Outset Medical, Inc.

Good day and thank you for standing by. Welcome to the Outset Medical Q3 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone. You will then hear an automated message, advise your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jim Mazzola, Head of Investor Relations. Please go ahead, sir.

Good afternoon, everyone, and welcome to our third quarter 2025 earnings call. Here with me today, as always, 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 be protected under the Private Securities Litigation Reform Act of 1995. These statements relate to expectations or predictions of future events, are based on our current estimates and various assumptions, and involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied. 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 the risk factors section of Outset's public filings with the Securities and Exchange Commission, including our latest annual and quarterly reports. Leslie?

Thanks for your patience, everybody, and thanks again for joining us. Before I get into the details of the quarter and our revised revenue guidance, I'd like to begin with a few key takeaways. First, while we've made significant progress transforming our sales process and strengthening our team, Our third quarter results show that there's still work ahead. Several large opportunities that remain in the final stages of our sales process were forecasted for the third and fourth quarters, and we now expect them to close over the fourth quarter and into 2026. This is a shift in timing, not in our expectations for closing these significant insourcing opportunities with large nationally recognized health systems. As we shifted towards selling enterprise-wide insourcing, we are managing very large opportunities. that often span dozens of hospitals within a large health system. For example, an opportunity we had forecasted to close in the third quarter required approvals from the executive leadership of more than a dozen different hospitals after approval at the corporate level. We need to and I fully expect we will better anticipate these deal dynamics going forward. We continue to make good progress on this particular opportunity, which we expect to realize via multiple orders spanning the remainder of the fourth quarter and into next year. Second, hospital demand continues to grow as a result of the clinical, operational, and financial benefits that can be achieved by insourcing dialysis with Outset's proven technology, expert know-how, and exceptional service. We continue to see clear evidence that acute customer demand for insourcing with Tableau is growing, and we expect this will support growth for many years to come. Tableau console sales increased 8% in the third quarter, Our pipeline grew meaningfully over last year, and the average size of our sales opportunities increased more than 20%. The markets we serve are large, and we are changing practice within them. Third, our ability to expand gross margin to our next milestone of 50% comes into clear focus with each subsequent quarter of progress. Reaching nearly 40% non-GAAP gross margin in the third quarter and remaining disciplined in expense management provides fuel on our path to profitability. Turning to commercial execution, our third quarter results fell short of our expectations. Last week, I accepted the resignation of our head of sales, who has made the decision to retire. We have a strong sales leadership team in place that will now report to me directly as we conduct a search process which is already underway. This leadership change may result in some internal disruption in the fourth quarter, which is a factor we felt was prudent to take into account as we considered our approach to guidance for the remainder of the year. What I can assure you is that our team has an unwavering commitment to our customers and the patients they serve, and I expect we will demonstrate that commitment as we move through the fourth quarter and into next year. Taking a closer look at the third quarter, revenue was $29.4 million, which represents 3% growth over the third quarter of last year. Treatment utilization was strong, and we remained disciplined in our pricing across consoles and consumables. We believe ASP's strength indicates that customers see Tableau appropriately priced for the value delivered, and consistent utilization reinforces that once a unit is installed, it's used and provides a long tail of recurring revenue. We also were pleased with our progress executing against a clear path to cash flow breakeven and then profitability. This path begins with hotline growth and gross margin expansion. It includes discipline spend management, And it shows up in the both significant reduction in cash use we project for 2025 and in the leverage we see to the bottom line. Additionally, our base of clinical, financial, and operational evidence supporting the advantages of insourcing continues to grow. Last week, there were three new data sets presented at the annual Kidney Week Conference. Among the findings, we presented data from more than one million Tableau treatments across approximately 750 facilities that show the clinical effectiveness of in-source dialysis in achieving rigorous treatment goals, including up to 24-hour treatments that typically involve the most critically ill patients. One of our customers, Advent Health, also presented data from the conversion of their Ocala, Florida site to an in-source dialysis service line with Tableau. Their results over five years showed a 94% reduction in serious cardiac or respiratory events, a sustained reduction in central line bloodstream infections, a very high nurse retention rate with greater than 95% dialysis staff satisfaction, and a strong return on investment in the first two years of operation. These results support the sentiment we hear from many nurse leaders who believe that insourcing with Tableau should be the standard of care at any hospital that provides inpatient dialysis. With that, I'll turn it over to Renee for more detail in the quarter before I provide closing comments.