Outset Medical at Goldman Sachs Conference: Strategic Focus on Acute and Home Dialysis

On Wednesday, 11 June 2025, Outset Medical (NASDAQ:OM) presented at the Goldman Sachs 46th Annual Global Healthcare Conference. The company outlined its strategic focus on acute and home dialysis, highlighting both opportunities and challenges. CEO Leslie Triggs emphasized market potential, while CFO Renee Gaeta discussed financial goals, including gross margin expansion and profitability.

Key Takeaways

• Outset Medical is targeting a total addressable market of over $11 billion, focusing on acute and home dialysis.
• The company’s Tableau system aims to reduce hospital dialysis costs by 50% to 75%.
• Aiming for a 50% gross margin, Outset Medical plans to boost recurring revenue through new streams like EMR integration.
• The company maintains a strong operational performance with a 97%-98% console uptime and a 95% customer satisfaction score.
• Outset Medical is committed to achieving cash flow positive status with its current cash reserves.

Financial Results

• Outset Medical exited the year with a gross margin above 40% and aims for 50% in the future.
• Recurring revenue is growing at over 20% year-over-year.
• The company reported consistent cartridge utilization, with some customers reaching up to 35 treatments per week.

Operational Updates

• A commercial transformation implemented in 2024 has strengthened the sales team and processes.
• The sales pipeline is maturing, with most forecasted deals in later stages.
• The Tableau system simplifies dialysis, performing 60%-75% of the work with a single cartridge installation.
• The product is integrated with major EMR systems, transmitting 3 million data points after each treatment.

Future Outlook

• Outset Medical anticipates sequential console growth and a return to revenue growth.
• The company is focused on profitability and self-sustainability.
• R&D efforts are concentrated on device performance, cost reduction, and software development.
• New subscription models around EMR integration are expected to enhance recurring revenue and gross margin.

Q&A Highlights

• The company avoids the chronic care market, dominated by larger players, to focus on acute and home dialysis.
• Outset Medical aims to convert more peritoneal dialysis patients to home hemodialysis.
• The commercial transformation is showing success through pipeline growth and conversion rates.

For further details, readers are encouraged to refer to the full transcript provided below.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference 2025:

Unidentified speaker, Interviewer: Anyway, I guess that’s a good segue here. Just to remind everyone that these events are not these meetings are not open to the press. So with that, we’ll get we’ll get started here with last session of the morning here with very pleased to welcome the management team from outset medical Leslie Triggs, Chief Executive Officer and Renee Gaeta, who is recently appointed very recently appointed as CFO. So congratulations on the role and look forward to getting into some of your initial observations as you’ve taken the job and consider the opportunities we go through the discussion this morning. And then as I’ve mentioned, happy to open up to any questions from people in the audience just after you.

I’m happy to repeat the question, so people on the webcast can hear as well. So maybe a lot of changes that I’ve said over the past several months of the recap and kind of rebasing of the strategy and maybe just kind of talk give us kind of evolution of the story update and where we are in kind of the Outset journey?

Leslie Triggs, Chief Executive Officer, Outset Medical: Yes. Well, of all, you for having us. It’s really great to be here. I’m going be directing all questions to Renee for the rest of the time. But I’ll answer just this one.

No, I’m just kidding.

Unidentified speaker, Interviewer: You can see how much she studied for the interviews.

Leslie Triggs, Chief Executive Officer, Outset Medical: Exactly. and foremost, we are really thrilled to welcome Renee and just really, really excited to have her on the team as a co partner and leading the company financially. Yes, a lot has happened. I think as it does to most companies post IPO, it’s been about five years, actually almost five years, we went public in September of twenty twenty. And we have learned a lot.

I think what maybe I’ll touch on what has not changed, the size of the market is still enormous. We are still accessing a TAM of over $11,000,000,000 We’re focused we are still our focus hasn’t changed. We’re still focused on penetrating into the acute dialysis market and the home dialysis market and that hasn’t changed. What also hasn’t changed is kind of the almost profound level of need for disruption in the dialysis space, again in the acute and the home market. And what has not changed is our technology lead.

So I think a lot has remained consistent and we’ll talk more about, I think how we’re getting stronger in some of those areas where we have needed to evolve the most is and mature the most to be honest is on our commercial prosecution of the opportunity ahead. I think we stayed in startup mode for too long. We grew super fast after the IPO and in hindsight and with the benefit of hindsight, we really whipped through what if you think about that classic adoption curve, we got through the early, early adopter part of that curve more quickly than most. We had a sales organization that was very successful with that type of customer. And then we quickly earned the right without really realizing that we had shifted into a new position on that adoption curve.

We’re going after what I would call kind of more mainstream enterprise adoption and suddenly found ourselves kind of unfortunately having fallen into the chasm of did not necessarily have the right team with the right skill sets, did not have the right sales process, It really didn’t have a new approach to forecast methodology and pipeline management. All of that was remade, remodeled, refashioned through the course of 2024. And so I think as we sit here today, the balance sheet has been strengthened, the commercial transformation is largely complete. We had a couple of skirmishes with the FDA that were not helpful. The regulatory overhang is behind us.

New financial leadership of the company, I think we are kind of ready to rocket ship forward here.

Unidentified speaker, Interviewer: Excellent. Well, maybe we can go into a few of those Sure. Elements in a little

Leslie Triggs, Chief Executive Officer, Outset Medical: bit more detail. And maybe

Unidentified speaker, Interviewer: just to start on the market. This is sort of I have some familiarity with dialysis. Like this is a really tough space because it’s a high patient burden space. It’s an area where there hasn’t been a ton of innovation. The reimbursement is sort of so so and sort of more socialized this type closer to socialized medicine in The U.

S. Than any other category in medtech. Maybe help us it’s also in the nice light market really dominated by two players in The U. S. So maybe help us think about just market dynamics here and kind of how where outset what sort of segment outset really goes after and what the key unmet need is that you’re able to address?

Leslie Triggs, Chief Executive Officer, Outset Medical: Sure. What’s really, really important to know is the dialysis space has three main segments, kind of front end, middle and back end. We are only focused on the front end acute care and the back end which is home. We are not interested at all in the chronic care middle part, is nearly socialized, is dominated by the two big players and is very, very, very cost sensitive. That is not the segment of the market that we are interested in and you will never see us go into that segment of the market.

On the acute care side, the most powerful opportunity that we have and the reason why Tableau has been adopted at the rate it has is that dialysis is reimbursed at all, which sounds like a weird thing to get excited about. But the reason it is exciting is that the hospitals have been bearing an enormous cost burden. So when a patient goes into the hospital and they’re given dialysis in the ICU or on the floor outside the ICU, the hospital bears the cost of that. It is not separately reimbursed. It has to be covered under whatever DRG they’re billing for the main procedure.

So it is a pure play cost center and hospitals forever and ever decades have been paying an enormous amount of money to outsource that service. They haven’t been providing that service on their own. They’ve been outsourcing it to like a DaVita or Fresenius and paying a very hefty price tag for doing that. The main reason in my estimation that the market evolved that way was actually because of machines. The machines were so complicated that hospitals felt that they could not take the time to train their own nurses, maintain competency and all these different machines that they were going to have to acquire and maintain.

It was just easier to kind of set it and forget it. I’m just going to write the check to a party and I don’t need to worry about it. We changed the game through the technology door by developing a technology that was easy enough for a regular patient to use at home. Definitionally, it’s therefore going to make it accessible for the average nurse and average hospital to be able to set up dialysis and allow the hospital to really control their own destiny. That’s our main value proposition is control your own destiny financially.

Usually we’ll come in if they’re going from outsource to in source, again standing up their own in source service line with Tableau. They will cut the cost of their service of dialysis by 50% to 75% with a payback period typically inside twelve months, which is very rapid for capital. And they’re doing that through supplies cost reduction and labor cost reduction. And the reason why that’s a very compelling value proposition again is because it’s actually not reimbursed at all. So what we’re really in the business of doing is actually helping hospitals expand their margin by removing or materially lessening pure play cost center.

And on the acute side, maybe square up where Tableau fits versus like SLED or CRRT? Sure. So there’s two well, yes, maybe three, but two broad categories of the type of dialysis that’s done in a hospital. One is called IHD. That’s just a fancy acronym for regular dialysis.

It’s called intermittent hemodialysis. That’s three to four hour dialysis, just actually like you find in the dialysis clinic. That’s about ninety percent to 95% of all the treatments that are performed in a hospital are just three to four hour treatments outside the ICU. There is another modality called CRRT. That is actually a fancy acronym for long dialysis, like twenty four hour dialysis or greater.

And that typically is about 5% to 10% of a hospital volume. We designed Tableau, so that Tableau could deliver any not any, but any duration within zero to twenty four hours, which has given the hospital a lot of flexibility and it’s given the hospital the opportunity to down select to effectively one machine and standardize to one machine for any treatment between zero and twenty four hour therapy. There are other machines on the market that do CRRT really, really well. Those treatments that are over twenty four hours And those would be machines manufactured by ex Baxter now Vantip for example. So in that sense it’s complementary.

Unidentified speaker, Interviewer: Okay. And then I think the other dynamic here in the acute setting is just the operational use of I mean, using CRRT or some traditional in hospital dialysis systems, you’re changing cartridges, you’re changing dialyzers, like it’s pretty workflow intensive. How does Tableau help get after that?

Leslie Triggs, Chief Executive Officer, Outset Medical: Yes. I just by simplification. So Tableau takes almost all of the guesswork out of it and almost all of the manual setup out of it. So I’ll give you one example. With some of the conventional other machines mostly manufactured by Fresenius actually, they would open up a Tyvek bag and all the tubing would just sort of spill out.

And it would be up to the user to remember all the steps around what’s called stringing the machine. We manufacture a cartridge where all of that tubing is pre organized for them. So you open the door of Tableau, you literally press the cartridge onto the front of Tableau and you’ve probably done in that single step about 60% or 75% of the setup. So really just simplification. And also I’d say removing all there’s no mental math, there’s no memorization.

We have about 74 to be precise sensors in Tableau and a touchscreen and custom animation that really walks the users through it. So even if a nurse has been on vacation or been away from the machine for a couple of weeks, they’re able to get right back on very quickly because there’s really nothing to remember.

Unidentified speaker, Interviewer: Okay. And then maybe just like going wrapping up on the markets in the home setting. Yes. Most of the home dialysis today is PD with a little bit bit of HHD.

Renee Gaeta, Chief Financial Officer, Outset Medical: Yes.

Unidentified speaker, Interviewer: Is outset I always got didn’t really understand exactly where the placement is. The replacement for HHD is replacement for PD. Where does it fit in that segment of the market?

Leslie Triggs, Chief Executive Officer, Outset Medical: Yes. Do so PD peritoneal dialysis is another form of home dialysis and then HHD is home, hemodialysis just to define terms. We’ve always viewed HHD as number one follow on add to PD. There’s a huge opportunity there. PD is an awesome therapy and it’s a great place to start.

It is a therapy that most patients are on for two to three years. And we’ve always believed if the patient is already successful in the home with PD, why would they be going back to the clinic? And the sad reality is the vast, vast majority of patients who have to come off PD usually for clinical reasons end up being sent right back to the dialysis clinic. There is no reason it should be that way. They should be offered an opportunity to go from PD over to HHD.

So I would my crystal ball would be that that mix probably won’t change. I think most patients will start on PD in the clinic. What we want to avail ourselves of is an opportunity to convert more of those PD patients over to HHD. And then there will be patients who are clinically ineligible for PD upfront. And in those cases, I think HHD is a great place to start.

Unidentified speaker, Interviewer: Excellent. And so kind of level setting on the market, let’s talk about the commercial changes that you made. And I think you’re already actually seeing some early success with that just using Q1 and last year, kind of how you finished last year as a barometer for that. Maybe just back up a little bit, talk through some of the changes that you made and maybe you could just go into a little bit more detail on some of the proof points you’re seeing that gives you confidence that this is the right move.

Leslie Triggs, Chief Executive Officer, Outset Medical: Yes. So to simplify it, so the three big changes that we focus on making were people, process and pipeline management to really break it down at a basic level. People, I talked before we had a great team of device sales people at a time when we didn’t fully realize that we were not selling a device. The majority of our sales process actually is really coaching and counseling hospitals and health systems about changing their service model. So we have roughly an eight stage sales process.

I would say six of the eight stages are really about in sourcing and we’ve become the experts. We have proprietary know how that only comes after years and hundreds and hundreds of these deployments about exactly how to in source, especially if you’ve been outsourcing for a couple of decades, it’s very, very new. So we needed to find a group of people who had a lot of expertise in selling standardization and selling at the enterprise level. It’s a really different process and skill set to be able to convince a health system to do set up a new service line in twenty, forty, 60 of its hospitals versus talking to one hospital CEO about doing it one time in one institution, which is kind of what we were doing back in 2020, 2021, 2022. So almost an entirely new capital sales team that we instituted again through 2024, a new sales leadership team.

Our sales team is led by an individual who led sales for CareFusion and then into Beck and Dickinson and then on the infusion pump side. What we’re doing commercially is very similar to the infusion pump standardization. And even on the product side, we are fully integrated now with Epic and Cerner. We think that’s going to be a very powerful incremental growth story for us in future years as we look toward EMR revenue. But People, we needed a whole new sales process as I mentioned.

Selling to a health system, looking at broad deployment is very different than selling to one hospital. And pipeline management. I think in our early start up days with early adopters, our sales cycle was different. Our sales process and our pipeline management was really different than it is today. It’s a conservative approach.

It’s a very deliberate approach and there’s a heavy level of inspection and a tighter forecast methodology.

Unidentified speaker, Interviewer: Excellent. And maybe just obviously, you’ve been implementing this for a little bit of time now. I mean, you’re starting to would you say you’re starting to see the initial rewards on that if you kind of take I know one quarter, it’s hard to kind of contextualize that as a trend but you are starting to see a pickup. You saw nice sequential revenue growth Q4 to Q1, when it was normally seasonally weaker quarter, but maybe just talk to us about how you’re evaluating the success of this commercial transformation?

Leslie Triggs, Chief Executive Officer, Outset Medical: Well, we’re looking in two areas. One is pipeline and then two is the conversion of said pipeline. So on the pipeline side, we’re looking at the are we seeing growth in the pipeline across the country, kind of consistent performance across territories? Are we seeing the maturity of the pipeline continue to advance? We talked last quarter about a majority of our largest forecasted deals for this year are already in the later stages of that sales process, which I wouldn’t have been able to say a year ago.

And then we also look at the distribution of the pipeline. That’s part one. And then are we converting the pipeline, which is really what counts. In last quarter, what I was really pleased to see was very consistent performance in contribution. We had all of our capital sales reps contributing to the revenue that we met.

This was not a quarter in which you and sometimes you see this in companies, had one or two heroes or one or two big deals that came through and allowed the company to make the number. That was not the case. Both in Q4 and Q1, we saw really good distribution, everybody contributing, good distribution around new customers, existing customers expanding, deal size, good distribution and we had a number of smaller deals come through, really large deals come through. So when I look at mix in terms of the sales rep contributions and then customer mix and distribution, those are some of the headlines for me and what gives me confidence that we’re nearly complete on the commercial changes.

Unidentified speaker, Interviewer: Okay. And does your outlook for the rest of the year contemplate continued console growth over on a sequential basis?

Leslie Triggs, Chief Executive Officer, Outset Medical: It does. So, yes, and I’ve been asked a lot about the capital spending outlook. So I’ll just comment on that while we’re talking about rest of the year. I mean, outlook remains unchanged and enthusiastic is the way I would describe it. We’re keeping obviously, I think where everybody in medtech is keeping a close eye on the capital or just hospital spending in general.

But for us capital spending, we have not seen any movement to date in a way that’s affected our pipeline, our ability to convert that pipeline or our expectations for the rest of the year.

Unidentified speaker, Interviewer: And how do you measure conversion rate? Is that over some period of time there are X number of accounts in the pipeline and some percentages of convert in a period of time, like how is that conversion rate measured?

Leslie Triggs, Chief Executive Officer, Outset Medical: Both. So we measure that we’re forecasting, so you’ve got the aggregate pipeline and then we’ve got a forecast expected conversion within the year, the calendar year. And then within that construct, we have expected conversion within any given quarter. Yes.

Unidentified speaker, Interviewer: And what would you say is like a optimal conversion rate or what you would consider like the right conversion rate for the business? And where are you relative to that right now?

Leslie Triggs, Chief Executive Officer, Outset Medical: What I’m really focused on and our sales team, our leadership team is really focused on right now is accuracy.

Unidentified speaker, Interviewer: Accuracy and forecasting?

Leslie Triggs, Chief Executive Officer, Outset Medical: Exactly. Yes, exactly. Because that’s what gives a business predictability and we know the job that we need to do this year, which is to say what we’re going to do and do it. And so we have to do three things really, really well. We want a return to revenue growth and specifically console growth, which gets to forecast accuracy.

We want to continue to make good steady progress on gross margin and we want to execute against this path to profitability and get the company self sustaining.

Unidentified speaker, Interviewer: Okay. And then maybe before turning over to the P and L, just on cartridge revenue, that sort of seems to have both growing the installed base and then utilization per console. Do you sell are stocking orders that come with console placements?

Leslie Triggs, Chief Executive Officer, Outset Medical: Very small. I mean, if somebody is going to buy consoles for the time, yes, of course. They got to buy cartridges for the time. But those I wouldn’t describe those as out of sync with whatever their month utilization would be. Those are pretty standardized.

I mean from time to time as we have gotten larger enterprise customers, we do see stocking orders, but I wouldn’t call it a big part of our business. What I think is a unique facet and one that has given us a lot of predictability on the recurring revenue side, which continues to grow at 20 plus percent year over year is the utilization has been We typically model it at all in five treatments a week, but we have customers that are low double digits per week. It depends on whether they’re doing long treatments in the ICU or mostly shorter treatments outside the ICU. But I was visiting with a couple of customers yesterday here in the Miami area and there was one customer they said their average is 25 to 35 treatments per week.

That would be roughly seven treatments per console per week.

Unidentified speaker, Interviewer: And is there a ramp up period? Like how long does it take customers to get to that five treatments per week?

Leslie Triggs, Chief Executive Officer, Outset Medical: Usually not very long because what we’re going after as part of our commercial strategy is what we would call kind of a whole house conversion, at least outside the ICU. And so for the most part, again, another kind of interesting feature of what we’re doing here is that unlike a product that’s maybe being sold into the cath lab where a rep is going walk in, there’s four other reps fighting for the same stent. Most hospitals are converting wholly to Tableau because think about it, if you’ve been outsourcing with DaVita or Fresenius, you as a hospital, you’ve never owned dialysis equipment before. So when you’re in sourcing, you’re buying the dialysis systems for the time and you’re only buying Tableau. So what we’ve discovered and been able to verify through data is our utilization isn’t driven so much by the number of sales reps we have, it’s actually driven by machine uptime.

And so one place we have put a lot of investment, again this investment has already been made is in our field service engineering team. We have maintained consistently 97%, 98% uptime with a CSAT score of 95%. So what we’ve really continued to focus on the utilization front is the strength of the field service team and the overarching user experience.

Unidentified speaker, Interviewer: Okay. And does that mean when someone to maximize uptime subsequent to placing a console or selling a console, are you putting a clinical support rep in the account to help get the account onboarded and give them either best practices, it sounds kind of hokey, but at least give them the roadmap of here’s what you need to do to maximize uptime, here’s how I don’t if it’s a field service rep or a clinical support rep. How much kind of TLC are you giving customers when you initiate a relationship?

Leslie Triggs, Chief Executive Officer, Outset Medical: Absolutely. So we have the capital sales team, but then we have a clinical sales team. And the clinical sales group and it’s still relatively small. This is a group of sub under 30 people. But they are focused on making sure that all of the users, whether it’s a dialysis nurse or dialysis tech, what have you, are very comfortable and confident in the utilization of the machine.

But that for us is a week or two type experience. This is not an enduring level of TLC. Over the long term, each hospital has a field service engineer. I mean, field service engineers are covering many hospitals and many consoles. But what we’ve learned is that the user experience over the duration of time, these two customers from yesterday, I’ll give an example, both adopted in 2021, still using Tableau, only Tableau, still in sourced.

And the two names as they mentioned to me, when I asked the team experience were the field service engineers. That’s the principal relationship transitions over time to field service engineers who make sure that those machines are humming and ready to roll when they’re needed.

Unidentified speaker, Interviewer: Excellent. Maybe we could turn over to the financials and Renee, I know you’re new to the job. But before we kind of jump into the details or maybe just give us a sense of what attracted you to the opportunity? And what are you thinking about as your kind of top priorities here over the six months in the job?

Renee Gaeta, Chief Financial Officer, Outset Medical: Sure. Yes, super excited to not only be at the company, but be here. Think for me, it’s number one is always about the technology. What is the company trying to do? I have did take a little bit of time off over the past year and looked at a lot of organization, but Leslie team and in particular Tableau really stood out for me as something that is trying to change an industry that unfortunately has seen no innovation and is really crowded with two big behemoths in the room.

How can we do something different? That was sort of the starting point for an initial conversation and really for me be able to sort of get behind that. What we’re going to do for this year and me coming in is no different from what Leslie and the team have indicated for 2025. We are very focused on executing for top line growth, reinstating console revenue growth, which we saw for Q1, which is great, making sure that we continue on the journey that the company has seen for gross margin expansion, continuing to push on those levers at all components of gross margin and what are the steps towards near term profitability. So those outlined targets felt very comfortable for me.

And of course, the due diligence that I did within the organization prior to joining, how I could get behind that and you can see we obviously reiterated those points with my joining last week.

Unidentified speaker, Interviewer: Excellent. Maybe we could start on gross margins and it’s been I think that is probably the key lever on the whole profitability story. I mean, you’ve restructured OpEx, but at some point you’re going have to grow investments. And I think you’re not going to cut your way to a growth company. So gross margins came in close to I think 40% when you exclude the impact of under absorption here in Q1.

You’ve talked about on a reported basis exiting the year above 40%, high 30s for the year. Help us think about contextualize that gross margin for us. Is that the peak gross margin? Is that where can that go?

Renee Gaeta, Chief Financial Officer, Outset Medical: Yes. Certainly, I think we have three really big levers within that. Our reoccurring revenue that is the attach of the consoles after we’ve placed the unit. We’re looking at service leverage. And then of course, I would say rightsizing our inventory levels and making sure that we’re producing at the right level for the scale of our business today and going forward.

And you can see within outset, they’ve done a great job of that over time. They’ve gross margins have improved. We still have some work to do. We have publicly disclosed that we have a milestone out there 50% in the future and we are clearly on that pathway. As you mentioned, our Q1 results, we’re very happy with.

There’s more work to do there, but it’s something that I believe is certainly attainable.

Unidentified speaker, Interviewer: And I think one of the practical realities of this business unlike pure disposable companies is you do have a lot of other costs in gross margin, whether that’s warranty or field service engineers. You don’t have the same freight burden that the other dialysis companies have. But how big a gap is there between like your standard margin and your fully burdened gross margin?

Renee Gaeta, Chief Financial Officer, Outset Medical: Yes. I mean, we haven’t disclosed sort of the elements or the components of that. What I can tell you is, we like the sales model that we have such that we have got a console and then we’ve got the cartridge reoccurring, which definitely has a higher gross margin as a component and that sort of lives on as the unit is utilized. And then we can certainly leverage on the field service side. Obviously, as Leslie has mentioned, very important component to the uptime of that machine, which then sort of feeds back into the cycle.

So it is a more complicated gross margin profile than yes, some of the other companies that are out there in med device. But I think that also gives us a lot of levers and opportunities to be able to continue to drive that mix and that gross margin improvement over all of those facets.

Unidentified speaker, Interviewer: And what do you have to what has to play out to get to 50%? Like what are the operational factors that need to unfold over the next several years to reach that 50% target in 2027?

Renee Gaeta, Chief Financial Officer, Outset Medical: Yes. For us, I think the things that we’ve mentioned with regards to reoccurring revenue continuing cartridge placement and utilization of those machines, service leverage and certainly again sort of optimizing the balance sheet, the devices that we have and making improvements on those consoles, bringing those costs down as best we can. Those are the three pillars that will sort of get us there. We have not indicated a specific timeline for when that’s going happen. We are clearly on the pathway to that and it’s a milestone that is near and dear to our heart.

Unidentified speaker, Interviewer: Okay. And then lastly on gross margin. To what extent can pricing play a tailwind for you because you have this fairly compelling ROI value proposition of the hospital. I recognize there’s always competitive and price is a tough path to go down always, but it would seem like there’s an opportunity for you to take some pricing that is commensurate with the value that you’re providing.

Renee Gaeta, Chief Financial Officer, Outset Medical: Sure. I’ll sort of speak to it, how we think about it within the context of gross margin and our goals for this year, but certainly have Leslie sort of maybe speak more on the sales side. But I would say pricing is not necessarily a requirement or a lever to be able to get to that 50% milestone. It is exactly those three things that I’ve indicated and those will be what helps get us to the achievement. But certainly our team looks at pricing, evaluates opportunities.

One thing that I’ve been pleasantly surprised by is really the rigor that our team has around pricing and the consistency that our ASPs have had.

Leslie Triggs, Chief Executive Officer, Outset Medical: I would maybe add both on margin and future revenue growth, but certainly going back to how okay, so you hit 50% then what, right? We’re not done when we get to 50%. There is no reason why gross margin will not be substantially higher than 50% for this company. One new lever as we look beyond 50, our new, I’ll call it kind of concentric rings of recurring revenue. The way we think about this is you buy your baseline Tableau and then we already have a recurring revenue stream around a software that allows us to do some special features in the ICU.

We have Tableau cart, which is an accessory to Tableau. We have now have EMR and a big opportunity I think in EMR, not only to increase the switching costs and any increase in bulletproof retention, but also introduce new subscription models. There might be an introductory level of EMR. There might be a premium level of EMR that offer those customers different features. So that’s just an example as we look to new recurring revenue streams in the future that will also offer us incremental gross margin.

Unidentified speaker, Interviewer: Excellent. And then maybe just toggling through some of the OpEx items. I think we’ve talked a lot about sales and marketing. Maybe on the R and D side, think you pivoted your investment from console development to really doubling down on software. Maybe help us think about the trajectory of R and D and where those priority investments are right now?

Leslie Triggs, Chief Executive Officer, Outset Medical: Sure. On the hardware side, our priorities remain focused on and they always will be focused on device performance, right? We’re always going to look and see two ways to just make sure that device performance continues to reach its potential. But really device performance, what I’ll call kind of sustaining engineering and then just cost down programs that Renee alluded to. On the software side, yes, we have made and will continue to make investments not only in software, but in EMR integration, interoperability and data analytics.

We mentioned on the last quarter’s call that we transmit 3,000,000 data points after every treatment. We have over 3,000,000,000,000 data points in our cloud. That offers and it’s way too early to talk about it, that offers a lot of opportunity around everybody’s favorite buzzword AI. And so too premature, but there are any number of ways that we do plan to leverage the data that we already have and that’s being said every day both in terms of let’s say field service efficiency and cost down, but also potentially new clinical features for customers that may add to this subscription revenue model that I was just talking about.

Unidentified speaker, Interviewer: And then, was going to close on cash. I know you’ve obviously executed this recap of the company. You’ve gone through the significant rebasing of OpEx. You’re seeing gross margins improve.

Renee Gaeta, Chief Financial Officer, Outset Medical: It

Unidentified speaker, Interviewer: sounds like we’re now at a point where you can comfortably say cash on hand can get you to not just cash flow breakeven, but cash flow positive.

Leslie Triggs, Chief Executive Officer, Outset Medical: Right. That’s right. Yes. No change.

Unidentified speaker, Interviewer: Okay. Maybe with that, I’ll turn it back to you then to kind of wrap things up here. Any kind of key takeaways that you want to leave folks on the webcast or in the room with as you kind of think about the trajectory of outset here not just for the balance of 2025, but kind of the go forward message?

Leslie Triggs, Chief Executive Officer, Outset Medical: Yes. Thanks. And again, for the opportunity to share the story. I think about the next couple of years as outset two point zero, we’ve had the opportunity to create a two point zero, which not every company has the opportunity to do. And so as I think about what’s possible in a one of the largest markets of healthcare with a real paucity of competitors, a consistent need for change and I think quite a proprietary technology and sort of change ecosystem around it.

I frankly have never been more bullish. And I’ll say I didn’t think I would ever say that because I was pretty bullish to begin with. So but you probably expect me to be fairly enthusiastic. I do think as we sit here today, we have the right team, we have the right technology and I think we have a renewed focus on what matters most. Like maybe not all, but many companies, think we got in our own way a little bit and lost our way a little bit in the intervening years post IPO.

But we are back. The market has never left us. We’re back as an organization that knows what we need to do with a clear rigor around getting it done, a re rate to revenue growth. We are going to get to that 50% and more gross margin and this company will be a profitable one in the not too distant future.

Unidentified speaker, Interviewer: Excellent. Well, thank you very much for taking the time to share the updates here. Renee, congrats on the job and welcome to the role. And Leslie, we look forward to getting updates here in August.

Leslie Triggs, Chief Executive Officer, Outset Medical: Thank you so much. Thank you. Thanks for attending.

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