Outset Medical Inc. reported fourth‑quarter and full‑year 2025 results that showed modest top‑line growth but a significant earnings miss. Revenue rose 5% to $119.5 million for the year, while the company posted a non‑GAAP earnings‑per‑share loss of $0.84, a miss of $1.08 against the consensus estimate of a $0.24 loss. The company’s gross margin expanded to 39.6% non‑GAAP for the year, up 400 basis points from 35.6% in 2024, and the fourth‑quarter non‑GAAP gross margin reached 42.9%, up 500 basis points from 42.4% in Q4 2024.
In the fourth quarter, revenue totaled $28.9 million, down 2% from $29.5 million in Q4 2024. Product revenue was $19.9 million and service and other revenue was $9.0 million. The decline in product revenue was driven by lower consumable sales, a result of order timing rather than a loss of demand. Service revenue, however, grew modestly, offsetting the product decline and supporting the overall margin expansion.
Gross‑margin improvement was largely driven by a shift in product mix and pricing power. Product gross margin exceeded 50% for the first time in Q4 2025, while non‑GAAP gross margin expanded more than 500 basis points year‑over‑year. The company also reduced non‑GAAP operating expenses by 4% to $25.7 million, contributing to a narrowed operating loss of $10.4 million in the quarter and a net loss of $19.5 million, compared with a $19.3 million net loss in Q4 2024.
Outset’s cash burn fell sharply, from $116 million in 2024 to $46 million in 2025, reflecting disciplined cost management and a stronger cash position of $173 million. The company’s recapitalization reduced debt and provided sufficient liquidity to reach cash‑flow breakeven. Management highlighted the FDA clearance of the next‑generation Tablo platform, noting that it is the first dialysis system cleared under the FDA’s 2025 cybersecurity requirements and that it is now used at roughly 1,000 acute‑care sites in the United States.
The company reiterated its 2026 revenue guidance of $125 million to $130 million, a range that is slightly below the analyst consensus of approximately $131.5 million. Management emphasized that the guidance reflects a cautious outlook amid a lengthy sales cycle for larger enterprise opportunities, but also signals confidence in the company’s differentiated platform and improving margins. The guidance, combined with the margin expansion and reduced cash burn, suggests a path toward profitability, although the EPS miss and conservative revenue outlook highlight near‑term challenges.
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