Outset Medical — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue totaled $33.6 million, a 14% increase year-over-year (YoY) from $29.4 million and a 6% increase sequentially.
• Product revenue was $23.7 million, up 15% YoY from $20.6 million.
• Service and other revenue was $9.9 million, up 12% YoY from $8.9 million.
• Recurring revenue (Tablo consumables and services) was $23.1 million, up 10% YoY from $21.1 million and 4% sequentially.
• Console revenue was $10.5 million, up 26% YoY and 10% sequentially.
• Gross profit was $13.7 million, up 18% YoY from $11.6 million.
• Gross margin expanded to 40.7%, an increase of 130 basis points YoY from 39.4%; non-GAAP gross margin was 40.8% (up from 39.9%).
• Product gross margin was 44.2% (down from 45.7% YoY); service and other gross margin was 32.4% (up from 24.8% YoY).
• Operating expenses were $25.9 million, a 5% decrease YoY from $27.4 million.
• Research and development (R&D) expenses were $5.9 million (up from $5.4 million); sales and marketing (S&M) expenses were $11.7 million (down from $13.6 million); general and administrative (G&A) expenses were $8.3 million (down from $8.5 million).
• Non-GAAP operating expenses were $24.2 million.
• Net loss was $14.7 million, narrowing from a $17.8 million loss YoY; non-GAAP net loss was $12.9 million (up from $12.4 million).
• Net cash used during the quarter was $10.3 million.
• Total cash, cash equivalents, short-term investments, and restricted cash position was $140.7 million at quarter end.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $32.9 million, compared to $36.8 million in the prior-year period.
• Total liabilities were $147.1 million as of September 30, 2026, compared to $137.5 million as of December 31, 2025.
• Term loan balance was $98.4 million as of September 30, 2026.

Guidance and Future Outlook:

• Reiterated 2026 revenue guidance of $125 million to $130 million.
• Expects non-GAAP gross margin for the full year to be in the low-40% to mid-40% range.

Business Segments and Product Lines:

• Tablo adoption is expanding across the existing customer base driven by strong customer satisfaction and retention.
• New insourced dialysis partnerships are being formed with leading health systems.
• The Tablo Hemodialysis System is FDA-cleared for use from hospital to home and is trusted by more than 1,000 U.S. healthcare facilities.

Market and Competitive Landscape:

• The company is advancing its mission to help providers nationwide improve the cost, complexity, and clinical outcomes of dialysis.
• Tablo combines water purification and on-demand dialysate production into a single, integrated system connecting with Electronic Medical Record systems and a proprietary data analytics platform.

Risks and Challenges:

• Litigation charges related to stockholder class action and relative derivative lawsuits were incurred outside the ordinary course of business.
• Forward-looking statements are subject to risks including macroeconomic factors, changes in tariff or trade laws, regulatory actions by the FDA, and the ability to achieve cash-flow breakeven.

Management Commentary and Tone:

• Leslie Trigg, Chair and CEO, stated that third-quarter results demonstrated continued progress against strategic priorities and solid sales execution across capital and recurring revenue.
• Management expressed confidence that strong customer satisfaction and retention are fueling new partnerships and positioning the company for sustained long-term growth and value creation.

Other Key Points:

• The company hosts a conference call on November 4, 2026, at 1:30 p.m. PT / 4:30 p.m. ET to discuss results.
• Non-GAAP financial measures exclude stock-based compensation expense and litigation charges to assist investors in analyzing recurring operating performance.
• Stock-based compensation expense for the quarter was $1.7 million, down from $5.1 million in the prior-year period.
• Litigation charges for the quarter were $0.1 million, down from $0.3 million in the prior-year period.