Outset Medical (OM) Q4 2025 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Sun, May 10, 2026 at 1:08 AM GMT+7 32 min read OM Image source: The Motley Fool. Wednesday, February 11, 2026 at 5 p.m. ET Need a quote from a Motley Fool analyst? Email pr@fool.com 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 wil

Outset Medical (OM) Q4 2025 Earnings Transcript

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Outset Medical (OM) Q4 2025 Earnings Transcript

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