OM · Outset Medical, Inc.

Outset Medical delivered a materially improved first quarter of 2026, marked by significant gross margin expansion and narrowing net losses despite modest top-line contraction. Revenue declined 6% year-over-year to $27.9 million, driven by a 13% drop in product revenue ($18.6M vs. $21.3M), partially offset by a 10% increase in service and other revenue ($9.3M vs. $8.5M). Crucially, gross margin surged 620 basis points to 43.4%, fueled by record product gross margin (52.4%) and a more than doubling of service gross margin (25.5% vs. 9.2%), reflecting improved operational leverage and pricing discipline. Net loss improved 26% to $19.0 million (GAAP) and $15.4 million (Non-GAAP), aided by gross profit growth of 9% and disciplined cost management—though operating expenses rose 6% to $29.0 million due to strategic investments in systems and personnel. Management attributed the performance to 'disciplined execution' and 'record gross margin performance', highlighting strong Tablo utilization and expanding service margins as key drivers. The company maintained its full-year 2026 revenue guidance of $125–$130 million and reiterated its expectation for low-to-mid-40% non-GAAP gross margin, signaling confidence in continued margin progression and commercial execution. With $161 million in total liquidity at quarter-end and $12 million net cash used in operations—below prior forecasts—the company reinforced its path toward cash flow breakeven and profitability.