Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Outset Medical Reports Third Quarter 2023 Financial Results By: Outset Medical, Inc. via Business Wire November 07, 2023 at 16:05 PM EST Reiterates Updated 2023 Revenue Guidance of Approximately $130 Million Outset Medical, Inc. (Nasdaq: OM) (“Outset” or the “Company”), a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, today reported financial results for the third quarter ended September 30, 2023. Revenue for the third quarter was $30.4 million, a 9% increase over revenue of $27.8 million in the third quarter of 2022, and gross margin was 23.6%, or 25.6% on a non-GAAP basis, compared to 16.4% on a non-GAAP basis in the third quarter of 2022. Total cash, including restricted cash, cash equivalents and short-term investments, was $197 million as of September 30, 2023. “Our third quarter results were in line with the expectations we set in October, and our focus remains on ensuring the benefits of Tablo reach as many providers and patients as possible this year and well into the future,” said Leslie Trigg, Chair and Chief Executive Officer. “All of the structural tailwinds for Tablo remain firmly in place, and we have high confidence in our ability to generate sustained long-term growth, achieve our gross margin goals, and reach profitability.” Third Quarter 2023 Financial Results Revenue for the quarter was $30.4 million, including product revenue of $23.5 million, an increase of 8.2% compared to $21.7 million in the third quarter of 2022, and service and other revenue of $6.8 million, an increase of 13.4% compared to $6.0 million in the third quarter of 2022. Total gross profit was $7.2 million, compared to $4.3 million for the third quarter of 2022. Total gross margin was 23.6%, compared to 15.6% in the third quarter of 2022. On a non-GAAP basis, gross margin improved to 25.6% from 16.4% in the third quarter of 2022. Product gross profit was $6.7 million, compared to $2.1 million of product gross profit in the third quarter of 2022. Product gross margin was 28.4%, compared to 9.7% in the third quarter of 2022. Service and other gross profit was $0.5 million, compared to $2.2 million of service and other gross profit in the third quarter of 2022. Service and other gross margin was 6.8%, compared to 37.0% in the third quarter of 2022. Operating expenses were $52.6 million, including research and development (R&D) expenses of $16.1 million, sales and marketing (S&M) expenses of $24.7 million, and general and administrative (G&A) expenses of $11.8 million. This compared to operating expenses of $45.3 million, including R&D expenses of $13.1 million, S&M expenses of $22.3 million, and G&A expenses of $10.0 million in the third quarter of 2022. Excluding stock-based compensation expense, non-GAAP operating expenses were $42.3 million, including R&D expenses of $13.3 million, S&M expenses of $21.0 million, and G&A expenses of $8.1 million. Net loss was ($46.2) million, or ($0.93) per share, compared to net loss of ($40.8) million, or ($0.85) per share, for the same period in 2022. On a non-GAAP basis, net loss was ($35.3) million, or ($0.71) per share, compared to non-GAAP net loss of ($33.4) million, or ($0.70) per share for the same period in 2022. Full Year 2023 Financial Guidance Outset reiterated its 2023 revenue guidance of approximately $130 million and its previous gross margin guidance for the year to be in the low-20% range, exiting the fourth quarter in the mid-20% range. Webcast and Conference Call Details Outset will host a conference call today, November 7, 2023, at 2:00 p.m. PT / 5:00 p.m. ET to discuss its third quarter 2023 financial results. Those interested in listening to the conference call may do so by registering online. Once registered, participants will receive dial-in numbers and a unique pin to join the call. 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. The Company’s financial measures under GAAP include stock-based compensation expense, as listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of this non-cash expense item 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 burn, profitability and outlook; statements regarding the Company’s overall business strategy, plans and objectives of management; 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; our ability to respond to and resolve any reports, observations or other actions by the Food and Drug Administration (FDA) or other regulators in a timely and effective manner; as well as the Company’s expectations regarding the impact of macroeconomic factors 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 pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis. The Tablo® Hemodialysis System, FDA cleared for use from the hospital to the home, represents a significant technological advancement that transforms the dialysis experience for patients and operationally simplifies it for providers. Tablo serves as a single enterprise solution that can be utilized across the continuum of care, allowing dialysis to be delivered anytime, anywhere and by anyone. The integration of water purification and on-demand dialysate production enables Tablo to serve as a dialysis clinic on wheels, with 2-way wireless data transmission and a proprietary data analytics platform powering a new holistic approach to dialysis care. Tablo is a registered trademark of Outset Medical, Inc. Outset Medical, Inc. Condensed Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Revenue: Product revenue $ 23,531 $ 21,739 $ 80,640 $ 67,024 Service and other revenue 6,831 6,022 19,229 16,344 Total revenue 30,362 27,761 99,869 83,368 Cost of revenue: Cost of product revenue (2) 16,837 19,632 59,866 60,460 Cost of service and other revenue 6,368 3,793 18,715 10,348 Total cost of revenue 23,205 23,425 78,581 70,808 Gross profit (1) 7,157 4,336 21,288 12,560 Gross margin (1) 23.6 % 15.6 % 21.3 % 15.1 % Operating expenses: Research and development (2) 16,076 13,059 44,775 37,411 Sales and marketing (2) 24,720 22,276 74,038 65,851 General and administrative (2) 11,815 10,000 34,892 30,493 Total operating expenses 52,611 45,335 153,705 133,755 Loss from operations (45,454 ) (40,999 ) (132,417 ) (121,195 ) Interest income and other income, net 2,573 805 7,889 1,384 Interest expense (3,213 ) (567 ) (9,258 ) (1,470 ) Loss before provision for income taxes (46,094 ) (40,761 ) (133,786 ) (121,281 ) Provision for income taxes 86 20 411 231 Net loss $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Net loss per share, basic and diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Shares used in computing net loss per share, basic and diluted 49,913 48,129 49,364 47,835 (1) Gross profit and gross margin by source consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Gross profit Product revenue $ 6,694 $ 2,107 $ 20,774 $ 6,564 Service and other revenue 463 2,229 514 5,996 Total gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Gross margin Product revenue 28.4 % 9.7 % 25.8 % 9.8 % Service and other revenue 6.8 % 37.0 % 2.7 % 36.7 % Total gross margin 23.6 % 15.6 % 21.3 % 15.1 % (2) Include stock-based compensation expense as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of revenue $ 620 $ 210 $ 1,381 $ 493 Research and development 2,793 1,919 8,232 4,885 Sales and marketing 3,765 2,870 9,908 7,440 General and administrative 3,715 2,431 10,015 7,032 Total stock-based compensation expense $ 10,893 $ 7,430 $ 29,536 $ 19,850 Outset Medical, Inc. Condensed Balance Sheets (in thousands, except per share amounts) September 30, December 31, 2023 2022 (Unaudited) Assets Current assets: Cash and cash equivalents $ 36,297 $ 73,222 Short-term investments 157,701 214,280 Accounts receivable, net 35,493 28,070 Inventories 48,257 51,476 Prepaid expenses and other current assets 6,026 6,597 Total current assets 283,774 373,645 Restricted cash 3,329 3,311 Property and equipment, net 13,774 15,876 Operating lease right-of-use assets 5,713 6,117 Other assets 961 1,166 Total assets $ 307,551 $ 400,115 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 2,880 $ 603 Accrued compensation and related benefits 21,544 21,519 Accrued expenses and other current liabilities 12,160 16,227 Accrued warranty liability 4,068 3,620 Deferred revenue, current 10,828 8,662 Operating lease liabilities, current 1,544 1,318 Total current liabilities 53,024 51,949 Accrued interest 680 113 Deferred revenue 99 151 Operating lease liabilities 4,901 5,576 Term loan 96,784 96,336 Total liabilities 155,488 154,125 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value; 5,000 shares authorized, and no shares issued and outstanding as of September 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value; 300,000 shares authorized as of September 30, 2023 and December 31, 2022; 50,173 and 48,465 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 50 48 Additional paid-in capital 1,075,413 1,035,456 Accumulated other comprehensive loss (253 ) (564 ) Accumulated deficit (923,147 ) (788,950 ) Total stockholders' equity 152,063 245,990 Total liabilities and stockholders' equity $ 307,551 $ 400,115 Outset Medical, Inc. Condensed Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2023 2022 Net cash used in operating activities $ (106,931 ) $ (111,222 ) Net cash provided by (used in) investing activities 59,601 (14,547 ) Net cash provided by financing activities 10,423 7,298 Net decrease in cash, cash equivalents and restricted cash (36,907 ) (118,471 ) Cash, cash equivalents and restricted cash at beginning of the period 76,533 215,659 Cash, cash equivalents and restricted cash at end of the period (1) $ 39,626 $ 97,188 (1) The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed balance sheets that sum to the total of the amounts shown in the accompanying condensed statements of cash flows (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 36,297 $ 63,877 Restricted cash 3,329 33,311 Total cash, cash equivalents and restricted cash* $ 39,626 $ 97,188 * The total cash, including restricted cash, cash equivalents and investment securities as of September 30, 2023 was $197.3 million; compared to $260.8 million as of September 30, 2022. Appendix A Outset Medical, Inc. Results of Operations – Non-GAAP (in thousands, except per share amounts) (unaudited) Reconciliation between GAAP and non-GAAP net loss per share: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss per share, diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Stock-based compensation expense 0.22 0.15 0.60 0.41 Non-GAAP net loss per share, diluted $ (0.71 ) $ (0.70 ) $ (2.12 ) $ (2.13 ) Reconciliation between GAAP and non-GAAP net loss: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss, diluted $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Stock-based compensation expense 10,893 7,430 29,536 19,850 Non-GAAP net loss, diluted $ (35,287 ) $ (33,351 ) $ (104,661 ) $ (101,662 ) Reconciliation between GAAP and non-GAAP results of operations: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Stock-based compensation expense 620 210 1,381 493 Non-GAAP gross profit $ 7,777 $ 4,546 $ 22,669 $ 13,053 GAAP gross margin 23.6 % 15.6 % 21.3 % 15.1 % Stock-based compensation expense 2.0 0.8 1.4 0.6 Non-GAAP gross margin 25.6 % 16.4 % 22.7 % 15.7 % GAAP research and development expense $ 16,076 $ 13,059 $ 44,775 $ 37,411 Stock-based compensation expense (2,793 ) (1,919 ) (8,232 ) (4,885 ) Non-GAAP research and development expense $ 13,283 $ 11,140 $ 36,543 $ 32,526 GAAP sales and marketing expense $ 24,720 $ 22,276 $ 74,038 $ 65,851 Stock-based compensation expense (3,765 ) (2,870 ) (9,908 ) (7,440 ) Non-GAAP sales and marketing expense $ 20,955 $ 19,406 $ 64,130 $ 58,411 GAAP general and administrative expense $ 11,815 $ 10,000 $ 34,892 $ 30,493 Stock-based compensation expense (3,715 ) (2,431 ) (10,015 ) (7,032 ) Non-GAAP general and administrative expense $ 8,100 $ 7,569 $ 24,877 $ 23,461 GAAP total operating expense $ 52,611 $ 45,335 $ 153,705 $ 133,755 Stock-based compensation expense (10,273 ) (7,220 ) (28,155 ) (19,357 ) Non-GAAP total operating expense $ 42,338 $ 38,115 $ 125,550 $ 114,398 View source version on businesswire.com: https://www.businesswire.com/news/home/20231107814356/en/Contacts Investor Contact Jim Mazzola 858-342-8272 jmazzola@outsetmedical.com Media Contact Jennifer Sipple media@outsetmedical.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Outset Medical Reports Third Quarter 2023 Financial Results By: Outset Medical, Inc. via Business Wire November 07, 2023 at 16:05 PM EST Reiterates Updated 2023 Revenue Guidance of Approximately $130 Million Outset Medical, Inc. (Nasdaq: OM) (“Outset” or the “Company”), a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, today reported financial results for the third quarter ended September 30, 2023. Revenue for the third quarter was $30.4 million, a 9% increase over revenue of $27.8 million in the third quarter of 2022, and gross margin was 23.6%, or 25.6% on a non-GAAP basis, compared to 16.4% on a non-GAAP basis in the third quarter of 2022. Total cash, including restricted cash, cash equivalents and short-term investments, was $197 million as of September 30, 2023. “Our third quarter results were in line with the expectations we set in October, and our focus remains on ensuring the benefits of Tablo reach as many providers and patients as possible this year and well into the future,” said Leslie Trigg, Chair and Chief Executive Officer. “All of the structural tailwinds for Tablo remain firmly in place, and we have high confidence in our ability to generate sustained long-term growth, achieve our gross margin goals, and reach profitability.” Third Quarter 2023 Financial Results Revenue for the quarter was $30.4 million, including product revenue of $23.5 million, an increase of 8.2% compared to $21.7 million in the third quarter of 2022, and service and other revenue of $6.8 million, an increase of 13.4% compared to $6.0 million in the third quarter of 2022. Total gross profit was $7.2 million, compared to $4.3 million for the third quarter of 2022. Total gross margin was 23.6%, compared to 15.6% in the third quarter of 2022. On a non-GAAP basis, gross margin improved to 25.6% from 16.4% in the third quarter of 2022. Product gross profit was $6.7 million, compared to $2.1 million of product gross profit in the third quarter of 2022. Product gross margin was 28.4%, compared to 9.7% in the third quarter of 2022. Service and other gross profit was $0.5 million, compared to $2.2 million of service and other gross profit in the third quarter of 2022. Service and other gross margin was 6.8%, compared to 37.0% in the third quarter of 2022. Operating expenses were $52.6 million, including research and development (R&D) expenses of $16.1 million, sales and marketing (S&M) expenses of $24.7 million, and general and administrative (G&A) expenses of $11.8 million. This compared to operating expenses of $45.3 million, including R&D expenses of $13.1 million, S&M expenses of $22.3 million, and G&A expenses of $10.0 million in the third quarter of 2022. Excluding stock-based compensation expense, non-GAAP operating expenses were $42.3 million, including R&D expenses of $13.3 million, S&M expenses of $21.0 million, and G&A expenses of $8.1 million. Net loss was ($46.2) million, or ($0.93) per share, compared to net loss of ($40.8) million, or ($0.85) per share, for the same period in 2022. On a non-GAAP basis, net loss was ($35.3) million, or ($0.71) per share, compared to non-GAAP net loss of ($33.4) million, or ($0.70) per share for the same period in 2022. Full Year 2023 Financial Guidance Outset reiterated its 2023 revenue guidance of approximately $130 million and its previous gross margin guidance for the year to be in the low-20% range, exiting the fourth quarter in the mid-20% range. Webcast and Conference Call Details Outset will host a conference call today, November 7, 2023, at 2:00 p.m. PT / 5:00 p.m. ET to discuss its third quarter 2023 financial results. Those interested in listening to the conference call may do so by registering online. Once registered, participants will receive dial-in numbers and a unique pin to join the call. 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. The Company’s financial measures under GAAP include stock-based compensation expense, as listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of this non-cash expense item 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 burn, profitability and outlook; statements regarding the Company’s overall business strategy, plans and objectives of management; 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; our ability to respond to and resolve any reports, observations or other actions by the Food and Drug Administration (FDA) or other regulators in a timely and effective manner; as well as the Company’s expectations regarding the impact of macroeconomic factors 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 pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis. The Tablo® Hemodialysis System, FDA cleared for use from the hospital to the home, represents a significant technological advancement that transforms the dialysis experience for patients and operationally simplifies it for providers. Tablo serves as a single enterprise solution that can be utilized across the continuum of care, allowing dialysis to be delivered anytime, anywhere and by anyone. The integration of water purification and on-demand dialysate production enables Tablo to serve as a dialysis clinic on wheels, with 2-way wireless data transmission and a proprietary data analytics platform powering a new holistic approach to dialysis care. Tablo is a registered trademark of Outset Medical, Inc. Outset Medical, Inc. Condensed Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Revenue: Product revenue $ 23,531 $ 21,739 $ 80,640 $ 67,024 Service and other revenue 6,831 6,022 19,229 16,344 Total revenue 30,362 27,761 99,869 83,368 Cost of revenue: Cost of product revenue (2) 16,837 19,632 59,866 60,460 Cost of service and other revenue 6,368 3,793 18,715 10,348 Total cost of revenue 23,205 23,425 78,581 70,808 Gross profit (1) 7,157 4,336 21,288 12,560 Gross margin (1) 23.6 % 15.6 % 21.3 % 15.1 % Operating expenses: Research and development (2) 16,076 13,059 44,775 37,411 Sales and marketing (2) 24,720 22,276 74,038 65,851 General and administrative (2) 11,815 10,000 34,892 30,493 Total operating expenses 52,611 45,335 153,705 133,755 Loss from operations (45,454 ) (40,999 ) (132,417 ) (121,195 ) Interest income and other income, net 2,573 805 7,889 1,384 Interest expense (3,213 ) (567 ) (9,258 ) (1,470 ) Loss before provision for income taxes (46,094 ) (40,761 ) (133,786 ) (121,281 ) Provision for income taxes 86 20 411 231 Net loss $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Net loss per share, basic and diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Shares used in computing net loss per share, basic and diluted 49,913 48,129 49,364 47,835 (1) Gross profit and gross margin by source consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Gross profit Product revenue $ 6,694 $ 2,107 $ 20,774 $ 6,564 Service and other revenue 463 2,229 514 5,996 Total gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Gross margin Product revenue 28.4 % 9.7 % 25.8 % 9.8 % Service and other revenue 6.8 % 37.0 % 2.7 % 36.7 % Total gross margin 23.6 % 15.6 % 21.3 % 15.1 % (2) Include stock-based compensation expense as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of revenue $ 620 $ 210 $ 1,381 $ 493 Research and development 2,793 1,919 8,232 4,885 Sales and marketing 3,765 2,870 9,908 7,440 General and administrative 3,715 2,431 10,015 7,032 Total stock-based compensation expense $ 10,893 $ 7,430 $ 29,536 $ 19,850 Outset Medical, Inc. Condensed Balance Sheets (in thousands, except per share amounts) September 30, December 31, 2023 2022 (Unaudited) Assets Current assets: Cash and cash equivalents $ 36,297 $ 73,222 Short-term investments 157,701 214,280 Accounts receivable, net 35,493 28,070 Inventories 48,257 51,476 Prepaid expenses and other current assets 6,026 6,597 Total current assets 283,774 373,645 Restricted cash 3,329 3,311 Property and equipment, net 13,774 15,876 Operating lease right-of-use assets 5,713 6,117 Other assets 961 1,166 Total assets $ 307,551 $ 400,115 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 2,880 $ 603 Accrued compensation and related benefits 21,544 21,519 Accrued expenses and other current liabilities 12,160 16,227 Accrued warranty liability 4,068 3,620 Deferred revenue, current 10,828 8,662 Operating lease liabilities, current 1,544 1,318 Total current liabilities 53,024 51,949 Accrued interest 680 113 Deferred revenue 99 151 Operating lease liabilities 4,901 5,576 Term loan 96,784 96,336 Total liabilities 155,488 154,125 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value; 5,000 shares authorized, and no shares issued and outstanding as of September 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value; 300,000 shares authorized as of September 30, 2023 and December 31, 2022; 50,173 and 48,465 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 50 48 Additional paid-in capital 1,075,413 1,035,456 Accumulated other comprehensive loss (253 ) (564 ) Accumulated deficit (923,147 ) (788,950 ) Total stockholders' equity 152,063 245,990 Total liabilities and stockholders' equity $ 307,551 $ 400,115 Outset Medical, Inc. Condensed Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2023 2022 Net cash used in operating activities $ (106,931 ) $ (111,222 ) Net cash provided by (used in) investing activities 59,601 (14,547 ) Net cash provided by financing activities 10,423 7,298 Net decrease in cash, cash equivalents and restricted cash (36,907 ) (118,471 ) Cash, cash equivalents and restricted cash at beginning of the period 76,533 215,659 Cash, cash equivalents and restricted cash at end of the period (1) $ 39,626 $ 97,188 (1) The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed balance sheets that sum to the total of the amounts shown in the accompanying condensed statements of cash flows (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 36,297 $ 63,877 Restricted cash 3,329 33,311 Total cash, cash equivalents and restricted cash* $ 39,626 $ 97,188 * The total cash, including restricted cash, cash equivalents and investment securities as of September 30, 2023 was $197.3 million; compared to $260.8 million as of September 30, 2022. Appendix A Outset Medical, Inc. Results of Operations – Non-GAAP (in thousands, except per share amounts) (unaudited) Reconciliation between GAAP and non-GAAP net loss per share: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss per share, diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Stock-based compensation expense 0.22 0.15 0.60 0.41 Non-GAAP net loss per share, diluted $ (0.71 ) $ (0.70 ) $ (2.12 ) $ (2.13 ) Reconciliation between GAAP and non-GAAP net loss: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss, diluted $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Stock-based compensation expense 10,893 7,430 29,536 19,850 Non-GAAP net loss, diluted $ (35,287 ) $ (33,351 ) $ (104,661 ) $ (101,662 ) Reconciliation between GAAP and non-GAAP results of operations: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Stock-based compensation expense 620 210 1,381 493 Non-GAAP gross profit $ 7,777 $ 4,546 $ 22,669 $ 13,053 GAAP gross margin 23.6 % 15.6 % 21.3 % 15.1 % Stock-based compensation expense 2.0 0.8 1.4 0.6 Non-GAAP gross margin 25.6 % 16.4 % 22.7 % 15.7 % GAAP research and development expense $ 16,076 $ 13,059 $ 44,775 $ 37,411 Stock-based compensation expense (2,793 ) (1,919 ) (8,232 ) (4,885 ) Non-GAAP research and development expense $ 13,283 $ 11,140 $ 36,543 $ 32,526 GAAP sales and marketing expense $ 24,720 $ 22,276 $ 74,038 $ 65,851 Stock-based compensation expense (3,765 ) (2,870 ) (9,908 ) (7,440 ) Non-GAAP sales and marketing expense $ 20,955 $ 19,406 $ 64,130 $ 58,411 GAAP general and administrative expense $ 11,815 $ 10,000 $ 34,892 $ 30,493 Stock-based compensation expense (3,715 ) (2,431 ) (10,015 ) (7,032 ) Non-GAAP general and administrative expense $ 8,100 $ 7,569 $ 24,877 $ 23,461 GAAP total operating expense $ 52,611 $ 45,335 $ 153,705 $ 133,755 Stock-based compensation expense (10,273 ) (7,220 ) (28,155 ) (19,357 ) Non-GAAP total operating expense $ 42,338 $ 38,115 $ 125,550 $ 114,398 View source version on businesswire.com: https://www.businesswire.com/news/home/20231107814356/en/Contacts Investor Contact Jim Mazzola 858-342-8272 jmazzola@outsetmedical.com Media Contact Jennifer Sipple media@outsetmedical.com
Outset Medical, Inc. (Nasdaq: OM) (“Outset” or the “Company”), a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, today reported financial results for the third quarter ended September 30, 2023. Revenue for the third quarter was $30.4 million, a 9% increase over revenue of $27.8 million in the third quarter of 2022, and gross margin was 23.6%, or 25.6% on a non-GAAP basis, compared to 16.4% on a non-GAAP basis in the third quarter of 2022. Total cash, including restricted cash, cash equivalents and short-term investments, was $197 million as of September 30, 2023. “Our third quarter results were in line with the expectations we set in October, and our focus remains on ensuring the benefits of Tablo reach as many providers and patients as possible this year and well into the future,” said Leslie Trigg, Chair and Chief Executive Officer. “All of the structural tailwinds for Tablo remain firmly in place, and we have high confidence in our ability to generate sustained long-term growth, achieve our gross margin goals, and reach profitability.” Third Quarter 2023 Financial Results Revenue for the quarter was $30.4 million, including product revenue of $23.5 million, an increase of 8.2% compared to $21.7 million in the third quarter of 2022, and service and other revenue of $6.8 million, an increase of 13.4% compared to $6.0 million in the third quarter of 2022. Total gross profit was $7.2 million, compared to $4.3 million for the third quarter of 2022. Total gross margin was 23.6%, compared to 15.6% in the third quarter of 2022. On a non-GAAP basis, gross margin improved to 25.6% from 16.4% in the third quarter of 2022. Product gross profit was $6.7 million, compared to $2.1 million of product gross profit in the third quarter of 2022. Product gross margin was 28.4%, compared to 9.7% in the third quarter of 2022. Service and other gross profit was $0.5 million, compared to $2.2 million of service and other gross profit in the third quarter of 2022. Service and other gross margin was 6.8%, compared to 37.0% in the third quarter of 2022. Operating expenses were $52.6 million, including research and development (R&D) expenses of $16.1 million, sales and marketing (S&M) expenses of $24.7 million, and general and administrative (G&A) expenses of $11.8 million. This compared to operating expenses of $45.3 million, including R&D expenses of $13.1 million, S&M expenses of $22.3 million, and G&A expenses of $10.0 million in the third quarter of 2022. Excluding stock-based compensation expense, non-GAAP operating expenses were $42.3 million, including R&D expenses of $13.3 million, S&M expenses of $21.0 million, and G&A expenses of $8.1 million. Net loss was ($46.2) million, or ($0.93) per share, compared to net loss of ($40.8) million, or ($0.85) per share, for the same period in 2022. On a non-GAAP basis, net loss was ($35.3) million, or ($0.71) per share, compared to non-GAAP net loss of ($33.4) million, or ($0.70) per share for the same period in 2022. Full Year 2023 Financial Guidance Outset reiterated its 2023 revenue guidance of approximately $130 million and its previous gross margin guidance for the year to be in the low-20% range, exiting the fourth quarter in the mid-20% range. Webcast and Conference Call Details Outset will host a conference call today, November 7, 2023, at 2:00 p.m. PT / 5:00 p.m. ET to discuss its third quarter 2023 financial results. Those interested in listening to the conference call may do so by registering online. Once registered, participants will receive dial-in numbers and a unique pin to join the call. 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. The Company’s financial measures under GAAP include stock-based compensation expense, as listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of this non-cash expense item 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 burn, profitability and outlook; statements regarding the Company’s overall business strategy, plans and objectives of management; 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; our ability to respond to and resolve any reports, observations or other actions by the Food and Drug Administration (FDA) or other regulators in a timely and effective manner; as well as the Company’s expectations regarding the impact of macroeconomic factors 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 pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis. The Tablo® Hemodialysis System, FDA cleared for use from the hospital to the home, represents a significant technological advancement that transforms the dialysis experience for patients and operationally simplifies it for providers. Tablo serves as a single enterprise solution that can be utilized across the continuum of care, allowing dialysis to be delivered anytime, anywhere and by anyone. The integration of water purification and on-demand dialysate production enables Tablo to serve as a dialysis clinic on wheels, with 2-way wireless data transmission and a proprietary data analytics platform powering a new holistic approach to dialysis care. Tablo is a registered trademark of Outset Medical, Inc. Outset Medical, Inc. Condensed Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Revenue: Product revenue $ 23,531 $ 21,739 $ 80,640 $ 67,024 Service and other revenue 6,831 6,022 19,229 16,344 Total revenue 30,362 27,761 99,869 83,368 Cost of revenue: Cost of product revenue (2) 16,837 19,632 59,866 60,460 Cost of service and other revenue 6,368 3,793 18,715 10,348 Total cost of revenue 23,205 23,425 78,581 70,808 Gross profit (1) 7,157 4,336 21,288 12,560 Gross margin (1) 23.6 % 15.6 % 21.3 % 15.1 % Operating expenses: Research and development (2) 16,076 13,059 44,775 37,411 Sales and marketing (2) 24,720 22,276 74,038 65,851 General and administrative (2) 11,815 10,000 34,892 30,493 Total operating expenses 52,611 45,335 153,705 133,755 Loss from operations (45,454 ) (40,999 ) (132,417 ) (121,195 ) Interest income and other income, net 2,573 805 7,889 1,384 Interest expense (3,213 ) (567 ) (9,258 ) (1,470 ) Loss before provision for income taxes (46,094 ) (40,761 ) (133,786 ) (121,281 ) Provision for income taxes 86 20 411 231 Net loss $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Net loss per share, basic and diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Shares used in computing net loss per share, basic and diluted 49,913 48,129 49,364 47,835 (1) Gross profit and gross margin by source consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Gross profit Product revenue $ 6,694 $ 2,107 $ 20,774 $ 6,564 Service and other revenue 463 2,229 514 5,996 Total gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Gross margin Product revenue 28.4 % 9.7 % 25.8 % 9.8 % Service and other revenue 6.8 % 37.0 % 2.7 % 36.7 % Total gross margin 23.6 % 15.6 % 21.3 % 15.1 % (2) Include stock-based compensation expense as follows: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of revenue $ 620 $ 210 $ 1,381 $ 493 Research and development 2,793 1,919 8,232 4,885 Sales and marketing 3,765 2,870 9,908 7,440 General and administrative 3,715 2,431 10,015 7,032 Total stock-based compensation expense $ 10,893 $ 7,430 $ 29,536 $ 19,850 Outset Medical, Inc. Condensed Balance Sheets (in thousands, except per share amounts) September 30, December 31, 2023 2022 (Unaudited) Assets Current assets: Cash and cash equivalents $ 36,297 $ 73,222 Short-term investments 157,701 214,280 Accounts receivable, net 35,493 28,070 Inventories 48,257 51,476 Prepaid expenses and other current assets 6,026 6,597 Total current assets 283,774 373,645 Restricted cash 3,329 3,311 Property and equipment, net 13,774 15,876 Operating lease right-of-use assets 5,713 6,117 Other assets 961 1,166 Total assets $ 307,551 $ 400,115 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 2,880 $ 603 Accrued compensation and related benefits 21,544 21,519 Accrued expenses and other current liabilities 12,160 16,227 Accrued warranty liability 4,068 3,620 Deferred revenue, current 10,828 8,662 Operating lease liabilities, current 1,544 1,318 Total current liabilities 53,024 51,949 Accrued interest 680 113 Deferred revenue 99 151 Operating lease liabilities 4,901 5,576 Term loan 96,784 96,336 Total liabilities 155,488 154,125 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value; 5,000 shares authorized, and no shares issued and outstanding as of September 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value; 300,000 shares authorized as of September 30, 2023 and December 31, 2022; 50,173 and 48,465 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 50 48 Additional paid-in capital 1,075,413 1,035,456 Accumulated other comprehensive loss (253 ) (564 ) Accumulated deficit (923,147 ) (788,950 ) Total stockholders' equity 152,063 245,990 Total liabilities and stockholders' equity $ 307,551 $ 400,115 Outset Medical, Inc. Condensed Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2023 2022 Net cash used in operating activities $ (106,931 ) $ (111,222 ) Net cash provided by (used in) investing activities 59,601 (14,547 ) Net cash provided by financing activities 10,423 7,298 Net decrease in cash, cash equivalents and restricted cash (36,907 ) (118,471 ) Cash, cash equivalents and restricted cash at beginning of the period 76,533 215,659 Cash, cash equivalents and restricted cash at end of the period (1) $ 39,626 $ 97,188 (1) The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed balance sheets that sum to the total of the amounts shown in the accompanying condensed statements of cash flows (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 36,297 $ 63,877 Restricted cash 3,329 33,311 Total cash, cash equivalents and restricted cash* $ 39,626 $ 97,188 * The total cash, including restricted cash, cash equivalents and investment securities as of September 30, 2023 was $197.3 million; compared to $260.8 million as of September 30, 2022. Appendix A Outset Medical, Inc. Results of Operations – Non-GAAP (in thousands, except per share amounts) (unaudited) Reconciliation between GAAP and non-GAAP net loss per share: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss per share, diluted $ (0.93 ) $ (0.85 ) $ (2.72 ) $ (2.54 ) Stock-based compensation expense 0.22 0.15 0.60 0.41 Non-GAAP net loss per share, diluted $ (0.71 ) $ (0.70 ) $ (2.12 ) $ (2.13 ) Reconciliation between GAAP and non-GAAP net loss: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP net loss, diluted $ (46,180 ) $ (40,781 ) $ (134,197 ) $ (121,512 ) Stock-based compensation expense 10,893 7,430 29,536 19,850 Non-GAAP net loss, diluted $ (35,287 ) $ (33,351 ) $ (104,661 ) $ (101,662 ) Reconciliation between GAAP and non-GAAP results of operations: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 GAAP gross profit $ 7,157 $ 4,336 $ 21,288 $ 12,560 Stock-based compensation expense 620 210 1,381 493 Non-GAAP gross profit $ 7,777 $ 4,546 $ 22,669 $ 13,053 GAAP gross margin 23.6 % 15.6 % 21.3 % 15.1 % Stock-based compensation expense 2.0 0.8 1.4 0.6 Non-GAAP gross margin 25.6 % 16.4 % 22.7 % 15.7 % GAAP research and development expense $ 16,076 $ 13,059 $ 44,775 $ 37,411 Stock-based compensation expense (2,793 ) (1,919 ) (8,232 ) (4,885 ) Non-GAAP research and development expense $ 13,283 $ 11,140 $ 36,543 $ 32,526 GAAP sales and marketing expense $ 24,720 $ 22,276 $ 74,038 $ 65,851 Stock-based compensation expense (3,765 ) (2,870 ) (9,908 ) (7,440 ) Non-GAAP sales and marketing expense $ 20,955 $ 19,406 $ 64,130 $ 58,411 GAAP general and administrative expense $ 11,815 $ 10,000 $ 34,892 $ 30,493 Stock-based compensation expense (3,715 ) (2,431 ) (10,015 ) (7,032 ) Non-GAAP general and administrative expense $ 8,100 $ 7,569 $ 24,877 $ 23,461 GAAP total operating expense $ 52,611 $ 45,335 $ 153,705 $ 133,755 Stock-based compensation expense (10,273 ) (7,220 ) (28,155 ) (19,357 ) Non-GAAP total operating expense $ 42,338 $ 38,115 $ 125,550 $ 114,398 View source version on businesswire.com: https://www.businesswire.com/news/home/20231107814356/en/
Investor Contact Jim Mazzola 858-342-8272 jmazzola@outsetmedical.com Media Contact Jennifer Sipple media@outsetmedical.com