Outset Medical (OM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $27.9 million, down 6% year-over-year, with product revenue declining 13% and service revenue rising 10%.

• Gross margin expanded to 43.4% (43.8% non-GAAP), driven by higher average selling prices and improved service margins.

• Net loss narrowed to $19.0 million from $25.8 million in Q1 2025; non-GAAP net loss was $15.4 million.

• Cash, cash equivalents, restricted cash, and short-term investments totaled $161 million at quarter-end, with net cash used in operations of $12.8 million, less than forecasted.

• Service and implementation teams enabled successful go-live implementations at new and existing customer sites, supporting insourcing transitions.

Financial highlights

• Product revenue was $18.6 million, down 13% year-over-year; service and other revenue grew 10% to $9.3 million.

• Gross profit increased 9% to $12.1 million; product gross margin reached 52.4%, service margin 25.5%.

• Non-GAAP gross margin expanded 620 basis points year-over-year to 43.8%.

• Operating expenses rose 6% to $29.0 million, driven by investments in systems and personnel.

• Non-GAAP net loss improved 32% year-over-year to $15.4 million.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $125–$130 million, representing 5–9% growth over 2025, with most growth expected in Q3 and Q4.

• Gross margin expected in the low to mid 40% range for the full year, depending on product mix.

• Anticipated cash usage for the year revised downward to less than $40 million, about 15% better than prior expectations.

• Management expects continued operating losses in the near term as investments are made to support anticipated growth.

• Existing liquidity is expected to be sufficient for at least the next 12 months.