Outset Medical (OM) Goldman Sachs 45th Annual Global Healthcare Conference summary

Product and operational updates

• TabloCart received early FDA clearance, with inventory available for immediate shipment and a focus on ramping sales and updating customer agreements.

• The company is recovering from a previous pause in TabloCart shipments and is now focused on ramping back to expected levels for the rest of the year.

• Execution in Q2 and the back half of the year is a top priority, with renewed focus after resolving regulatory issues.

Financial performance and guidance

• Recurring revenues from consumables and service are expected to make up about half of H2 revenue, providing forward visibility.

• Cost reduction initiatives will remove $20M in 2024, annualizing to $30M in 2025 and over $100M by 2027, accelerating the path to break even ahead of previous Q4 2027 guidance.

• Gross margin has expanded for 12 consecutive quarters, reaching 31.1% in Q1, with a target of 50% as the next milestone.

• Key KPIs include install base growth and continued gross margin expansion.

Market strategy and competitive landscape

• Acute market penetration is about 10%, with broad-based adoption across 650+ U.S. facilities and a strong pipeline, including many large deals over $1M.

• The sales cycle has stabilized at 9-12 months, with economic savings as the primary driver for hospital adoption.

• The home strategy targets both mid-sized dialysis organizations (MDOs) and upstream opportunities like skilled nursing facilities (SNFs), leveraging cost and patient outcome benefits.

• The land-and-expand approach is used in both acute and home markets, focusing on initial entry and subsequent expansion within accounts.