Outset Medical (OM) investor relations material

Organizational transformation and operational progress

• Resolved FDA issues, strengthening regulatory maturity and reducing risk.

• Shifted sales model to focus on large hospital systems, increasing average order size by 20% in recent months.

• Tablo technology continues to receive strong customer feedback and demonstrated clinical benefits at recent industry meetings.

• Presented data on over one million Tablo treatments, highlighting robust utilization.

• Despite operational improvements, recent quarter missed consensus due to deal timing and guidance was lowered for 2025.

Revenue dynamics and sales cycle challenges

• Missed Q3 consensus by $1.3 million due to a large deal not closing as forecasted, though it remains active in the pipeline.

• Recurring revenue from consumables and service remains strong and predictable, but inventory purchasing patterns at large customers caused temporary misalignment.

• Improved internal processes to better align customer usage data with purchasing, aiming for more accurate forecasting.

• Q4 trends indicate normalization between utilization and purchasing, with stable recurring revenue expected.

• Capital equipment sales remain inherently lumpy due to complex, multi-decision-maker enterprise deals.

Sales organization and leadership transition

• Transitioned sales team from device-focused to enterprise solution sellers, supporting large-scale hospital conversions.

• Implemented new sales processes and tools to address longer sales cycles.

• Undergoing sales leadership change to further drive consistency and accelerate deal closure.

• Strong sales and field service leadership remains in place to ensure continuity during the transition.

• No evidence of hospital capital budget constraints impacting sales; focus remains on internal execution.