OM - Earnings call 3 2020 | Outset Medical, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Outset Medical Third Quarter 2020 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Lynn Lewis. Please go ahead.

Lynn Lewis

Good afternoon, everyone, and welcome to our earnings call for the third quarter of fiscal year 2020. today and Leslie Officer. Rebecca company Chief President the Officer; Executive Chambers, for will Trigg, be and Participating Chief Financial

the question-and-answer quarter offer and we today, after the call our will market During activity host we commercial a close commentary of review results, financial on third which received session. after our today,

being section release, recorded of This found in be If had chance a can archived outsetmedical.com. be you've will our at to Investor and it of Relations in not call section website is review the earnings Investors our the the website.

Any estimates material or that assumptions. like performance remind upon to the that that by under today's based are or expectations various upon obligation These I'd All or begin, we future relate and these are our made materially forward-looking forward-looking will is call that Private intent to statements. Securities and events cause Before market these to forward-looking involve during statements statements statements anticipated could are trends, information, of assumes from to statements. results XXXX. predictions forward-looking you Litigation protected it events, All Reform be statements. all Outset differ of our or statements current based statements update those no implied uncertainties and actual current forward-looking risks available results Act

statements. on should you these undue place Accordingly, reliance not

initial refer of to and public our Commission list the our description XXXX, September Exchange risks in business, with the Factors the prospectus Risk conjunction on and with section please and a Securities For filed associated offering. XXX(b)(X) uncertainties our with XX, of

over call I'll Leslie? turn With to Leslie the Trigg, that, CEO.

Leslie Trigg

for quarter quarter we're results. first with earnings everyone, to a third by to I'd XXXX our to more strong that call a be afternoon, review excited us public start Good our joining result. Lynn. saying even new on and post-IPO and as company to like start thank excited here very you Thanks, third

in million growth, $XX.X to year-over-year. quarter, pleased total We are third representing significant and revenue sequentially both the report for

quarter Our as revenue achievement the accelerate to continues for the market. adoption within Tablo exceeded our initial expectations acute

initial approximately net our public proceeds. completed We in million September, $XXX in offering raising

So speaking anywhere. those engaged a we you I'd before a its and done first Outset, enable kind haven't be of discussing System, with months quarter pleasure the of Tablo solution to anytime, like the to had Hemodialysis while and with past At built Tablo as third brief the for we to over dialysis yet, years, of of trends. complete commercial we overview market, dialysis Outset the provide technology, which was a enterprise anyone, by designed many

drivers recurring a One number option innovate those determination in of nonelective require the of the was who or renal end-stage ESRD. from suffering this disease the dialysis, main patients for and space to which typically of our only is

dialysis looked Tablo's same providers to care dialysate production, cost a dialysis Before all dialysis challenges it elevating traditional And standard complicated. their enables the experience. effectively overcome patient hospital With a and outlet. is water on-demand Tablo, did one and all home. of the the electrical deliver Tablo modernizes this delivery simultaneously as from to the to overall lower and faucet needs in the way and cumbersome 'XXs, purification integrated costly, the while

customer markets, and care and on from to systems our We of base, to innovative the home addressable billion given calling to penetration regional market, with growth. $X estimated a entering estimate represents From commercial near-term $X.X the which care a perspective, integrated also national drive the opportunity, which leverage a organization benefit hemodialysis phase same the the and field second both we market. our We're drive HHD market, or is providers. total we sales single on ability support focus acute across U.S. billion we're expect an health

investment infrastructure lower In are C-suite never setting, savings cost reduce labor, and a Tablo often single than specialized platform, provides continuum of with the short uniquely systems care combined with the Tablo's before. ability from home meaningful hospital cost the capital health dialysis and Tablo the driven savings period, done by which because need to across a cost it year. within supplies. of for the the with to entire acute dynamics and These national these payback decision-makers enables Further, regional device management has a resonates been less a

simple, have which who make can been market, management, empowers patients Tablo For with in of universe traditionally automation ownership passive at be home mind. and who and take state-of-the-art ease we dialysis Animated care use to setup the designed approachable, successful of home. recipients expands of their and and sensors the friendly treatment guidance patients touchscreen treatment. of Tablo

treating most that Tablo, dialyzing less many demonstrate the well. on on training it intradialytic data the In and And we we be feel to And will continue home newer importantly, market. reports with from in anecdotally after a hear measured. symptoms along focused and patients while Tablo. well they technology. Because for care. than describing excited fatigue FDA result, Tablo rollout cost impact more outcomes spring Tablo really home, important promise total Tablo is on collecting HHD it we building And month deliberately of the we're provider patient quickly the carefully the had for since clearance And of use means XXXX of exceptional about adoption is delivering as the doing this the to our the our that We're what's retention have doing intentionally experience. foundation and of an transforming begun and way, our at on the patients very

our benefit is our revenue though not efforts and believe on will macro Over acute tailwinds, from chronic growth commercial time, several we them. dependent

patients or CMS on Model, a their Executive the nationwide. clinics home receive model which The goal XX% at XXXX. based towards XX% For through across example, by XXXX, revenue rates. improving home decreases in goal and or its January ESRD Choices Treatment model, policy Within dialysis transplant step announced success Presidential goes into XXXX. at receive this start order effect the on dialysis that of transplant of recently new first set clinics dialysis participation to all X, dialysis mandates will increases this

beginning dialysis all even January We the first to improve this patient will interest XXXX, in in for stations that greater payers also to Advantage time. dialysis eligible result become believe in outcomes. an of change enroll Medicare works cost Second, commercial taking and innovation reduce the in

the COVID Finally, proposition. to Tablo another yet added value has plank

reduction rapid clinical training hospitals also COVID point-of-care it realized addition and efficiency of advantages Tablo's In to cost system's versatility, mobility. using and benefits, the through the

believe influence forth patient preferences. continue care home at immunocompromised meaning a of In to terms with The to it will of X the dialysis patients. benefits have COVID a really chronic a we other clinic week traveling on impact on sitting to quarters and times new the and in compared back whole setting, dialyzing closed taken

product to and discuss recent momentum and we shift like the now commercial I'd gears that So in enhancements drove quarter. the third

you launched functionality cost on build expanding further through enhancements to data economic know, of deliver and data talented performance As value updates to driven ecosystem on our lower recently engineers. is new R&D, Tablo alongside device our ways on our end, benefits we our operational Tablo's improve Hub. in intend revenue. we that particularly science by initiatives that product To this and This and customers, software focused attributes group and

is to cloud-based and simplifying Hub and customer-facing As a patient data, care provides machine treatment compliance-related our billing strengthening Tablo platform reporting. access reminder, while that

whether at dialysis remote QX, treatment afar. monitoring Tablo clinicians on differentiating this Providers now during new in remote ICU treatment. timely to of use produce it from clinicians This platform COVID-positive includes home. monitor can As or also feature an or are the particularly as clinic simultaneously to allowing is monitoring, multiple a exposure helps patients patients patients

purchased which capability. customers hours. Tablo access We've XT, launched up rolling enables recently and begun for XT, previously XX customers both to also this new that existing to treatment We out new to had

Moving to trends. commercial

in acute market with really grow, adoption. the pleased are we the traction the of continues to and Our commercial scale pace and

customer contracts our in drove regional systems, our and expansion strong addition health with within to results. national New QX existing base,

new IDN X as we agreements quarter, regional well customers systems. the as national health new X During signed thought-leading with

X than of country a the health health the in regional top result now of are largest As more of progress, engaged with dozen the systems this a systems. and national we

one tied a machines. the cycle, to efficiency, was customers XX is over contracting. new outside which incumbent and with regional offers purchase we reduction across typical For which total to pattern focus made customer's these continue replacement hospitals buying was a And Tablo IDN on decision to importantly, compared is a This a health cost of long-term their perspective, care operating facilities. our decision and system's of see

expected consoles, National and and Stockpile use over Strategic Health with the disasters for to U.S. which of quarter, COVID period. the leaves will million an also a $XX placed X-year of third be XX In service natural contract These additional the Tablo during and into the we nation's Human Services, consoles response. contribute revenue a for product secured Department

home dialysis to front, commercial we've tracking on and interest patients broadly, quarter. grow our our dialyzing care translate at began pipeline efforts this innovative growing we've then, amongst health More our into home seen our first Since systems Tablo the home past also meaningfully, On patient providers. projections. seen

strong resources home. data Tablo retention and devoting and training In patient time on customer addition pipeline, a also to collection developing on patient we're to at

a our X noted takes weeks incumbent the it incumbent especially machine very about finding HHD those experiences with been decided consistently to technology. who to X in vocal Tablo the takes We're have a which it X switch weeks, home So the that as customers previous Compared on patient, effectively HHD it when far, patients became have positive typically on significant to reduction. on area. their about available to to experience Tablo Tablo, their train

above tracking also expectations. is early, while Retention, our

bolstered also our We recently team. leadership

As Steve recently Dickinson, of to most look Intervention track at a commercial we record the scaling us Williamson Peripheral was leadership our Monday, Outset. business. organizations for Steve $X.X appointed here Steve we operational Officer. on Chief where Commercial proven forward his as from joins we billion has excellence, while and driving President he company's announced Becton

ahead, over through and growing critical down laying home foundation national of and the second, the the regional time; in deeper products; business. top market expansion So objectives: scaling the our driving quarters in acute while market third, on we're also down sub-acute health first, X cost and focused into systems, our revenue the for

circle mission. our begins better back like remarks, prepared And declaration that to my important to about mantra, ending of something now. really is which each says I'd part Before our

and technology word, now, kind elevate not patients the of After underscores focused to and an The providers. providers not our deserve structural at now. begins year, last receiving of cost month, patients uniquely radically next very back, to experience better, are amazing. our urgency. of tomorrow, words, next reveals deserve tailwinds first they The sense promise. of for enough, with we it market believe and reduce Not positioned the its decades X total execution good They determination for our we great. aspirational deliver this deserve team, first And on care

So the with Rebecca. turn that, call over I'll to now

Rebecca Chambers

Leslie. Thanks,

As the in consumables Leslie This adoption, COVID-related acute we and services mentioned, quarter strong tied quarter to by to driven that our base. contracts our $XX.X third of year-over-year the installed larger as orders HHS result well and grew million. second received XXX% revenue growth was during including impact as

to the prior Product grew million, prior equal $XX.X $X.X installed revenue larger and million. million. grew $X to in by quarter driven to compared million revenue as XXX% of third revenue the Service the $X.X XXXX revenue period. grew ASP base to equaled $X.X $X.X Consumable increased year year-over-year year to XXX% million Console our other million to compared and equal compared period.

and service HHS including our Growth installed revenue, agreements larger freight to base, in growth. the contributed across

second that within for the been in has now Tablo is embedded drive tailwind our purchasing a quarter, many decision. While and advantages COVID customers' us it third the

quarter. Therefore, revenue driven by fourth solely in we don't the anticipate COVID meaningful

grow Our anticipate to significantly. as to be we result, reported revenue third quarter. in base the business is a expected And to what QX we similar to continue

today's the encourage results. non-GAAP Turning GAAP earnings can now in release. to to be which reconciliation review to gross I margin our non-GAAP highlight I you and measures, of will operating expenses. found

associated contributed margin the year This and prior minus significantly of percentage expected, improvement a of lower Consumable was Sequentially, expansion as our supply versus treatments. sequential of in-sourcing balance lower finished down a delivered margins sequentially ahead console was percentage to our meaningful cost X to expenses accounting reduction plan market a start-up our support and coupled as or material slightly margin These the moving year-over-year in Console R&D Our from XXX result console sequential improvement. the points QX with chain as logistics XX.X%, manufacturing improved to given our costs a and by service margin improved points. team, margin in lower activities non-GAAP gross of standard cost cost. expansion result labor field offset of an on higher reduction goods provider, utilization was period. costs gross as initiative. as teams the lower cost well of stemming services

In the our and the year. of second build-out console third next in quarter, manufacturing we in-source to finalized launch are the tracking efforts console of manufacturing our quarter facility

to Our remain existing contract the Tijuana, Mexico, in of cartridges new Thailand on production move Tablo to contract from our track. in manufacturing a initiatives partner also manufacturer

in expansion down plans quarter, continue advance to third the cost to our during We gross saw margin and initiatives significant drive our rapidly. gains further

to to expected well support expected be Further release ahead than to of cost console improve the portion in of a quarter margin offset deferral. of start-up sequentially. initiatives a costs and by more manufacturing the benefit Looking the to as gross is reduction Tablo as labor our full the XT fourth investment the revenue is quarter,

Moving expenses. non-GAAP to operating

operating the $XX.X Higher equaled quarter a OpEx. in quarter, expenses million Third million. to sequential non-GAAP $X.X as growth million, tied the drove increase as commercial associated the commissions expense by bookings prior investments company pickup our to as driven well operating in year, Compared with prior versus organization. primarily public $X.X grew in operating expenses G&A an up

upon satisfying release, in million closing in the for expense our tied conditions detailed compensation to As quarter IPO. the GAAP non-GAAP we certain performance of $XX.X options reconciliation the stock-based recorded expense the vesting earnings to as was third

We quarters. an million next these related performance X $XX options expect compensation over to to additional stock-based recognize the of

Looking be ahead share to count basic shares. approximately the fourth quarter, our will XX million

the loss $XX.X loss per net in We the reported to $XX.XX or loss or Non-GAAP $XX.X XXXX. $X.XX $X.XX period. in compared share million of net per $XX.XX share share a GAAP loss non-GAAP net a resulting per same net for or net per year of quarter of prior a million, for million share third was loss million $XX.X compared to $XX.X of period

$XXX short-term the restricted cash, approximately $XXX raised quarter of we cash approximately IPO. with cash investments. mentioned, million Leslie ended equivalents, As in the We million and

each to on of In exceptional summary, made has XXXX progress Outset date our initiatives.

patients, execute. launched for We have to an updates, our exciting for to and our and forward customers, expanded margin update footprint, QX by on progress new next our employees FDA look product secured our our providing We commercial clearance continuing shareholders delivering improved dedicated HHD. gross remain during We their to our and call. innovate earnings

your for you time. Thank

the move We open will to line. now Operator, the session. Q&A please

Operator

[Operator Instructions]

first comes Bob with of Our Bank Hopkins America. question from

Robert Hopkins

the quarter Congrats the a asking to company. pieces bit on little to Wanted your some start just first of by as a quarter. moving about public

it you I sort $X.X suggested, of kind QX? the about about in per you utilization the you you the did come quarter? think are you of utilization if seeing of revenue what did number I million trends kind in -- And as And did expected And quarter. system? in Rebecca, consumable in you just you're wonder in could that talk to as how that relates

Rebecca Chambers

Happy Yes. do to Thanks, Bob. so.

So consumables quarter, $X.X million. in second were approximately the

did in So expectations. nice a with on a basis, basis, strong pickup was on line a roughly sequentially, ASP, see, flat. roughly very and sequential year-over-year We which

So quarter. the has ASP that second were in seeing in we strength continued the

bit a to base. a that script. couple place towards across the the number was well trending the consoles COVID-related around of slower a know. you expectations, really little installed overall ramp consoles And I did Those though we consoles base. would on than some of Utilization a basis include there. second in And of installed machine X.X week of we of treatments referred consoles did the earlier per quarter say per those the are a as in factors number

those on the the trend So getting to we'd a back as consoles net-net to continues anticipate. basis, trends. foundational more expect And to utilization do fourth in we quarter COVID normalized

Robert Hopkins

it's no, wanted Very thorough. or I Okay. helpful. Leslie to just Rebecca, then And for -- very

that of COVID to how wanted I'm So if trend how benefit? we QX. you are COVID a benefit. QX to And kind quantifying I without kind and of you comments but your missed sense quantifying maybe can talk on the Just QX for that are -- this, about get sorry

Rebecca Chambers

to, Bob. couple on of points a is happy here. to And think Yes, tag Okay. I Leslie going

talked the We're quantify So happy $X quarter. QX recognize we million that just to. the we in do it. Back about second summer, that around million associated over $X with and we order, of

third being in the about delta You the the majority vast recognized should think quarter. of

meaningfully expectations will, our when So if as was it significant, you. in expected, quarter back shared third with you the we expected as

And we this just and over again, really saw remove a was only is at underlying base quarters. XXXX. X the look you quarter order each not those the growth but sequential COVID-related steady recognized that throughout QX, trend no business, So of do And QX and of if impact we large QX different.

our note have we it's to this think a confidence -- QX in environment. I months we given important a And of continue ahead Further, we're is expectations in lot even just few that ago. a operate for of backlog to operating

that a elucidates business that But bit the -- clearly growth hopefully base COVID-related the significant So quarter. sorry, as remove little in here QX I'm third more for the impact that trends you in again, you.

Leslie Trigg

Bob, quarter. maybe we're a last the couple of thinking in to of add I'll how -- points coming your part just the about I'll question Maybe COVID about fourth

X pandemic Patients first not a that there's a a to the dialysis optional. times weeks more, It's are point going or whether year, procedure. important is an not. think week is to or elective make dialysis I get not XX

in to continue country, pop that parts impact business our reason. a quarter XXXX in the up COVID sector fourth the not in through medtech or bit or confidence little does our beyond. unique projections various the is and our QX in hotspots If into So of that for

I upside, reasons probably one point, a but the reason think of of all this within factor, in it's health COVID of systems many I adopt versus just It one would to Tablo. And and no And say, hospital to purchase is that terms inpatient main driver, customers deliver at that DRG are they're reduction. means that factors time really a every the adopting, I recall, is being, the COVID deciding you result national to the many. has back the driving margin dialysis, goes stays the for about involve dialysis, We hospitals. the show, are as discrete again, a cost Tablo eating operating the a decision negative purchase in it's stand-alone talked road decision think dialysis embedded for that shows the cost. about data there's that XX% that inpatient on of

the than reading a do on pun system by ever restoration has elective of are think health further in means that acute. uncertainty bearing reduction as could the I news no for that so operating to cost more margin, given And been fueled the of volume. all cost COVID reduction think down more be improving intended. executives continuing I the as need procedure around never mean, I some been we've

think mandates COVID. Tablo solution, squarely is and or strategic within the fits I So no a COVID pretty powerful

Operator

And our from with Lewis David of line next the question Stanley. comes Morgan

David Lewis

Leslie, about placements maybe the half quick console the half. Rebecca help of Just the be just up first year? guess, a console the out, second it's Rebecca, us the first me. just thinking half I ones thinking and half to about versus Maybe for second the in few -- placements. Will but relative just for

large activity a relates have And hospitals? kind terms of systems national the of sort you of right just are I regional then in now follow-ups. related what couple of of And Leslie, you sort seeing to for be, it as versus then would

Rebecca Chambers

higher bit. in half Yes, year embedded the And of second is our David, and first than I'll the year, first take they be the that the of will absolutely, half in in the guidance.

Leslie Trigg

Okay.

it take from here. I'll great. So

So versus IDNs. national yes, regional

national in I new players those systems, signed with think of model with we easy VA of service quantifying train where the health and mentioned kind as to in nurses group that I'm been agreements a their in a what of cost dialysis. a for division systems to data has are is have the once hospitals across now and quarter. of wide. well pretty inclusive our national marquee script, the hospitals time, that is step X X next rollouts it and And sales health to the about sort integrating typical and established, their single a own country, What I the largest then seen then they'll network number quickly the we of enterprise master smaller we've with cadence guess, Tablo typically over the deliver on to these their How be we're quickly a of them solution. in is third excited start value reduction fairly network, came of perhaps how spreading national understanding seeing the of roster national impact. or

top I a hospitals that say systems. force we and regional the XX would have equivalently focused is So sales health the hospital on national

particular. general, excited very uptake health in about quickly in encouraged large occurring been But how systems these with has and the we've been national very,

David Lewis

here. helpful. was buzzy, So Very also be higher couple I Rebecca, a I'll was third. silence. to the the fourth placements it trying ask Okay. like get just there, fourth And -- on sorry, grow in versus quarter? acute will And mute to the placements was I awkward

forward just weeks is for a rule path one. the kind ago, kind buzzy, payment, of proposed ESRD Just post now number couple bundle the of of

IDNs and doing of there with system. some national the average And more are doing placements. are sort changes X system targeted It with XT? the regional these on -- rollouts that There through. is were mean having are some conversation think have does How come now do systems? that number conversation How hospital their the just CRRT to with of some was see nice that you that change you are XT. who I you

Leslie Trigg

Rebecca,... Okay.

Rebecca Chambers

first. You go

Leslie Trigg

David, thanks. Yes. Okay.

orders. take maybe -- So on these I'll sequential in the

So rule. the proposed

to TPNIES, would But similar what's of add-on in was proposed of viewed T-P-N-I-E-S, indeed the coming in So capital which is include -- proposal out innovation, win technology for question we to very a sort proposed the frankly, payment. really the a the new TPNIES would pronounced equipment to CMS space. they renal dialysis cleared final the whether equipment criteria open implement rule capital rule or include rule equipment in yes, And what criteria. equipment new is by machines whether supplies FDA eligibility they question whether out that only in constitute would after home include is their capital eligibility included that, and XXXX. was came in January the capital the only The

we And kind So hoping the allowance see we're for of this pleased an outcome. were that's the would be obviously, We'll have the capital. this in or future, to 'XX. whether opportunity 'XX to reapply

in We we'll some because there criteria flexibility a still meet have newness the either year.

if think we be we'd that to did the consider this baked into expectations. compared but tailwind reliant receive our as to base be we or it we're not that in something I a on our would designation case, future, certainly something

proposed So that's rule. about how we're the thinking

the to maybe I'll On we need XT if -- to. rule, double then the the question, we final move back can certainly on

feature let maybe me maybe a step the talk about this does. front, and back new just on XT take what think I

a functionality. for It provides XT XX up hours. to run the enables So new to Tablo mechanically

such CRRT, clinical involves that a which that that CVVHDF is not [indiscernible] or specific provide. often Tablo you or Now treatment therapies does mentioned, CVVH as

period of new not setting longer is CRRT in a flow machine. allows rates feature regular to for Tablo just run users a at dialysis the time. The lower So acute

particularly fairly the is now, nurses think lot more Right I offering adds in. value conversation though question change flexibility. acute was, conversation? think options. boxed part setting I the way in by in the your always it well, of it or It's of how a have don't the your ICU, and physicians the does second

run-up customize the it dialysis of enables You offering of this can by or treatments do ICU can hours, staff the parameters the to ICU. time needs specific treatment XX in the I that. really patient that And to for the think the

we just results to going that which to for commercially, a customers flexibility the and mobility acute your offers talk question, Tablo and ways of of in amplify this team So believe, feature think care Tablo quality David, about versatility, the their for sort in, clinical allows patients. our higher I back

Rebecca Chambers

trends same. to placement are then you That is console as question is sequentially the units we to slightly And will all you David, if said, your Effectively, effectively, received the in console expected across the over to number. be this up with total order we to console do much being -- quarter to regard in fourth, answer quarter, with unit be total the shared unit the -- trend second unit of console basis. summer, down sequentially a out flat on in strip large placements less trend terms that that not sequential third

driver through think order, service we well console benefit we should both is revenue HHS that other The console which sequentially line to a the the the as will of quarter line. from full as

just puts with takes. helping So and

Operator

from comes following Amit question line Goldman our And the with of Hazan Sachs.

Amit Hazan

Congrats add on all the milestones. I'll that as well.

obviously, items if out to guidance, want thinking any but comment placements to us? should formal giving to qualitatively you I console puts be takes and about, on you would you're not Let me it's talk can related can And for other XXXX. we seeing just just call start by you get to maybe whether that or

Rebecca Chambers

it about think you. the for And to question. with Happy thanks qualitatively Yes.

we view be us saw and in don't in our third expect we outlook. confidence the period quarter, do obviously midst give when planning process I do -- the comes down the right now XXXX, and as these rest we it think end we we in we're in they that That to XXXX fourth to of our the out of being to trends this said, the quarter, year. specific, continue

beyond pleased willing not that, So we're to to going. is but really with say just comment that business how the

very lends itself XXXX. to is also and the high, fourth that outlook in a confidence for Our quarter positive

Amit Hazan

home get on for a follow-up quick just And back Okay. in and I'll queue. me then

of some color expansion. health as home these on you've into of home, to going acute leveraging how IPO your Maybe process, in point days? system give base On the in about customer the just talked that's entry the kind kind early

Leslie Trigg

Sure. Maybe I'll comment on that, Rebecca.

So short well. very answer going is

let's systems I say, the -- that chronic right, full nephrologists, patients the is particularly package. the think for and that them continues systems predictable partner pipeline health viewing at revenue are they how really revenue a this an to these to nurses the already walls practitioners factor of that chronic have hospital. a streams are health us amongst health their to that the episodic another of assets of care annuity we've fill, with in extenders, surprised really many pleasantly as I the from providing stream network of offer realizing physicians, make care complement, all in have patients, access outside They think very And been systems quickly opportunity home. sort nurse X good their of

And think to again, I've the pleased setting really here, but I see so setting. the patients leaning been of, into the days organizations home their acute-to-the-home pleased for reach about what very qualitatively from to these thought-leading been excited are is and national in see, forward early sure, well-known say, I've would what early, that managing I number

Operator

Danielle with the And from SVB. line Antalffy of comes next question the

Danielle Antalffy

have and I one Rebecca. I think my question second is be for, it you, for question would Leslie, for

the of very should do centers coming how versus is that about sales it. when question after get the to should growth how much about to are penetration some first Rebecca curve? penetration, where of I be I'll with to going -- I'm we -- There's how you where of be be where at a still you have And how is incremental hospitals much thinking we you online? it's growth had. I new So think then But my acute trying sale, guess sense therapy Leslie, you about incremental thinking same-store follow-up lots know early. So be the on

Leslie Trigg

Sure. Great. Okay. Yes.

say, of thoughts we share first started all, I getting it we're we think a believe to a to just couple suffice have there. mean, -- of I maybe here.

with regional XX very, top the a emphasis very systems. an long have runway We on health

think a I in we the tremendous we remarks amount there between hospital over in that networks we've got of XX, there. prepared a from mentioned gosh, that to means the But dozen are opportunity not of and a of smaller speak them. on dozen over

a bit that's little So color. qualitative of

X on progress top the the we think when good very being really side, systems. about then national And already there in making it national of are you

our close penetration intentionally number we total our is breadth to of pretty is networks, paying remarkable. there of the strategy, within individual about national these And focused the opportunity as are in right? number just national sort on attention customers. think we we of those a of we facilities what so systems Because regional as to each of are And the very are

So within we've more customers each of hospital still the the that country. about facilities to X expand and tremendous have broadly their national individual opportunity around publicly, in talked across we

Danielle Antalffy

it. Got

than we and Rebecca I a I the think Street mean for Okay. helpful. bit margin front. then, That's just you, expected. you expected, better gross And had the did little on

upside have of strategy the revenue the was process, to of margin to laid go sort expected would you faster the gross and your way thinking During lot years? you this be this IPO gross we like, quarter, X as a improve okay, you this than are next contributed? out we Or to few our margin. Should goals about things get tracking over

Rebecca Chambers

make our willing console ability case to were in-sourcing are we should the plan cartridge executing But confident I on remain completely quarterly a second and But And end, manufacturing yet. that that just in that, We we'll we base we're Danielle, But think fair are confident to with very that deliver pleased and a right? these quarter laid necessarily necessarily X I second initiatives results. make quarter. question, the X for in do side and progress and plan. out, to to in Obviously, to we I again, for we're quarter the that the plan. -- caution, continue source doesn't call the trend initiative one. trend, here, to Thanks new doesn't Yes. our the

Operator

Instructions] [Operator

comes with from Wise Rick Stifel. question next Our

Frederick Wise

a highlighted that around in you're investment, focusing where and Maybe I'm organization. sales people? terms of you the your, investing aspect curious where revolved sure, just Leslie, are the about hear ever-evolving you bit thoughts another to team, I'm

Leslie Trigg

this to people device aim an Sure. just frequently in The and focused talk delivering about is we're what because, patients answer a Yes, Rick, a we matter fact, that. -- really they so -- and on yes, that experience. to not where to providers happy at and we matter to Outset lot deliver

quality then the you that when that differentiated the the mindset deliver individuals to put execution. a experience, reliant so of heavily have on And around you you're

amount time time. And so an at the sort we enormous people of thinking excessive the almost an the right spend places right right of time, about in

that our touch a feel X we we And probably XX the that I'll in we're of our more today do geographically One, put on as with have national national we're speaking now, even big systems. powerhouse and representation team focused really on. regional making that have So greater health good accounts that of. are that regions, these we emphasis But backdrop specifically investments are We all adequate that areas toward top team. progress accounts sales in proud focused. contain a that capital ensuring reps

for a our, but specialist are program just sort our whole what quarterbacks you lot day-to-day do call short. not program more for implementation, these of device, we is the And the which TPS, than Tablo installation, if implementation, -- the our team, Second the Tablo installing is right. a only it

of as we facility the ensuring of for every and patient understand who patient And for that is first beginning, nurses of well responsible quickly. physicians the that and and continue And their and the training adopts from treatments that the the hospital the so and the the the example, quarterback they're that done gain confidence well Tablo and population. each TPS how think really Tablo and and what prescribing to for go techs the

group, investment team our lastly new of service base is expanding another absolutely our then our team, growth focus installed continuum. area TPS is So vital second is that's this order And as and our probably and that field TPS, even back, -- service partner analogy. the sort running they're the that's The our with a can't don't Maybe -- there to co I go focal vital on I of success. if know I the engineers quarterbacks. field support guess,

of So anyway, with every ensuring analogy to actually probably let's a I Tablo. better in new important co just they're and can the say implementation each facility an was speak success accurately, that pilot,

-- acute very within groups experience field we'll the to investing our as the So base. are high-growth what focused X our we on call installed in principally in those organization continue really that we're

Frederick Wise

Right.

made very quarter. all, you the this You've couple mean, that compelling. first of comments call of I outperformed a were during

much your this third -- and not us hard appreciate conference in market, of third call. and me a for is adoption about to up your You're with we're starting caution ready quarter strongly, ahead. to implications I it's ask is back to your growing. our your guiding the 'XX. accelerating like indicating going But quarter sort modeling the quarter saying And quarter volume. [ first of company in as in know home about And ] fourth that and I acute sort us the I quarter, the models first all very certainly you're and the fourth pipeline wanting to go and carefulness for far be But too guidance. public on this numbers to But likely I and not the reflect you're not better XXXX. am than give have apologize for outperformance, play

that Is be a But know as think seem we the going 'XX. the my want that a slow, after maybe There you we mean, reflecting excellent all and wind things be given are have way to react challenges doesn't ahead. should to balance reason on the new happening. is, time it that the products would us growth I positive you on into that up of those at contemplate of of market, with particularly the year long the help I thoughts momentum because that to of maybe like lot same it? some right to why question So seems

Rebecca Chambers

Yes, thank summary. well the you as for great

digits of revenue By regard rate, there are growth things comping of anymore. we getting a to of to point off mind. not we're are think to couple with that definition, I come a where single low

growth obviously caution extrapolation. I a from rate so perspective, would And

regard of the would with quarter that would the business, more pleased. we one underlying trends about it the third the saw business continuing versus comment. in to and from not, encourage obviously business COVID-related you base and be extrapolate what to year-over-year second trends again, grow we're base from So to But and We the XXXX. think the

new revenue mentioned, in and early growth do provider are penetrating, majority and in we methodical are to vast that expected are in XXXX. driving Leslie a that that a growth stages of the is The the we in, acute driver market, home, seeing as we And need this participating or customer is rollout way. to and very be just we pipeline also while remember in the contracts, of

our ahead far home. would on And caution of so I SKIs you get to too

is term, the way as in necessarily for more huge experience Leslie long-term not that We patient in driving this methodically very near a very the are, and ensuring said, positive. doing looking patient numbers

excited do that still in are here QX XXXX, today. you And Rick. confidence back There's to the is strong. we and bit, all but our over sit hopefully, as course a brings So a we little of lot

Operator

speakers any I'm not And ladies questions time. at I to this the would any remarks. turn call further gentlemen, your to and showing further for back like now

Lynn Lewis

today. Thanks, our Investors night. section as reminder, be our through release. fourth you. of of good following the And forward earnings you look and call concludes This quarter. the in -- of webcast a today's contained a the to fiscal and dial-in instructions for call joining this a update call, next well as us Thank in again the a we close replay our Thank available as will website as

Operator

Ladies and call. today's Thank conference gentlemen, concludes you for this participating.

good You may a evening. now disconnect. Everyone, have

Outset Medical (OM) 11 Nov 202020 Q3 Earnings call transcript