Outset Medical Reports Third Quarter 2020 Financial Results
Strong Quarter Driven by Accelerating Acute Market Penetration and Significant Margin Expansion
Third Quarter 2020 & Recent Highlights
- Recorded net revenue of
$13.8 million in the third quarter of 2020, a 423% increase compared to$2.6 million in the third quarter of 2019 - Awarded a second contract from the
U.S. Department of Health and Human Services to deploy Tablo for preparedness, and response to, disasters and public health emergencies - Sent the first patient home on Tablo since receiving FDA approval on
March 31, 2020 - Appointed
Steve Williamson as Chief Commercial Officer - Completed initial public offering of approximately 10.3 million shares, raising
$254.8 million in net proceeds
“Our commercial momentum continued to accelerate in the third quarter as we signed new contracts with some of the largest national and regional health systems in the country,” said
Third Quarter 2020 Financial Results
Revenue for the third quarter of 2020 was
Total gross loss for the third quarter of 2020 was
Operating expenses for the third quarter of 2020 were
Excluding stock-based compensation expense, non-GAAP operating expenses for the third quarter 2020 were
Third quarter net loss was
Total cash, including restricted cash, cash equivalents and short-term investments, as of
Webcast and Conference Call Details
Outset will host a conference call today,
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 flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include substantial charges such as stock-based compensation, 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 item in non‐GAAP measures to assist investors in analyzing and assessing past and future operating performance. 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 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. 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 may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements may include information concerning the impact of the COVID-19 pandemic on the Company and its operations, the Company’s possible or assumed future results of operations, including descriptions of the Company’s revenues, profitability, outlook and overall business strategy. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results 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
About
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
|
Condensed Statements of Operations (in thousands, except per share amounts) (unaudited) |
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|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
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|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
|
$ |
10,812 |
|
|
$ |
2,409 |
|
|
$ |
26,435 |
|
|
$ |
7,501 |
|
|
|
Service and other revenue |
|
|
2,944 |
|
|
|
221 |
|
|
|
6,253 |
|
|
|
492 |
|
|
|
Total revenue |
|
|
13,756 |
|
|
|
2,630 |
|
|
|
32,688 |
|
|
|
7,993 |
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue (1) |
|
|
17,265 |
|
|
|
6,350 |
|
|
|
42,118 |
|
|
|
18,950 |
|
|
|
Cost of service and other revenue (1) |
|
|
1,617 |
|
|
|
1,574 |
|
|
|
4,024 |
|
|
|
4,065 |
|
|
|
Total cost of revenue |
|
|
18,882 |
|
|
|
7,924 |
|
|
|
46,142 |
|
|
|
23,015 |
|
|
|
Gross profit |
|
|
(5,126 |
) |
|
|
(5,294 |
) |
|
|
(13,454 |
) |
|
|
(15,022 |
) |
|
|
Gross margin |
|
|
(37.3 |
) |
% |
|
(201.3 |
) |
% |
|
(41.2 |
) |
% |
|
(187.9 |
) |
% |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development (1) |
|
|
9,175 |
|
|
|
5,708 |
|
|
|
21,066 |
|
|
|
16,698 |
|
|
|
Sales and marketing (1) |
|
|
13,344 |
|
|
|
5,009 |
|
|
|
29,870 |
|
|
|
13,376 |
|
|
|
General and administrative (1) |
|
|
13,088 |
|
|
|
2,439 |
|
|
|
21,462 |
|
|
|
6,641 |
|
|
|
Total operating expenses |
|
|
35,607 |
|
|
|
13,156 |
|
|
|
72,398 |
|
|
|
36,715 |
|
|
|
Loss from operations |
|
|
(40,733 |
) |
|
|
(18,450 |
) |
|
|
(85,852 |
) |
|
|
(51,737 |
) |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other income, net |
|
|
(3 |
) |
|
|
569 |
|
|
|
524 |
|
|
|
2,111 |
|
|
|
Interest expense |
|
|
(428 |
) |
|
|
(1,047 |
) |
|
|
(2,461 |
) |
|
|
(3,237 |
) |
|
|
Change in fair value of redeemable convertible preferred stock warrant liability |
|
|
437 |
|
|
|
3,546 |
|
|
|
(93 |
) |
|
|
4,030 |
|
|
|
Loss on extinguishment of term loan |
|
|
(1,567 |
) |
|
|
— |
|
|
|
(1,567 |
) |
|
|
— |
|
|
|
Loss before provision for income taxes |
|
|
(42,294 |
) |
|
|
(15,382 |
) |
|
|
(89,449 |
) |
|
|
(48,833 |
) |
|
|
Provision for income taxes |
|
|
— |
|
|
|
20 |
|
|
|
— |
|
|
|
20 |
|
|
|
Net loss |
|
$ |
(42,294 |
) |
|
$ |
(15,402 |
) |
|
$ |
(89,449 |
) |
|
$ |
(48,853 |
) |
|
|
Net loss attributable to common stockholders, basic and diluted |
|
$ |
(42,294 |
) |
|
$ |
(16,666 |
) |
|
$ |
(47,281 |
) |
|
$ |
(66,015 |
) |
|
|
Net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(3.44 |
) |
|
$ |
(18.93 |
) |
|
$ |
(6.30 |
) |
|
$ |
(78.77 |
) |
|
|
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted |
|
|
12,299 |
|
|
|
880 |
|
|
|
7,508 |
|
|
|
838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Include stock-based compensation expenses as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
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|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
||||
|
Cost of revenue |
|
$ |
142 |
|
|
$ |
1 |
|
|
$ |
181 |
|
|
$ |
3 |
|
|
|
Research and development |
|
|
3,074 |
|
|
|
43 |
|
|
|
3,326 |
|
|
|
266 |
|
|
|
Sales and marketing |
|
|
2,645 |
|
|
|
44 |
|
|
|
2,828 |
|
|
|
119 |
|
|
|
General and administrative |
|
|
8,047 |
|
|
|
148 |
|
|
|
8,836 |
|
|
|
248 |
|
|
|
Total stock-based compensation expenses |
|
$ |
13,908 |
|
|
$ |
236 |
|
|
$ |
15,171 |
|
|
$ |
636 |
|
|
|
Condensed Balance Sheets (in thousands, except per share amounts) |
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|
|
2020 |
|
|
2019 |
|
||
|
|
|
(Unaudited) |
|
|
|
|
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|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
311,327 |
|
|
$ |
36,926 |
|
|
Short-term investments |
|
|
32,888 |
|
|
|
33,152 |
|
|
Accounts receivable, net |
|
|
7,082 |
|
|
|
3,914 |
|
|
Inventories |
|
|
11,810 |
|
|
|
4,596 |
|
|
Prepaid expenses and other current assets |
|
|
4,717 |
|
|
|
1,058 |
|
|
Total current assets |
|
$ |
367,824 |
|
|
$ |
79,646 |
|
|
Restricted cash |
|
|
33,311 |
|
|
|
743 |
|
|
Property and equipment, net |
|
|
14,412 |
|
|
|
7,895 |
|
|
Operating lease right-of-use assets |
|
|
8,498 |
|
|
|
— |
|
|
Other assets |
|
|
1,977 |
|
|
|
82 |
|
|
Total assets |
|
$ |
426,022 |
|
|
$ |
88,366 |
|
|
Labilities, redeemable convertible preferred stock and stockholders' equity (deficit) |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,062 |
|
|
$ |
4,960 |
|
|
Accrued compensation and related benefits |
|
|
10,850 |
|
|
|
6,956 |
|
|
Accrued expenses and other current liabilities |
|
|
8,959 |
|
|
|
2,909 |
|
|
Accrued warranty liability |
|
|
3,258 |
|
|
|
1,702 |
|
|
Deferred revenue, current |
|
|
4,132 |
|
|
|
883 |
|
|
Operating lease liabilities, current |
|
|
782 |
|
|
|
— |
|
|
Term loan, current |
|
|
— |
|
|
|
7,500 |
|
|
Total current liabilities |
|
|
33,043 |
|
|
|
24,910 |
|
|
Accrued interest, noncurrent |
|
|
119 |
|
|
|
217 |
|
|
Deferred revenue, noncurrent |
|
|
566 |
|
|
|
134 |
|
|
Operating lease liabilities, noncurrent |
|
|
8,309 |
|
|
|
— |
|
|
Redeemable convertible preferred stock warrant liability |
|
|
— |
|
|
|
4,285 |
|
|
Term loan, noncurrent |
|
|
29,652 |
|
|
|
21,561 |
|
|
Total liabilities |
|
|
71,689 |
|
|
|
51,107 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Redeemable convertible preferred stock, |
|
|
— |
|
|
|
409,446 |
|
|
Stockholders' equity (deficit): |
|
|
|
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
|
— |
|
|
Common stock, |
|
|
42 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
|
816,306 |
|
|
|
357 |
|
|
Accumulated other comprehensive income |
|
|
1 |
|
|
|
22 |
|
|
Accumulated deficit |
|
|
(462,016 |
) |
|
|
(372,567 |
) |
|
Total stockholders' equity (deficit) |
|
|
354,333 |
|
|
|
(372,187 |
) |
|
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) |
|
$ |
426,022 |
|
|
$ |
88,366 |
|
|
Condensed Statements of Cash Flows (in thousands) (unaudited) |
||||||||
|
|
|
Nine Months Ended |
|
|||||
|
|
|
|
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Net cash used in operating activities |
|
$ |
(73,175 |
) |
|
$ |
(55,100 |
) |
|
Net cash provided by (used in) investing activities |
|
|
(6,411 |
) |
|
|
61,501 |
|
|
Net cash provided by financing activities |
|
|
386,555 |
|
|
|
143 |
|
|
Net increase in cash and cash equivalents |
|
|
306,969 |
|
|
|
6,544 |
|
|
Cash, cash equivalents and restricted cash at beginning of the period |
|
|
37,669 |
|
|
|
33,415 |
|
|
Cash, cash equivalents and restricted cash at end of the period (1) |
|
$ |
344,638 |
|
|
$ |
39,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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): |
|
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|
|
|
|||||||
|
|
|
|
|
|||||
|
|
|
2020 |
|
|
2019 |
|
||
|
Cash and cash equivalents |
|
$ |
311,327 |
|
|
$ |
39,216 |
|
|
Restricted cash |
|
|
33,311 |
|
|
|
743 |
|
|
Total cash, cash equivalents and restricted cash* |
|
$ |
344,638 |
|
|
$ |
39,959 |
|
|
|
|
|
|
|
|
|
|
|
|
* The total cash, including restricted cash, cash equivalents and short-term investments, as of |
|
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|
Appendix A |
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|
Results of Operations – Non-GAAP (in thousands, except per share amounts) (unaudited) |
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|
Reconciliation between GAAP and non-GAAP net loss per share attributable to common stockholders: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
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|
Three Months Ended |
|
Nine Months Ended |
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|
|
|
|
|
|
||||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
GAAP net loss per share to common stockholders, diluted |
|
$ |
(3.44 |
) |
|
$ |
(18.93 |
) |
|
$ |
(6.30 |
) |
|
$ |
(78.77 |
) |
|
Stock-based compensation expense |
|
|
1.13 |
|
|
|
0.26 |
|
|
|
2.02 |
|
|
|
0.76 |
|
|
Non-GAAP net loss per share to common stockholders, diluted |
|
$ |
(2.31 |
) |
|
$ |
(18.67 |
) |
|
$ |
(4.28 |
) |
|
$ |
(78.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Reconciliation between GAAP and non-GAAP net loss attributable to common stockholders: |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
GAAP net loss attributable to common stockholders, diluted |
|
$ |
(42,294 |
) |
|
$ |
(16,666 |
) |
|
$ |
(47,281 |
) |
|
$ |
(66,015 |
) |
|
Stock-based compensation expense |
|
|
13,908 |
|
|
|
236 |
|
|
|
15,171 |
|
|
|
636 |
|
|
Non-GAAP net loss per share attributable to common stockholders, diluted |
|
$ |
(28,386 |
) |
|
$ |
(16,430 |
) |
|
$ |
(32,110 |
) |
|
$ |
(65,379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Appendix A |
|||||||||||||
|
Results of Operations – Non-GAAP (continued) (in thousands, except per share amounts) (unaudited) |
|||||||||||||
|
Reconciliation between GAAP and non-GAAP results of operations: |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
||||
|
GAAP gross profit |
|
$ |
(5,126) |
|
$ |
(5,294) |
|
$ |
(13,454) |
|
$ |
(15,022) |
|
|
Stock-based compensation expense |
|
|
142 |
|
|
1 |
|
|
181 |
|
|
3 |
|
|
Non-GAAP gross profit |
|
$ |
(4,984) |
|
$ |
(5,293) |
|
$ |
(13,273) |
|
$ |
(15,019) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
|
(37.3) |
% |
|
(201.3) |
% |
|
(41.2) |
% |
|
(187.9) |
% |
|
Stock-based compensation expense |
|
|
1.0 |
|
|
0.0 |
|
|
0.6 |
|
|
0.0 |
|
|
Non-GAAP gross margin |
|
|
(36.3) |
% |
|
(201.3) |
% |
|
(40.6) |
% |
|
(187.9) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development expense |
|
$ |
9,175 |
|
$ |
5,708 |
|
$ |
21,066 |
|
$ |
16,698 |
|
|
Stock-based compensation expense |
|
|
(3,074) |
|
|
(43) |
|
|
(3,326) |
|
|
(266) |
|
|
Non-GAAP research and development expense |
|
$ |
6,101 |
|
$ |
5,665 |
|
$ |
17,740 |
|
$ |
16,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing expense |
|
$ |
13,344 |
|
$ |
5,009 |
|
$ |
29,870 |
|
$ |
13,376 |
|
|
Stock-based compensation expense |
|
|
(2,645) |
|
|
(44) |
|
|
(2,828) |
|
|
(119) |
|
|
Non-GAAP sales and marketing expense |
|
$ |
10,699 |
|
$ |
4,965 |
|
$ |
27,042 |
|
$ |
13,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative expense |
|
$ |
13,088 |
|
$ |
2,439 |
|
$ |
21,462 |
|
$ |
6,641 |
|
|
Stock-based compensation expense |
|
|
(8,047) |
|
|
(148) |
|
|
(8,836) |
|
|
(248) |
|
|
Non-GAAP general and administrative expense |
|
$ |
5,041 |
|
$ |
2,291 |
|
$ |
12,626 |
|
$ |
6,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total operating expense |
|
$ |
35,607 |
|
$ |
13,156 |
|
$ |
72,398 |
|
$ |
36,715 |
|
|
Stock-based compensation expense |
|
|
(13,766) |
|
|
(235) |
|
|
(14,990) |
|
|
(633) |
|
|
Non-GAAP total operating expense |
|
$ |
21,841 |
|
$ |
12,921 |
|
$ |
57,408 |
|
$ |
36,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005854/en/
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