Q4 2025 Outset Medical Inc Earnings Call

Speaker #3: Fourth quarter 2025 earnings call. Here with me today are Leslie Trigg, Chair and Chief Executive Officer; and Renee Gaeta, Chief Financial Officer. We issued a news release after the close of market today, which can be found on the investor pages of outsetmedical.com.

Speaker #3: This call is being recorded and will be archived on the investor section of our website. It is our intent that all forward-looking statements made during today's call will be protected under the private securities litigation reform act of 1995.

Speaker #3: Outset assumes no obligation to update these statements. For a list and description of the risks and uncertainties associated with our business, please refer to Outset's public filings with the Securities and Exchange Commission, including our latest annual and quarterly.

Jim Mazzola: Good afternoon, everyone, and welcome to our Q4 2025 earnings call. Here with me today are Leslie Trigg, Chair and Chief Executive Officer, and Renee Gaeta, Chief Financial Officer. We issued a news release after the close of market today, which can be found on the investor pages of outsetmedical.com. This call is being recorded and will be archived on the investor section of our website. It is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Outset assumes no obligation to update these statements. For a list and description of the risks and uncertainties associated with our business, please refer to Outset's public filings with the Securities and Exchange Commission, including our latest annual and quarterly reports. Leslie?

Speaker 1: We issued a news release after the close of market today, which can be found on the investor pages of outsetmedical.com. This call is being recorded and will be archived on the investor section of our website. It is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Outset assumes no obligation to update these statements. For a list and description of the risks and uncertainties associated with our business, please refer to Outset's public filings with the Securities and Exchange Commission, including our latest annual and quarterly reports. Leslie? Thanks, Jim. Good afternoon, everyone, and thank you for joining us.

Speaker #3: reports. Leslie? Thanks,

Speaker #2: Jim. Good afternoon, everyone, and thank you for joining us. 2025 was a year of progress and transformation at Outset Medical. A year where we overcame adversity to emerge with a stronger foundation.

Speaker #2: And even deeper capabilities to help hospitals, health systems, post-acute, and home providers improve patient care outcomes at lower cost and with less complexity. During the year, we substantially reduced our cost structure while making significant investments to extend our technology and service leadership.

Leslie Trigg: Thanks, Jim. Good afternoon, everyone, and thank you for joining us. 2025 was a year of progress and transformation at Outset Medical, a year where we overcame adversity to emerge with a stronger foundation and even deeper capabilities to help hospitals, health systems, post-acute, and home providers improve patient care outcomes at lower costs and with less complexity. During the year, we substantially reduced our cost structure while making significant investments to extend our technology and service leadership. These investments were key to our announcement two weeks ago about the FDA clearance of our next-generation Tablo platform. Second, we meaningfully strengthened our team and infused new talent into key leadership roles in finance, medical affairs, and field service. Third, we recapitalized the company with less debt and new capital to fund Outset through cash flow break-even and beyond.

Speaker #2: These investments were key to our announcement two weeks ago about the FDA clearance of our next-generation Tableau platform. Second, we meaningfully strengthened our team and infused new talent into key leadership roles in finance, medical affairs, and field service.

Speaker 1: 2025 was a year of progress and transformation at Outset Medical, a year where we overcame adversity to emerge with a stronger foundation and even deeper capabilities to help hospitals, health systems, post-acute, and home providers improve patient care outcomes at lower costs and with less complexity. During the year, we substantially reduced our cost structure while making significant investments to extend our technology and service leadership. These investments were key to our announcement two weeks ago about the FDA clearance of our next-generation Tablo platform. Second, we meaningfully strengthened our team and infused new talent into key leadership roles in finance, medical affairs, and field service. Third, we recapitalized the company with less debt and new capital to fund Outset through cash flow break-even and beyond.

Speaker #2: Third, we recapitalized the company with less debt and new capital to fund Outset through cash flow breakeven and beyond. Fourth, we expanded our base of published evidence demonstrating the significant clinical, operational, and financial benefits that can be achieved by insourcing with Outset and Tableau.

Speaker #2: In particular, the clinical value proposition came into clear focus as our customers documented even more evidence of improved clinical outcomes. Fifth, we maintained a very high customer satisfaction, or CSAT, score above 95% for the exceptional customer service we provide.

Speaker #2: And lastly, we continue to sign new agreements for the insourcing of dialysis at new and expansion sites, including at one of the largest national health systems in the country with well over 100 facilities.

Speaker 1: Fourth, we expanded our base of published evidence, demonstrating the significant clinical, operational, and financial benefits that can be achieved by insourcing with Outset and Tablo. In particular, the clinical value proposition came into clear focus as our customers documented even more evidence of improved clinical outcomes. Fifth, we maintained a very high customer satisfaction, or CSAT, score above 95% for the exceptional customer service we provide. Lastly, we continued to sign new agreements for the insourcing of dialysis at new and expansion sites, including at one of the largest national health systems in the country with well over 100 facilities. Tablo is now used at roughly 1,000 acute care sites in the United States. Turning to our financial results for the year, we announced preliminary fourth quarter revenue last month, which came in at the high end of our revised guidance range.

Leslie Trigg: Fourth, we expanded our base of published evidence, demonstrating the significant clinical, operational, and financial benefits that can be achieved by insourcing with Outset and Tablo. In particular, the clinical value proposition came into clear focus as our customers documented even more evidence of improved clinical outcomes. Fifth, we maintained a very high customer satisfaction, or CSAT, score above 95% for the exceptional customer service we provide. Lastly, we continued to sign new agreements for the insourcing of dialysis at new and expansion sites, including at one of the largest national health systems in the country with well over 100 facilities. Tablo is now used at roughly 1,000 acute care sites in the United States. Turning to our financial results for the year, we announced preliminary Q4 revenue last month, which came in at the high end of our revised guidance range.

Speaker #2: Tableau is now used at roughly 1,000 acute care sites in the United States. Turning to our financial results for the year, we announced preliminary fourth-quarter revenue last month, which came in at the high end of our revised guidance range.

Speaker #2: At $119.5 million, revenue grew by 5% over 2024 and sets us up for what we anticipate will be an even stronger growth year in 2026.

Speaker #2: As we have worked toward greater consistency and predictability in our top-line results, we continue our steady five-year expansion of gross margin to finish the year at 39.6% non-GAAP gross margin.

Speaker #2: Gross margin exiting the year was well above 40%, which keeps us on a trajectory to our next milestone of 50%. Moving to our end markets, I am most proud of the progress we made during 2025 strengthening our partnership and presence with acute and post-acute care providers.

Speaker 1: At $119.5 million, revenue grew by 5% over 2024 and sets us up for what we anticipate will be an even stronger growth year in 2026. As we have worked toward greater consistency and predictability in our top-line results, we continued our steady five-year expansion of gross margin to finish the year at 39.6% non-GAAP gross margin. Gross margin exiting the year was well above 40%, which keeps us on a trajectory to our next milestone of 50%. Moving to our end markets, I am most proud of the progress we made during 2025 strengthening our partnership and presence with acute and post-acute care providers. We began to see vocal champions emerge throughout our customer base because of the clinical and operational benefits that can be achieved by insourcing with Outset. The financial benefits have long been understood and remain a key selling point.

Leslie Trigg: At $119.5 million, revenue grew by 5% over 2024 and sets us up for what we anticipate will be an even stronger growth year in 2026. As we have worked toward greater consistency and predictability in our top-line results, we continued our steady five-year expansion of gross margin to finish the year at 39.6% non-GAAP gross margin. Gross margin exiting the year was well above 40%, which keeps us on a trajectory to our next milestone of 50%. Moving to our end markets, I am most proud of the progress we made during 2025 strengthening our partnership and presence with acute and post-acute care providers. We began to see vocal champions emerge throughout our customer base because of the clinical and operational benefits that can be achieved by insourcing with Outset. The financial benefits have long been understood and remain a key selling point.

Speaker #2: We began to see vocal champions emerge throughout our customer base because of the clinical and operational benefits that can be achieved by insourcing with Outset.

Speaker #2: The financial benefits have long been understood and remain a key selling point. In 2025, we saw new momentum from nursing leaders sharing their experiences with improved clinical outcomes as well.

Speaker #2: Lower infection rates, reduced length of stay, and higher nurse satisfaction with the dialysis service line that is insourced with Outset. Operationally, from gross margin expansion to product innovation to operating expense performance, we made meaningful progress in 2025 and took strides on our path to profitability.

Speaker #2: In the past year, we reduced cash usage by $70 million. Increased gross margin by more than $500 basis points and continued to narrow our operating loss.

Speaker 1: In 2025, we saw new momentum from nursing leaders sharing their experiences with improved clinical outcomes as well: lower infection rates, reduced length of stay, and higher nurse satisfaction with the dialysis service line that is insourced with Outset. Operationally, from gross margin expansion to product innovation to operating expense performance, we made meaningful progress in 2025 and took strides on our path to profitability. In the past year, we reduced cash usage by $70 million, increased gross margin by more than 500 basis points, and continued to narrow our operating loss. Additionally, we made investments in innovation to further extend our technology lead and just two weeks ago received FDA clearance for the next-generation Tablo platform. This new platform is the first dialysis system cleared under the FDA's 2025 cybersecurity requirements and includes hardware and software enhancements that improve performance and system reliability as well.

Leslie Trigg: In 2025, we saw new momentum from nursing leaders sharing their experiences with improved clinical outcomes as well: lower infection rates, reduced length of stay, and higher nurse satisfaction with the dialysis service line that is insourced with Outset. Operationally, from gross margin expansion to product innovation to operating expense performance, we made meaningful progress in 2025 and took strides on our path to profitability. In the past year, we reduced cash usage by $70 million, increased gross margin by more than 500 basis points, and continued to narrow our operating loss. Additionally, we made investments in innovation to further extend our technology lead and just two weeks ago received FDA clearance for the next-generation Tablo platform. This new platform is the first dialysis system cleared under the FDA's 2025 cybersecurity requirements and includes hardware and software enhancements that improve performance and system reliability as well.

Speaker #2: Additionally, we made investments in innovation to further extend our technology lead and just two weeks ago received FDA clearance for the next generation Tableau platform.

Speaker #2: This new platform is the first dialysis system cleared under the FDA's 2025 cybersecurity requirements, and includes hardware and software enhancements that improve performance and system reliability as well.

Speaker #2: A 2025 survey of U.S. healthcare IT and cybersecurity professionals published in the HIPAA Journal found that 93% of healthcare organizations had experienced at least one cyber attack in the past 12 months, with an average of 43 attacks per organization annually.

Speaker #2: Cyber attacks slow patient care, reduce a hospital's capacity, and create staffing strain. More than 70% of hospitals experiencing a significant cyber attack report direct patient care disruption, which is why health systems now treat cybersecurity as a critical patient safety issue.

Speaker 1: A 2025 survey of US healthcare IT and cybersecurity professionals published in the HIPAA Journal found that 93% of healthcare organizations had experienced at least one cyberattack in the past 12 months, with an average of 43 attacks per organization annually. Cyberattacks slow patient care, reduce a hospital's capacity, and create staffing strain. More than 70% of hospitals experiencing a significant cyberattack report direct patient care disruption, which is why health systems now treat cybersecurity as a critical patient safety issue. A dialysis system that meets FDA's most stringent cybersecurity requirements helps protect hospitals by reducing the risk of compromise, limiting the risk of spread, and safeguarding patients. We view Tablo's secure-by-design architecture, multi-layer authentication, and resilience against unauthorized access, as well as its compliance with FDA's rigorous cybersecurity standards, as a significant new competitive advantage.

Leslie Trigg: A 2025 survey of US healthcare IT and cybersecurity professionals published in the HIPAA Journal found that 93% of healthcare organizations had experienced at least one cyberattack in the past 12 months, with an average of 43 attacks per organization annually. Cyberattacks slow patient care, reduce a hospital's capacity, and create staffing strain. More than 70% of hospitals experiencing a significant cyberattack report direct patient care disruption, which is why health systems now treat cybersecurity as a critical patient safety issue. A dialysis system that meets FDA's most stringent cybersecurity requirements helps protect hospitals by reducing the risk of compromise, limiting the risk of spread, and safeguarding patients. We view Tablo's secure-by-design architecture, multi-layer authentication, and resilience against unauthorized access, as well as its compliance with FDA's rigorous cybersecurity standards, as a significant new competitive advantage.

Speaker #2: A dialysis system that meets FDA's most stringent cybersecurity requirements helps protect hospitals by reducing the risk of compromise, limiting the risk of spread, and safeguarding patients.

Speaker #2: We view Tableau's secure-by-design architecture, multi-layer authentication, and resilience against unauthorized access, as well as its compliance with the FDA's rigorous cybersecurity standards, as a significant new competitive advantage.

Speaker #2: It provides yet another compelling value proposition on top of cost savings and on top of clinical outcomes improvement that we believe will be recognized by health systems amid ever-increasing concerns over cybersecurity, continuity of care, and patient safety.

Speaker #2: This clearance is the 10th 510(k) for Outset, building on our track record of innovation in the dialysis market. The next-generation Tableau is also a new foundation from which we intend to innovate further, with future enhancements planned to widen and deepen the moat we have already established in the acute and home markets.

Speaker 1: It provides yet another compelling value proposition on top of cost savings and on top of clinical outcomes improvement that we believe will be recognized by health systems amid ever-increasing concerns over cybersecurity, continuity of care, and patient safety. This clearance is the 10th 510(k) for Outset, building on our track record of innovation in the dialysis market. The next-generation Tablo is also a new foundation from which we intend to innovate further, with future enhancements planned to widen and deepen the moat we have already established in the acute and home markets. We are excited for the planned launch toward the end of Q2. Turning to our commercial organization, our team executed well in Q4 against many of the largest opportunities in our pipeline. We closed the deal that had shifted out of Q3 and made meaningful progress on several others.

Leslie Trigg: It provides yet another compelling value proposition on top of cost savings and on top of clinical outcomes improvement that we believe will be recognized by health systems amid ever-increasing concerns over cybersecurity, continuity of care, and patient safety. This clearance is the 10th 510(k) for Outset, building on our track record of innovation in the dialysis market. The next-generation Tablo is also a new foundation from which we intend to innovate further, with future enhancements planned to widen and deepen the moat we have already established in the acute and home markets. We are excited for the planned launch toward the end of Q2. Turning to our commercial organization, our team executed well in Q4 against many of the largest opportunities in our pipeline. We closed the deal that had shifted out of Q3 and made meaningful progress on several others.

Speaker #2: We are excited for the planned launch toward the end of the second quarter. Turning to our commercial organization, our team executed well in the fourth quarter against many of the largest opportunities in our pipeline.

Speaker #2: We closed the deal that had shifted out of the third quarter and made meaningful progress on several others. I am proud of the fourth-quarter execution, our sales leadership team demonstrated, and optimistic about the additional strides we can take in 2026.

Speaker #2: Our strong pipeline is reflective of the benefits that can be achieved by insourcing dialysis without Outset's proven technology, expert know-how, and exceptional service. And now, together with the next-generation Tableau launching this year, and a rich roadmap of additional innovations to follow, we expect to drive growth for many years to come.

Speaker #2: With that, I'll turn it over to Renee for more detail on the year and our guidance.

Speaker 1: I am proud of the Q4 execution our sales leadership team demonstrated and optimistic about the additional strides we can take in 2026. Our strong pipeline is reflective of the benefits that can be achieved by insourcing dialysis with Outset's proven technology, expert know-how, and exceptional service. And now, together with the next-generation Tablo launching this year and a rich roadmap of additional innovations to follow, we expect to drive growth for many years to come. With that, I'll turn it over to Renee for more detail on the year and our guidance for 2026. Thank you, Leslie, and good afternoon, everyone. Revenue in the Q4 of $28.9 million consisted of $19.9 million in product revenue, which, as expected, was below $21 million in the Q4 of last year.

Leslie Trigg: I am proud of the Q4 execution our sales leadership team demonstrated and optimistic about the additional strides we can take in 2026. Our strong pipeline is reflective of the benefits that can be achieved by insourcing dialysis with Outset's proven technology, expert know-how, and exceptional service. And now, together with the next-generation Tablo launching this year and a rich roadmap of additional innovations to follow, we expect to drive growth for many years to come. With that, I'll turn it over to Renee for more detail on the year and our guidance for 2026.

Speaker #2: for 2026. Thank

Speaker #1: you, Leslie. And good afternoon, everyone. Revenue in the fourth quarter of 28.9 million consisted of 19.9 million in product revenue, which, as expected, was below 21 million in the fourth quarter of last year.

Speaker #1: The components of product revenue include console sales, which grew 11% to 6.4 million, and consumable sales, of 13.5 million. As we indicated last quarter, consumable sales were lower in the quarter compared to the fourth quarter of last year due to order timing, consumable revenue did rebound sequentially just as we had anticipated on last quarter's call based on our Tableau utilization data growing nearly 11% over the third quarter.

Renee Gaeta: Thank you, Leslie, and good afternoon, everyone. Revenue in the Q4 of $28.9 million consisted of $19.9 million in product revenue, which, as expected, was below $21 million in the Q4 of last year.

Speaker 1: The components of product revenue include console sales, which grew 11% to $6.4 million, and consumable sales of $13.5 million. As we indicated last quarter, consumable sales were lower in the quarter compared to the fourth quarter of last year due to order timing. Consumable revenue did rebound sequentially, just as we had anticipated on last quarter's call based on our Tablo utilization data, growing nearly 11% over the third quarter. We were very active during the quarter to tighten up our forecasting methodology for treatments, which now includes closer collaboration with our largest customers on their ordering patterns. I believe we have made improvements to better predict treatment demand, and we will continue to monitor Tablo utilization and ordering data as we hone our approach. Service and other revenue of $9 million grew 6% from $8.5 million in the prior year period.

Renee Gaeta: The components of product revenue include console sales, which grew 11% to $6.4 million, and consumable sales of $13.5 million. As we indicated last quarter, consumable sales were lower in the quarter compared to the Q4 of last year due to order timing. Consumable revenue did rebound sequentially, just as we had anticipated on last quarter's call based on our Tablo utilization data, growing nearly 11% over the third quarter. We were very active during the quarter to tighten up our forecasting methodology for treatments, which now includes closer collaboration with our largest customers on their ordering patterns. I believe we have made improvements to better predict treatment demand, and we will continue to monitor Tablo utilization and ordering data as we hone our approach. Service and other revenue of $9 million grew 6% from $8.5 million in the prior year period.

Speaker #1: We were very active during the quarter to tighten up our forecasting methodology for treatments, which now includes closer collaboration with our largest customers on their ordering patterns.

Speaker #1: I believe we have made improvements to better predict treatment demand, and we will continue to monitor Tableau utilization and ordering data as we hone our approach.

Speaker #1: Service and other revenue of $9 million grew 6% from $8.5 million in the prior year period. Recurring revenue from the sale of Tableau consumables and service was $22.5 million.

Speaker #1: Again, growing sequentially as we anticipated on last quarter's call. But down from the fourth quarter of 2024 due to customer ordering patterns that resulted in a strong fourth quarter in the prior year.

Speaker #1: Next, I will walk through our gross margin and operating expenses for the quarter. Please refer to the tables in today’s earnings release for a reconciliation of GAAP to non-GAAP measures.

Speaker 1: Recurring revenue from the sale of Tablo consumables and service was $22.5 million, again growing sequentially as we anticipated on last quarter's call, but down from Q4 2024 due to customer ordering patterns that resulted in a strong fourth quarter in the prior year. Next, I will walk through our gross margin and operating expenses for the quarter. Please refer to the tables in today's earnings release for a reconciliation of GAAP to non-GAAP measures. Non-GAAP gross margin expanded more than 500 basis points from last year, reaching 42.9% for the quarter, even with another 130 basis point headwind from the underabsorption of manufacturing overhead. Excluding the manufacturing headwind, we would have seen non-GAAP gross margin closer to the mid-40% range. Product gross margin increased 640 basis points year-over-year to 50.7% from 44.3% in Q4 2024.

Renee Gaeta: Recurring revenue from the sale of Tablo consumables and service was $22.5 million, again growing sequentially as we anticipated on last quarter's call, but down from Q4 2024 due to customer ordering patterns that resulted in a strong Q4 in the prior year. Next, I will walk through our gross margin and operating expenses for the quarter. Please refer to the tables in today's earnings release for a reconciliation of GAAP to non-GAAP measures. Non-GAAP gross margin expanded more than 500 basis points from last year, reaching 42.9% for the quarter, even with another 130 basis point headwind from the underabsorption of manufacturing overhead. Excluding the manufacturing headwind, we would have seen non-GAAP gross margin closer to the mid-40% range. Product gross margin increased 640 basis points year-over-year to 50.7% from 44.3% in Q4 2024.

Speaker #1: Non-GAAP gross margin expanded more than 500 basis points from last year, reaching 42.9% for the quarter, even with another 130 basis point headwind from the underabsorption of manufacturing overhead.

Speaker #1: Excluding the manufacturing headwind, we would have seen non-gap gross margin closer to the mid-40% range. Product gross margin increased 640 basis points year over year to 50.7% from 44.3% in the fourth quarter of the first time product gross 2024.

Speaker #1: This marks margin has exceeded 50%. Service and other gross margin was 25.6%, growing 470 basis points from 20.9% in the fourth quarter of 2024.

Speaker #1: This progress keeps us right on our path to the next milestone of 50%. Moving to operating expenses, non-GAAP operating expenses declined nearly 4% to $25.7 million compared to $26.6 million in the fourth quarter of 2024.

Speaker 1: This marks the first time product gross margin has exceeded 50%. Service and other gross margin was 25.6%, growing 470 basis points from 20.9% in the fourth quarter of 2024. This progress keeps us right on our path to the next milestone of 50%. Moving to operating expenses, non-GAAP operating expenses declined nearly 4% to $25.7 million compared to $26.6 million in the fourth quarter of 2024. Non-GAAP operating loss was $13.3 million, 14% below the operating loss of $15.5 million in the prior year period. Non-GAAP net loss of $15 million was 22% lower than $19.3 million in the fourth quarter of 2024. These positive results reflect our drive to profitability. Moving to our balance sheet, we ended the quarter with $173 million in cash, cash equivalents, short-term investments, and restricted cash. We used approximately $9 million in cash during the quarter.

Renee Gaeta: This marks the first time product gross margin has exceeded 50%. Service and other gross margin was 25.6%, growing 470 basis points from 20.9% in the Q4 of 2024. This progress keeps us right on our path to the next milestone of 50%. Moving to operating expenses, non-GAAP operating expenses declined nearly 4% to $25.7 million compared to $26.6 million in the Q4 of 2024. Non-GAAP operating loss was $13.3 million, 14% below the operating loss of $15.5 million in the prior year period. Non-GAAP net loss of $15 million was 22% lower than $19.3 million in the Q4 of 2024. These positive results reflect our drive to profitability. Moving to our balance sheet, we ended the quarter with $173 million in cash, cash equivalents, short-term investments, and restricted cash. We used approximately $9 million in cash during the quarter.

Speaker #1: Non-GAAP operating loss was $13.3 million, 14% below the operating loss of $15.5 million in the prior year period. Non-GAAP net loss of $15 million was 22% lower than $19.3 million in the fourth quarter of 2024.

Speaker #1: These positive results reflect our drive to profitability. Moving to our balance sheet, we ended the quarter with $173 million in cash, cash equivalents, short-term investments, and restricted cash.

Speaker #1: We used approximately $9 million in cash during the quarter. To close out the full year of 2025, we reported revenue of $119.5 million, a 5% increase over 2024.

Speaker #1: Product revenue was $84.8 million, a 5% increase over $81 million, in 2024. Service and other revenue was $34.7 million, a 6% increase over $32.7 million, in 2024, and recurring revenue was $88.7 million, also a 6% increase over $83.9 million, in 2024.

Speaker 1: To close out the full year of 2025, we reported revenue of $119.5 million, a 5% increase over 2024. Product revenue was $84.8 million, a 5% increase over $81 million in 2024. Service and other revenue was $34.7 million, a 6% increase over $32.7 million in 2024, and recurring revenue was $88.7 million, also a 6% increase over $83.9 million in 2024. Non-GAAP gross margin for the year increased 400 basis points to 39.6% or 41.1%, excluding the impact of manufacturing underabsorption. For the full year, the underabsorption headwind was 150 basis points, right on our forecast and will have a diminishing effect in 2026. Non-GAAP operating expenses in 2025 were $97.8 million, a 19% reduction from $120.7 million in 2024. Non-GAAP net loss was $65.4 million, a 31% decline compared to $94.8 million in 2024.

Renee Gaeta: To close out the full year of 2025, we reported revenue of $119.5 million, a 5% increase over 2024. Product revenue was $84.8 million, a 5% increase over $81 million in 2024. Service and other revenue was $34.7 million, a 6% increase over $32.7 million in 2024, and recurring revenue was $88.7 million, also a 6% increase over $83.9 million in 2024. Non-GAAP gross margin for the year increased 400 basis points to 39.6% or 41.1%, excluding the impact of manufacturing underabsorption. For the full year, the underabsorption headwind was 150 basis points, right on our forecast and will have a diminishing effect in 2026. Non-GAAP operating expenses in 2025 were $97.8 million, a 19% reduction from $120.7 million in 2024. Non-GAAP net loss was $65.4 million, a 31% decline compared to $94.8 million in 2024.

Speaker #1: Non-GAAP gross margin for the year increased 400 basis points to 39.6%, or 41.1% excluding the impact of manufacturing under-absorption. For the full year, the under-absorption headwind was 150 basis points, right on our forecast, and will have a diminishing effect in 2026.

Speaker #1: Non-GAAP operating expenses in 2025 were $97.8 million, a 19% reduction from $120.7 million in 2024. Non-GAAP net loss was $65.4 million, a 31% decline compared to $94.8 million in 2024.

Speaker #1: Turning to our guidance for 2026, we expect revenue to be in the range of 125 million to 130 million, a 5% to 9% increase over 2025.

Speaker #1: In terms of revenue timing, we expect the first quarter to be roughly flat to the fourth quarter of 2025, and then stepping up through the rest of the year.

Speaker #1: For non-GAAP gross margin, we expect to be in the low-to-mid 40% range. A higher console mix would move gross margin lower in the range, just as a higher mix of consumables would move gross margin to the higher end of the range.

Speaker 1: Turning to our guidance for 2026, we expect revenue to be in the range of $125 million to $130 million, a 5% to 9% increase over 2025. In terms of revenue timing, we expect Q1 to be roughly flat to Q4 of 2025 and then stepping up through the rest of the year. For non-GAAP gross margin, we expect to be in the low to mid-40% range. A higher console mix would move gross margin lower in the range, just as a higher mix of consumables would move gross margin to the higher end of the range. We expect the manufacturing underabsorption that was a headwind in 2025 to attenuate as we move through 2026. Finally, we anticipate continued operating leverage this year with operating expense growth at roughly half the rate of expected sales growth.

Renee Gaeta: Turning to our guidance for 2026, we expect revenue to be in the range of $125 million to $130 million, a 5% to 9% increase over 2025. In terms of revenue timing, we expect Q1 to be roughly flat to Q4 of 2025 and then stepping up through the rest of the year. For non-GAAP gross margin, we expect to be in the low to mid-40% range. A higher console mix would move gross margin lower in the range, just as a higher mix of consumables would move gross margin to the higher end of the range. We expect the manufacturing underabsorption that was a headwind in 2025 to attenuate as we move through 2026. Finally, we anticipate continued operating leverage this year with operating expense growth at roughly half the rate of expected sales growth.

Speaker #1: We expect the manufacturing under absorption that was a headwind in 2025 to attenuate as we move through 2026. Finally, we anticipate continued operating leverage this year, with operating expense growth at roughly half the rate of expected sales growth.

Speaker #1: In terms of cash use, we expect Q1 to be our highest cash use quarter for the year due to planned investments in inventory and manufacturing.

Speaker #1: On a full-year basis, the combination of revenue growth, gross margin expansion, and expense discipline will enable us to use less cash in 2026 than the $46 million we used in 2025.

Speaker #1: With that, I will turn the call back to Leslie for closing.

Speaker #1: comments. Thanks, Renee.

Speaker #2: I want to close by reiterating that we operate in two large end markets where we remain the clear technology leader. Tableau consoles have performed more than 3 million cumulative treatments, and what is even more astounding is the depth and the breadth of our data repository.

Speaker 1: In terms of cash use, we expect Q1 to be our highest cash use quarter for the year due to planned investments in inventory and manufacturing. On a full-year basis, the combination of revenue growth, gross margin expansion, and expense discipline will enable us to use less cash in 2026 than the $46 million we used in 2025. With that, I will turn the call back to Leslie for closing comments. Thanks, Renee. I want to close by reiterating that we operate in two large end markets where we remain the clear technology leader. Tablo consoles have performed more than 3 million cumulative treatments, and what is even more astounding is the depth and the breadth of our data repository. There are now more than 8 trillion data points in our cloud platform, which helps fuel our analytics and innovation engines, improves the customer experience, and ultimately enhances patient care.

Renee Gaeta: In terms of cash use, we expect Q1 to be our highest cash use quarter for the year due to planned investments in inventory and manufacturing. On a full-year basis, the combination of revenue growth, gross margin expansion, and expense discipline will enable us to use less cash in 2026 than the $46 million we used in 2025. With that, I will turn the call back to Leslie for closing comments.

Speaker #2: There are now more than 8 trillion data points in our cloud platform, which helps fuel our analytics and innovation engines, improves the customer experience, and ultimately enhances patient care.

Speaker #2: We're gaining scale with significant growth runway ahead through hundreds of master sales and service agreements already in place and a pipeline of new customer opportunities.

Leslie Trigg: Thanks, Renee. I want to close by reiterating that we operate in two large end markets where we remain the clear technology leader. Tablo consoles have performed more than 3 million cumulative treatments, and what is even more astounding is the depth and the breadth of our data repository. There are now more than 8 trillion data points in our cloud platform, which helps fuel our analytics and innovation engines, improves the customer experience, and ultimately enhances patient care.

Speaker #2: All of this progress sets a powerful foundation for value creation over the long term. Providers, including many of the largest health systems in the country, are realizing the advantages that insourcing with Tableau can deliver.

Speaker #2: Our team is differentiated by its expertise and an unwavering commitment to our customers and the patients they serve. I expect we will demonstrate that commitment again in 2026 as we drive growth and move ever closer to profitability.

Speaker 1: We're gaining scale with significant growth runway ahead through hundreds of master sales and service agreements already in place and a pipeline of new customer opportunities. All of this progress sets a powerful foundation for value creation over the long term. Providers, including many of the largest health systems in the country, are realizing the advantages that insourcing with Tablo can deliver. Our team is differentiated by its expertise and an unwavering commitment to our customers and the patients they serve. I expect we will demonstrate that commitment again in 2026 as we drive growth and move ever closer to profitability. With that, I think we are ready for Q&A. Operator, please open the lines. Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone.

Leslie Trigg: We're gaining scale with significant growth runway ahead through hundreds of master sales and service agreements already in place and a pipeline of new customer opportunities. All of this progress sets a powerful foundation for value creation over the long term. Providers, including many of the largest health systems in the country, are realizing the advantages that insourcing with Tablo can deliver. Our team is differentiated by its expertise and an unwavering commitment to our customers and the patients they serve. I expect we will demonstrate that commitment again in 2026 as we drive growth and move ever closer to profitability. With that, I think we are ready for Q&A. Operator, please open the lines.

Speaker #2: With that, I think we are ready for Q&A. Operator, please open the

Speaker #2: lines. Thank

Speaker #3: As a reminder, if you would like to ask a question, please press star 11 on your telephone. If you would like to remove yourself from the queue, press star 11 again.

Speaker #3: We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment for the first question of the day.

Speaker #3: Next question will be coming from the line of Marie Thibaut of BTIG. Your line is open.

Speaker #3: open.

Speaker #4: Oh, good

Speaker #4: Evening. Thanks for taking the questions. I wanted to start here with next-gen Tableau. Thanks for the background on the advantages that system will offer.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. If you would like to remove yourself from the queue, press star one one again. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment for the first question of the day, which will be coming from the line of Marie Thibault of BTIG. Your line is open.

Speaker #4: Can you tell us a little bit about how that might change the markets that you can go after, the types of hospitals you can go after, and whether it might change the sales cycle timelines?

Speaker 1: If you would like to remove yourself from the queue, press star one one again. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment for the first question of the day, which will be coming from the line of Marie Thibault of BTIG. Your line is open. Oh, good evening. Thanks for taking the questions. I wanted to start here with NextGen Tablo. Thanks for the background on the advantages that system will offer. Can you tell us a little bit about how that might change, the markets that you can go after, the types of hospitals you can go after, whether it might change the sales cycle timelines, and any ASP lifts that we might see as well from that launch? Sure. I'm happy to address that. Thanks for the question and hello. Yeah.

Speaker #4: And any ASP lists that we might see as well from that launch.

Speaker #2: Sure. I'm happy to address that. Thanks for the question, and hello. Yeah. So let me talk a little bit more about that. It's one of my favorite topics right now because we are really proud of the work that went into this and what we believe will be the value that we deliver to hospitals.

Marie Thibault: Oh, good evening. Thanks for taking the questions. I wanted to start here with NextGen Tablo. Thanks for the background on the advantages that system will offer. Can you tell us a little bit about how that might change, the markets that you can go after, the types of hospitals you can go after, whether it might change the sales cycle timelines, and any ASP lifts that we might see as well from that launch?

Speaker #2: I myself have talked with so many hospital leaders around cyber, and particularly those that view vendor devices as their biggest vulnerability. They not only have to worry about the security of their own network, but, of course, increasingly, all of the different devices that are connected to it.

Leslie Trigg: Sure. I'm happy to address that. Thanks for the question and hello. Yeah. So let me talk a little bit more about that. It's one of my favorite topics right now because we are really proud of the work that went into this and what we believe will be the value that we deliver to hospitals. I myself have talked with so many hospital leaders around cyber and particularly those that view vendor devices as their biggest vulnerability. They not only have to worry about the security of their own network, but of course, increasingly, all of the different devices that are connected to it. So I think it's more than fair to say that health system executives have an extremely heightened focus on the cybersafety of the medical devices being used in their environments.

Speaker #2: So, I think it's more than fair to say that health system executives have an extremely heightened focus on the cybersafety of the medical devices being used in their environments.

Speaker 1: So let me talk a little bit more about that. It's one of my favorite topics right now because we are really proud of the work that went into this and what we believe will be the value that we deliver to hospitals. I myself have talked with so many hospital leaders around cyber and particularly those that view vendor devices as their biggest vulnerability. They not only have to worry about the security of their own network, but of course, increasingly, all of the different devices that are connected to it. So I think it's more than fair to say that health system executives have an extremely heightened focus on the cybersafety of the medical devices being used in their environments.

Speaker #2: So, given the fact that we now have the first dialysis system harmonized with FDA's very rigorous cybersecurity standards, I do believe it will help us generate incremental attention and interest among potential customers.

Speaker #2: I'd say regardless of size, maybe to hit on one part of your question, I haven't seen a big difference in the level of cybersecurity attention between small, medium, or large hospitals.

Speaker #2: They're all concerned about it. Because it's something that they increasingly view through the lens of fundamental patient safety. So yes, I do think that this will be a potential tailwind, a potential catalyst for us in 2026 and obviously beyond.

Speaker 1: So given the fact that we now have the first dialysis system harmonized with FDA's very rigorous cybersecurity standards, I do believe it will help us generate incremental attention and interest among potential customers, I'd say regardless of size, maybe to hit on one part of your question. I haven't seen a big difference in the level of cybersecurity attention between small, medium, or large hospitals. They're all concerned about it because it's something that they increasingly view through the lens of fundamental patient safety. So yes, I do think that this will be a potential tailwind, a potential catalyst for us in 2026 and obviously beyond. I do think that it could, again, very early, we just got the approval a couple of weeks ago. So too early to speculate, but minimally, I think that we will see incremental attention and interest.

Leslie Trigg: So given the fact that we now have the first dialysis system harmonized with FDA's very rigorous cybersecurity standards, I do believe it will help us generate incremental attention and interest among potential customers, I'd say regardless of size, maybe to hit on one part of your question. I haven't seen a big difference in the level of cybersecurity attention between small, medium, or large hospitals. They're all concerned about it because it's something that they increasingly view through the lens of fundamental patient safety. So yes, I do think that this will be a potential tailwind, a potential catalyst for us in 2026 and obviously beyond. I do think that it could, again, very early, we just got the approval a couple of weeks ago. So too early to speculate, but minimally, I think that we will see incremental attention and interest.

Speaker #2: I do think that it could—again, very early; we just got the approval a couple of weeks ago, so too early to speculate. But, minimally, I think that we will see incremental attention and interest, and I do think that our ability to offer hospitals sort of advanced cybersafeguards will be very positively received.

Speaker #2: In terms of the ASP lift, look forward to giving you more specifics on that as we get a little closer to the launch a little bit deeper in the year.

Speaker #2: We do, I think, philosophically—we have always followed a philosophy around pricing for value. And we believe that the value to this upgrade is quite significant.

Speaker #2: But I'll close by saying stay tuned as we get a little deeper into the year on

Speaker 1: I do think that our ability to offer hospitals sort of advanced cybersafeguards will be very positively received. In terms of the ASP lift, look forward to giving you more specifics on that as we get a little closer to the launch, a little bit deeper in the year. I think philosophically, we have always followed a philosophy around pricing for value, and we believe that the value to this upgrade is quite significant. But I'll close by saying, stay tuned as we get a little deeper into the year on specifics. Okay. Very helpful, Leslie. Thank you for that. Then a quick follow-up on the sales force and the deal pipeline. Certainly sounds like you've tightened up the process so that you have cleaner visibility into timing and the deals. But can you tell us anything about the stability of the sales force?

Leslie Trigg: I do think that our ability to offer hospitals sort of advanced cybersafeguards will be very positively received. In terms of the ASP lift, look forward to giving you more specifics on that as we get a little closer to the launch, a little bit deeper in the year. I think philosophically, we have always followed a philosophy around pricing for value, and we believe that the value to this upgrade is quite significant. But I'll close by saying, stay tuned as we get a little deeper into the year on specifics.

Speaker #2: specifics. Okay.

Speaker #4: Very helpful, Leslie. Thank you for that. And then a quick follow-up on the sales force and the deal pipeline—it certainly sounds like you've tightened up the process so that you have cleaner visibility into timing and the deals.

Speaker #4: But can you tell us anything about the stability of the sales force? Was there any attrition post the leadership leaving? Are there any updates on the search for the leader?

Speaker #4: And anything, sort of, on how you're viewing the deal pipeline now, given the guidance of sequentially flat for the first quarter? Thanks for taking the questions.

Marie Thibault: Okay. Very helpful, Leslie. Thank you for that. Then a quick follow-up on the sales force and the deal pipeline. Certainly sounds like you've tightened up the process so that you have cleaner visibility into timing and the deals. But can you tell us anything about the stability of the sales force? Was there any attrition post the leadership leaving? Are there any updates on a search for the leader and anything sort of on how you're viewing the deal pipeline now given the guidance of sequentially flat for Q1? Thanks for taking the question.

Speaker #2: Absolutely. Yeah. Well, I think as I reflect on Q4, and I'll say current state, today, we do have an experienced sales leadership team. They did an excellent job at keeping the organization focused on the quarter.

Speaker #2: I think the results of Q4 reflect that, albeit on a revised guidance range. We did execute at the top of that revised guidance range.

Speaker 1: Was there any attrition post the leadership leaving? Are there any updates on a search for the leader and anything sort of on how you're viewing the deal pipeline now given the guidance of sequentially flat for Q1? Thanks for taking the question. Absolutely. Yeah. Well, I think as I reflect on Q4 and I'll say current state today, we do have an experienced sales leadership team. They did an excellent job at keeping the organization focused on the quarter. I think the results of Q4 reflect that, albeit on a revised guidance range. We did execute at the top of that revised guidance range. We did see the treatments renormalize. We did see the deal from Q3 that slipped close in Q4. We did see console sales bookings land exactly where we expected them to land in Q4. So all of that was encouraging.

Speaker #2: We did see the treatments renormalize. We did see the deal from Q3 that slipped close in Q4. We did see console sales bookings land exactly where we expected them to land in Q4.

Leslie Trigg: Absolutely. Yeah. Well, I think as I reflect on Q4 and I'll say current state today, we do have an experienced sales leadership team. They did an excellent job at keeping the organization focused on the quarter. I think the results of Q4 reflect that, albeit on a revised guidance range. We did execute at the top of that revised guidance range. We did see the treatments renormalize. We did see the deal from Q3 that slipped close in Q4. We did see console sales bookings land exactly where we expected them to land in Q4. So all of that was encouraging.

Speaker #2: So, all of that was encouraging. Now, as we kind of look forward, Renee and I remain very hands-on, inspecting the pipeline and forecasting the deals, and we're still operating at a very detailed level.

Speaker #2: We'll obviously continue vigilant monitoring, but in terms of the stability and focus of the sales organization, I'd say so far, so good. We do still have a search underway, which is being done for us by a leading executive search firm.

Speaker #2: Because we do have a very strong and capable sales leadership team in place today, it is affording us the time to find the best of the best.

Speaker 1: Now, as we kind of look forward, Renee and I remain very hands-on, inspecting the pipeline and forecasted deals. And we're still operating at a very detailed level. We'll obviously continue vigilant monitoring. But in terms of the stability and focus of the sales organization, I'd say so far, so good. We do still have a search underway, which is being done for us by a leading executive search firm. Because we do have a very strong and capable sales leadership team in place today, it is affording us the time to find the best of the best. So we're being very deliberative to ensure that we have the best cultural and operational fit for the business. Maybe lastly, I was just saying thank you. Oh. Thank you.

Leslie Trigg: Now, as we kind of look forward, Renee and I remain very hands-on, inspecting the pipeline and forecasted deals. And we're still operating at a very detailed level. We'll obviously continue vigilant monitoring. But in terms of the stability and focus of the sales organization, I'd say so far, so good. We do still have a search underway, which is being done for us by a leading executive search firm. Because we do have a very strong and capable sales leadership team in place today, it is affording us the time to find the best of the best. So we're being very deliberative to ensure that we have the best cultural and operational fit for the business. Maybe lastly, what?

Speaker #2: So, we're being very deliberative to ensure that we have the best cultural and operational fit for the business. Maybe lastly, I think

Speaker #2: So we're being very deliberative to ensure that we have the best cultural and operational fit for the business. Maybe lastly, I think—what? Sorry.

Speaker #4: Sorry, I was just saying thank you.

Speaker #2: Oh. Thank you. But I was going to address the third part of your question, which I think was pipeline in Q4 and kind of across 2025.

Speaker #2: So looking back on the year in full, yes, the pipeline did grow across all the key metrics that we measure, which are the overall size of the pipeline, the average deal size, but in particular, deals over $1 million in console value, and then we also look at, does the pipeline look healthy in terms of diversification?

Marie Thibault: I was just saying thank you.

Leslie Trigg: Oh. Thank you. But I was going to address the third part of your question, which I think was pipeline in Q4 and kind of across 2025. So looking back on the year in full, yes, the pipeline did grow across all the key metrics that we measure, which are the overall size of the pipeline, the average deal size, but in particular, deals over $1 million in console value. And then we also look at does the pipeline look healthy in terms of diversification? And we look at diversification in a couple of different ways.

Speaker 1: But I was going to address the third part of your question, which I think was pipeline in Q4 and kind of across 2025. So looking back on the year in full, yes, the pipeline did grow across all the key metrics that we measure, which are the overall size of the pipeline, the average deal size, but in particular, deals over $1 million in console value. And then we also look at does the pipeline look healthy in terms of diversification? And we look at diversification in a couple of different ways. One is diversification between new customers who are coming into the pipeline interested in moving from outsourcing to insourcing with Outset, and then existing customers who are already insourced with Tablo and looking at expansion to new facilities based on the clinical or operational financial benefits that they've already seen and proven out to themselves.

Speaker #2: And we look at diversification in a couple of different ways. One is diversification between new customers who are coming into the pipeline interested in moving from outsourcing to insourcing. Without that,

Speaker #2: And then existing customers who are already insourced with Tableau and looking at expansion to new facilities based on the clinical, operational, or financial benefits that they've already seen and proven out to themselves.

Speaker #2: So yes, we do see good diversification between new and existing. We also look at the diversification in terms of hospital size. We see good diversification between kind of the big brand-name beachhead health systems that have entered our pipeline, but also medium-sized hospitals and small hospitals.

Leslie Trigg: One is diversification between new customers who are coming into the pipeline interested in moving from outsourcing to insourcing with Outset, and then existing customers who are already insourced with Tablo and looking at expansion to new facilities based on the clinical or operational financial benefits that they've already seen and proven out to themselves.

Speaker #2: And I'll maybe take an opportunity just to touch on a point that's adjacent to your question, Marie. When I talk about small hospitals, we're really proud of the impact, albeit early.

Speaker #2: It's nascent, but the impact that we have had in 25 and we expect to have in 26 with critical access hospitals. These are hospitals that are increasingly looking at standing up new dialysis service lines because dialysis clinics in their local rural communities have closed.

Speaker 1: So yes, we do see good diversification between new and existing. We also look at the diversification in terms of hospital size. We see good diversification between kind of the big brand name beachhead health systems that have entered our pipeline, but also medium-sized hospitals and small hospitals. And I'll maybe take an opportunity just to touch on a point that's adjacent to your question, Marie. When I talk about small hospitals, we're really proud of the impact, albeit early. It's nascent, but the impact that we have had in 2025 and we expect to have in 2026 with critical access hospitals. These are hospitals that are increasingly looking at standing up new dialysis service lines because dialysis clinics in their local rural communities have closed.

Leslie Trigg: So yes, we do see good diversification between new and existing. We also look at the diversification in terms of hospital size. We see good diversification between kind of the big brand name beachhead health systems that have entered our pipeline, but also medium-sized hospitals and small hospitals. And I'll maybe take an opportunity just to touch on a point that's adjacent to your question, Marie. When I talk about small hospitals, we're really proud of the impact, albeit early. It's nascent, but the impact that we have had in 2025 and we expect to have in 2026 with critical access hospitals. These are hospitals that are increasingly looking at standing up new dialysis service lines because dialysis clinics in their local rural communities have closed.

Speaker #2: And the patients, therefore, in these rural areas do not always have access to any sort of dialysis care which obviously is problematic because it is a life-sustaining therapy.

Speaker #2: And so we are proud of the partnership that we're starting to effectuate with critical access hospitals to ensure that these rural communities have consistent access to dialysis. So, very long-winded answer.

Speaker #2: I apologize for that. But in terms of pipeline diversification, across the size and type of the hospitals, I think we are very well balanced.

Speaker 1: And the patients, therefore, in these rural areas do not always have access to any sort of dialysis care, which obviously is problematic because it is a life-sustaining therapy. And so we are proud of the partnership that we're starting to effectuate with critical access hospitals to ensure that these rural communities have consistent access to dialysis. So very long-winded answer. I apologize for that. But in terms of pipeline diversification across the size and type of the hospitals, I think we are very well balanced, again, across large enterprise solution-level deals, again, all the way down to critical access hospitals and sort of everything in between. Thank you so much. Thank you. One moment for the next question. And our next question is coming from the line of Joshua Jennings of TD Cowen. And your line is open. Hi. Good afternoon. Thanks for taking the questions.

Leslie Trigg: And the patients, therefore, in these rural areas do not always have access to any sort of dialysis care, which obviously is problematic because it is a life-sustaining therapy. And so we are proud of the partnership that we're starting to effectuate with critical access hospitals to ensure that these rural communities have consistent access to dialysis. So very long-winded answer. I apologize for that. But in terms of pipeline diversification across the size and type of the hospitals, I think we are very well balanced, again, across large enterprise solution-level deals, again, all the way down to critical access hospitals and sort of everything in between.

Speaker #2: Again, across large enterprise solution-level deals, all the way down to critical access hospitals and sort of everything in between.

Speaker #2: Again, across large enterprise, solution-level deals—again, all the way down to critical access hospitals and sort of everything in between. Thank you.

Speaker #4: you so much.

Speaker #1: Thank you. One moment for the next question. And our next question is coming from the line of Joshua Jennings, of TDCal, and your line is open.

Speaker #5: Hi. Good afternoon. Thanks for taking the questions. And wanted to follow up on Marie's question. Your answer, Leslie, just on the pipeline diversification, is there any way to or two questions within one.

Speaker #5: One, can you quantify the pipeline growth entering '25 versus entering '26 or vice versa? And then just as we think about the potential to expand your current customer base and just the sales cycle associated with those deals, is there any is there a prioritization of the sales force to reduce the sales cycle, or is there or is the mix appropriate I think as you stated?

Marie Thibault: Thank you so much.

Operator: Thank you. One moment for the next question. And our next question is coming from the line of Joshua Jennings of TD Cowen. And your line is open.

Joshua Jennings: Hi. Good afternoon. Thanks for taking the questions. Wanted to follow up on Marie's question. Your answer, Leslie, just on the pipeline diversification. Is there any way to or two questions within one. One, can you quantify the pipeline growth entering 2025 versus entering 2026 or vice versa? And then just as we think about the potential to expand your current customer base and just the sales cycle associated with those deals, is there a prioritization of the sales force to reduce the sales cycle, or is the mix appropriate, I think, as you stated? Any strategic attack plan just in terms of the different buckets within the pipeline and thinking about contracting the sales cycle over the next 12 to 24 months?

Speaker 1: Wanted to follow up on Marie's question. Your answer, Leslie, just on the pipeline diversification. Is there any way to or two questions within one. One, can you quantify the pipeline growth entering 2025 versus entering 2026 or vice versa? And then just as we think about the potential to expand your current customer base and just the sales cycle associated with those deals, is there a prioritization of the sales force to reduce the sales cycle, or is the mix appropriate, I think, as you stated? Any strategic attack plan just in terms of the different buckets within the pipeline and thinking about contracting the sales cycle over the next 12 to 24 months? Yeah. Thanks, Josh. Those are all great questions.

Speaker #5: Any strategic attack plan, just in terms of the different buckets within the pipeline and thinking about contracting the sales cycle over the next 12 to 24 months?

Speaker #2: Yeah, thanks, Josh. Those are all great questions. I'm going to answer them with a little bit of sensitivity from a competitive standpoint, but let me see if I can at least provide something helpful. You hit the nail on the head when you talked about color.

Speaker #2: So you really hit the sales cycle. And that's exactly why diversification in the pipeline around deal size is important, and why the diversification between sort of new customers and expansion customers is important.

Speaker #2: The larger the deals, the longer the sales cycle, and that's not unique to Outset. That's, I think, universal to any capital equipment business. When customers are new to Outset, obviously, you've got a few extra steps around master sales and service agreements and OAs, etc., long before you get to a PO.

Leslie Trigg: Yeah. Thanks, Josh. Those are all great questions.I'm going to answer them with a little bit of sensitivity from a competitive standpoint, but let me see if I can at least provide some helpful color. So you really hit the nail on the head when you talked about the sales cycle. And that's exactly why diversification in the pipeline around deal size is important and why the diversification between sort of new customers and expansion customers is important. The larger the deals, the longer the sales cycle. And that's not unique to Outset. That's, I think, universal to any capital equipment business. When customers are new to Outset, obviously, you've got a few extra steps around master sales and service agreements and OAs, etc., long before you get to a PO. And that always adds some time.

Speaker 1: I'm going to answer them with a little bit of sensitivity from a competitive standpoint, but let me see if I can at least provide some helpful color. So you really hit the nail on the head when you talked about the sales cycle. And that's exactly why diversification in the pipeline around deal size is important and why the diversification between sort of new customers and expansion customers is important. The larger the deals, the longer the sales cycle. And that's not unique to Outset. That's, I think, universal to any capital equipment business. When customers are new to Outset, obviously, you've got a few extra steps around master sales and service agreements and OAs, etc., long before you get to a PO. And that always adds some time.

Speaker #2: And that always adds some time. When you're dealing with enterprise solution opportunities, you are talking about 10 hospital conversions, 15, 20, or more hospital conversions, sometimes all at the same time.

Speaker #2: And those are big decisions. We recognize that those are big, important decisions. And so understandably, those types of deals are going to involve more stakeholders at the health system level.

Speaker #2: You not only are working with a systems CNO—as, for example, if it's a 15- or 20-hospital system—you also need to make sure that all other 15 or 20 local-level CNOs are on board and enthusiastic.

Speaker 1: When you're dealing with enterprise solution opportunities, you are talking about 10 hospital conversions, 15, 20, or more hospital conversions, sometimes all at the same time. Those are big decisions. We recognize that those are big, important decisions. So understandably, those types of deals are going to involve more stakeholders at the health system level. You not only are working with a system CNO, as, for example, if it's a 15 or 20 hospital system, you also need to make sure that all other 15 or 20 local-level CNOs are on board and enthusiastic. That takes a bit more time. When we look at the larger enterprise opportunities, our sales cycle, and we've shared this before, it remains, I would say, in that 9 to 12-month-plus-plus range. It can be as long as a year and a half.

Leslie Trigg: When you're dealing with enterprise solution opportunities, you are talking about 10 hospital conversions, 15, 20, or more hospital conversions, sometimes all at the same time. Those are big decisions. We recognize that those are big, important decisions. So understandably, those types of deals are going to involve more stakeholders at the health system level. You not only are working with a system CNO, as, for example, if it's a 15 or 20 hospital system, you also need to make sure that all other 15 or 20 local-level CNOs are on board and enthusiastic. That takes a bit more time. When we look at the larger enterprise opportunities, our sales cycle, and we've shared this before, it remains, I would say, in that 9 to 12-month-plus-plus range. It can be as long as a year and a half.

Speaker #2: And so that takes a bit more time. So when we look at the larger enterprise opportunities, our sales cycle—and we've shared this before—it remains, I would say, in that 9- to 12-month-plus-plus range, but it can be as long as a year and a half.

Speaker #2: At the same time, when we look at deals that are much smaller—that is, deals that can close in as little as three to six months.

Speaker #2: And so, as we think about the design of our pipeline, the management of the pipeline, that's exactly how we're thinking about it, Josh—it's really about a balance between sales cycle time.

Speaker #2: You also asked me about the Salesforce focus, and here I'll be a little bit more artful, but I would say that we are focused on serving any and all hospitals and post-acute facilities that want to kind of control their own destiny when it comes to the clinical, operational, and financial benefits of insourcing versus outsourcing.

Speaker 1: At the same time, when we look at deals that are much smaller, that is close. That can be as little as 3 to 6 months. And so as we think about the design of our pipeline, the management of the pipeline, that's exactly how we're thinking about it, Josh, is really about a balance between sales cycle time. You also asked me about the sales force focus. And here I'll be a little bit more artful, but I would say that we are focused on serving any and all hospitals and post-acute facilities that want to kind of control their own destiny when it comes to the clinical, operational, financial benefits of insourcing versus outsourcing.

Leslie Trigg: At the same time, when we look at deals that are much smaller, that is close. That can be as little as 3 to 6 months. And so as we think about the design of our pipeline, the management of the pipeline, that's exactly how we're thinking about it, Josh, is really about a balance between sales cycle time. You also asked me about the sales force focus. And here I'll be a little bit more artful, but I would say that we are focused on serving any and all hospitals and post-acute facilities that want to kind of control their own destiny when it comes to the clinical, operational, financial benefits of insourcing versus outsourcing.

Speaker #2: With that being said, yes, you're right that if you're thinking about customers who already have a footprint with insourcing and Tableau, in theory, that often can have a shorter sales cycle with lower barriers to adoption.

Speaker #2: But again, I want to stress we're focused on serving everyone who wants to control their own destiny moving forward for better patient care. Hopefully, that provided a little bit of helpful context.

Speaker #2: color. No, definitely.

Speaker #5: I mean, it may be a little bit too granular, but just any color on, or a quantification of, I guess, the pipeline entering '26 versus '25?

Speaker 1: With that being said, yes, you're right that if you're thinking about customers who already have a footprint with insourcing in Tablo, in the theoretical, that often can have a shorter sales cycle with lower barriers to adoption. But again, I want to stress, we're focused on serving everyone who wants to control their own destiny moving forward for better patient care. Hopefully, that provides a little bit of helpful color. No, definitely. I mean, it may be a little bit too granular, but just any color on or a quantification of, I guess, the pipeline entering 2026 versus 2025? Yeah. We saw about the same amount of growth in the pipeline as we did between 2024 and 2025.

Leslie Trigg: With that being said, yes, you're right that if you're thinking about customers who already have a footprint with insourcing in Tablo, in the theoretical, that often can have a shorter sales cycle with lower barriers to adoption. But again, I want to stress, we're focused on serving everyone who wants to control their own destiny moving forward for better patient care. Hopefully, that provides a little bit of helpful color.

Speaker #2: Yeah. We saw about the same amount of growth in the pipeline as we did between '24 and '25. We saw, again, about the same rate of growth between '25 heading into year-end '25 heading into the beginning of sorry, year-end '24 into year-end '25, about the same rate of growth as we did the prior 12 months.

Joshua Jennings: No, definitely. I mean, it may be a little bit too granular, but just any color on or a quantification of, I guess, the pipeline entering 2026 versus 2025?

Speaker #2: So, I continue to be very encouraged about the demand that we're generating. And I think that some of the pipeline—I know that some of the pipeline expansion more recently has been because of this new clinical value proposition that's been emerging and been published increasingly by our own customers; seeing a reduction in length of stay, a reduction in CLABSI rates, even a reduction in code blues during dialysis treatments.

Leslie Trigg: Yeah. We saw about the same amount of growth in the pipeline as we did between 2024 and 2025. We saw, again, about the same rate of growth between 2025 heading into year-end 2025 heading into the beginning of, sorry, year-end 2024 into year-end 2025, about the same rate of growth as we did the prior 12 months. So I continue to be very encouraged about the demand that we're generating. And I think that some of the pipeline; I know that some of the pipeline expansion more recently has been because of this new clinical value proposition that's been emerging and been published increasingly by our own customers, seeing a reduction in length of stay, a reduction in CLABSI rates, even a reduction in code blues during dialysis treatments.

Speaker 1: We saw, again, about the same rate of growth between 2025 heading into year-end 2025 heading into the beginning of, sorry, year-end 2024 into year-end 2025, about the same rate of growth as we did the prior 12 months. So I continue to be very encouraged about the demand that we're generating. And I think that some of the pipeline; I know that some of the pipeline expansion more recently has been because of this new clinical value proposition that's been emerging and been published increasingly by our own customers, seeing a reduction in length of stay, a reduction in CLABSI rates, even a reduction in code blues during dialysis treatments.

Speaker #2: And I have understood from potential customers that that has driven, I would say, an incremental wave of interest beyond the financial ROI benefits that have been long understood with insourcing with Tableau for a couple of years.

Speaker #2: now. Great.

Speaker #5: Thanks. Maybe I'll just speak in one more. Sorry. Multi-part question on that last one. But just thinking about the guide in 5 to 9 percent revenue growth, any help just thinking about, as we're forecasting and updating our models, console growth versus consumable growth within that range?

Speaker 1: I have understood from potential customers that that has driven, I would say, an incremental wave of interest beyond the financial ROI benefits that have been long understood with insourcing with Tablo for a couple of years now. Great. Thanks. Let me just see if I can one more. Sorry. Multi-part question on that last one. But just thinking about the guidance and 5% to 9% revenue growth, any help just thinking about as we're forecasting and updating our models, console growth versus consumable growth within that range? Thanks for taking the questions. Sure, Josh. Happy to step in here. I think as we sat back and thought about the guidance range, we absolutely look at it across the three primary components of revenue and the different puts and takes to each of those.

Leslie Trigg: I have understood from potential customers that that has driven, I would say, an incremental wave of interest beyond the financial ROI benefits that have been long understood with insourcing with Tablo for a couple of years now.

Speaker #5: Thanks for taking the

Speaker #5: questions. Sure,

Speaker #2: Josh, happy to step in here. I think as we sat back and thought about the guidance range, we absolutely look at it across the three primary components of revenue.

Joshua Jennings: Great. Thanks. Let me just see if I can one more. Sorry. Multi-part question on that last one. But just thinking about the guidance and 5% to 9% revenue growth, any help just thinking about as we're forecasting and updating our models, console growth versus consumable growth within that range? Thanks for taking the questions.

Speaker #2: And the different puts and takes to each of those. So you're right in that our 5 to 9 percent growth is what we believe is our balanced best approach for right now for the full year.

Speaker #2: And I would believe that my position is that you should think about forecasting growth for recurring revenue to be roughly in line with that top-line growth.

Renee Gaeta: Sure, Josh. Happy to step in here. I think as we sat back and thought about the guidance range, we absolutely look at it across the three primary components of revenue and the different puts and takes to each of those. So you're right in that our 5% to 9% growth is what we believe is our balanced best approach for right now for the full year. And I would believe that my position is that you should think about forecasting growth for recurring revenue to be roughly in line with that top-line growth. As you can even see for what we just performed on for 2025 against 2024, we saw very consistent revenue growth in console, consumables, and service.

Speaker #2: As you can even see from what we just performed on for 2025 against 2024, we saw very consistent revenue growth in console consumables and

Speaker #2: service. Thanks

Speaker 1: So you're right in that our 5% to 9% growth is what we believe is our balanced best approach for right now for the full year. And I would believe that my position is that you should think about forecasting growth for recurring revenue to be roughly in line with that top-line growth. As you can even see for what we just performed on for 2025 against 2024, we saw very consistent revenue growth in console, consumables, and service. Thanks again. Yeah. Thank you. One moment for the next question. And our next question will be coming from the line of Kengo Ao of RBC. Your line is open. Hi. Thanks so much for taking my question. I just had two follow-up questions. I know you guys continue to track ahead of expectations on gross margins. Is there any update on the timeline to getting to that 50% mark?

Speaker #5: again.

Speaker #1: Thank you. One moment for the next question. And our next question will be coming from the line of Kendo Ao of RBC. Your line is open.

Speaker #6: Hi. Thanks so much for taking my question. I'd say two modeling questions. I know you guys continue to track head of expectations on gross margins.

Speaker #6: Is there any update on the timeline to get into that 50% mark? Can you achieve that prior to exiting 2027? And then also, I have a quick question.

Joshua Jennings: Thanks again.

Speaker #6: Does your current cash— is that enough right now for you to reach profitability, or do you need to raise any more cash before reaching that point?

Leslie Trigg: Yeah.

Operator: Thank you. One moment for the next question. And our next question will be coming from the line of Kengo Ao of RBC. Your line is open.

Speaker #6: Thanks so much.

Speaker #2: You can see on gross margins—sure, yeah. Yeah, great questions. I think, as alone, you can see that year after year, we continue to execute against gross margin.

Kengo Ao: Hi. Thanks so much for taking my question. I just had two follow-up questions. I know you guys continue to track ahead of expectations on gross margins. Is there any update on the timeline to getting to that 50% mark? Can you achieve that prior to exiting 2027? And then also, I have a quick question. Does your current cash is that enough right now for you to reach profitability, or do you need to raise any more cash before reaching that point? Thanks so much.

Speaker #2: And just last year, we had a 500 basis point improvement. So, we are continuing to march towards that pathway. And as you've indicated, our goal is 50%.

Speaker 1: Can you achieve that prior to exiting 2027? And then also, I have a quick question. Does your current cash is that enough right now for you to reach profitability, or do you need to raise any more cash before reaching that point? Thanks so much. Sure. Yeah. Yeah. Great questions. I think as you can see on gross margins alone, you can see that year after year, we continue to execute against gross margin. And just last year, had a 500 basis point improvement. So we are continuing to march towards that pathway. And as you've indicated, our goal is 50%. And we just saw that even with just product gross margin for Q4. We're going to guide for the current year to, as I mentioned, sort of the low to mid 40% range. But we do feel as though that 50% absolutely is within our planning horizon.

Speaker #2: And we just saw that even with just product gross margin for Q4. We're going to guide for the current year to, as I mentioned, sort of the low to mid 40% range.

Speaker #2: But we do feel as though that 50% absolutely is within our planning horizon. I'm just not going to give a formal year. To when we're going to achieve that.

Renee Gaeta: Sure. Yeah. Yeah. Great questions. I think as you can see on gross margins alone, you can see that year after year, we continue to execute against gross margin. And just last year, had a 500 basis point improvement. So we are continuing to march towards that pathway. And as you've indicated, our goal is 50%. And we just saw that even with just product gross margin for Q4. We're going to guide for the current year to, as I mentioned, sort of the low to mid 40% range. But we do feel as though that 50% absolutely is within our planning horizon.

Speaker #2: But we absolutely look forward to doing that. And sharing that with everyone at that time. Specific to cash on the balance sheet, I think as you think about we've got 173 million in cash, cash equivalents in investments.

Speaker #2: As you've seen just from our performance in this past year, we brought operating cash burn down from 116 million in 2024 down to 46 million in 2025.

Speaker #2: And as stated on our call, we will look to better improve against that in 2026 as well. And we absolutely believe that we've got sufficient cash on the balance sheet to get us to profitability and

Speaker 1: I'm just not going to give a formal year to when we're going to achieve that. But we absolutely look forward to doing that and sharing that with everyone at that time. Specific to cash on the balance sheet, I think as you think about, we've got $173 million in cash, cash equivalents, and investments. As you've seen just from our performance in this past year, we brought operating cash burn down from $116 million in 2024 down to $46 million in 2025. And as stated on our call, we will look to better improve against that in 2026 as well. And we absolutely believe that we've got sufficient cash on the balance sheet to get us to profitability and beyond. I really appreciate the color there. And then that's the quick question on capital budgets. I was wondering what you're seeing on the hospital capital budget environment right now.

Renee Gaeta: I'm just not going to give a formal year to when we're going to achieve that. But we absolutely look forward to doing that and sharing that with everyone at that time. Specific to cash on the balance sheet, I think as you think about, we've got $173 million in cash, cash equivalents, and investments. As you've seen just from our performance in this past year, we brought operating cash burn down from $116 million in 2024 down to $46 million in 2025. And as stated on our call, we will look to better improve against that in 2026 as well. And we absolutely believe that we've got sufficient cash on the balance sheet to get us to profitability and beyond.

Speaker #2: beyond. No, I really appreciate the color there.

Speaker #6: And then, that's just a quick question. On capital budgets, I was wondering what you're seeing on the hospital capital budget environment right now. Do you feel like it's up year over year?

Speaker #6: And also, what's the state right now? And then also, can you give me a little commentary? I think you talked about having a backlog.

Speaker #6: Is that still—can you talk about the size and maybe the scale of that right now for Tableau?

Speaker #2: Sure. Yeah. Well, on the capital spending front, we are not seeing any material changes at least in the customers that we're calling on or the customers that are on our pipeline.

Kengo Ao: I really appreciate the color there. And then that's the quick question on capital budgets. I was wondering what you're seeing on the hospital capital budget environment right now. Do you feel like it's up year-over-year? And also, what's the state right now? And then also, can you give me a little commentary? I know you talked about having a backlog. Is that still? Can you talk about the size and maybe the scale of that right now for Tablo?

Speaker #2: We have not really observed any material changes. In their planning, or how they're thinking about capital spending for 2026. So nothing systematic or widespread that changes our outlook either near-term or long-term.

Speaker 1: Do you feel like it's up year-over-year? And also, what's the state right now? And then also, can you give me a little commentary? I know you talked about having a backlog. Is that still? Can you talk about the size and maybe the scale of that right now for Tablo? Sure. Yeah. Well, on the capital spending front, we are not seeing any material changes, at least in the customers that we're calling on or the customers that are in our pipeline. We have not really observed any material changes in their planning or how they're thinking about capital spending for 2026. So nothing systematic or widespread that changes our outlook either near-term or long-term. Backlog, yes. That has been an important lever for us in the past. It remains an important lever for us as we move forward over the planning horizon.

Speaker #2: Backlog, yes. That has been an important lever for us in the past. It remains an important lever for us as we move forward over the planning horizon.

Leslie Trigg: Sure. Yeah. Well, on the capital spending front, we are not seeing any material changes, at least in the customers that we're calling on or the customers that are in our pipeline. We have not really observed any material changes in their planning or how they're thinking about capital spending for 2026. So nothing systematic or widespread that changes our outlook either near-term or long-term. Backlog, yes. That has been an important lever for us in the past. It remains an important lever for us as we move forward over the planning horizon. I would say we feel very good about where we're entering 2026. And that will continue to be one of the KPIs that we measure ourselves against as we move through the year and into 2027.

Speaker #2: And I would say we feel very good about where we're entering 2026. And that will continue to be one of the KPIs that we measure ourselves against as we move through the year and into

Speaker #2: And I would say we feel very good about where we're entering 2026. And that will continue to be one of the KPIs that we measure ourselves against as we move through the year and into '27.

Speaker #1: Thank you. One moment for the next question. And our next question is coming from the line of Rick Wise of Steve Will. Your line is

Speaker #1: open. Good

Speaker #5: Afternoon. Hi, Leslie. Hi, Renee. I just want to have some follow-up questions, sort of building on a lot of the excellent questions already discussed.

Speaker 1: I would say we feel very good about where we're entering 2026. And that will continue to be one of the KPIs that we measure ourselves against as we move through the year and into 2027. Thank you. One moment for the next question. Our next question is coming from the line of Rick Wise of Stifel. Your line is open. Good afternoon. Hi, Leslie. Hi, Renee. Just, I want to have some follow-up questions sort of building on a lot of the excellent questions already discussed. On the next-gen Tablo system, it's great to see it. A couple of follow-ups. One, is there an upgrade opportunity here? Does your existing installed base upgrade for a nominal fee? Is it a whole new Tablo they would buy?

Speaker #5: On the next-gen Tableau system, it's great to see it. A couple of follow-ups. One, is there an upgrade opportunity here? Does your existing installed base upgrade for a nominal fee?

Operator: Thank you. One moment for the next question. Our next question is coming from the line of Rick Wise of Stifel. Your line is open.

Rick Wise: Good afternoon. Hi, Leslie. Hi, Renee. Just, I want to have some follow-up questions sort of building on a lot of the excellent questions already discussed. On the next-gen Tablo system, it's great to see it. A couple of follow-ups. One, is there an upgrade opportunity here? Does your existing installed base upgrade for a nominal fee? Is it a whole new Tablo they would buy?

Speaker #5: Is it a whole new Tableau they would buy? I mean, is there an opportunity to upgrade your entire existing base at a full cost of a new Tableau, whatever that ASP would be?

Speaker #5: Maybe just help us understand that. Could you talk a little bit more the cyber security topic is obviously compelling alone. But help us understand some of the additional some of the other new features and capabilities and how that might add to Tableau's luster and ease of use and clinical utility.

Speaker #5: And then I have a related follow-up question to that. Thank you.

Speaker 1: I mean, is there an opportunity to upgrade your entire existing base at a full cost of a new Tablo, whatever that ASP would be? Maybe just help us understand that. Could you talk a little bit more? The cybersecurity topic is obviously compelling alone, but help us understand some of the additional, some of the other new features and capabilities and how that might add to Tablo's luster and ease of use and clinical utility. And then I have a related follow-up question to that. Thank you. Okay. Great. Yeah. Perfect. Why don't I? I'll try to address the first part, and then we can go to your part two. So on the next-gen and the upgrade opportunity, short story long, yes. Our existing installed base customers will have full access to this upgrade. They will be able to upgrade.

Rick Wise: I mean, is there an opportunity to upgrade your entire existing base at a full cost of a new Tablo, whatever that ASP would be? Maybe just help us understand that. Could you talk a little bit more? The cybersecurity topic is obviously compelling alone, but help us understand some of the additional, some of the other new features and capabilities and how that might add to Tablo's luster and ease of use and clinical utility. And then I have a related follow-up question to that. Thank you.

Speaker #2: Okay. Great. Yeah, perfect. Why don't I try to address the first part, and then we can go to your part two. So, on the next-gen and the upgrade opportunity—short story long, yes.

Speaker #2: Our existing installed-based customers will have full access to this upgrade. They will be able to upgrade. At the same time, new customers will also have an opportunity to buy new Tableaus us that already contain because they've been manufactured in already contain all of the software, hardware, and cyber upgrades that I'm about to elaborate on in one second.

Leslie Trigg: Okay. Great. Yeah. Perfect. Why don't I? I'll try to address the first part, and then we can go to your part two. So on the next-gen and the upgrade opportunity, short story long, yes. Our existing installed base customers will have full access to this upgrade. They will be able to upgrade.

Speaker #2: So yes, this is a full access upgrade that will be available to the current installed base and also new customers moving forward.

Speaker #2: You also talked about, or asked about, what are some of the details around, on the cyber front? What does that really mean? Gosh, this could be like an hour-long conference call, a podcast that I'm sure you all would really enjoy.

Speaker 1: At the same time, new customers will also have an opportunity to buy new Tablos that already contain all of the software, hardware, and cyber upgrades that I'm about to elaborate on in one second. So yes, this is a full access upgrade that will be available to the current installed base and also new customers moving forward. You also talked about or asked about what some of the details around on the cyber front are? What does that really mean? Gosh, this could be an hour-long conference call that is a podcast that I'm sure you all would really enjoy. But I will try to keep my answer brief. This was a massive amount of work for our team and took us many, many, many months of technical achievement to reach.

Leslie Trigg: At the same time, new customers will also have an opportunity to buy new Tablos that already contain all of the software, hardware, and cyber upgrades that I'm about to elaborate on in one second. So yes, this is a full access upgrade that will be available to the current installed base and also new customers moving forward. You also talked about or asked about what some of the details around on the cyber front are? What does that really mean? Gosh, this could be an hour-long conference call that is a podcast that I'm sure you all would really enjoy. But I will try to keep my answer brief. This was a massive amount of work for our team and took us many, many, many months of technical achievement to reach.

Speaker #2: But I will try to keep my answer brief. This was a massive amount of work for our team. And it took us many, many, many months of technical achievement to reach.

Speaker #2: But for example, we updated physical network cloud connections with new software and hardware changes. We added many, many, many new security controls. We have our software now has round-the-clock cyber monitoring.

Speaker #2: In terms of the device performance itself and some of the reliability improvements, those, again, are its new software, a new operating system, and new hardware.

Speaker #2: And how this translates to the customer benefit was something you also asked me about. Well, number one, we're always focused on improving uptime, which in and of itself improves the user experience.

Speaker 1: But for example, we updated physical network cloud connections with new software and hardware changes. We added many, many, many new security controls. Our software now has round-the-clock cyber monitoring. In terms of the device performance itself and some of the reliability improvements, those, again, are. It's new software, a new operating system, new hardware. And how this translates to the customer benefit was something you also asked me about. Well, number one, we're always focused on improving uptime, which in and of itself improves the user experience. And so when you've got device performance enhancements, reliability enhancements, you are improving uptime, the availability of that device. The more the device is available, the better the patient care experience. Patient care can be delivered when it is needed by the patient.

Leslie Trigg: But for example, we updated physical network cloud connections with new software and hardware changes. We added many, many, many new security controls. Our software now has round-the-clock cyber monitoring. In terms of the device performance itself and some of the reliability improvements, those, again, are. It's new software, a new operating system, new hardware. And how this translates to the customer benefit was something you also asked me about. Well, number one, we're always focused on improving uptime, which in and of itself improves the user experience. And so when you've got device performance enhancements, reliability enhancements, you are improving uptime, the availability of that device. The more the device is available, the better the patient care experience. Patient care can be delivered when it is needed by the patient.

Speaker #2: And so, when you've got device performance enhancements, reliability enhancements, you are improving uptime. The availability of that device—the more the device is available, the better the patient care experience.

Speaker #2: Patient care can be delivered when it is needed by the patient. And then, of course, the user experience with nurses and biomeds in the hospital.

Speaker #2: We'll be beneficiaries of the device performance and the reliability improvements as well. And I think I'll say moving forward, we're not done. We are extremely committed to what I like to call customer-centric innovation, not inventing things because we can, from an engineering standpoint.

Speaker #2: But inventing things because we've heard them from users, feedback, ideas. The improvements in this next-gen are a direct example of kind of this customer-centric orientation and very reflective of many of the suggestions and ideas we've gotten directly from our nurse users and others within the acute care and post-acute

Speaker 1: And then, of course, the user experience with nurses and biomeds in the hospital will be beneficiaries of the device performance and the reliability improvements as well. And I think I'll say moving forward, we're not done. We are extremely committed to what I like to call customer-centric innovation, not inventing things because we can from an engineering standpoint, but inventing things because we've heard them from users, feedback, ideas. The improvements in this next-gen are a direct example of kind of this customer-centric orientation and very reflective of many of the suggestions and ideas we've gotten directly from our nurse users and others within the acute care and post-acute environment. Great. And just to build on that, just in the simplest of terms, and you haven't told us the ASP or whether it's more or less or equal to the current generation of Tablo.

Leslie Trigg: And then, of course, the user experience with nurses and biomeds in the hospital will be beneficiaries of the device performance and the reliability improvements as well. And I think I'll say moving forward, we're not done. We are extremely committed to what I like to call customer-centric innovation, not inventing things because we can from an engineering standpoint, but inventing things because we've heard them from users, feedback, ideas. The improvements in this next-gen are a direct example of kind of this customer-centric orientation and very reflective of many of the suggestions and ideas we've gotten directly from our nurse users and others within the acute care and post-acute environment.

Speaker #2: environment. Great.

Speaker #5: And just to build on that, just in the simplest of terms, and you have told us the ASP or whether it's more or less or equal to the current generation of Tableau.

Speaker #5: But if I assume it's there are more features and the cybersecurity is an incremental value, and it's higher, what does this all mean for your gross margins once you're fully launched?

Speaker #5: Is this margin accretive at that point? Is there a manufacturing learning curve? And so it actually depresses them initially as you launch. Just and maybe just related to sorry to ask such a multi-part question, but what's in your guidance at this point?

Rick Wise: Great. And just to build on that, just in the simplest of terms, and you haven't told us the ASP or whether it's more or less or equal to the current generation of Tablo.But if I assume there are more features and the cybersecurity is an incremental value and it's higher, what does this all mean for your gross margins once you're fully launched? Is this margin accretive at that point? Is there a manufacturing learning curve? And so it actually depresses them initially as you launch. And maybe just related, sorry to ask such a multi-part question, but what's in your guidance at this point? A first- or second-half guide, and bringing that gross margin question into it, how do we think about the new Tablo impacting margins? Thank you for dealing with all that.

Speaker 1: But if I assume there are more features and the cybersecurity is an incremental value and it's higher, what does this all mean for your gross margins once you're fully launched? Is this margin accretive at that point? Is there a manufacturing learning curve? And so it actually depresses them initially as you launch. And maybe just related, sorry to ask such a multi-part question, but what's in your guidance at this point? A first- or second-half guide, and bringing that gross margin question into it, how do we think about the new Tablo impacting margins? Thank you for dealing with all that. No problem, Rick. This is Renee. I'll help sort of answer some of the gross margin questions and, in particular, how we're thinking about this.

Speaker #5: A first or a second-half guide on bringing that gross margin question into it? How do we think about the new Tableau impacting margins? Thank you for.

Speaker #5: A first or a second-half guide on bringing that gross margin question into it? How do we think about the new Tableau impacting margins?

Speaker #5: Dealing with Yeah. all

Speaker #5: Yeah, all that. No problem, Rick.

Speaker #2: This is Renee. I'll help sort of answer some of the gross margin questions. And in particular, how we're thinking about this. So as Leslie mentioned, we're working on the commercial launch strategy and have a Q2 timeframe around that.

Speaker #2: We're hopefully we'll give additional clarity specific to ASPs that I would say we absolutely think that there is value to product innovation and that this product just continues our innovation pipeline and that customers will see value in that.

Speaker #2: Specific to gross margin, you could imagine then that could be a potential tailwind specific to revenue We've strategically thought throughout the year, but also gross margins.

Renee Gaeta: No problem, Rick. This is Renee. I'll help sort of answer some of the gross margin questions and, in particular, how we're thinking about this.

Speaker 1: So as Leslie mentioned, we're working on the commercial launch strategy and have a Q2 timeframe around that where hopefully we'll give additional clarity specific to ASPs that I would say we absolutely think that there is value to product innovation and that this product just continues our innovation pipeline and that customers will see value in that. Specific to gross margin, you could imagine then that could be a potential tailwind specific to revenue throughout the year, but also gross margins. We've strategically thought about this product launch, this product generation, as Leslie just mentioned, the ability for current customers to upgrade their devices if they so choose, what future manufacturing of devices look like, plus also the units that I have on hand in finished goods at the moment.

Renee Gaeta: So as Leslie mentioned, we're working on the commercial launch strategy and have a Q2 timeframe around that where hopefully we'll give additional clarity specific to ASPs that I would say we absolutely think that there is value to product innovation and that this product just continues our innovation pipeline and that customers will see value in that. Specific to gross margin, you could imagine then that could be a potential tailwind specific to revenue throughout the year, but also gross margins. We've strategically thought about this product launch, this product generation, as Leslie just mentioned, the ability for current customers to upgrade their devices if they so choose, what future manufacturing of devices look like, plus also the units that I have on hand in finished goods at the moment.

Speaker #2: about this product launch, this product generation as Leslie just mentioned, the ability for current customers to upgrade their devices if they so choose, what future manufacturing of devices looks like, plus also the units that I have on hand in finished goods at the moment.

Speaker #2: The functionality we really thought about this when we were designing this next generation and the ability to have that flexibility to upgrade to add the components and, of course, add the software.

Speaker #2: So current state within our gross margin guide, we've factored it in, I would say, similar to how you can think about gross margin. Right now, we currently don't expect it to be sort of a big detriment.

Speaker #2: I know sometimes companies have that when they're switching. We think this will be, and of course, the more—relatively—a mild impact. Consoles that we do sell, that has a dampening effect on gross margin, as you know from our history.

Speaker 1: The functionality, we really thought about this when we were designing this next generation and the ability to have that flexibility to upgrade, to add the components, and of course, add the software. So, current state within our gross margin guide, we've factored it in, I would say, similar to how you can think about gross margin. Right now, we currently don't expect it to be sort of a big detriment. I know sometimes companies have that when they're switching generations or versions of their device. We think this will be relatively a mild impact. And of course, the more consoles that we do sell, that has a dampening effect on gross margin, as you know from our history. So in some ways, I'd love to sell have a tailwind from this and sell more consoles, have higher top-line revenue growth. That could dampen in the near-term gross margin.

Renee Gaeta: The functionality, we really thought about this when we were designing this next generation and the ability to have that flexibility to upgrade, to add the components, and of course, add the software. So, current state within our gross margin guide, we've factored it in, I would say, similar to how you can think about gross margin. Right now, we currently don't expect it to be sort of a big detriment. I know sometimes companies have that when they're switching generations or versions of their device. We think this will be relatively a mild impact. And of course, the more consoles that we do sell, that has a dampening effect on gross margin, as you know from our history. So in some ways, I'd love to sell have a tailwind from this and sell more consoles, have higher top-line revenue growth. That could dampen in the near-term gross margin.

Speaker #2: So in some ways, I'd love to sell have a tailwind from this and sell more consoles, have higher top-line revenue growth. That could dampen in the near term gross margin.

Speaker #2: But as we've thought about it in the current guide, both from a revenue perspective and a gross margin range, we need the commercial launch will be sort of late Q2.

Speaker #2: So it'll be back end included in our back end assessment. And let's see how that launch goes and how it rolls through the summer of summer

Speaker #2: months. Thank you for all the

Speaker #5: color. Thank you.

Speaker #1: That does conclude today's Q&A session. I would like to turn the call back over to Leslie now for closing remarks. Please go ahead.

Speaker 1: But as we've thought about it in the current guide, both from a revenue perspective and a gross margin range, we need the commercial launch will be sort of late Q2. So it'll be back-end included in our back-end assessment. And let's see how that launch goes and how it rolls through the summer months. Thank you for all the color. Thank you. That does conclude today's Q&A session. I would like to turn the call back over to Leslie now for closing remarks. Please go ahead. Great. Thanks to everybody for joining today. I'd like to close by thanking our customers and our team for the very, very meaningful difference that they make every day in the lives of dialysis patients. Hope you all have a great evening. Thank you so much for joining today's conference call. This does conclude today's meeting. You may now disconnect.

Renee Gaeta: But as we've thought about it in the current guide, both from a revenue perspective and a gross margin range, we need the commercial launch will be sort of late Q2. So it'll be back-end included in our back-end assessment. And let's see how that launch goes and how it rolls through the summer months.

Speaker #2: Great. Thanks to everybody for joining today. I'd like to thank close by thanking our customers and our team for the very, very meaningful difference that they make every day in the lives of dialysis patients.

Speaker #2: Hope you all have a great

Speaker #2: Good evening. Thank you so much for joining today's conference.

Rick Wise: Thank you for all the color.

Operator: Thank you. That does conclude today's Q&A session. I would like to turn the call back over to Leslie now for closing remarks. Please go ahead.

Leslie Trigg: Great. Thanks to everybody for joining today. I'd like to close by thanking our customers and our team for the very, very meaningful difference that they make every day in the lives of dialysis patients. Hope you all have a great evening.

Operator: Thank you so much for joining today's conference call. This does conclude today's meeting. You may now disconnect.