2021 Revenue Guidance Range Elevated to $99
million to $101 million
Outset Medical, Inc. (Nasdaq: OM) (“Outset” or the “Company”), a
medical technology company pioneering a first-of-its-kind
technology to reduce the cost and complexity of dialysis, today
reported financial results for the third quarter ended September
30, 2021.
Recent Highlights
- Recorded net revenue of $26.3 million in the third quarter of
2021, a 91.3% increase compared to $13.8 million in the third
quarter of 2020
- Achieved gross margin of 11.2% in the third quarter of 2021
compared to (37.3%) in the third quarter of 2020
- Received favorable decision for Tablo under the Transitional
Add-on Payment Adjustment for New and Innovative Equipment and
Supplies (TPNIES) program
- Four clinical abstracts outlining Tablo’s clinical performance
in both Home and Acute settings to be shared at the American
Society of Nephrology’s Kidney Week Meeting
“Our strong third quarter performance further reinforces our
confidence in our business and in our expectations for growth,”
said Leslie Trigg, President and Chief Executive Officer. “We are
also very pleased to have secured a positive decision on our TPNIES
application, which we believe validates Tablo’s value to patients
and providers and makes Tablo the first and only technology to
receive a TPNIES approval.”
Third Quarter 2021 Financial Results
Revenue for the third quarter of 2021 was $26.3 million,
representing an increase of 91.3% compared to $13.8 million in the
third quarter of 2020. Product revenue for the third quarter of
2021 was $21.8 million, representing an increase of 101.9% compared
to $10.8 million in the third quarter of 2020. Service and other
revenue for the third quarter of 2021 was $4.5 million,
representing an increase of 52.6% compared to $2.9 million in the
third quarter of 2020.
Total gross profit for the third quarter of 2021 was $2.9
million, compared to a gross loss of ($5.1) million for the third
quarter of 2020. Total gross margin for the third quarter of 2021
was 11.2%, compared to (37.3%) in the third quarter of 2020.
Product gross profit for the third quarter of 2021 was $1.3
million, compared to ($6.5) million of product gross loss in the
third quarter of 2020. Product gross margin for the third quarter
of 2021 was 5.9%, compared to (59.7%) in the third quarter of 2020.
Service and other gross profit for the third quarter of 2021 was
$1.6 million, compared to $1.3 million of service and other gross
profit in the third quarter of 2020. Service and other gross margin
for the third quarter of 2021 was 36.7%, compared to 45.1% in the
third quarter of 2020.
Operating expenses for the third quarter of 2021 were $33.1
million, including research and development (R&D) expenses of
$9.7 million, sales and marketing (S&M) expenses of $15.7
million, and general and administrative (G&A) expenses of $7.6
million. This compared to operating expenses of $35.6 million,
including R&D expenses of $9.2 million, S&M expenses of
$13.3 million, and G&A expenses of $13.1 million in the third
quarter of 2020.
Excluding stock-based compensation expense, non-GAAP operating
expenses for the third quarter of 2021 were $30.3 million,
including R&D expenses of $9.0 million, S&M expenses of
$14.5 million, and G&A expenses of $6.8 million.
Third quarter 2021 net loss was ($30.5) million, or ($0.65) per
share, compared to net loss of ($42.3) million, or ($3.44) per
share, for the same period in 2020. On a non-GAAP basis, net loss
for the third quarter of 2021 was ($27.6) million, or ($0.59) per
share, compared to non-GAAP net loss of ($28.4) million, or ($2.31)
per share for the same period in 2020.
Total cash, including restricted cash, cash equivalents and
short-term investments, was $406.4 million as of September 30,
2021.
Full Year 2021 Financial Guidance
Outset projects revenue for the full year 2021 to range from $99
million to $101 million, which represents approximately 98% to 102%
growth over the Company’s fiscal year 2020 revenue. This updated
guidance compares to prior 2021 revenue guidance of $97 million to
$100 million.
Webcast and Conference Call Details
Outset will host a conference call today, November 3, 2021, at
2:00 p.m. PT / 5:00 p.m. ET to discuss its third quarter 2021
financial results. The dial-in numbers are (833) 614-1409 for
domestic callers and (914) 987-7130 for international callers. The
conference ID is 7975557. A live webcast of the conference call
will be available on the Investor Relations section of the
Company's website at https://investors.outsetmedical.com. The
webcast will be archived on the website following the completion of
the call.
Use of Non-GAAP Financial Measures
The Company may report non‐GAAP results for gross profit/loss,
gross margin, operating expenses, operating margins, net
income/loss, basic and diluted net income/loss per share, other
income/loss, and cash flows. These non-GAAP financial measures are
in addition to, and not a substitute for, or superior to, financial
measures calculated in accordance with GAAP. The Company’s
financial measures under GAAP include stock-based compensation
expense, as listed in the itemized reconciliations between GAAP and
non‐GAAP financial measures included in this press release.
Management has excluded the effects of this non-cash expense item
in non‐GAAP measures to assist investors in analyzing and assessing
past and future operating performance and period-to-period
comparisons. There are limitations related to the use of non-GAAP
financial measures because they are not prepared in accordance with
GAAP, may exclude significant expenses required by GAAP to be
recognized in the Company’s financial statements, and may not be
comparable to non-GAAP financial measures used by other companies.
The Company encourages investors to carefully consider its results
under GAAP, as well as its supplemental non‐GAAP information and
the reconciliation between these presentations, to more fully
understand its business. Reconciliations between GAAP and non‐GAAP
results are presented in the Appendix A of this press release.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact
are forward-looking statements. Forward-looking statements are
based on management’s current assumptions and expectations of
future events and trends, which affect or may affect the Company’s
business, strategy, operations or financial performance, and actual
results and other events may differ materially from those expressed
or implied in such statements due to numerous risks and
uncertainties. Forward-looking statements include, but are not
limited to, statements about the Company’s possible or assumed
future results of operations and financial position, including
expectations regarding projected revenues, profitability and
outlook, statements regarding the Company’s overall business
strategy, plans and objectives of management, the Company’s
expectations with respect to anticipated benefits of the TPNIES
approval, as well as the Company’s expectations regarding the
continuing impact of the COVID-19 pandemic on the Company and its
operations as well as the impact on its customers and suppliers.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Factors that could cause actual results or other events to differ
materially from those contemplated in this press release can be
found in the Risk Factors section of Outset’s public filings with
the Securities and Exchange Commission, including Outset’s latest
annual and quarterly reports. Because forward-looking statements
are inherently subject to risks and uncertainties, you should not
rely on these forward-looking statements as predictions of future
events. These forward-looking statements speak only as of their
date and, except to the extent required by law, the Company
undertakes no obligation to update these statements, whether as a
result of any new information, future developments or
otherwise.
About Outset Medical, Inc.
Outset is a medical technology company pioneering a
first-of-its-kind technology to reduce the cost and complexity of
dialysis. The Tablo® Hemodialysis System, FDA cleared for use from
the hospital to the home, represents a significant technological
advancement that transforms the dialysis experience for patients
and operationally simplifies it for providers. Tablo serves as a
single enterprise solution that can be utilized across the
continuum of care, allowing dialysis to be delivered anytime,
anywhere and by anyone. The integration of water purification and
on-demand dialysate production enables Tablo to serve as a dialysis
clinic on wheels, with 2-way wireless data transmission and a
proprietary data analytics platform powering a new holistic
approach to dialysis care. Tablo is a registered trademark of
Outset Medical, Inc.
Outset Medical, Inc.
Condensed Statements of
Operations
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenue:
Product revenue
$
21,824
$
10,812
$
60,662
$
26,435
Service and other revenue
4,494
2,944
13,788
6,253
Total revenue
26,318
13,756
74,450
32,688
Cost of revenue:
Cost of product revenue (2)
20,526
17,265
63,180
42,118
Cost of service and other revenue
2,846
1,617
6,983
4,024
Total cost of revenue
23,372
18,882
70,163
46,142
Gross profit (1)
2,946
(5,126
)
4,287
(13,454
)
Gross margin (1)
11.2
%
(37.3
)
%
5.8
%
(41.2
)
%
Operating expenses:
Research and development (2)
9,729
9,175
25,331
21,066
Sales and marketing (2)
15,726
13,344
42,079
29,870
General and administrative (2)
7,629
13,088
26,597
21,462
Total operating expenses
33,084
35,607
94,007
72,398
Loss from operations
(30,138
)
(40,733
)
(89,720
)
(85,852
)
Other income (expense):
Interest income and other income, net
99
(3
)
375
524
Interest expense
(431
)
(428
)
(1,284
)
(2,461
)
Change in fair value of redeemable
convertible preferred stock warrant liability
—
437
—
(93
)
Loss on extinguishment of term loan
—
(1,567
)
—
(1,567
)
Loss before provision for income taxes
(30,470
)
(42,294
)
(90,629
)
(89,449
)
Provision for income taxes
—
—
74
—
Net loss
$
(30,470
)
$
(42,294
)
$
(90,703
)
$
(89,449
)
Net loss attributable to common
stockholders, basic and diluted (3)
$
(30,470
)
$
(42,294
)
$
(90,703
)
$
(47,281
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.65
)
$
(3.44
)
$
(1.96
)
$
(6.30
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
46,588
12,299
46,252
7,508
______________________________________
(1) Gross profit and gross margin by
source consisted of the following:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Gross profit
Product revenue
$
1,298
$
(6,453
)
$
(2,518
)
$
(15,683
)
Service and other revenue
1,648
1,327
6,805
2,229
Total gross profit
$
2,946
$
(5,126
)
$
4,287
$
(13,454
)
Gross margin
Product revenue
5.9
%
(59.7
)
%
(4.2
)
%
(59.3
)
%
Service and other revenue
36.7
%
45.1
%
49.4
%
35.6
%
Total gross margin
11.2
%
(37.3
)
%
5.8
%
(41.2
)
%
(2) Include stock-based compensation
expenses as follows:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Cost of revenue
$
64
$
142
$
201
$
181
Research and development
760
3,074
2,568
3,326
Sales and marketing
1,207
2,645
4,001
2,828
General and administrative
833
8,047
5,883
8,836
Total stock-based compensation
expenses
$
2,864
$
13,908
$
12,653
$
15,171
(3) A reconciliation of the net loss to
net loss attributable to common stockholders is as follows:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net loss
$
(30,470
)
$
(42,294
)
$
(90,703
)
$
(89,449
)
Adjustment to redemption value on
redeemable convertible preferred stock
—
—
—
(362
)
Deemed dividend on settlement of accrued
dividend*
—
—
—
42,530
Net loss attributable to common
stockholders, basic and diluted
$
(30,470
)
$
(42,294
)
$
(90,703
)
$
(47,281
)
* Deemed dividend on settlement of accrued
dividend arose as a result of the terms and conditions associated
with the Company's redeemable convertible preferred stock
outstanding prior to the Company's initial public offering ("IPO").
These terms and conditions were described in the Company's previous
SEC filings, including the 424(b) prospectus filed on September 16,
2020 in connection with the IPO.
Outset Medical, Inc.
Condensed Balance
Sheets
(in thousands, except per share
amounts)
September 30,
December 31,
2021
2020
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
230,508
$
294,972
Short-term investments
142,535
19,898
Accounts receivable, net
19,302
6,468
Inventories
34,297
18,384
Prepaid expenses and other current
assets
6,659
6,189
Total current assets
433,301
345,911
Restricted cash
33,311
33,311
Property and equipment, net
14,532
14,998
Operating lease right-of-use assets
7,494
8,253
Other assets
166
1,356
Total assets
$
488,804
$
403,829
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
2,702
$
4,948
Accrued compensation and related
benefits
17,759
16,845
Accrued expenses and other current
liabilities
11,389
7,903
Accrued warranty liability
3,234
2,913
Deferred revenue, current
5,212
3,201
Operating lease liabilities, current
1,109
882
Total current liabilities
41,405
36,692
Accrued interest, noncurrent
600
240
Deferred revenue, noncurrent
109
570
Operating lease liabilities,
noncurrent
7,199
8,044
Term loan, noncurrent
29,740
29,674
Total liabilities
79,053
75,220
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000
shares authorized, and no shares issued and outstanding as of
September 30, 2021 and December 31, 2020
—
—
Common stock, $0.001 par value; 300,000
shares authorized as of September 30, 2021 and December 31, 2020;
47,018 and 42,722 shares issued and outstanding as of September 30,
2021 and December 31, 2020, respectively
47
43
Additional paid-in capital
994,486
822,624
Accumulated other comprehensive (loss)
income
(20
)
1
Accumulated deficit
(584,762
)
(494,059
)
Total stockholders' equity
409,751
328,609
Total liabilities and stockholders'
equity
$
488,804
$
403,829
Outset Medical, Inc.
Condensed Statements of Cash
Flows
(in thousands)
(unaudited)
Nine Months Ended September
30,
2021
2020
Net cash used in operating activities
$
(97,588
)
$
(73,175
)
Net cash used in investing activities
(126,089
)
(6,411
)
Net cash provided by financing
activities
159,213
386,555
Net (decrease) increase in cash, cash
equivalents and restricted cash
(64,464
)
306,969
Cash, cash equivalents and restricted cash
at beginning of the period
328,283
37,669
Cash, cash equivalents and restricted cash
at end of the period (1)
$
263,819
$
344,638
______________________________________
(1) The following table provides a
reconciliation of cash, cash equivalents and restricted cash
reported within the accompanying condensed balance sheets that sum
to the total of the amounts shown in the accompanying condensed
statements of cash flows (in thousands):
September 30,
2021
2020
Cash and cash equivalents
$
230,508
$
311,327
Restricted cash
33,311
33,311
Total cash, cash equivalents and
restricted cash*
$
263,819
$
344,638
* The total cash, including restricted
cash, cash equivalents and investment securities as of September
30, 2021 was $406.4 million; compared to $377.5 million as of
September 30, 2020.
Appendix A
Outset Medical, Inc.
Results of Operations –
Non-GAAP
(in thousands, except per share
amounts)
(unaudited)
Reconciliation between GAAP and
non-GAAP net loss per share attributable to common
stockholders:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
GAAP net loss per share to common
stockholders, diluted
$
(0.65
)
$
(3.44
)
$
(1.96
)
$
(6.30
)
Stock-based compensation expense
0.06
1.13
0.27
2.02
Non-GAAP net loss per share to common
stockholders, diluted
$
(0.59
)
$
(2.31
)
$
(1.69
)
$
(4.28
)
Reconciliation between GAAP and
non-GAAP net loss attributable to common stockholders:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
GAAP net loss attributable to common
stockholders, diluted
$
(30,470
)
$
(42,294
)
$
(90,703
)
$
(47,281
)
Stock-based compensation expense
2,864
13,908
12,653
15,171
Non-GAAP net loss per share attributable
to common stockholders, diluted
$
(27,606
)
$
(28,386
)
$
(78,050
)
$
(32,110
)
Reconciliation between GAAP and
non-GAAP results of operations:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
GAAP gross profit
$
2,946
$
(5,126
)
$
4,287
$
(13,454
)
Stock-based compensation expense
64
142
201
181
Non-GAAP gross profit
$
3,010
$
(4,984
)
$
4,488
$
(13,273
)
GAAP gross margin
11.2
%
(37.3
)
%
5.8
%
(41.2
)
%
Stock-based compensation expense
0.2
1.0
0.3
0.6
Non-GAAP gross margin
11.4
%
(36.3
)
%
6.1
%
(40.6
)
%
GAAP research and development
expense
$
9,729
$
9,175
$
25,331
$
21,066
Stock-based compensation expense
(760
)
(3,074
)
(2,568
)
(3,326
)
Non-GAAP research and development
expense
$
8,969
$
6,101
$
22,763
$
17,740
GAAP sales and marketing
expense
$
15,726
$
13,344
$
42,079
$
29,870
Stock-based compensation expense
(1,207
)
(2,645
)
(4,001
)
(2,828
)
Non-GAAP sales and marketing expense
$
14,519
$
10,699
$
38,078
$
27,042
GAAP general and administrative
expense
$
7,629
$
13,088
$
26,597
$
21,462
Stock-based compensation expense
(833
)
(8,047
)
(5,883
)
(8,836
)
Non-GAAP general and administrative
expense
$
6,796
$
5,041
$
20,714
$
12,626
GAAP total operating expense
$
33,084
$
35,607
$
94,007
$
72,398
Stock-based compensation expense
(2,800
)
(13,766
)
(12,452
)
(14,990
)
Non-GAAP total operating expense
$
30,284
$
21,841
$
81,555
$
57,408
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103005373/en/
Investor Contact Lynn Lewis or Brian Johnston Gilmartin
Group investors@outsetmedical.com
Media Contact Nicole Shannon Director, Marketing
Communications for Outset Medical nshannon@outsetmedical.com
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