Outset Medical, Inc.

Previous wording

We generate revenue from the placement of Tablo consoles along with accessories, and shipping and handling charged to customers, which revenue is recognized up-front. We also earn recurring revenue from sales of consumables, including Tablo cartridge, and services, which generates significant total revenue over the life of Tablo consoles. Our total revenues were $27.9 million and $29.8 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

We generate revenue from the placement of Tablo consoles along with accessories, and shipping and handling charged to customers, which revenue is recognized up-front. We also earn recurring revenue from sales of consumables, including Tablo cartridge, and services, which generates significant total revenue over the life of Tablo consoles. Our total revenues were $31.6 million and $31.4 million for the three months ended June 30, 2026 and 2025, respectively, and $59.5 million and $61.2 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

We primarily sell our solutions through our direct sales organization, which covers most major metropolitan markets in the United States. Our sales organization is comprised of our capital sales team, responsible for generating new customer demand for Tablo, and our clinical sales team, responsible for driving utilization and fleet expansion of Tablo at existing customer sites. In addition, our field service team provides maintenance services and product support to our customers. Our field sales and service teams represent 57% of our total full-time employees as of March 31, 2026. The same sales organization and field service team drive Tablo penetration in both the acute and home markets. We believe the ability to leverage one team to serve both markets will result in significant productivity and cost optimization as we continue to scale our business.

Current wording

We primarily sell our solutions through our direct sales organization, which covers most major metropolitan markets in the United States. Our sales organization is comprised of our capital sales team, responsible for generating new customer demand for Tablo, and our clinical sales team, responsible for driving utilization and fleet expansion of Tablo at existing customer sites. In addition, our field service team provides maintenance services and product support to our customers. Our field sales and service teams represent 47% of our total full-time employees as of June 30, 2026. The same sales organization and field service team drive Tablo penetration in both the acute and home markets. We believe the ability to leverage one team to serve both markets will result in significant productivity and cost optimization as we continue to scale our business.

Previous wording

We plan to further broaden our installed base by continuing to target national and regional integrated delivery networks and health systems, SNFs, LTACHs and other post-acute providers. In addition, we focus on driving utilization and fleet expansion with existing customers by providing an exceptional user experience delivered through our commercial team and a steady release of software enhancements that amplify Tablo’s operational reliability and clinical versatility. Our ability to successfully execute on this strategy, and thereby increase our revenue in the acute market, will depend on several factors. These factors include the success of our initiatives to optimize and further evolve our commercial organization, infrastructure and sales processes to support the growth of our business in the acute and post-acute care markets as we focus more heavily on enterprise selling and transition beyond earlier stage adoption of Tablo.

Current wording

We plan to further broaden our installed base by continuing to target national and regional integrated delivery networks and health systems, SNFs, LTACHs and other post-acute providers. In addition, we focus on driving utilization, fleet expansion and fleet refresh opportunities with existing customers through continued commercial engagement, an exceptional user experience delivered through our commercial team and a steady release of software enhancements that amplify Tablo’s operational reliability and clinical versatility. Our ability to successfully execute on this strategy, and thereby increase our revenue in the acute market, will depend on several factors. These factors include the success of our initiatives to optimize and further evolve our commercial organization, infrastructure and sales processes to support the growth of our business in the acute and post-acute care markets as we focus more heavily on enterprise selling and transition beyond earlier stage adoption of Tablo.

Previous wording

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Product revenue decreased by $2.7 million, or 13%, for the three months ended March 31, 2026 as compared to the same period in the prior year. This decrease was driven by a $1.7 million decrease in console revenue and a $1.0 million decrease in consumable revenue.

Current wording

Product revenue decreased by $3.9 million, or 9%, for the six months ended June 30, 2026 as compared to the same period in the prior year. This decrease was driven by a $2.7 million decrease in consumable revenue and a $1.2 million decrease in console revenue.

Previous wording

Service and other revenue increased for the three months ended March 31, 2026 as compared to the same period in the prior year. The increase was primarily due to services associated with growth in our console installed base.

Current wording

Service and other revenue increased for the three and six months ended June 30, 2026 as compared to the same periods in the prior year. The increase was primarily due to services associated with growth in our console installed base.

Previous wording

Gross profit increased for the three months ended March 31, 2026 as compared to the same period in the prior year. Gross margin improved by 6.2 percentage points for the three months ended March 31, 2026 as compared to the same period in the prior year. These improvements in gross profit and gross margin were primarily driven by higher average selling prices for consoles and higher gross margin on service and other revenue, which were partially offset by the lower average selling price for consumables.

Current wording

Gross profit increased for the three and six months ended June 30, 2026 as compared to the same periods in the prior year. Gross margin improved by 4.2 percentage points for the three months ended June 30, 2026 and 5.2 percentage points for the six months ended June 30, 2026 as compared to the same periods in the prior year. These improvements in gross profit and gross margin were primarily driven by higher gross margin on service and other revenue. Such improvements were offset by a lower mix of consumable revenue, which had a higher gross margin than console and service revenues, as compared to the same periods in the prior year.

Previous wording

Sales and marketing expenses decreased for the three months ended March 31, 2026 as compared to the same period in the prior year. The decrease was mainly driven by lower compensation expenses, partially offset by higher freight costs.

Current wording

Sales and marketing expenses decreased for the three and six months ended June 30, 2026 as compared to the same periods in the prior year. The decrease was primarily driven by a decrease in compensation-related and stock-based compensation expenses and infrastructure costs due to a lower headcount in 2026 compared to the prior year. This decrease was partially offset by increases in freight expense.

Previous wording

General and administrative expenses increased for the three months ended March 31, 2026 as compared to the same period in the prior year. The increase was primarily due to an overall increase in compensation-related and stock-based compensation expense.

Current wording

General and administrative expenses increased for the three and six months ended June 30, 2026 as compared to the same periods in the prior year. The increase was primarily due to an increase in compensation-related and stock-based compensation expenses and higher legal costs related to the stockholder class action and related derivative lawsuits.

Previous wording

The decrease in interest income and other income, net for the three months ended March 31, 2026 as compared to the same period in the prior year was driven by a lower average short-term investment balance in 2026.

Current wording

The decrease in interest income and other income, net for the three and six months ended June 30, 2026 as compared to the same periods in the prior year were driven by a lower average short-term investment balance in 2026.

Previous wording

The interest expense for the three months ended March 31, 2026 was relatively consistent with the amount in the same period in the prior year.

Current wording

The interest expense for the three and six months ended June 30, 2026 were relatively consistent with the amount in the same periods in the prior year.

Previous wording

Since our inception, we have incurred net losses and negative cash flows from operations. To date, we have financed our operations and capital expenditures primarily through sales of equity securities, revenue from sales, debt financings, and proceeds from employee exercise of stock options and ESPP purchases.

Current wording

Since our inception, we have incurred net losses and negative cash flows from operations. To date, we have financed our operations and capital expenditures primarily through sales of equity securities, revenue from sales, debt financings, and proceeds from ESPP purchases.

Previous wording

As of March 31, 2026, we had cash, cash equivalents, restricted cash, and short-term investments of $160.5 million.

Current wording

As of June 30, 2026, we had cash, cash equivalents, restricted cash, and short-term investments of $151.0 million.

Previous wording

The net cash used in operating activities of $12.8 million for the three months ended March 31, 2026 was due to a net loss of $19.0 million, the amortization of premiums on investments of $0.4 million, and provision for credit losses of $0.4 million, which were adjusted by stock-based compensation expense of $3.5 million, a net cash inflow from the change in our operating assets and liabilities of $1.5 million, depreciation and amortization of $0.8 million, non-cash interest expense of $0.7 million, and non-cash lease expense of $0.4 million. The net cash inflow from operating assets and liabilities was primarily due to decreases in accounts receivable and prepaid expenses and other assets, and increases in accrued expenses and accounts payable. This net cash inflow from operating assets and liabilities was partially offset by an increase in inventory, a decrease in accrued compensation and related benefits resulting from the payout of 2025 annual cash bonuses, and decreases in deferred revenue and operating lease liabilities.

Current wording

The net cash used in operating activities of $22.5 million for the six months ended June 30, 2026 was due to a net loss of $37.0 million, the amortization of premiums on investments of $0.8 million, and provision for credit losses of $0.7 million, which were adjusted by stock-based compensation expense of $6.1 million, depreciation and amortization of $1.4 million, non-cash interest expense of $1.4 million, non-cash lease expense of $0.8 million, and a net cash inflow from the change in our operating assets and liabilities of $4.7 million. The net cash inflow from operating assets and liabilities was primarily due to increases in accounts payable, accrued expenses, and deferred revenue, and a decrease in prepaid expenses and other assets. This net cash inflow from operating assets and liabilities was partially offset by a decrease in accrued compensation and related benefits resulting from the payout of 2025 annual cash bonuses, an increase in accounts receivable and decreases in operating lease liabilities and accrued warranty liability.

Previous wording

The net cash provided by investing activities of $7.9 million for the three months ended March 31, 2026 was due to the maturities of short-term investment securities of $30.9 million, which was partially offset by the purchases of short-term investment securities of $22.9 million.

Current wording

The net cash provided by investing activities of $22.1 million for the six months ended June 30, 2026 was due to the maturities of short-term investment securities of $63.8 million, which was partially offset by purchases of short-term investment securities of $41.5 million and purchases of property and equipment of $0.2 million.

Previous wording

The net cash provided by financing activities of $0.5 million for the three months ended March 31, 2026 was primarily due to proceeds from ESPP purchases.

Current wording

The net cash provided by financing activities of $0.4 million for the six months ended June 30, 2026 was due to proceeds from ESPP purchases, partially offset by cash outflow of $0.1 million in payments on finance lease liabilities.