie Thibault: I wanted to start here with next-gen Tablo. Thanks for the background on the advantages that system will offer. Can you tell us a little bit about how that might change the markets that you can go after, the types of hospitals you can go after, whether it might change your sales cycle time lines? And any ASP lift that we might see as well from that launch? Leslie Trigg: Sure. I'm happy to address that. Thanks for the question and hello. Yes. So let me talk a little bit more about that. It's one of my favorite topics right now because we are really proud of the work that went into this and what we believe will be the value that we deliver to hospitals. I myself have talked with so many hospital leaders around cyber, and particularly those that view vendor devices as their biggest vulnerability. They not only have to worry about the security of their own network, but of course, increasingly, all of the different devices that are connected to it. So I think it's more than fair to say that health system executives have an extremely heightened focus on the cyber safety of the medical devices being used in their environment. So given the fact that we now have the first dialysis system harmonized with FDA's very rigorous cybersecurity standards, I do believe it will help us generate incremental attention and interest among potential customers, I'd say, regardless of size, maybe to hit on one part of your question. I haven't seen a big difference in the level of cybersecurity attention between small, medium or large hospitals. They're all concerned about it, because it's something that they increasingly view through the lens of like fundamental patient safety. So yes, I do think that this will be a potential tailwind, a potential catalyst for us in 2026 and obviously beyond. I do think that it could -- again, very early, we just got the approval a couple of weeks ago, so too early to speculate. But minimally, I think that we will see incremental attention and interest. And I do think that our ability to offer hospitals sort of advanced cyber safeguards will be very positively received. In terms of the ASP lift, look forward to giving you more specifics on that as we get a little closer to the launch a little bit deeper in the year. We do, I think, philosophically, we have always followed a philosophy around pricing for value. And we believe that value to this upgrade is quite significant. But I'll close by saying stay tuned as we get a little deeper into the year on specifics. Marie Thibault: Okay. Very helpful, Leslie. And then a quick follow-up on the sales force and the deal pipeline. It certainly sounds like you've tightened up the process so that you have cleaner visibility into timing and the deals. But can you tell us anything about the stability of the sales force? Was there any attrition post the leadership leaving? And are there any updates on the search for the leader? And anything sort of on how you're viewing the deal pipeline now given the guidance of sequentially flat for first quarter? Leslie Trigg: Absolutely. Yes. Well, I think as I reflect on Q4, and I'll say, current state, today, we do have an experienced sales leadership team. They did an excellent job at keeping the organization focused on the quarter. I think the results of Q4 reflect that, albeit on a revised guidance range. We did execute at the top of that revised guidance range. We did see the treatments renormalize. We did see the deal from Q3, that slipped, close in Q4. We did see console sales bookings land exactly where we expected them to land in Q4. So all of that was encouraging. Now as we kind of look forward, Renee and I remain very hands-on inspecting the pipeline and forecasted deals. And we're still operating at a very detailed level. We'll obviously continue vigilant monitoring. But in terms of the stability and focus of the sales organization, I'd say, so far, so good. We do still have a search underway, which is being done for us by a leading executive search firm. Because we do have a very strong and capable sales leadership team in place today, it is affording us the time to find the best of the best. So we're being very deliberative and to ensure that we have the best cultural and operational fit for the business. Maybe lastly, I think -- what? Marie Thibault: Sorry. I was just saying thank you. Leslie Trigg: Thank you. But I was going to address the third part of your question, which I think was pipeline in Q4 and kind of across 2025. So looking back on the year in full, yes, the pipeline did grow across all the key metrics that we measure, which are the overall size of the pipeline, the average deal size, in particular, deals over $1 million in console value. And then we also look at: does the pipeline look healthy in terms of diversification? And we look at diversification a couple of different ways. One is diversification between new customers, who are coming into the pipeline interested in moving from outsourcing to in-sourcing with Outset, and then existing customers who are already in-sourced with Tablo and looking at expansion to new facilities based on the clinical or operational and financial benefits that they've already seen and proven after themselves. So yes, we do see good diversification between new and existing. We also look at the diversification in terms of hospital size. We see good diversification between kind of the big, brand-name, beachhead health systems that have entered our pipeline, but also medium-sized hospitals and small hospitals. And I'll maybe take an opportunity just to touch on a point that's adjacent to your question, Marie. When I talk about small hospitals, we're really proud of the impact, albeit early, it's nascent, but the impact that we have had in '25, and we expect to have in '26, with critical access hospitals. These are hospitals that are increasingly looking at standing up new dialysis service lines because dialysis clinics in their local, rural communities have closed. And the patients, therefore, in these rural areas do not always have access to any sort of dialysis care, which obviously is problematic because it is a life-sustaining therapy. And so we are proud of the partnership that we're starting to effectuate with critical access hospitals, to ensure that these rural communities have consistent access to dialysis. So very long-winded answer, I apologize for that. But in terms of pipeline diversification, across the size and type of the hospitals, I think we are very well balanced, again, across large enterprise solution level deals, again, all the way down to critical access hospitals and sort of everything in between. Operator: And our next question is coming from the line of Joshua Jennings of TD Cowen. Joshua Jennings: I wanted to follow up on Marie's question you answered, Leslie, just on the pipeline diversification. Is there any way to -- or 2 questions within one. One, can you quantify the pipeline growth entering '25 versus entering '26 or vice versa? And then just as we think about the potential to expand your current customer base and just the sales cycle associated with those deals, is there any -- is there a prioritization for the sales force to reduce the sales cycle? Or is the mix appropriate, I think, as you stated? Any strategic attack plan just in terms of the different buckets within the pipeline, thinking about contracting the sales cycle over the next 12 to 24 months? Leslie Trigg: Yes. Thanks, Josh. Those are all great questions. I'm going to answer them with a little bit of sensitivity from a competitive standpoint, but let me see if I can at least provide some helpful color. So you really hit the nail on the head when you talked about the sales cycle. And that's exactly why diversification in the pipeline around deal size is important and why the diversification between sort of new customers and expansion customers is important. The larger the deal, the longer the sales cycle. And that's not unique to Outset. That's, I think, universal to any capital equipment business. When customers are new to Outset, obviously, you've got a few extra steps around master sales and service agreements and OAs, et cetera, long before you get to a PO. And that always adds some time. When you're dealing with enterprise solution opportunities, you are talking about 10 hospital conversions, 15, 20 or more hospital conversions, sometimes all at the same time. And those are big decisions. We recognize that those are big, important decisions. And so understandably, those types of deals are going to involve more stakeholders at the health system level. You not only are working with a system CNO. As for example, if it's a 15 or 20-hospital system, you also need to make sure that all other 15 or 20 local level CNOs are on board and enthusiastic. And so that takes a bit more time. So when we look at the larger enterprise opportunities, our sales cycle, and we've shared this before, it remains, I would say, in that 9 to 12-month plus-plus range that it can be as long as 1.5 years. At the same time, when we look at deals that are much smaller, that is closed, that can be as little as 3 to 6 months. And so as we think about the design of our pipeline, the management of the pipeline, that's exactly how we're thinking about it, Josh, is really about a balance between sales cycle time. You also asked me about the sales force focus, and here I'll be a little bit more artful. But I would say that we are focused on serving any and all hospitals and post-acute facilities that want to kind of control their own destiny when it comes to the clinical, operational and financial benefits of in-sourcing versus outsourcing. With that being said, yes, you're right that if you're thinking about customers who already have a footprint with in-sourcing in Tablo, in the theoretical, that often can have a shorter sales cycle with lower barriers to adoption. But again, I want to stress, we're focused on serving everyone who wants to control their own destiny moving forward for better patient care. Hopefully, that provides a little bit of helpful color. Joshua Jennings: No, definitely. And maybe a little bit too granular, but just any color on or quantification of, I guess, the pipeline ending '26 versus '25? Leslie Trigg: Yes. We saw about the same amount of growth in the pipeline as we did between '24 and '25. We saw, again, about the same rate of growth between '25 heading into -- year-end '25 heading into the beginning of -- sorry, year-end '24 and the year-end '25, about the same rate of growth as we did the prior 12 months. So I continue to be very encouraged about the demand that we're generating. And I think that some of the pipeline -- I know that some of the pipeline expansion more recently has been because of this new clinical value proposition that's been emerging and then published increasingly by our own customers, seeing a reduction in length of stay, a reduction in CLABSI rates, even a reduction in code blues during dialysis treatment. And I have understood from potential customers that has driven, I would say, an incremental wave of interest beyond the financial ROI benefits that have been long understood with in-sourcing with Tablo for a couple of years now. Joshua Jennings: Great. Just sneaking one more, sorry. Multipart question on that last one. But just thinking on the guide and 5% to 9% revenue growth, any help just thinking about, as we're forecasting, updating our models, console growth versus consumable growth within that range? Renee Gaeta: Sure, Josh. Happy to step in here. I think as we sat back and thought about the guidance range, we absolutely looked at it across the 3 primary components of revenue and the different puts and takes to each of those. So you're right in that our 5% to 9% growth is our -- what we believe is our balanced, best approach for right now for the full year. And I would believe that -- my position is that you should think about forecasting growth for recurring revenue to be roughly in line with that top line growth. And as you can even see from what we just performed on for 2025 against 2024, we saw very consistent revenue growth in console, consumables and service. Operator: Our next question will be coming from the line of Kendall Au of RBC. Kendall Au: I just had like 2 modeling questions. I know you guys continue to track ahead of expectations on gross margins. Is there any update on the time line to get into that 50% mark? Can you achieve that prior to exiting 2027? And then also, I have a quick question, does your current cash -- is that enough right now for you to reach profitability? Or do you need to raise any more cash before reaching that point? Renee Gaeta: Sure. Yes, great questions. I think as you can see -- on gross margins alone, you can see that year after year we continue to execute against our gross margin and, just last year, had a 500 basis point improvement. So we are continuing to march towards that pathway. And as you've indicated, our goal is 50%. And we just saw that even with just product gross margin for Q4. We're going to guide for the current year to, as I mentioned, sort of the low to mid-40% range. But we do feel as though that 50% absolutely is within our planning horizon. I'm just not going to give a formal year to when we're going to achieve that, but we absolutely look forward to doing that and sharing that with everyone at that time. Specific to cash on the balance sheet, I think as you think about we've got $173 million in cash, cash equivalents and investments, as you've seen just from our performance in this past year, we brought operating cash burn down from $116 million in 2024 down to $46 million in 2025. And as stated on our call, we will look to better improve against that in 2026 as well. And we absolutely believe that we've got sufficient cash on the balance sheet to get us to profitability and beyond. Kendall Au: I really appreciate the color there. And then I have just quick question on capital budget. I was wondering what you're seeing on the hospital capital budget environment right now. Do you feel like it's up year-over-year? And also, what's the state right now? And then also, can you give me a little commentary, I know you talked about having a backlog, is that still -- like, can you talk about the size and maybe the scale of that right now for Tablo? Leslie Trigg: Sure. Yes. Well, on the capital spending front, we are not seeing any material changes, at least in the customers that we're calling on or the customers that are in our pipeline, we have not really observed any material changes in their planning or how they're thinking about capital spending for 2026. So nothing systematic or widespread that changes our outlook either near term or long term. Backlog, yes. That has been an important lever for us in the past. It remains an important lever for us as we move forward over the planning horizon. And I would say we feel very good about where we're entering 2026. And that will continue to be one of the KPIs that we measure ourselves against as we move through the year and into '27. Operator: And our next question is coming from the line of Rick Wise of Stifel. Frederick Wise: Just I want to have some follow-up questions sort of building on a lot of the excellent questions already discussed. On the next-gen Tablo system, it's great to see it, a couple of follow-ups. One, is there an upgrade opportunity here? Like, does your existing installed base upgrade for a nominal fee? Is it a whole new Tablo they would buy? Is there an opportunity to upgrade your entire existing base at a full cost of a new Tablo, whatever that ASP would be? Maybe just help us understand that. Could you talk a little bit more -- the cyber security topic is obviously compelling alone, but help us understand some of the additional, some of the other new features and capabilities and how that might add to Tablo's luster and ease of use and clinical utility? And then I have a related follow-up question to that. Leslie Trigg: Okay. Great. Yes. Perfect. Why don't I -- I'll try to address the first part and then we can go to your part two. So on the next gen and the upgrade opportunity, short story long, yes. Our existing installed base customers will have full access to this upgrade. They will be able to upgrade. At the same time, new customers will also have an opportunity to buy new Tablos that already contain, because they've been manufactured in, already contain all of the software, hardware and cyber upgrades that I'm about to elaborate on in 1 second. So yes, this is a full access upgrade both for -- that will be available to the current installed base and also new customers moving forward. You also talked about or asked about what are some of the details around -- on the cyber front, what does that really mean? Gosh, this could be like an hour-long conference call that I -- a podcast, that I'm sure you all would really enjoy, but I will try to keep my answer brief. This was a massive amount of work for our team and took us many, many, many months of technical achievement to reach. But for example, we updated physical network cloud connections with new software and hardware changes. We added many, many, many new security controls. We have -- our software now has round-the-clock cyber monitoring. In terms of the device performance itself and some of the reliability improvements, those, again, it's new software, a new operating system, new hardware. And how this translates to the customer benefit was something you also asked me about. Well, number one, we're always focused on improving uptime, which in and of itself improves the user experience. And so when you've got device performance enhancements, reliability enhancements, you are improving uptime. The availability of that device, the more the device is available, the better the patient care experience, patient care can be delivered when it is needed by the patient. And then, of course, the user experience with nurses and biomeds in the hospital, will be beneficiaries of the device performance and the reliability improvements as well. And I think I'll say moving forward, we're not done. We are extremely committed to what I like to call customer-centric innovation. Not inventing things because we can, from an engineering standpoint, but inventing things because we've heard them from users. Feedback, ideas. The improvements in this next-gen are a direct example of kind of this customer-centric orientation and very reflective of many of the suggestions and ideas we've gotten directly from our nurse users and others within the acute care and post-acute environment. Frederick Wise: Great. And just to build on that, just in the simplest of terms, is -- and you haven't told us the ASP or whether it's more or less or equal to the current generation of Tablo. But if I assume it's -- there are more features and the cybersecurity is an incremental value and it's higher, what does this all mean for your gross margins once you're fully launched? Is this margin-accretive at that point? Is there a manufacturing learning curve, and so it actually depresses them initially as you launch? And maybe just related -- sorry to ask such a multipart question, but what's in your guidance at this point? A first or second half guide. Then bringing that gross margin question into it, how do we think about the new Tablo impacting margins? Thank you for dealing with all that. Renee Gaeta: No problem, Rick. This is Renee. I'll help sort of answer some of the gross margin questions and, in particular, how we're thinking about this. So as Leslie mentioned, we're working on the commercial launch strategy and how the Q2 time frame around that where, hopefully, we'll give additional clarity specific to ASPs. But I would say we absolutely think that there is value to product innovation and that this product just continues our innovation pipeline and that customers will see value in that. Specific to gross margin, you could imagine then that could be a potential tailwind specific to revenue throughout the year, but also gross margins. We've strategically thought about this product launch, this product generation, as Leslie just mentioned, the ability for current customers to upgrade their devices if they so choose, what future manufacturing of devices look like, plus also the units that I have on hand in finished goods at the moment. The functionality, we really thought about this when we were designing this next generation. And the ability to have that flexibility to upgrade, to add the components and, of course, add the software. So current state within our gross margin guide, we've factored it in, I would say, similar to how you can think about gross margin. Right now, we currently don't expect it to be sort of a big detriment. I know sometimes companies have that when they're switching generations or versions of their device. We think this will be relatively a mild impact. And of course, the more consoles that we do sell, that has a dampening effect on gross margin, as you know, from our history. So in some ways, I'd love to sell -- have a tailwind from this and sell more consoles, have higher top line revenue growth, that could dampen in the near term gross margin. But as we've thought about it in the current guide, both from a revenue perspective and a gross margin range, we need -- the commercial launch will be sort of late Q2. So it will be back-end -- included in our back-end assessment, and let's see how that launch goes and how it rolls through the summer months. Operator: That does conclude today's Q&A session. I would like to turn the call back over to Leslie now for closing remarks. Please go ahead. Leslie Trigg: Great. Thanks to everybody for joining today. I'd like to thank -- close by thanking our customers and our team for the very, very meaningful difference that they make every day in the lives of dialysis patients. I hope you all have a great evening. Operator: Thank you so much for joining today's conference call. This does conclude today's meeting. You may now disconnect. Before you buy stock in Outset Medical, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Outset Medical wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $471,827!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,319,291!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Outset Medical. The Motley Fool has a disclosure policy. Outset Medical (OM) Q4 2025 Earnings Transcript was originally published by The Motley Fool

Interested in Outset Medical, Inc.? Here are five stocks we like better. Q1 revenue was $27.9 million, down slightly year‑over‑year due to lumpiness in capital order timing, but management reaffirmed full‑year guidance of $125–$130 million and expects the bulk of growth to come in Q3–Q4. Margins and cash improved materially—non‑GAAP gross margin rose 620 bps to 43.8% and non‑GAAP net loss narrowed to $15.4 million—while the company ended the quarter with $161 million in cash and now expects full‑year cash usage of less than $40 million. Next‑generation Tablo is slated for a limited release in Q2 into Q3 with a full launch thereafter, touting hardware/software upgrades and being positioned as the first dialysis system cleared under the FDA’s 2025 cybersecurity requirements, which management says could accelerate replacements and create new EMR integration revenue opportunities. Breakout Momentum Plays You Need to Know About Outset Medical (NASDAQ:OM) reported first-quarter 2026 revenue of $27.9 million, as management pointed to “consistent execution” in console utilization, new customer additions, gross margin expansion, and cash discipline, while acknowledging that capital order timing weighed on results. Chair and CEO Leslie Trigg said the quarter’s revenue was “down slightly from the fourth quarter due to the lumpiness of capital sales,” but emphasized the company “remain[s] confident” in its full-year growth plan, supported by a deep sales pipeline and an upcoming next-generation Tablo launch. → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% Chief Financial Officer Renee Gaeta said revenue declined 6% year over year from $29.8 million in the first quarter of 2025, “largely due to some lumpiness in the timing of capital orders.” Product revenue was $18.6 million, down 13%, including capital sales of $5.4 million. Consumable sales were “a bit stronger than anticipated” at $13.2 million, Gaeta said. Gaeta added that about $1 million in capital deals shifted out of the first quarter and are expected to close later in the year, noting the company had anticipated this year-over-year dynamic on its prior earnings call. Service and other revenue rose 10% to $9.3 million, and recurring revenue from consumables and service totaled $22.5 million, which Gaeta said was roughly flat sequentially and versus the prior-year period, “both as we anticipated.” → Light Speed Returns: Corning Cashes In on NVIDIA Growth Outset posted notable margin improvement. Gaeta said non-GAAP gross margin expanded 620 basis points year over year to 43.8%. Product gross margin increased 400 basis points to 52.4%, driven by sales mix, while service and other gross margin improved to 26.7%—up more than 1,600 basis points from 10.3% a year earlier—reflecting what she described as “strong execution” and progress toward “the next milestone of 50% company-wide gross margin.” Non-GAAP operating expenses increased nearly 4% to $25.6 million, which Gaeta attributed to investments in systems and people. Non-GAAP operating loss was $13.4 million, in line with the prior year. Non-GAAP net loss was $15.4 million, improving 32% from $22.8 million in the first quarter of 2025. → Years in the Making, AMD’s Upside Movement Has Just Begun On cash, Gaeta said Outset ended the quarter with $161 million in cash equivalents, short-term investments, and restricted cash. The company used approximately $12 million during the quarter, which she said was less than previously forecast due to expense discipline and working capital management. Looking ahead, Gaeta said Outset now anticipates using less than $40 million for the full year, “roughly 15% better than we previously expected.” Management reaffirmed full-year 2026 guidance. Gaeta said Outset continues to expect revenue of $125 million to $130 million, representing 5% to 9% growth over 2025, with “the majority of the 2026 growth coming in the third and fourth quarters.” She also reiterated expectations for full-year non-GAAP gross margin in the low-to-mid 40% range, citing the mix effects of console shipments versus consumables. In the Q&A, Stifel analyst Rick Wise asked for more detail on the capital order “variability and lumpiness.” Trigg said the pipeline “did continue to grow in Q1,” with strength across size, diversity, and maturity. She said Outset is “in the late stages of several large new deals” expected to close in 2026 and sees “an emerging refresh opportunity” among existing customers with older Tablo fleets who have communicated an intent to buy replacement units “in future quarters and in future years.” Trigg characterized the primary challenge as close timing, noting the capital sales cycle is “less predictable” than utilization once consoles are installed. She said deals that slipped out of the first quarter are expected to close in the “Q2 through Q4 timeframe,” supporting confidence in the annual outlook. Wise also asked about quarterly phasing. Gaeta said the company expects a “modest step-up” in the second quarter, with more growth in the third and fourth quarters. She added that results should show “sequential step-up in each quarter,” while emphasizing that the timing of capital order closes will influence the cadence. TD Cowen analyst Colin Clark pressed on what underpins the company’s confidence in closing delayed orders. Trigg said confidence is informed by deal staging and Outset’s growing ability to use historical data to estimate close probabilities across quarters. She said the company has visibility into both new customers and existing customers expanding based on their financial and clinical results with Tablo. Trigg said Outset is preparing for an initial transition to next-generation Tablo later in the second quarter, with a “limited release extending into the third quarter, then ramp to a full launch.” She described the next-generation system as including hardware and software enhancements intended to improve performance and reliability, and said the platform is “the first dialysis system” Outset believes has been cleared under the FDA’s 2025 cybersecurity requirements. Trigg framed cybersecurity as an increasingly important purchasing factor for hospitals and health systems and said the company views Tablo’s “secure-by-design principles” and layered access controls as a “significant new competitive advantage.” In Q&A, she added that the next-generation system “could” accelerate replacement timelines for older Tablo consoles. The company also introduced Derick Elliott, who joined as EVP of Commercial about a month prior to the call. Elliott said he has spent his first month reviewing the business, meeting leadership and sales teams, evaluating pipeline and forecasting methods, and visiting customers. He cited more than 30 years of experience serving similar hospital customers, including 17 years at Stryker in sales leadership roles. Elliott said his near-term priorities include helping the commercial organization prepare for the next-generation Tablo launch and supporting customer-level efforts to advance and close business in 2026. Separately, Clark asked about EMR integration, referencing a company webinar with Reid Health. Trigg said Tablo currently offers one-way data transfer and is directly integrated with Epic, Cerner, and other EMRs, enabling treatment data to upload to a health system’s EHR after each treatment. She said Outset sees an opportunity to add a future bidirectional feature that would allow prescription data to transmit from the EMR to Tablo, which she said could deliver value for customers and represent an incremental recurring revenue opportunity through additional EMR features. In closing remarks, Trigg said more than 1,000 facilities are using Tablo and that more than 3.5 million cumulative treatments have been performed. She also pointed to “more than 8 trillion data points” in Outset’s cloud platform, which she said supports analytics, innovation, and customer experience improvements. Outset Medical is a medical technology company specializing in innovations for renal care. The company's flagship offering, the Tablo Hemodialysis System, is designed to streamline and simplify dialysis treatment across acute and outpatient settings. By integrating water purification, dialysate production, and treatment monitoring into a single device, Tablo aims to reduce the complexity and logistical burden traditionally associated with hemodialysis therapy. Tablo's modular design allows for rapid setup and flexible deployment in hospitals, clinics, long‐term care facilities and emergency response scenarios. The article "Outset Medical Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

SAN JOSE, Calif., May 07, 2026 (GLOBE NEWSWIRE) -- Outset Medical, Inc. (Nasdaq: OM), a medical technology company pioneering a first-of-its-kind technology to improve clinical outcomes in dialysis with less cost and complexity, today reported financial results for the first quarter ended March 31, 2026. First Quarter and Recent Highlights Net revenue totaled $27.9 million, a decrease of 6% compared to $29.8 million in the first quarter of 2025. Recurring revenue consisting of Tablo consumables and services was $22.5 million, roughly even with the prior-year period. Gross margin expanded by more than 600 basis points over the prior-year period to 43.4% (43.8% on a non-GAAP basis). Product gross margin of 52.4% and service and other gross margin of 26.7% were record highs. Net cash used during the quarter of $12 million was less than previously forecasted, resulting in a strong cash position, including restricted cash, cash equivalents and short-term investments, of $161 million at quarter-end. “We delivered a solid first quarter and continued to make meaningful progress on our path to profitability, driven by disciplined execution and another quarter of record gross margin performance,” said Leslie Trigg, Chair and Chief Executive Officer. “With utilization strong and service margins expanding, we remain focused on driving broader adoption of Tablo across care settings and confident in our full-year outlook.” First Quarter 2026 Financial Results Revenue for the first quarter was $27.9 million, a decrease of 6% compared to $29.8 million in the first quarter of 2025. Product revenue of $18.6 million decreased 13% from $21.3 million in the first quarter of 2025. Service and other revenue of $9.3 million increased 10% compared to $8.5 million in the first quarter of 2025. Recurring revenue from the sale of Tablo cartridges and service was $22.5 million as compared to $22.7 million in the prior-year period. Gross profit of $12.1 million increased 9% from $11.1 million for the first quarter of 2025. Gross margin was 43.4%, compared to 37.2% in the first quarter of 2025. On a non-GAAP basis, gross margin reached 43.8% as compared to 37.6% in the first quarter of 2025. Product gross profit was $9.7 million, compared to $10.3 million in the first quarter of 2025. Product gross margin was 52.4%, compared to 48.3% in the first quarter of 2025. Service and other gross profit was $2.4 million, compared to $0.8 million in the first quarter of 2025. Service and other gross margin was 25.5%, compared to 9.2% in the first quarter of 2025. Operating expenses of $29.0 million increased 6% from the prior-year period, driven by investments in systems and people. Research and development (R&D) expenses were $5.6 million, sales and marketing (S&M) expenses were $13.3 million, and general and administrative (G&A) expenses were $10.1 million. This compared to operating expenses of $27.5 million in the first quarter of 2025, including R&D expenses of $5.5 million, S&M expenses of $14 million, and G&A expenses of $8.3 million. Excluding stock-based compensation expense and litigation charges, non-GAAP operating expenses were $25.6 million, including R&D expenses of $4.8 million, S&M expenses of $12.8 million, and G&A expenses of $7.9 million. Net loss was $19.0 million compared to net loss of $25.8 million for the same period in 2025. On a non-GAAP basis, net loss was $15.4 million compared to non-GAAP net loss of $22.8 million for the same period in 2025. Total cash, including restricted cash, cash equivalents and short-term investments, was $161 million as of March 31, 2026. 2026 Financial Guidance Outset reiterated its 2026 revenue guidance of $125 million to $130 million, a 5% to 9% increase over $119.5 million in 2025, and non-GAAP gross margin guidance in the low to mid-40% range for the year. Webcast and Conference Call Details Outset will host a conference call today, May 7, 2026, at 1:30 p.m. PT / 4:30 p.m. ET to discuss its first quarter 2026 financial results. Those interested in joining the conference call may do so by dialing (646) 307-1963 or toll-free (800) 715-9871 and referencing conference ID 1632568. Participants are encouraged to register more than 15 minutes before the start of the call. A live webcast of the conference call will be available on the Investor Relations section of the Company's website at https://investors.outsetmedical.com. The webcast will be archived on the website following the completion of the call. Use of Non-GAAP Financial Measures The Company may report non-GAAP results for gross profit/loss, gross margin, operating expenses, operating margins, net income/loss, basic and diluted net income/loss per share, other income/loss, and cash flows. These non-GAAP financial measures are in addition to, and not a substitute for, or superior to, financial measures calculated in accordance with GAAP. As listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release, the Company’s GAAP financial measures include stock-based compensation expense and litigation charges incurred outside of the ordinary course of business in connection with the stockholder class action and relative derivative lawsuits as disclosed in the Company’s latest annual and quarterly reports. Stock-based compensation is a non-cash expense. In addition, litigation charges related to the above-described matters are excluded because they constitute non-routine litigation costs, arise outside of the ordinary course of the Company’s business, and are not indicative of its recurring operating results or underlying performance trends. As such, management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance and period-to-period comparisons. There are limitations related to the use of non-GAAP financial measures because they are not prepared in accordance with GAAP, may exclude significant expenses required by GAAP to be recognized in the Company’s financial statements, and may not be comparable to non-GAAP financial measures used by other companies. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the Appendix A of this press release. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results and other events may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements include, but are not limited to, statements about the Company’s possible or assumed future results of operations and financial position, including expectations regarding projected revenues, gross margin, operating expenses, capital expenditures, cash use, cash burn, cash position, profitability and outlook; statements about the sufficiency of the Company’s cash balances through cashflow breakeven; statements regarding the anticipated impacts and benefits of the Company’s cost reduction actions, initiatives to optimize the commercial organization and improve forecasting and order visibility, and restructurings; statements regarding anticipated customer orders or other business opportunities including the expected size, closing and timing thereof; statements regarding the Company’s overall business strategy, plans and objectives of management; statements regarding the anticipated launch and timing of product enhancements and new features, as well as new or expanded services, and the expected benefits, performance, and impact thereof; the Company’s expectations regarding the market sizes and growth potential for Tablo and the total addressable market opportunities for Tablo; continued execution of the Company’s initiatives designed to expand gross margins; the Company’s ability to respond to and resolve any reports, observations or other actions by the Food and Drug Administration or other regulators in a timely and effective manner; as well as the Company’s expectations regarding the impact of macroeconomic factors (including changes in tariff or trade laws and policies) on the Company, its customers and suppliers. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results or other events to differ materially from those contemplated in this press release can be found in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission, including its latest annual and quarterly reports. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements speak only as of their date and, except to the extent required by law, the Company undertakes no obligation to update these statements, whether as a result of any new information, future developments or otherwise. About Outset Medical, Inc. Outset is a medical technology company transforming the dialysis experience across the continuum of care with a first-of-its-kind technology. The Tablo® Hemodialysis System, FDA-cleared for use from hospital to home, is trusted by more than 1,000 U.S. healthcare facilities and has enabled millions of treatments delivered by thousands of nurses. Designed to reduce the cost and complexity of dialysis, Tablo combines water purification and on-demand dialysate production into a single, integrated system that connects seamlessly with Electronic Medical Record systems and a proprietary data analytics platform. This enterprise solution empowers providers to develop an in-house dialysis program where they are in control – enabling better operational, clinical, and financial outcomes. Outset is redefining what’s possible in kidney care through innovation, scale, and a relentless commitment to improving the lives of patients and the professionals who care for them. For more information, visit www.outsetmedical.com. Investor Contact [email protected]

Image source: The Motley Fool. Thursday, May 7, 2026 at 4:30 p.m. ET Chief Executive Officer — Leslie L. Trigg Chief Financial Officer — Renee M. Gaeta Chief Commercial Officer — Derek Elliott Need a quote from a Motley Fool analyst? Email [email protected] Leslie L. Trigg: Thanks, Jim. Good afternoon, everyone, and thank you for joining us. The first quarter reflected consistent execution across console utilization, new customer additions, gross margin expansion, and disciplined cash management. While variability in capital order timing impacted our capital sales performance in the quarter, we remain confident in our growth plan for the year, supported by the upcoming launch of the next-generation Tableau, a deep sales pipeline, and the addition of an experienced commercial leader in Derek Elliott, who I am pleased to personally introduce to you today. Beginning with the quarter, revenue of $27.9 million was down slightly from the fourth quarter due to the lumpiness of capital sales, but we are confident in our growth plans for the full year. Treatment and service performed exactly as we expected, and we achieved excellent gross margin expansion with product margin reaching over 52%, the result of our ongoing margin expansion programs and mix. More broadly, our end markets remain healthy and providers continue to allocate capital to projects that deliver clear benefits like those we offer. We are reaffirming our annual guidance today because we remain very confident in the depth, diversity, and maturity of our pipeline. In particular, we are in the late stages of closing several large new deals and also an emerging refresh opportunity with existing customers who have older Tableau consoles and intend to buy replacement units in future quarters and years. We had several key wins during the quarter and managed successful go-live implementations at both new customer sites and with existing customers expanding Tableau insourcing to new facilities within their network. A very recent example occurred just a few weeks ago in Texas. Over the course of two days, our team set up dialysis service lines at multiple hospitals owned by one of the largest health systems in the country. These facilities had a total of approximately 400 beds and required support to train the nursing staff, ensure replicable procedures were in place, and prepare the internal team to manage the new service line. Our service and implementation teams are truly the shining stars of Outset Medical, Inc. Extending our unique dialysis clinical expertise to customers, these teams ensure nurses are well trained, policies and procedures are in place, and that customers have a reliable, seamless transition from their outsourced provider to an insourced model. Here in the second quarter, our team is replicating this success with go-live implementations occurring at more than 30 facilities involving nearly 200 consoles. From an operational perspective, we are well prepared for the initial transition to next-generation Tableau later this quarter. We believe this platform is the first dialysis system cleared under the FDA 2025 cybersecurity requirements, and includes hardware and software enhancements that improve performance and system reliability. A dialysis system that meets FDA’s cybersecurity guidance helps protect hospitals by reducing the risk of compromise, limiting the risk of spread, and safeguarding patients. We view Tableau’s Secure by Design principles, layered access controls, and controls intended to reduce the risk of unauthorized access as a significant new competitive advantage. It provides yet another compelling value proposition on top of the cost savings and clinical outcomes improvements associated with insourcing that we believe will be recognized by health systems amid ever-increasing concerns over cybersecurity, continuity of care, and patient safety. We plan to begin with a limited release extending into the third quarter, then ramp to a full launch. In early customer discussions, there has been strong reception to the cybersecurity benefits and other enhancements that next-generation Tableau will provide. We are very excited for the rollout and will share additional details on our August call. Finally, I would like to reiterate our strong cash position and unwavering focus on reaching profitability. During the quarter, we expanded margins to record levels and remained disciplined in our spending, both of which contributed to a lower-than-expected use of cash. I am proud of the progress our team continues to make streamlining our supply chain and manufacturing operations, strengthening our service organization, becoming more efficient in every corner of the business, and expanding our partnership and presence with acute and post-acute care providers. Before Renee walks through the financials, I want to take a minute to introduce our new commercial leader, Derek Elliott. Derek has been on the job for a month and is already making an impact through his deep customer relationships, sales and marketing expertise, and disciplined approach to pipeline management. I would like to invite Derek to say a few words about himself and his priorities. Derek? Derek Elliott: Thanks, Leslie, and good afternoon, everyone. As Leslie said, I joined Outset Medical, Inc. about one month ago and spent that time conducting a deep dive into the business. I have met with our leadership and sales teams, conducted thorough reviews of our pipeline and forecast methodology, and visited many customers. One month in, I can say with confidence that we have a great team, a strong and differentiated product fit, and customers who are deeply interested in improving the dialysis experience for their patients and organizations. When Leslie first approached me about this position, it became clear that my background was a unique fit for Outset Medical, Inc. I have spent more than 30 years serving many of the same customers in sales leadership positions, including 17 years at Stryker across national accounts, capital equipment, and professional services. More recently, I have worked closely with customers to sell EMR connectivity, software, and data analytics across hospitals and health systems nationwide. It is all very similar to Outset Medical, Inc.’s business, customer call points, and value proposition. My near-term priorities include working with our commercial team to prepare for the launch of next-generation Tableau and being very involved at the customer level as we advance and close business in 2026. We have a meaningful opportunity to improve the lives of patients and the providers who serve them. I see how that mission motivates people across Outset Medical, Inc., and I am proud to now be a part of this team. With that, I will turn the call over to Renee. Renee M. Gaeta: Thank you, Derek, and good afternoon, everyone. Revenue in the first quarter was $27.9 million, a 6% decrease from $29.8 million in 2025, largely due to some lumpiness in the timing of capital orders. Product revenue was $18.6 million, down 13%. We anticipated this year-over-year dynamic on our last earnings call and also saw about $1 million in capital deals shift from the first quarter that are expected to close later in the year. Capital sales were $5.4 million, and consumable sales were a bit stronger than anticipated at $13.2 million. We remain very focused on our forecasting methodology for treatments, which, as I mentioned last quarter, now includes closer collaboration with our largest customers on their ordering patterns. Service and other revenue of $9.3 million grew 10% from $8.5 million in the prior-year period. Recurring revenue from the sale of Tableau consumables and service was $22.5 million, roughly flat sequentially and with 2025, both as we anticipated. Next, I will walk through gross margin and operating expenses for the quarter. Please refer to the table in today’s earnings release for a reconciliation of GAAP to non-GAAP measures. Non-GAAP gross margin expanded 620 basis points from last year, reaching 43.8% for the quarter. Product gross margin was driven by sales mix and increased 400 basis points to 52.4% from 48.4% in 2025. Service and other gross margin was 26.7%, increasing again sequentially and growing more than 1.6 thousand basis points compared to 10.3% in 2025. This reflects strong execution and keeps us on track for the next milestone of 50% company-wide gross margin. Moving to operating expenses, non-GAAP operating expenses increased nearly 4% to $25.6 million compared to $24.6 million in 2025, driven by investments in systems and people. Non-GAAP operating loss was $13.4 million, even with the prior-year period. Non-GAAP net loss of $15.4 million improved 32% compared to $22.8 million in 2025. These results reflect continued progress as we work to achieve profitability. Moving to our balance sheet, we ended the quarter with $161 million in cash, cash equivalents, short-term investments, and restricted cash. We used approximately $12 million during the quarter, which is less than we previously forecast due to ongoing expense discipline and working capital management. As we look ahead to our cash needs for the remainder of the year, we now anticipate using less than $40 million, which is roughly 15% better than we previously expected. Turning to our guidance for 2026, we continue to expect revenue to be in the range of $125 million to $130 million, a 5% to 9% increase over 2025, with the majority of the 2026 growth coming in the third and fourth quarters. For non-GAAP gross margin, guidance assumes that as we ship more consoles, gross margin will approach the lower end of the range, just as a higher mix of consumables will move gross margin towards the higher end of the range. Balancing these two factors, we continue to expect gross margin to be in the low- to mid-40% range for the full year. With that, I will turn the call back to Leslie for closing comments. Leslie L. Trigg: Thanks, Renee. I want to close by emphasizing Outset Medical, Inc.’s strong market position. With more than 1 thousand facilities using Tableau and more than 3.5 million cumulative treatments performed, we continue to gain ground as the leader of dialysis insourcing. We expect next-generation Tableau, as the only dialysis system we believe to have been cleared under the FDA’s rigorous guidelines for cybersecurity, will continue to solidify and extend that position. There are now more than 8 trillion data points in our cloud platform, which helps fuel our analytics and innovation engine, improve the customer experience, and ultimately enhance patient care. With insights from this data repository and our strong suite of professional implementation services, Outset Medical, Inc. is increasingly recognized as the trusted partner. We improve dialysis patient care while reducing costs and streamlining operations, and we get to see the results every day for customers of all sizes. For example, a regional 400-bed multisite health system reported an approximately six-fold decrease in their dialysis costs during their first year of insourcing with Outset Medical, Inc. and Tableau. This health system performs approximately 2 thousand dialysis treatments per year; the cost savings are substantial. As meaningful, they saw no central line bloodstream infections, improved their documentation and Joint Commission readiness, and operationalized a more sustainable staffing model. All of the progress we have made provides a powerful foundation for value creation over the long term, which we look forward to demonstrating in the coming quarters and years. We will now open the call for questions. Operator, please open the lines. Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the queue. Your first question comes from the line of Rick Wise with Stifel. Please go ahead. Rick Wise: Good afternoon, everybody. Hi, Leslie. You will not be surprised that I am hoping you can give us a little more color on, as you described it, the capital order variability and lumpiness. Just when I look back to the fourth quarter, you characterized the pipeline as building positively — sounds like it still is — and a healthy balance of larger and smaller deals, new and existing customers, and I doubt that has changed. What resulted in lumpiness? Why the delay? And maybe help us better understand when we are likely to see those sales happen or what you are expecting. Leslie L. Trigg: Yes. Hi, Rick. Good to hear your voice. Let me start with the capital order variability and the pipeline. The pipeline did continue to grow in Q1 as well. We saw good sequential growth in new opportunities that were added to the pipeline. As you remember from Q4, the way we look at the health of the pipeline, of course, is in terms of its size, depth, the diversity, the size of each deal, new customers versus existing customer expansions, and then the maturity — the stage that the deals are in that pipeline. Across all these dimensions, the pipeline for 2026 and beyond is robust. We, in particular, are in the late stages of several large new deals that we do expect to close in 2026, and are also at the cusp of an emerging refresh opportunity with existing customers who have older Tableau fleets and have conveyed an intent to buy replacement units in future quarters and in future years. In terms of the lumpiness of the capital order sales cycle, it is less predictable for us than Tableau utilization. We have talked in the past about the stability and predictability of the utilization of the consoles once sold and installed. That continues to serve us well — it served us well in Q1 — and yet again, the lumpiness of the capital sales cycle makes it less predictable. It is really around the close timing, which might be stating the obvious. Beyond that, all the other areas of our business performed exactly as we expected, and we do remain on track with our guidance for the year, because the couple of deals that we saw slip out of the quarter are expected to close here in the Q2 through Q4 timeframe. That gives us a lot of confidence in the guidance range, in addition to a couple of new tailwinds coming later in Q2 and through Q3 and Q4 in the form of the next-generation Tableau launch and the additional firepower our new commercial leader is going to bring to our organization. All of those things make us very bullish about executing Q2 through Q4. Rick Wise: Gotcha. Maybe just a second one for me. There is a lot to unpack here. But just on a more mundane level, help us think through the quarterly phasing — the quarterly flow. It sounds like it is going to be a more back half–loaded year based on your comments, or at least what we should assume today for the moment. It could happen sooner — some of those delayed orders, for example. But the second quarter — does the second quarter, as opposed to stepping up like it did sequentially the way it did last year — is it flat with the first quarter or down? And since you are holding guidance constant, if we take the midpoint of your $125 million to $130 million range, do we evenly step it up in the third, fourth quarter? And again, last year both were around $29 million. Are these going to be roughly equal quarters and whatever the remainder is to get to the midpoint of the guide? Help us think through the phasing. Thank you. Renee M. Gaeta: Sure, Rick, I am happy to give some color here. As we sit here today with just one quarter in, we have spent a lot of time looking at not only the pipeline, as Leslie mentioned, but of course all of the factors that roll up into our full-year guidance. At this point in time, we would say that Q2 would be a modest step up, and then, as we indicated on the call, Q3 and Q4 will see the larger percentage of the growth. Whether or not Q3 and Q4 are flat, you might continue to see some step up — it will again be based on the timing of the close of these capital orders and pull-through. But as 70% of our revenue is coming from consumables and service and other, that part we expect to see stable. The 5% to 9% growth that we are expecting for the top line would certainly be across all of those categories. Rick Wise: So just to sum it up, modest step up in the second quarter, and it is not like you are saying that all of the remainder to get to the — just to focus on the midpoint of the guide — it is not all in the fourth quarter. You will see sequential step up in each quarter. Renee M. Gaeta: Correct. I think that is a good way to think about it. Rick Wise: Great. Thank you very much. Renee M. Gaeta: Thanks, Rick. Operator: Your next question comes from the line of Colin Clarke with TD Cowen. Please go ahead. Colin Clarke: Hi, thanks for taking my questions. First, on the delayed orders in the first quarter, I am curious — you talked about having several large orders in the pipeline expected to get landed in the February period. What is driving your confidence there? What about those orders in size and scale and the stage of that process is driving the reiteration of guidance here? Thank you. Leslie L. Trigg: Sure, I am happy to take that. I have had the opportunity to remain extremely close to all of our largest deals and forecast for 2026. First and foremost, we look at the staging of those deals. We have talked in the past about the stages of our sales process, and so we look at how many of those deals are in the later stages of the pipeline. We now have the ability to use historical data to inform the probability of close between, let us say, Q2, Q3, and Q4. The confidence, to answer your question, is informed by the data that we have about where these customers are — both new customers and existing customers that, based on their financial and clinical results with Tableau, are choosing to expand into new facilities. Informed by that probability-of-close data, we feel we have a good understanding and a good handle on which of those deals are likely to land in Q2, Q3, and Q4. In addition to that, I just alluded to next-generation Tableau, which we will be in full launch mode with in the second half of the year, and we do expect next gen to be a demand driver as hospitals and health systems continue to tell us that cybersecurity is at or very near the top of their priority list. As we believe we have the only dialysis system in the market to meet these very stringent FDA requirements, we believe that will be a demand driver based on how well this is resonating thus far in our early sales conversations. We view that as an incremental tailwind for the second half of the year. Colin Clarke: Understood. That is very helpful. I am curious on the next-gen system — does it have the potential, do you think, to accelerate these trade-in timelines as far as replacing older-generation Tableaus? Leslie L. Trigg: That is an excellent question. The short answer is yes, I think it could. Colin Clarke: Perfect. One final one from me. Thank you for hosting the webinar this afternoon with the dialysis supervisor at Reid Health — we found it really helpful. We were interested in what she said about bidirectional integration of Tableau into the EMR. Can you talk about the functionality that enables and what that does for your revenue recognition when Tableau not only uploads data to the EMR, but the operators have the potential to input orders from the EMR to Tableau? Leslie L. Trigg: Sure. Thank you for listening to the webinar — I appreciate that. Yes, Reid Health has had a lot of very positive benefits clinically and financially through insourcing with Tableau. To fill other listeners in, what is being alluded to is a potential future capability for bidirectional data transfer. Today, what we offer is uniquely one-way data transfer. We are directly integrated with Epic and Cerner and many other EMRs, which again is unique to Tableau. Health systems use that today to directly transmit or upload all of the treatment data from Tableau after every treatment up to their EHR. There is an opportunity to add a new feature in the future that would allow prescription data or information to be transmitted directly from the EMR to Tableau. That is something we are excited about as a future direction and that we have heard — and it sounds like you heard from Reid Health — would deliver quite a bit of value to our customers. When we think about our recurring revenue foundation that Renee alluded to — roughly about 70% of our total revenue — our overarching revenue strategy is to drive the highest possible percentage of our total revenue from recurring revenue sources. It is visible and very predictable. EMR is an example of a recurring revenue layer that we have added around service and around consumables, and we have had good early success with selling EMR both in terms of upfront implementation and recurring maintenance fees annually. Were we to add new features like bidirectional, we would view that as an incremental revenue opportunity, further fueling the recurring revenue foundation that we enjoy. Colin Clarke: That is very helpful. Thank you. I will hop back in the queue. Leslie L. Trigg: Thank you. Operator: We have no further questions at this time. I will now turn the call back over to Leslie L. Trigg for more closing remarks. Leslie L. Trigg: Terrific. Thank you to everybody for joining today. I would like to close by thanking our customers and our team for the difference that they make every day in the lives of dialysis patients. Have a great evening, everyone. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect. 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