Outset Medical, Inc.

What they do

Outset designs and sells the Tablo Hemodialysis System, a compact console that integrates water purification and on-demand dialysate production, requiring only an electrical outlet and tap water. The company generates revenue from upfront console and accessory sales, plus recurring consumables (Tablo cartridges) and service contracts. It sells primarily through a direct sales organization, focusing first on acute care and expanding into post-acute and home settings.

Revenue drivers

• Console sales — Upfront sales of Tablo consoles and accessories; accounted for 26% of revenue in 2025.
• Consumables — Recurring sales of Tablo cartridges; accounted for 45% of revenue in 2025.
• Service and other — Recurring service contracts and other revenue; accounted for 29% of revenue in 2025.

Recent performance

In Q2 2026, net revenue was $31.6 million, up 1% year-over-year and 14% sequentially. Recurring revenue from cartridges and service was $22.1 million, roughly even with the prior year. Gross margin expanded to 42.0% from 37.8%, and net loss narrowed to $18.0 million from $18.5 million. Cash, equivalents, and short-term investments were $151.0 million at June 30, 2026.

Strategy

Management is focused on driving adoption in acute care, expanding into post-acute facilities (SNFs, LTACHs), and building home dialysis readiness. They are investing in sales, clinical support, and data analytics to increase utilization and fleet expansion. A recent three-year, $40 million agreement with HCA Healthcare to refresh the Tablo fleet marks the first refresh deal, enhancing backlog visibility.

Risks

• Extended losses and negative cash flow — The company has been net loss-making for all reported years (2021-2025) with cumulative net losses exceeding $677 million.
• Revenue concentration in consumables — Recurring revenue is dependent on continued utilization of installed Tablo consoles; a decline in usage would hit the largest revenue stream.
• Competition and market adoption — Tablo faces competition from established hemodialysis machine manufacturers that have entrenched relationships in hospital and home settings.
• Dependence on large customers — A significant portion of revenue can come from large health systems like HCA Healthcare; loss or delay of such deals could materially affect results.

Outlook

Management reiterated 2026 revenue guidance of $125 million to $130 million, a 5% to 9% increase over 2025 revenue of $119.5 million. They expect non-GAAP gross margin in the low-40% to mid-40% range for the full year. The company continues to prioritize driving adoption, fleet expansion, and path toward profitability.