Outset Medical doubled 2021 revenue to $102M amid widening net loss

Sir Isaac Newton determined that every action has an equal opposite reaction. That seemingly rang true for Outset Medical, which reeled in a record-high annual revenue in 2021 while watching its operating expenses reach new heights, too.

For the full year, the portable dialysis machine maker logged revenues of $102.6 million. That’s more than double the previous year’s tally—specifically, a 105.5% increase compared to the $49.9 million earned in 2020.

In terms of output, however, Outset racked up operating expenses of just over $138 million, about half of which came from sales and marketing expenses. The other half was split between the costs of research and development and of other general and administrative needs.

The year’s operating expenses solidly outstripped those of 2020—when Outset spent a total of $104.4 million—and brought net income to a loss of $131.9 million, even further into the red than 2020’s net loss of $121.5 million.

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The company was undeterred, however, with CEO Leslie Trigg saying in a statement that 2021 was an “exceptional” year that brought Outset “meaningful progress toward our long-term gross margin goal.” Alongside the year-end earnings report, Outset also announced that Trigg has been appointed chair of the company’s board of directors.

Investors, too, were apparently focusing on the positive. When markets opened on Thursday, Outset’s stock price quickly began surging upwards: After closing on Wednesday afternoon at $34.22, it kicked off Thursday morning to jump past $38 within minutes.

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Those spirit-lifting revenues came largely from sales of Outset’s Tablo hemodialysis system. The machine is essentially an entire dialysis clinic on wheels, allowing for treatments to be delivered practically anywhere, from the hospital to the home, without requiring extensive training.

In 2021, the company signed agreements with seven of the eight largest national health systems and about one-third of the 100 largest regional health systems in the U.S., significantly upping the reach of the Tablo system.

It also locked down another clearance from the FDA, the latest since Tablo was cleared for at-home dialysis treatments in early 2020. The agency’s November action green-lit a new sterilization method for the system’s single-use, disposable cartridge, which allowed Outset to move production to North America, reducing shipping costs and speeding up delivery times.

Those and other expansions of Outset’s manufacturing abilities and client base are expected to bring in another record year of revenues for the company. For all of 2022, it’s forecasting total revenue between $142 million and $150 million, which would mark growth of at least 38% compared to last year’s intake.