Outset Medical (OM) 8 May 242024 Q1 Earnings call transcript

good day, and thank you for standing by. Welcome to the Outset Medical Q1 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. And I would like to turn the conference over to your speaker today, Jim Mazzola, Head of Investor Relations. Please go ahead.

Okay. afternoon, good and you, everyone. Thank first Welcome earnings XXXX to our call. quarter

all release our call be materially could Trigg, Reform me the Officer. assumptions our Officer various of news our statements actual the of investor today call found cause with on outsetmedical.com. from expectations today's will Private being can on these Chief intent differ protected Securities update today, We events during the It forward-looking which anticipated or that market those website. are a and pages Financial predictions Here Act archived on relate statements Chief assumes recorded and results of under Leslie or Litigation Executive made implied. involve or and future the Investors based be estimates be close Outset that section These statements. Ahmed, events material and are issued of is risks This no to of after to XXXX. is current Nabeel uncertainties to obligation and will

description including and and reports. the of of Risk public section risks the associated with and list annual our refer business, Factors a For outsets with filings to our uncertainties latest SEC, please the quarterly

us Nabeel note in section our the started, quick will I'm One before bit Q&A cover we is handle the financial prepared with is under going here a feeling and get as weather Nabeel to today, normal. so remarks.

call turn with So that, me over to the Leslie. let

clearance capital, breakeven and a Outset's revenue never point of X Tableau behind taken additional flow us quarters tipping acute our reaching towards gross higher you more in conviction of its patient rate joining cash home outlook never represents FDA With retention now challenging an model everyone, consecutive in future been revenue, the XX% margin most recent of thank our and without Thanks, decisive strong the for significant steps been growth has headwind recurring expansion, that total with TabloCart, demand adoption needing afternoon, strong that for Jim. Good has industry-leading with than us. and now stronger.

team Earlier of half milestone. want provides of we here the FDA unique and with clearance receipt the to cross-functional guidance ahead during TabloCart of ecosystem, the look of prefiltration impact our year. out at this we forward remainder that to accomplish second incredible to will it TabloCart for year. this announced another expect week, clearance the thank during Tableau's we the the the for I have differentiator

we which again performance, million delivered to than of revenue the ongoing had some being of and quarterly of quarter. out from postponed associated anticipated orders in hold terms the TabloCart quarter, primarily we $XX.X the In originally headwinds ship was due lighter

behind is us. this now clearance With factor TabloCart, the of

Additionally, several cyber We customers both from customers reimbursement behind us console which slowed well. normalized. in this now experienced flow treatment payments attack Healthcare the and of as resulted purchases our deferring Change their disruption is cash until factor believe and several

April, by expected levels. ordering rebounding evidenced As to in treatment

shareholders and restructuring we we $XX that hand. on cash cash by XXXX through quarter, alignment of which will as the We OpEx non-GAAP over past reflected and Taking roughly between And our use a the a a by step took on our undertook the result, already to more back, anticipate reduce reduce cash breakeven meaningful million. desire action. of million with and our the we XXXX business, $XXX over complete quickly flow reach

get reach we expect there. our profitability projected without goals previously result, to markets access sooner and capital the than a the to to As need

grow. to Tableau advantages continues can provide

for this and guidance nursing a momentum and strong setting. opportunities of in up and pipeline care XXXX. additional with grew also momentum an believe the the financial well our confidence acute record we in skilled have generated year subacute We for We providers sets supports already us

tubing with the front, replace efforts and Tablo to console our PCBA operational substantially free the On silicon complete. material is

Looking action term TabloCart. X upgrade field ahead, near in process the additional to of we completing are

proud board and the our of look with our collaboration continuing with FDA forward are We across partnership to them.

lighter at our the financial than elevate importance opportunities we As end good we have in markets, greater our million with progress of made XXXX first placements, more we customers. setting, consists of beginning in of for acute look systems build total the and potential selling console our Even in-sourcing continued provider focus our and being strategic to to deals each our progress on enterprise quarter acute and Tablo in the care More dialysis new historically pipeline XX% acute expanding within pipeline customers. represents $X and to than nationwide. of landed health of new advance pipeline half continue and than benefits

system. charge customer during inadequate new in a key increased health our a the quarter the facing levels take Like provider of its wins was provider customers, other wanted costs outsourced their of dialysis many program. with and One this large was from Southwest associated and to service with hospital dialysis

Officer the equipped strong Pros acute is Tablo, of In Nursing the operational customer which with advantage to rapid ICU, an with early use to and Several setting assist for across program, of program bridge in-source outsourced clinical with team and our contract of shipped resulted able software rate the financial, are standout. attach these partnership in provider. also an taking in of have this consoles the their demonstrate to consoles the our continues which Tablo advantages program our a was with and termination with their hospital's Chief Officer, compelling Chief Financial in

year. continue as anticipate we towards growing guidance the We to our elongated quarter care with and forecasted we the continue of work into now how very range and with sale to played XXXk softer clearance -- with is cycle the prefiltration out. the here TabloCart momentum opportunity TabloCart good our acute as sales we customers. half summary of we feel an about that's through The first move manage a and through year for cleared And

revenue our guidance support recurring model for profitability. drive As scale, the distinguish and grown our to and setting, our to business we in have future the anchor acute continues built itself particularly

to end home the market. now Turning

dialysis. patients and the with greater the to progressive Care Our U.S. access progress which talked care with committed partnering was midsized Tablo. organizations Renal highlighted Care. we for the quarter of home universe is dialysis about working completed entails strategy, expanding upstream create home by largest Renal dialysis offering of providers the previous multiyear MBOs channel X-tiered We've agreement the penetration with calls accelerating health on to U.S. in our home by progressive, and

U.S. by successful very strong early the our programs marketing home Our option. with Care other Renal previously underserved direct-to-consumer interest initial many been have country hemodialysis viable of home in areas and revealed has

home life. Tablo a Advances Creating by also patients. initially to quality control home for patients help making dialysis. their see chose with opportunity home from peritoneal patients are HHD provide the an fundamental where seamless of major many report they transition maintain PD dialysis. from of dropout differences we We the for are at providers enables to who PD-related transition can higher to infections enjoy are driven cause a a patients

dialyzing and we retention keep Patient to quarter, Achilles the continue at prior rate example, of patients been home. the improve. has during hemo the retention the continue to attempts incumbent heel our strong to For system already see patient home

dialyze XX% in patients the percent on cited shows Our at This most nearly retention hemo is with Tablo recent XX-plus report. data as home for of that the the home over who system XX legacy treatment XX-day remain days. at a improvement USRDS last rate

the in well Additionally, controllable Tablo single we below we which to attrition continue to patients remaining believe see data. low on digits, historical of be

technology to to maintain And home set patients, this and For dialysis providers Tablo exactly and that easier is to caregivers, treat up, work, all is need what to delivers. payers a on.

added and terms In to a the in channel a Midwest, access increase provider our the home-only new regional of the new efforts strategic in expand size Northwest and providers. we provider of several MDO universe,

by skilled an outsourced nursing on-site with progress to more transportation U.S. substantial associated with offer X the fastest-growing to expense largest Our to partners in facilities This included which within of the expansion XX providers, and SNF facilities the treatment clinic. dialysis also to reducing in ongoing residents the funnel delivers top operator than provider dialysis serving the QX and benefits subacute risk of

approach this being consequence. day a a provide life-changing to returning clinic, hours home, transported medications, adequate residents XX as to importantly, X benefit a to can rest More spend dialyze, to meals, often waiting other who then and a finally often therapies missing and treating

grow early several our XXX than more consoles significantly continue initial years. provider program with potential to the and now rollout substantially grown the has with during last year, this After includes Tablo next to the

in-house offering providers reflects a dialysis Importantly, to this care services. new broader home model enhance seeking patient by of trend dialysis for and

XXXX, the recurring across of contracts. XX% the a high with consoles a results growing sales visibility driven to revenue, which subacute larger Our into quarter guidance. a to provide financial our and our stream continue acute highlight rate longer-term of by recurring renewal XXXX and and for of and increased portion Tablo service us large Tablo This consumable fleet home, over very and strength continues to revenue first of

a in generate than roughly Tablo year reminder, useful roughly at there performed in single acute are device generate more home. year the as life. the each through treatments Tablo a home $XX,XXX per in As patient per hospital $XX,XXX their setting with on the

over to Jim, I'd points to few about reiterate call Before key like I the the turn a quarter.

the expansion we acute remain the year providers year grow strong in within with see in continued The our the home confident Tablo place new our we return had large and through execution in of importance with plan. and the base adoption First, TabloCart, our we've customers. of the to care pipeline, understand of is success this of the foundation

Second, through XX.X% our gross profitability. the margin consecutive to to quarters demonstrated entire commitment of XX drive today. focused on We've gross that we margin the non-GAAP reported expansion team is

quarters the the took demonstrating will need believe for cash In to flow schedule without we and actions us operating we additional the of this reach several are that lead to capital. leverage and breakeven quarter we ahead addition

patients value And future. exceeding as recurring and to providers, scale value revenue over manufacturing it am continuing We've strong a this now deliver and software, confident made turn margins gross consistently nationwide to to revenue finally, can hardware, business. XX% I'll analytics, With and investments into I than and Jim. that the of the remains well ever business With grow all our service shareholders total the the compelling. model in infrastructure more that, well we proposition expand, we of

everyone. Hello, Revenue quarter $XX.X Leslie. Thanks, for million. was first the

While revenue other in the decline and first the product $X.X slightly in quarter. for aligned quarter, revenue, Service The quarterly million XXXX the expectations, $X.X increased a million. $X.X we guided fourth decrease decrease Console in million XXXX we was third by was from the quarter to which $X.X and with build a the during was recorded calls. below $XX.X fourth revenue consumable driven our that the million, was million million and fourth . was up quarter. from revenue revenue $XX.X

to already TabloCart We the disciplined were our of has to strong are of strong impact us. this discussed, encouraged of settings Tablo regulatory counsel result Leslie behind cyber Change of across remains hold As ASP believe all shortfall our Plus acute customers. uptake our see pricing now offering Healthcare expectations, attack the care with the and the Pro we as a drivers relative and

our quarter, end with utilization expectations. over Following in we for of strong continues to perform the and treatment cartridge month saw time sales line a April the

expenses, million our of related need charge Before XXXX breakeven accruals benefits moving to cash associated spending net $X.X the results margin of the to I for the goal with and is Included budgets to individuals. first capital. we restructuring. operating reversal initiative the the by quarter longer-term flow without the is a comprised severance GAAP want reaching took to offset and restructure the quarter additional during gross undertook of and impacted our that This in of charge in we with related highlight bonus

to non-GAAP in our our be I review We earnings the you have of accompany of P&L charge across measures, tables release. release. earnings which this encourage that can the impact in today's GAAP found reconciliation the outlined to

first to operating and our gross quarter moving reminder, reflect our Now non-GAAP expenses, which, as margin results. a

product more expanded gross increase percentage driven than first XXXX. quarter, the by sequential gross than other XX.X% basis Our Gross and offset a quarter outperformed at a point of quarter a point and in X the sequential improvement by of quarter more XXX nearly margin margin from our percentage service gross the for first to consecutive and from XX XX.X%, margin was partially expansion quarter fourth XXth point margin X%. expectations that

other that have the expenses year we quarter in as expense X% fourth previously gross described. XX% period, we and declined the and fourth service $XX of by compared margin expanded in driven to investments As in and undertook expected, due million Operating quarter the from prior the fourth first quarter made reductions the quarter. the to

share, cash net We $X in first approximately quarter flow XXXX. loss cash per expect was less than fund per million cash, restricted and or quarter first slightly the investments $X.XX $XXX cash, and $X.XX quarter we the the lower short-term breakeven. with Non-GAAP equivalents, million last or quarter to ended operations to of million share in $XX.X which than

our to XXXX. the for now outlook year Turning full

Starting reaffirming guidance margin are our We with today. revenue. revenue and gross

range a million expect to continue We $XXX million. $XXX of to

installations. and we online, do some As reengage ramp anticipate schedule comes contracts customer TabloCart time to on revise opportunities, back

benefit the low elongated sales million the quarters. TabloCart's third and return in fourth cycle and range full the coming As anticipate lapping in the QX $XX a result, with of be to the of revenue we

is Our of to second the half half revenue a to strong from ramp. require remainder recurring revenue with QX. growth to and second the come prior in believe our stream half roughly provides revenue revenue growing pipeline just console of quarterly revenue confidence us during achievable and would second expected the hold, acute recurring roughly lot which of XX% TabloCart substantial console achieving With to subacute the be ship in particularly line given sales we

for in to non-GAAP outperformance, our margin. margin margin. continued our With gross Turning guidance have we increased gross gross conviction XXXX

from fourth installed to low base range, the XX% full be margin the gross year of mid-XX% in expansion year, by gross recurring in console cost-down and expect the exiting revenue the for leverage. margin XXXX. service a the driven quarter we is Again, range larger For programs

Turning to OpEx for XXXX.

will $XXX As anticipate announced XXXX to we million. a $XXX for million actions that now today, result of we OpEx have the be

products strong And expect value X we in offering finally, the across broad revenue annual between our markets, end proposition and our our our XXXX integrated long-term XXXX. competitive of and guidance. wide With large moat teens high service and

that our expect our revenue We see of growth goal XXXX plan ability leverage. cartridge, XX%. gross to and our linear an mid-XX% expand basis we continue continue service exit XXXX annual our in console to programs be cost-down We exit and and recurring goal to margin of will from for on both to to invest

million add in we're and expect savings OpEx will We XXXX spending across making that XXXX the also cuts CapEx. COGS, in roughly $XX another in

XXXX. a reminder, further the business to large continues expected. perform require gross greater does CapEx, better we As if million-dollar margin our not even amounts annually opportunities single-digit low of which have in through expect than for to range We savings be

well us logical quarters cash of spending our need steps growth As several the all and raise to revenue remain The gives experience adjust and the have previously we additional realign margin our continue to gross We a bullish customer moat further the on breakeven confidence for flow and spending result capital. deep we longer we've with business to outlook of allowing are the work and levels to our wide as tailwinds drive without of our anticipate reaching to our expansion, taken we accelerate earlier and expected than our unmatched us in anticipated profitability. to in XXXX term. prioritized, the with established deliver Tablo, and which an

ready lines. open Q&A. for we're the think I that, With Operator, please

have Rick [Operator Wise Stifel. Instructions] today question that from will first of we The be coming

Good everybody. afternoon,

that manufacture it Tablo time have done Jim in to take Jim with, TabloCart. multipart to you've some are just me -- a touched meet us I'm be to Nabeel, to to the -- And Are specifically Let going a little can I'm to sorry, work maybe But start it's I there's orders install. and reengage to Leslie, I talk said, orders? his with ship you hand? to you now about there well, or can on as going name ask bit. and think, those ready aspects

pull half, And and the TabloCart mean, TabloCart specifically? getting the it as I from upside with Tableau I'm what is at. having Or second and going at conversations quantify no, as to if well can all, you in follow well it's TabloCart freeze you -- sales

the Sorry multipart for question.

I'm No section overlook of me happy all I to if your worries. Yes. those, any of I will question. and answer know -- let

the in exactly -- And was what marketing, the and of So orders back office of sales, all Taking any I hold, taking we step let pause order me think to did. our to hand. all part support had effectuate a that's back first all quick the contracting activities. we decided ship sort or when we

a to be generating reestablished. the does give take agreements, is in factor of needs generated. level good getting what None this new some look for are you Those are that, of So way, of What that bit does POs to on next news, sales that. the like? a course, activities there's that existing quotes, new reviewing And -- of cases, all by resolution of it time. but the like time difficult, that's

their factor take I that's go for approved. cases, have and And we think little time. not to might it. They just quarters expect to In those get need budgeting. ago will difficult is and approved funds redeployed and several customers again, bit organizations allocated into too a funds some internal have and either, back of will rebudget had but another customer the

early I well, will we're this of main confident the So think around all expect we well these of expected the right that And in I get pieces all this to of approval earlier hey, advantage we is originally QX. take had And a underway. through TabloCart the and be news in to we this prepared benefit just is to prepared right? us But that sales it the I'm here remainder ramp-up the back half, of lot again, steps for our feeding do of have what's the very is time year. take ready perspective half midpoint second approval confidence growth a ready half, trajectory. the than period gives second expected, which this from us get really the in

story a long but a be question, The to monologue, my it of is going defense. a bit was

you The yes. answer of manufacturing holds. because inventory asked in about at time the TabloCart That we the ship had was definitively ship. second already part is

of is think I bit second And And So so, chain I don't is related upside both. a growth? that the nailed the of if sort or come any where hey, delays is section there supply the where -- to expect it, question then Rick, last the you was, manufacturing. in from? it's And of your could half, little perhaps,

that expect of of sales putting Tableau, deferred do TabloCart Tablo were be out we out QX, where finally So those consoles will in repeatedly kind of of again, out quarters consoles the QX. wind of QX out of Tablo

back already win absolutely yes, existing storage And that TabloCart TabloCart and they customer we orders been with Again, the want maybe or have store, into do using will for card to standalone believe upgrade those sales. storage expect they the in base that and shore purchases to installed also, where customers Tablo have put existing we base prefiltration our our the version. the

channels, generated do of expect revenue both So will. we if through those being you

And lighter-than-expected mean, appreciate first it all the like and sounds would you sales the have understand all et back how the about the the understand Got been think was surrounding and million the But you higher, suggest. you mean better based I or a higher? sense, $X can period locked you. it's on Tablo quarter delayed as I it quarter, impacts initial think cyber cetera. it'd now help so just pieces be I better like delayed do said I orders that commentary actually million us quarter. might and helpful attack Can second just mean think than $X the a -- comments, I little to first maybe a -- optics, whether a come I you would resolved. I when mentioned, more No, help your order on optics will a hear us that. follow-up, back. delayed in in

Nabeel. it's Rick, Yes,

quarter a of had half the and The had really QX and back and of ramping quarter gave year. played as the we QX. first That's largely really We the guided. kind recovery year first in entering guidance we expected soft commentary back this then in in

of QX in the expected. will said So more first back didn't both largely again, like so Cart. half we performed the last of as year we'd this year always Having look half have periods, because, we --

QX, believe us care this deferral did in the did sales sales, is little cards now that, we also change slowdown, cart And approval. with we also continued and the we which behind said again, of Having from specifically, behind which, health see experience a bit us. console is

expected, QX lost we ramp for bit a of QX little that So deals, we had we Rick, largely now really the again, played But believe as haven't believe, to and again, softer. as a originally any we're half we we again, year, guided. second going strong

deferred question, the April out orders through that care you QX yes. was toward the answer changed on of situation right of I Let for embedded -- treatment is things console and think of about something there. record remainder One we're the the mention. to the your is have was me and he add very the come that to orders back for the actually And the asked strong, in just Rick, very had that placed any that important bullish the year and -- in really again, and treatment QX X the orders we're they very more direction revenue I'll were these about the was April just X of an end and -- come are side, in of to thing X because order reiterate, there. Actually, health then

Capital question of Singh And will Shagun our from Markets. next RBC be coming

ahead, cadence just get profitability 'XX was wondering you follow-up you here. on what a just there's Is million what that for said you quarters if approval I question in if understand the specific. to outstanding any can the street, And know for have way Leslie. some was the time Like will, you way the how car on really anything few just saying you backlog place, is in to spend commercial to are line? you, you and big I to on reengage are leadership waiting just Tableau Can these then, there your provide more the a on the time organization? savings quick $XX picture if you elaborating trying quantify but A I looking feet guess, for a restructuring. customers.

Nabeel, in want to Sure. Maybe, a you start off, minute. and I'll over take

For out year, of really let And to sort we year perspective, half sure. of periods. Shagun, a had the largely any maybe cart about me of of half let full me thinking like in how are because sort lay second the right? so half haven't the from the Again, this to go first of those expect last we look of we year back back year. the guidance

as back Leslie guidance ramp prefiltration. cart million zone, is $XX the we'd revenue QX out, our pointed in So low on for for

half year, Now of second Shagun, to. as point think we really of X at there's the the components

So first kind our all, implied installed -- will. have on be revenues of revenue, roughly if the recurring base. the service consumables larger is which our half we XH of This the will of of revenues will you and

line be of to when cart what with the revenue remaining had you The able did that recurring. after in to and the half we then second remainder sort of take you we is If the the console roughly half half, in roughly of sell. XXXX remaining first -- console revenue take is sort

thought So of back about we that's of how half the kind the year.

talked a that R&D were speaking. R&D we projects second groups your and half kind Shagun, on, or half of, sort little the of Moving with Leslie ops. respect look more and to at. And ops that rest of over the second were R&D, of question The the a from broadly deferring savings, is again, about again, savings took

The P&L. spans things control, is payback half horizon. the projects And that have and programs our LRP within like of just other across layers management of didn't it's again,

two. number So that's

let line first time we've three, more me Number a a perspective, about talk from maybe generated. the bit profitability little savings

undertaken the So period. actions over in out are comes through LRP $XX we of Roughly over total, million our have million saving $XX we million. $XXX

we $XX to in about 'XX a million that about, annualizes 'XX. As 'XX $XX and in bit more little talked million than and

propel million, million initial that kind exiting a math our out expectation you breakeven can that little how of a get bit out if the $XX see you take model, years, again, the profitability quarters. $XX pull 'XX, you was So if to you that few forward over by through how, of see can we'd will

Maybe commercial I'll pick up org. on the

your the aboard and I rapidly answer coverage yes. to last about out other. customers we have do adequate think was educate there short And question is

We are covered states. actually in all XX

Just as a a have quick reminder, capital sales team. we

both accounts We home. course, sales clinical of team, X sub-acute and national and we have a have cover All teams a those acute team. of and also

am with potential customers sharing all team customers. states, the past be in worried team. have news And we will we've I talked and sales about think our current XX so we the to continues continue new true, about do And this to in all That of be that get which calls. our speed a lot out of not sales operating both coverage at I leverage but with and

next Thibault from is our Marie BTIG. of And question coming

Wanted spoke you would with to better? that commentary can Has same? that on start know tougher. last publicly? Has Any you've how you it here X Has changed headwind that's one. in helpful. that detailed it longer a to give selling high I us and be since gotten with little worse? hear being a level stayed the the I gotten environment talked pretty cycle past a wanted about bit is

good has really I sure. would been environment, a Yes, been say thing. stable, on the capital which spending it's

environment. not spending changes have we seen any the So material capital in

capital of general, in saw we spending and budgeting those conversion in of. ensure Tablo advantaged of list. year stability lot a payback rises rapid certainly a inside in-sourcing prioritization the changes We period the aside, also very for of that to and because that that makes setting Tablo capital a top typically hospital to have are No does a that But speak the helps environment.

gross on margins. to great That's follow-up hear. Okay. And my here then

mid-XXs maintaining year starting You to XXs nice we see already a rest Should should for low mean -- year. of in we we year, think exit guidance onetime another there, midyear smaller kind a improvements? the continue to exit leap, for on How we're to you little just the have the down? Was expectations are should of I exceed year? just the the about and the incremental the expect increase. there, cadence expect and tick this full the to expecting

pleased margin consecutive We of mid-XX% our way to from gross with here to it's we year XX%. the exiting expansion. -- really going our quarter is ability deliver we our are linear so be it that And XXth to think Nabeel. on Yes. Marie, look, team's to

really path. a good the And performance. expect down again, to just So continue we

is Our CL Kristen from of next Stewart coming King. question

I if in to start on we just could And see bit expand was just of you could more U.S. a an renal little care materializing? impact the that from announcement. wondering really terms when

Renal U.S. them initial has to Well, And were a Care successful. with to our been very sure. be good Yes, us. partner good programs partner a home continue to

population to forward. is looking across States dialysis X roughly increasing the I it's manage and They organizations. and of the midsized really their central As United largest their home mission home mentioned, of growing these XX,XXX patients

time what able to home. training convince with for themselves adopt to faster a much think they made which easier I to were is Tablo, confirm patients it

remains wider home roughly remarkably of of equivalent patients and Our or consistent at time, wider demographic still our and X under it a despite sessions, average PD. weeks XX wider duration much adopting training

by rate that a real I So many has has really selling retention provider that's think been organizations key. recognized been been this and point

higher The home. many you And you train themselves. isn't as The people can as than can really keep It really is to out point. many other bloom manifest point there. the where of is patients that's the home. as to as outcomes economics the go much course, to so point alternatives That's at clinical and

growth, as be other home within view weapon so we're as is segment hands really like all strategic to of in we own MBO try And Renal our they U.S. and grow to their to able well this critical to a Care, home. our partnerships be privileged

of Suraj coming is Kalia question next our And from Oppenheimer.

me right? all . hear you Leslie, Jim, Can Nabeel.

Yes. .

lot Perfect. a provided. commentary Leslie, of

X-year . extrapolate quickly were marketing are? you rate, If Leslie, retention And if sales in XX% on what could do division was visibility there have workforce I you the curves also any into reduction those the the specifically point, to rates the retention time reduction, and at XX-day

Yes. Sure.

So to let rate legacy that. me I'll The question. year X year is have talk on -- the retention we and on yes, the system. about X compared to at I'll go now higher do patient Tablo the speak to -- also data markedly it Hemo we second Home your --

X-year retention the I'll another been really we've very, And well. pleased stable. as it has make So actually, been remark, very at

is life not been their X It's We say, And which something attrition, only or changes. we've has at in is then transplant. Suraj, controllable which off. want what to that's effect go the there's that. So affect it ourselves let's able much, our back year, what and be that. to really attrition, just opting in we the should center, uncontrollable challenge the past patients that higher. And the There's call hands been DaaS we our call out offered We in They to of controllable much stable. attrition. unfortunately,

rate. for patients on the And controllable the as in at so of about has in focus an organization great we Tablo. XX%. home denominator XX our And very significant growth attrition despite job rate controllable on pretty months remained And at really us, attrition stable that doing a

days they So Suraj, those results, are holding and definitely year. a XX between

here as and the R&D as people -- we're of CapEx team, area other reduction Nabeel with and the operations Regarding our said, the as the forms of programs of we lion's OpEx, share in, well to of the and the we reducing the mind. When our nonnegotiables, philosophy really they spend, sort sacred the of the reductions thought across and those approach cows had spread are about around organization. we remainder in

Our which that have to tenets and the pay patient growth; continue expansion number off. is we and driving two, that ensure continue we Tablo core initiatives, have our to were, on preserve experience is adoption deliver we gross customer to what the margin one, to

our So avoid areas. reduction very, we to very very, affecting planned carefully cost those

of coming Bank of Our is Securities. question Stephanie next from America

and of I late to a bit, about on how little But half second -- should in and half little wanted as the coming I the the follow you've the guess, guidance color up versus given to just not about Is the the outlook QX a appreciate QX first think year. half on how we offset second low versus the half. changing and we previous versus maybe the in difference the in getting for of better the second there should maybe expectations anything any end high the now? think guide

Stephanie.

to with about little quarter guided better respect getting it of a terms always word. customers again, So reasons talked came as QX, reactivated of a Again, softer. all with a TabloCart in to expect QX, we ramping the it for we'd that largely be with Leslie lack prefiltration. for in

low So as to we in up we zone, a bit do QX step that $XX little million said. expect

think a of about Now things. couple when half, back the we

So be prefiltration and sort second more we're ramped Stephanie, we will so half then in ramped components. let half ready TabloCart really, with second full we in me that some half. for the the to and working quarter bit little because have And to the a one, it's specificity. of X be And fully the expect second about talk are

the So one, service guidance the of a recurring revenues, enter installed at low implied our if that have even XH assume revenues. do end from half. you kind come second of as and our we we half of larger recurring base And of revenues consumables

from console which sense? the with make XH XX% the we was TabloCart we consoles does other did prefiltration, of had same same half XX, as The -- when in amount coming year is last that roughly revenue the

Yes. Thank you.

Okay.

consoles part always right? performance place had our more large end one. levers, And range, the that's or guidance markets. as we So same So you the can acute we've then in moving about home think through both

ASP. have We

new We And installed Pro to have have our course, sales to penetration we customers. sales. base both and Tableau TabloCart of existing or

So those are kind of how we guide think about .

can I talking. a few to points what mind just you're add came that

think expansion pipeline the will QX. about half, reiterate And in months. significant into in sales second see TabloCart, to is very heading also the X -- the before the big in cycle did being which big but we I again, addition to our XX I propellent talked we have

Some But X, come generally other it's months in months. months. bit and deals XX a earlier than deals X XX speaking, than longer go

think size pipeline want than of to in are I each reiterate So over I ever half our $X new a higher million mentioned, expansion, potential with over this from and are deals it, the I percentage significant in pipeline customers.

a So this good in pipeline little us is to a different way. very, very looking

another cycle is which that the the that And QX, second of lapping coming kind QX course, for of excuse -- of so tailwind, And in then, of sales half is half. that's third XXXX. from related second of me, And tailwind online 'XX.

through growth how I think about that's tailwinds of back X kind half to trajectory So us year. the of the propelling this this

Thanks, Stephanie. Okay.

question, operator. Next

And Jennings the of Joshua coming is next from question Cowen. TD

to system the months. past of like that update there's an forward been hoping imagine It just to part the I the on was brought over restructuring. enhancements a have deep . through should departed I plans get technology sounds as the CTO Tablo XX then terms anything year. XX that bench of as in of the be we head that Tableau any move to looking for enhancements there, but And replace this group? we on

legacy here, that. leaving Yes. and is to he the not if outset put and our, place Josh. that in to answer with. our us he's X CTO's Sure, gift greatest team of Happy

stellar operability. on absolutely and cyber data Software, President and Vice EMR analytics deep an have strength of bench We very very,

is number we investments. now ahead. the have maximize data significant our dimensions light EMR an very of transmission, script, And and of this those that making investments interoperability. in as are have enhancements the we And we and said, all to We is years Tablo today. in advantage kind of which really spent As noted we the software, cyber last data, in any I do market, harvest years moment have

be and investors that, I both pointed lead incredible And pause and that reflected this hey, taking think you advantage, merit there's technology and and you meaningful of on guys very out should has just very, that, and us by And lot. have know a really maybe an to I shareholders software. hardware marketing a what that incredible, a selling have. to we a you have been lot We

of sort can't that ambitious I never personality imaginative change we people the stop will We the being of the organization. are.

that software they is investments LRP the end of and the to we time have in off, the helped. to period as pay which or but going advantage and mentioned, -- are do pace I course better more might maybe we stop that. dreaming. to lead already we this the hardware, both just the make no, towards future, Hopefully, our And have, probably going over not of we focus best the which an LRP beyond. for aligned at probably of to the period are use will that it However, be the line

the the disposables. thinking thinking about what then LRP Tablo the about of stable the or on think game pricing system about of that And of some is are and capital within just price and name both the in as year-over-year Definitely. the be the guidance? the pricing LRP, Should evolution we assumptions on increases

ability Plus now with accessories, to I about offering these including then protect Pro and we've talked Josh. Yes, our And so look, prefiltration. Tablo about back the Tableau mean with value-added always our we've TabloCart end. -- pricing low on

LRP we broadly how now pricing that's again, think . the So about period and over

questions Josh. Thanks, us. for Operator, Okay. any further

to questions back no like there remarks. queue. time, ahead the this closing Leslie over go more for in are call I'd turn to and At the

joining Great. afternoon, Well, very everybody like good for I would thank to Thank wish us a you. this everybody and again evening.

for today's conference concludes Thank joining. This call. you

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