Q2 2026 Outset Medical Inc Earnings Call Transcript
Key Points
- Outset Medical Inc (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 (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 (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 (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 (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.
Thank you. 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 Jacobsen, Investor Relations. Please go ahead.
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, 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 these statements. For a list and description of the risks and uncertainties associated with the
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