Outset Medical NASDAQ: OM reported second-quarter 2026 revenue of $31.6 million, up 1% from a year earlier and 14% sequentially, as the dialysis technology company cited commercial progress, improving margins and a new $40 million refresh agreement with HCA Healthcare.
Chair and Chief Executive Officer Leslie Trigg said the company’s second-quarter performance reflected “steady execution across revenue, gross margin, operating expense discipline, and cash management.” Outset reiterated its full-year revenue guidance of $125 million to $130 million, representing anticipated growth of 5% to 9% from 2025.
Outset’s Tablo platform is used by hospitals and other providers to support insourced dialysis programs. During the quarter, the company completed its highest number of successful new-site implementations in several years, according to Trigg.
Revenue Mix and Margin Improvement
Chief Financial Officer Renee Gaeta said product revenue totaled $21.9 million, down 5% year over year. Console revenue rose 6% to $9.5 million, while consumable revenue declined 12% to $12.4 million against what Gaeta described as a difficult prior-year comparison.
Service and other revenue increased 17% to $9.7 million, supported by higher volumes and average selling price increases. Recurring revenue, including consumables, service, implementation services and freight, was $22.1 million, down 2% from the prior-year period.
Non-GAAP gross margin improved to 42.2%, up more than 380 basis points from the second quarter of 2025. Gaeta attributed the improvement primarily to product-cost reductions, lower overhead and service efficiencies. Product gross margin was 46.1%, down about 280 basis points because of a higher mix of console sales, while service and other gross margin rose more than 2,400 basis points to 33.4%.
“Gross margin performance reflects strong execution and keeps us on track towards our next milestone of a 50% company-wide gross margin,” Gaeta said.
Non-GAAP operating expenses were $25.8 million, up 1% from a year earlier. The company reported a non-GAAP operating loss of $12.4 million, an improvement of 7% year over year.
Outset ended the quarter with $151 million in cash equivalents, short-term investments and restricted cash. Cash use was $9.5 million during the quarter, and Gaeta said the company remains on track to use less than $40 million in cash for the full year.
HCA Refresh Agreement Adds Backlog
A central development during the quarter was Outset’s signing of a $40 million refresh agreement with HCA Healthcare. The agreement extends HCA’s and Outset’s commitment to insourced dialysis through 2028 and calls for HCA facilities already using Outset’s platform to update their fleets.
Trigg characterized the agreement as Outset’s first refresh win and said it provides contracted backlog that improves revenue visibility and predictability. The $40 million figure does not include potential expansion into additional HCA facilities that do not currently use Tablo.
Outset believes the refresh cycle could include approximately 3,000 consoles and represent up to $150 million in console revenue opportunity over the next several years. Company executives declined to provide more detailed timing or revenue-recognition expectations for the HCA agreement, citing customer confidentiality.
Gaeta said HCA was part of the company’s second-quarter pipeline and contributed to the strong console performance, alongside expansion customers and other console placements. She said Outset has a pipeline containing a range of deal sizes.
Utilization, Implementations and Next-Generation Tablo
Management said the decline in consumables reflected comparisons with strong demand in the first half of 2025, when flu season and hospital census levels benefited the business. Gaeta said the company continues to see strong device utilization across customer segments and did not identify any concerning trends.
Trigg said a higher number of site implementations in the second quarter reflected a prior delay between console sales and subsequent installations and training. She said those installations should support more normal ordering patterns in the future.
One Texas health system trained more than 100 nurses through Outset’s clinical excellence team and supported 956 treatments during its first 60 days, Trigg said. The company also implemented new sites at a top-10 health system customer, hospitals within regional health systems and post-acute care facilities.
Outset has established a customer-success program in which hospital customers are paired with clinical excellence team members who track operational, financial and clinical measures. In an independent Voice of the Customer assessment during the quarter, customers gave Outset an average recommendation score of 8.8 out of 10, according to Trigg.
The company is also conducting a pilot phase for its next-generation Tablo system. Trigg said the update includes hardware and software enhancements intended to improve performance, reliability, cybersecurity and clinician experience. She said Outset is taking a measured approach to the launch and will evaluate user experience, feedback and system performance before a broader rollout.
Second-Half Expectations
Outset expects most of its full-year growth to occur in the third and fourth quarters. In response to analyst questions, Gaeta said the company expects the third quarter could be affected by typical medtech seasonality, while the fourth quarter is expected to be stronger.
Trigg said Outset’s commercial priorities include expanding sales coverage among the top 250 health systems, growing within existing accounts and pursuing new customer acquisition. She added that the company now serves all 10 of the largest health systems, all 10 of the largest post-acute providers and approximately 30% of the top 100 integrated delivery networks.
About Outset Medical (NASDAQ:OM)
Outset Medical is a medical technology company specializing in innovations for renal care. The company's flagship offering, the Tablo Hemodialysis System, is designed to streamline and simplify dialysis treatment across acute and outpatient settings. By integrating water purification, dialysate production, and treatment monitoring into a single device, Tablo aims to reduce the complexity and logistical burden traditionally associated with hemodialysis therapy.
Tablo's modular design allows for rapid setup and flexible deployment in hospitals, clinics, long‐term care facilities and emergency response scenarios.
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