Q2 2025 Outset Medical Inc Earnings Call
Only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one one all your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one again, please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your first speaker today, Jim Mazzola head of Investor Relations.
Good day and thank you for standing by. Welcome to the outset medical second quarter 2025 earnings conference call.
At this time, all participants are in a listen-only mode.
Good afternoon, everyone and welcome to our second quarter 2025 earnings call here with me today are wealthy trig chair and Chief Executive Officer, and Renee Gaeta Chief Financial Officer, We issued a news release after the close of market today, which can be found on the investor pages of outset MEH.
Presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message advising. Your hand is raised.
<unk> Dot com. This call is being recorded and will be archived on the investors section of our website at.
To withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded.
It is our intent that all forward looking statements made during today's call will be protected under the private Securities Litigation Reform Act of 1995.
I would now like to hand the conference over to your first Speaker today, Jim Mazza head of investor relations
Statements relate to expectations or predictions of future events are based on our current estimates and various assumptions and involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied outset assumes no obligation to update these statements for full list and description of the risks.
Good afternoon everyone and Welcome to our second quarter 2025 earnings call here. With me today are Leslie, Trigg chair, and chief executive officer and Renee galletta Chief Financial Officer. We issued a news release after the close of market today, which can be found on the investor pages about set. Medical.com. This call is being recorded and will be archived on the investor section of our website.
And uncertainties associated with our business. Please refer to the risk factors section about the public filings with the Securities and Exchange Commission, including our latest annual and quarterly reports.
Thanks, Jim Good afternoon, everyone and thank you for joining us I would like to begin by extending a warm welcome to Renee who joined US in early Jan She is very quickly relative firstly immersed herself in the business and has already become a valuable strategic and operational partner.
Turning to the second quarter results. We are pleased to report another strong quarter today and to raise our guidance range for the year with the progress we made during the second half of 2024 and now through the first half of 2025, we have momentum that reflects the growing demand for the clinical financial and operational benefits that tableau can deliver as well.
It is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. These statements relate to expectations or predictions of future events, are based on our current estimates and various assumptions, and involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied. We assume no obligation to update these statements. For a full list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our public filings with the Securities and Exchange Commission, including our latest.
This annual and quarterly reports.
Is the internal work, we have done to improve our commercial execution.
Revenue in the second quarter of $31 $4 million grew 15% over last year, driven by another quarter of strong tableau console sales and consistent utilization.
Thanks Jim. Good afternoon, everyone. And thank you for joining us. I would like to begin by extending a warm. Welcome to Renee who joined us in early June. She is very quickly, rolled up her sleeve, immersed herself in the business and has already become a valuable strategic and operational partner.
Turning to the second quarter results, we are pleased to report another strong quarter today and to raise our guidance range for the year.
A key goal for this year was to sustainably reignite console growth and with two quarters down our team is executing very well console sales again increased sequentially and also grew over the second quarter of last year.
We also continue to see consistent utilization across the tableau installed base, which contributed to recurring revenue of $22 5 million in the quarter, 11% over the second quarter of last year. This included a 17% increase in consumable revenue.
With the progress we made during the second half of 2024. And now through the first half of 2025, we have momentum, that reflects the growing demand for the clinical financial and operational benefits that Tableau can deliver as well as the internal work, we have done to improve our commercial execution.
Revenue in the second quarter was $31.4 million, an increase of 15% over last year, driven by another quarter of strong Tableau consult sales and consistent utilization.
Once tableau consoles are placed their use and this utilization keeps us right on track to exit the fourth quarter on a run rate of more than $100 million annually and recurring revenue.
A key goal for this year was to sustainably reignite, Consul growth and with 2 quarters down our team is executing very well.
Council sales again, increased sequentially and also grew over the second quarter of last year.
Gross margin expansion remains a cornerstone of our path to profitability at an area, where we again executed well during the quarter non-GAAP gross margin reached 38, 4% expanding more than one percentage point from last year, even as we manage through the lower absorption of manufacturing overhead that we've previously discussed.
We also continue to see consistent utilization across the Tableau install base, which contributed to recurring revenue of 22.5 million in the quarter, 11% over the second quarter of last year. This included a 17% increase in consumable Revenue.
This progress keeps us right on path to the next milestone of 50%.
Turning to our end markets our results in the quarter were again, driven by penetration within acute care providers, including new console placements during the quarter Tableau is now in use at more than 900 acute and sub acute sites in the United States. Additionally.
once Tableau consoles are placed they're used and this utilization keeps us right on track to exit the fourth quarter on a run rate of more than a hundred million dollars annually in recurring Revenue,
Additionally, we closed a new enterprise agreement with one of the largest national health systems in the country. During the second quarter, which provides access to well over 100 facilities with the potential to place many hundreds of tableau consoles.
Growth margin expansion remains a Cornerstone of our past to profitability and an area where we again executed. Well during the quarter non-gaap gross. Margin reached 38.4% expanding more than 1 percentage point from last year, even as we managed through the lower absorption of manufacturing, overheads. That we've previously discussed.
This progress keeps us right on path to the next Milestone of 50%.
What is gratifying to us is to see the strong support in sourcing with tableau has earned among the dialysis nursing community.
With examples of better patient care at a substantially lower cost nurse leaders have emerged as huge champions for insourcing.
Turning to our end markets, our results in the quarter were again driven by penetration within acute care providers, including new, console placements during the quarter. Tableau is now in use at more than 900, acute and sub-acute sites in the United States.
In fact, the former CMO of one of our hospital customers that implemented in sourcing with tableau recently joined outset, as our Chief Nursing Officer.
On several recent customer visits I've had the opportunity to hear nurse leaders talk about how in sourcing their dialysis service line with tableau has dramatically reduced their rate of hospital acquired infections and improved overall patient care by enabling.
Additionally, we closed a new Enterprise agreement with 1 of the largest National Health Systems in the country during the second quarter, which provides access to well over a 100 facilities with the potential to place many hundreds of Tableau consoles.
What is gratifying to us is to see the strong support. Insourcing with Tableau has earned among the dialysis nursing community.
With examples of better patient care at a substantially lower cost.
Had several nursing leaders have put it high nurse retention compared to the staffing challenges their outsource providers struggled with and an ability for their hospital nursing teams to care for the whole patient versus solely delivering a dialysis treatment.
Nursery leaders have emerged as huge champions for insourcing.
In fact, the former CNO of 1 of our Hospital customers that implemented insourcing with Tableau recently, joined outset as our chief nursing officer.
And the home end market. We also made excellent progress during the quarter interest and tableau from patients and their providers is growing steadily in this very large market, while we still expect home to evolve more gradually than the acute end market. We made another important advanced during the quarter by finalizing any.
Agreement with the third largest mid sized dialysis organizations.
Through this agreement approximately 15000 dialysis patients across 30 states will have access to tableau. We now have agreements with all five of the largest mds in the United States.
Several nursing leaders have put it high nurse retention compared to the Staffing challenges. Their Outsource providers struggled with and an ability for their hospital. Nursing teams to care for the whole patient versus solely, delivering a dialysis treatment.
The success, we are having commercially is a direct result of the work we check to transform our sales organization and process.
Our progress includes restructuring retraining and enhancing our commercial organization, including by retooling, our capital sales team and infusing in enterprise sales skill set.
And the home and Market. We also made excellent progress during the quarter interest in Tableau from patients. And their providers is growing steadily in this very large Market, while we still expect home to evolve more gradually than the acute Ed Market. We made another important Advance during the quarter by finalizing. An agreement with the third largest midsize, dialysis organization.
We implemented an entirely new capital sales process with high specificity accountability and discipline.
Through this agreement, approximately 15,000 dialysis patients across 30 states will have access to Tableau.
And third we injected rigorous sales management inspection and tools at every step to improve capital sales forecasting and timing of close.
We now have agreements with all 5 of the largest mdos in the United States.
The success. We are having commercially is a direct result of the work. We check to transform our sales organization and process.
We continue to see positive indicators that these efforts are paying off.
For example console sales in the second quarter returned to levels. We last saw in early 2024 forecast accuracy has improved our pipeline grew again in the second quarter, both sequentially and year over year.
Our progress includes restructuring, retraining and enhancing our commercial organization, including by retooling, our Capital sales, team and infusing, an Enterprise sales skill set.
Second, we implemented an entirely New Capital sales process with high specificity accountability and discipline.
As we've grown the pipeline we have also seen growth in the percentage of opportunities progressing to the later stages of sales process and most importantly, we continue to see strong conversion of opportunities to sales.
And third, we injected rigorous Sales Management inspection and tools at every step to improve Capital sales, forecasting and timing is closed.
We continue to see positive indicators that these efforts are paying off.
As I said last quarter, our team has become proficient at educating stakeholders at all levels of an enterprise about the benefits tableau can deliver not only financially, but also clinically and operationally.
For example, console sales in the second quarter, return to levels. We last saw in early 2024
During the quarter, we added new customers adopting tableau for the first time and also saw existing customers expand their use to new locations.
Forecast, accuracy has improved. Our pipeline grew again, in the second quarter, both sequentially and year-over-year.
As we look ahead to the rest of the year, we remain confident in our pipeline and strong market demand. While we continue to closely monitor any impact from proposed federal funding cuts and health care customers tell us that the financial and clinical case for in sourcing with tableau remains compelling as they prioritize their cap.
As we've grown the pipeline, we have also seen growth in the percentage of opportunities progressing to the later stage of the sales process. And most importantly, we continue to see strong conversion of opportunities to sales.
As I said, last quarter, our team has become proficient at educating stakeholders at all levels of an Enterprise about the benefits. Tableau can deliver, not only financially, but also clinically and operationally.
<unk> expenditures for 2025.
In sourcing with tableau saves hospitals money at a relatively low acquisition cost and a short payback period.
During the quarter, we added new customers adopting Tableau for the first time and also saw existing customers expand their use to new locations.
This customer feedback fuels, our confidence in our plan for the rest of the year.
From an operational perspective, we are pleased with how average selling price and utilization trended. We believe ASP strength indicates that customers see tableau appropriately priced for the value expected and consistent utilization reinforces that once the unit is installed its use and provide.
As we look ahead to the rest of the year, we remain confident in our Pipeline and strong market demand. While we continue to closely monitor any impact from proposed Federal funding Cuts in healthcare customers, tell us that the financial and clinical case for insourcing with Tableau remains compelling as they prioritize their Capital expenditures for 2025.
It's a long tail of recurring revenue.
Related to utilization or manufacturing site has now produced more than $1 5 million tableau disposable treatments since we brought production in house in 2023.
Insourcing with Tableau saves hostiles money, has a relatively low acquisition cost, and a short payback period.
This customer feedback, fuels our confidence in our plans for the rest of the year.
From an operational perspective. We are pleased with how average selling price and utilization trended
This is important as we seek to deliver the highest levels of quality and gain scale to reduce production costs.
As we've talked about for several quarters. Our team is focused not only on reductions in cost of goods sold but also in operating expenses.
We Believe ASP strengths indicates that customers see Tableau appropriately priced for the value expected and consistent utilization. Reinforces that once a unit is installed. It's used and provides a long tail of recurring Revenue.
And the actions, we took to remove approximately $80 million of annualized spend again delivered leverage in the quarter with another record low non-GAAP operating loss.
Related to utilization. Our manufacturing site has now produced more than 1.5 million. Tableau disposable treatments since we brought production in-house in 2023,
We also used approximately 60% less cash than in the prior year period, keeping us right on track with our goal to use less than $50 million. This year.
This is important as we seek to deliver the highest levels of quality and gain scale to reduce production costs.
I want to reiterate that we are aggressively executing against a clear path to cash flow breakeven and then profitability.
As we've talked about for several quarters, our team is focused not only on reductions in cost of goods, sold, but also in operating expenses,
This path begins with topline growth and gross margin expansion. It includes disciplined spend management and it shows up in both the significant reduction in cash use we project for 2025 and in the leverage we see to the bottom line.
And the actions we took to remove approximately million dollars of annualized send again, delivered leverage in the quarter with another record, low non-gaap operating loss.
Lastly from an operational perspective, I want to reiterate our prior comments about tariff exposure tableau tableau cart and tableau cartridges remain exempt from tariffs under a special exemption pertaining to equipment that supports the product leads as April. Additionally, we continue to have tariff exemption under the U S.
We also use a proximately 60% less cash than in the prior year. Period keeping us right on track with our goal to use less than $50 million this year.
I want to reiterate that we are aggressively executing against a clear path to cash, flow break even and then profitability.
MCA and further contingencies, such that we continue to expect no impact from proposed or implemented tariffs at this time.
This path begins with Topline growth and gross margin expansion. It includes discipline spend management and it shows up in both, the significant reduction in cash, use we project for 2025 and in The Leverage, we see to the bottom line.
I'll close by reiterating our optimism for the opportunity ahead, we operate in two large end markets and the competitive moat around tableau continues to deepen our growing install base is extending our reach across the country.
Tableau cart and Tableau cartridges remain exempt, from tariffs, under a special exemption pertaining to equipment that supports the chronically disabled.
Our proprietary knowhow around in sourcing allows us to partner with hospitals as a solution not just a product our exceptional field service team drive the customer satisfaction score consistently above 95%.
Additionally, we continue to have tariff exemption under the usmca and further contingencies such that we continue to expect no impact from proposed or implemented tariffs at this time.
Our portfolio of reference Hirple customers continues to grow helping to drive market adoption.
At the midpoint of an important year for outset, our focus has not wavered from three vital priorities.
I'll close by reiterating our optimism for the opportunity ahead. We operate in 2, large and markets and the competitive moat around Tableau continues to deepen. Our growing install base is extending our reach across the country.
One grow console revenue to expand gross margin and three drive to profitability with two quarters to go we fully understand the importance of continued consistent execution. During this pivotal year.
Our proprietary know-how around insourcing allows us to partner with hospitals as a solution. Not just a product, our exceptional field service team drives the customer satisfaction score, consistently above 95%,
We are confident about our outlook and believe we are set up very well for the second half and into 2026.
Our portfolio of referenceable customers continues to grow helping to drive market adoption.
Providers, including the largest health systems in the country are seeing the enormous clinical financial and operational advantages that in sourcing with tableau can deliver them.
At the midpoint of an important year for outset, our Focus has not wavered from 3 vital priorities.
The market opportunity remains wide open for us and we continue to gain ground.
I want to close by thanking our entire team for their commitment to the patients. We serve in addition to their commitment to driving growth managing spend and reaching our shared goal of profitability.
1 grow console Revenue 2 expanded to profitability with 2 quarters to go. We fully understand the importance of continued consistent execution during this pivotal year.
And with that I will turn it over to Rene.
We are confident about our Outlook and believe, we are set up very well for the second half and into 2026.
Thank you Leslie and good afternoon, everyone I've enjoyed digging into the business during the two months since I joined outset in early June and I'm very happy to walk you through our financial results today.
Providers including the largest Health Systems in the country are seeing the enormous clinical financial, and operational advantages that insourcing with Tableau can deliver.
I look forward to meeting more of you in the coming weeks.
The market opportunity remains wide open for us and we continue to gain ground.
Revenue for the second quarter of $31 $4 million grew 15% over the second quarter of 2024.
The increase was driven largely by console volume and mix, including sales to acute customers, which carry a higher average selling price.
I want to close by thanking our entire team for their commitment. To the patients, we serve in addition to their commitment to driving growth managing spend and reaching our shared goal of profitability.
And with that, I will turn it over to Renee.
Due to the additional features attached to each unit.
Product revenue of $23 1 million.
Thank you, Leslie, and good afternoon everyone. I have enjoyed digging into the business during the 2 months since I joined outset in early June and I'm very happy to walk you through our financial results today.
Consisting of console revenue of $8 $9 million and consumable revenue of $14 2 million grew 20% from $19 2 million in the prior year.
I look forward to meeting more of you in the coming weeks.
revenue for the second quarter of 31.4 million grew 15% over the second quarter of 2024
Importantly console revenue grew sequentially and year over year.
The increase was driven largely by console volume and mix.
Service and other revenue of $8 $3 million grew 2% from $8 2 million in the prior year period.
Including sales to acute customers, which carry a higher average selling price.
Due to the additional features attached to each unit.
Reoccurring revenue from the sale of tableau consumables and service was $22 5 million, an increase of 11% over the second quarter of 2024.
Next I'll walk through our gross margin and operating expenses for the quarter.
Product revenue of 23.1 million, consisting of console revenue of 8.9 million, and consumable revenue of 14.2 million through 20% from 19.2 million in the prior year.
Please refer to the table in today's earnings release for a reconciliation of GAAP to non-GAAP measures.
Importantly, console Revenue, grew sequentially and year-over-year.
non-GAAP gross margin expanded another 110 basis points from last year, reaching 38, 4% for the quarter, even with a 100 basis point headwind from the under absorption of manufacturing overhead.
Revenue of 8.3 million, grew 2% from 8.2 million in the prior year period.
Product gross margin increased nearly 400 basis points year over year to 48, 9%.
Reoccurring revenue from the sale of Tableau consumables and service was 22.5 million and increase of 11% over the second quarter of 2024.
Service and other gross margin was six 9% compared to 13, 6% we reported in the second quarter of 2024 due to the short term investments we made in parts supply.
Next, I'll walk through our gross margin and operating expenses for the quarter. Please, refer to the table in today's earnings release for a Reconciliation of gaap to non-gaap measures.
We are making progress against our plan to optimize inventory levels and gradually increased production.
Non-gaap gross margin expanded. Another 110 basis points from last year, reaching 38.4% for the quarter, even with a 100 basis point headwind from the under absorption of manufacturing overhead,
Further mitigates the gross margin impact of the manufacturing under absorption we have discussed all year.
Product gross margin increased, nearly 400 basis points year-over-year to 48.9%.
For the year I expect a headwind of approximately 150 basis points, which will have a diminishing effect in 2026.
Excluding these factors gross margin is approaching 40% and product gross margin is approaching 50%.
Service and other gross margin was 6.9% compared to 13.6%. We reported in the second quarter of 2024 due to the short-term Investments. We made in part supply.
Also say we are right on track towards our next milestone of 50% gross margin.
Moving to operating expenses, we continue to see the positive impact of reductions the company primarily made during the second half of 2024.
We are making progress against our plan to optimize inventory levels and gradually increase production. Which further mitigates the growth margin impact of the manufacturing under absorption. We have discussed all year.
For the quarter non-GAAP operating expenses declined 19% to $25 $4 million compared to the second quarter of 2024.
For the year, I expect a headwind of approximately 150 basis points, which will have a diminishing effect in 2026.
non-GAAP operating loss was $13 $4 million.
Excluding these factors gross. Margin is approaching 40% and product. Growth margin is approaching 50%.
36% below the operating loss of $21 million in the prior year period.
All to say, we are right on track towards our next Milestone of 50%, gross margin.
Net loss of $18 $5 million was 46% lower than the second quarter of 2024.
These measures reflect the positive results of our drive to profitability.
Moving to operating expenses, we continue to see the positive impact of reductions. The company primarily made during the second half of 2024
Moving to our balance sheet.
We ended the quarter with $187 4 million in cash cash equivalents.
Non-gaap operating expenses defines 19% to 25.4 million compared to the second quarter of 2024.
Short term investments and restricted cash low cash use this year reflects the progress we are making on gross margin operating expenses and inventory levels.
Non-GAAP operating loss was $13.4 million.
36% below the operating loss of 21 million in the prior year, period.
We anticipate cash use will step up entering next year as we increased inventory purchasing and ramp production with the first quarter of any year expected to be our highest cash consuming quarter due to incentive compensation payout.
Net loss of 18.5 million was 46% lower than the second quarter of 2024.
These measures reflect the positive results of our drive to profitability.
Moving to our balance sheet.
We continue to believe our cash balances are sufficient through cash flow breakeven.
We ended the quarter with 187.4 million in cash cash equivalents.
Turning to our guidance for 2025 as Leslie mentioned, we are pleased to be in a position to raise our revenue guidance for the year from $115 million to $125 million to a range of $122 million to $126 million.
Short-term Investments and restricted cash. Low Cash, used this year, reflects the progress, we are making on gross margin operating expenses and inventory levels.
We are very confident in our outlook and yet intend to maintain a level of conservatism as we monitor the macro environment and work through this year of execution.
We anticipate cash use will step up entering next year as we increase, inventory, purchasing and ramp production. With the first quarter of any year expected to be our highest cash consuming quarter due to incentive. Compensation payouts.
Moving down the income statement, we continue to expect gross margin for the full year in the high 30% range.
We can continue to believe our cash balances are sufficient through cash flow break even.
Excluding the impact of under absorption, we continue to anticipate gross margin exiting the year above 40% in the fourth quarter of 2025.
Although gross margin may fluctuate on a quarter to quarter basis as a result of our product mix. We continue to expect the past, 52% will be driven by higher margin reoccurring revenue across a larger installed base service leverage and our console cost down programs.
Turning to our guidance for 2025 as Leslie mentioned. We are pleased to be in a position to raise our Revenue guidance, for the year, from 115 to 125 million to a range of 122 million to 126 million.
We are very confident in our Outlook and yet intend to maintain a level of conservatism. As we monitor the macro environment and work through this year of execution,
We anticipate operating expenses in 2025, and the low $90 million range.
moving down the income statement, we continue to expect growth margin for the full year in the high 30% range.
The combination of revenue growth gross margin expansion and expense discipline means that we continue to expect to use under $50 million in cash in 2025, which is less than half we used in 2024.
Excluding the impact of under absorption. We continue to anticipate growth margin exiting the year above 40% in the fourth quarter of 2025.
With that I think we're ready for Q&A operator, please open the lines.
Although gross margin May fluctuate on a quarter to quarter basis. As the result of our products mixed we continue to expect the path. To 50%, will be driven by higher margin. Reoccurring Revenue across a larger install base.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please stand by while we compile the Q&A roster.
Service, leverage and our console costs down programs.
We anticipate operating expenses in 2025, in the low, 90 million range.
The combination of Revenue, growth gross, margin expansion, and expense discipline means that we continue to expect to use under 50 million in cash in 2025, Which is less than half, we used in 2024.
Our first question comes from Rick Wise of Stifel.
With that, I think we're ready for Q&A operator. Please open the lines.
Good afternoon everybody.
Great to see another.
The fourth quarter enrolls.
Steady progress on all your key business priorities.
You bet.
If I could just.
Thank you at this time. We will conduct the question and answer session as a reminder, to ask a question, you would need to press star 1 1 on your telephone and wait for your name to be announced to withdraw your question. Please, press star 1 1, again please, stand by while we compile the Q&A roster.
Lovely.
On your guidance.
And not to use your words against you, but you said I think I'm quoting you said, we're set up very well for the second half.
our first question comes from Rick, Rick Wise at stifel,
25.
If I'm doing the back of the envelope math correctly, maybe I'm not but.
It seems like at the midpoint of the guide.
The.
Got it.
No.
Forget that different.
It sounds like the mid point.
Would be sort of.
Make the second half roughly very roughly equivalent.
First half sales level, but it could.
Momentum is growing in my thinking about this.
Correctly to maybe help us understand.
Whats maybe.
You.
Hopefully conservative.
Sure Hi, Rick happy to do that.
First and foremost we really are happy with the way the year has shaped up to date.
Uh, good afternoon, everybody. Um, great to see another, I think it's maybe the fourth quarter in a row of of steady, uh, progress on all your key business priorities. It's great to see that. Um, it if I could start off just, uh, Leslie on your guidance, uh, and not to use your words against you, but you, you said, I think I'm quoting you. You said we're set up very well for the second half of 25. And if I'm doing the back of the envelope math correctly, maybe I'm not. But, uh, it seems like at the midpoint of the guide, uh, that, uh, that, uh, that you know, looking at the forget, the differences between third and fourth grade. It sounds like the midpoint, uh, would be
Taking a quick quick step back we kicked off 2025 year by conveying that we did intend to remain conservative throughout 25 from a guidance standpoint, as we stayed focus on on what we know is a really important year of execution for the company, but having said that it was great to see very strong <unk>.
Sort of, uh, make the second half roughly equipped very roughly equivalent.
To the first half sales level. Uh, but it feels like momentum is growing. And and my thinking about this correctly and maybe help us understand uh, what maybe keeping you I'll I'll say thoughtfully, conservative
<unk> recurring revenue performance in the first half of this year, combining that with and you did hear me correctly. What we believe is a very good setup for the second half of the year.
Sure. Um,
I do that. Um first and foremost we really are happy with the way the year has shaped up to date.
We were pleased to raise the range both on the top end and the bottom by <unk> 7 million, which effectively raises the low end above what was the midpoint of our guidance at the beginning of the year. So I think that's all very very good news, let me say a little bit more about what another part of your question kind of why.
Um, taking a quick quick step back. We kicked off.
The 2025 year by conveying that we we did intend to remain conservative.
We believe the setup for two H and I'd say beyond two H is good.
I'll try to keep it short, but three short points. One this commercial transformation is absolutely taking root.
The changes and the improvements we made to the team and the tools and the processes is really paying off from pipeline management to forecasting too.
Our ability to convert opportunities to contracting it's in short it's all better.
I think the second short point is that demand is growing our pipeline did grow again, both sequentially and year over year.
And also equally as important the deals are progressing we have more deals in the pipeline that are in the later stages versus the earlier stages and we have good diversification in that pipeline more and more of these deals are at the enterprise level, which by definition means sort of a.
A very robust number of consoles per deal. So so that's good and then three constantly utilization remains high and this is a real point of pride for us because more than anything else I've always believed that constantly utilization is a direct reflection of how good of a job we're doing how good of a job as tableau doing are we and the team.
Great to see very strong console and recurring Revenue performance. Um, and the first half of this year combining that with and you did hear me correctly. What we believe is a very good setup for the second half of the year. Um, you know, we were, we were pleased to raise the range both on the top and, um, and and the Bottom by, you know, a full 7 million, which effectively raises the, the low end above, what was the midpoint of our guidance at the beginning of the year? So I I think that's all. Um, very, very good news. Let me say a little bit more about another part of your question, kind of why we believe the setup for 2 H. Um, and I'd say Beyond 2 H is good. Um, I'll try to keep it short, but 3 short points. Um, 1 this commercial transformation is absolutely taking root um the the changes and and the improvements we made to the team and the tools. And, and the processes is really paying off, um, from pipeline management to forecasting to, um, our ability to convert opportunities to Contracting. It's, um, in
Fulfilling the promises that we're making to both patients and providers and strong utilization suggests that that answer is yes and of course the utilization continues to be the foundation of very consistent very predictable recurring revenue, which is a strong place to operate from.
short, it's all better. Um, I think that the second short point is that demand is growing. Um, our pipeline did Grow, Again, both sequentially and year-over-year. Um, and also equally as important, the deals are progressing. We have more deals in the pipeline that are in the later stages, um, versus the earlier stages. And we have good diversification in that pipeline more and more of these deals are at the Enterprise level, which by definition means, sort of um a a very robust number of
Consoles per deal.
All in Rick you heard it correctly, we do feel really good.
And feel that we're entering <unk> with a strong setup and at the same time, we remain very committed to what we said we were going to do at the end of the year, which was.
Our commitment to guidance conservatism and we're going to stay focused on executing through the next few quarters here to deliver on it.
Great acoustic.
Deep program maybe.
One factor.
Many underpinning.
All of those comments.
The commercial strategy transition.
Hoping you could.
Give us some additional color on well I think previously you if I remember correctly, you said that you would call.
Good.
Salesforce transition would be so.
Fully productive.
So, so that's good and and then 3 console, utilization remains High. Um, and this is a real point of Pride for us because more than anything else. I've always believed that console utilization is a direct reflection of how good of a job we're doing, how good of a job is to have low doing, are we and the team, um, fulfilling the promises that we're making to both patients and providers and strong utilization? Suggests that that answer is is yes and of course the utilization continues to feed the the foundation, you know, a very consistent, very predictable, recurring Revenue which is a strong place to operate from. So um, all in Rick you you you heard it correctly, we do feel really good, um, and and feel that we're entering 2 H with a strong setup. And at the same time, um, we remain very committed to what we said. We were going to do at the end of the year, which was, um, a commitment to guidance conservatism, and we're going to stay focused on on executing through the next 2 quarters here to deliver on it.
After the quarter you just reported.
Are we.
Pat.
Stand up please if you will.
<unk>.
Help us understand that or there's more to go.
Would get you to where past growth.
And maybe help us.
Maybe I'd be curious to hear your thoughts about <unk>.
Now more fully trained on a productive salesforce factors into your roughly 25 outlook, maybe you have a question Rob.
Great. I appreciate all the detail there and maybe just sort of 1 factor of of of many underpinning. Uh, all those comments is uh, the commercial strategy transition. I was hoping you could uh uh, give us some additional color on. Where are we? I I think previously if I remember correctly, you said that you thought the the the the sales force transition would be sort of
Even for next year from that perspective, thanks, so much.
Sure Yeah happy to comment on that more.
In a nutshell the commercial organization.
Fully productive, uh, after the quarter. You just reported, I mean, are we past the sort of stand up phase, if you will, uh, help us understand that? Or if there's more to go, what what
Looks and feels and operates very differently today and all of the best ways. As a result of the changes and the improvements that we've made here over the last couple of quarters.
Would get you to. Yeah, we're past that. Um and and maybe help us. Maybe I'd be curious to hear your thoughts about
And that showed up for us in a in a really nice way both in in the first quarter and again in the second quarter as these new tools and the new sales process really again aimed at success at the enterprise sales level.
How a now more fully trained on it productive Salesforce factors into your rest of 25 Outlook and maybe have that set you up uh even for next year from that perspective. Thanks so much.
Did contribute to these are some of the things we look at rack improved forecast accuracy.
Sure. Yeah, happy to comment on that more um in in a nutshell, the the commercial organization.
More demonstrated visibility predictability and control over how deals where our deal is exactly in the sales process and how are those deals progressing.
Looks and feels and operates very differently today, and all of the best ways as a result of the changes in the improvements that we've made here over the last couple of quarters.
The ability of the team to.
To convert those opportunities to contracts and ultimately to revenue has also improved.
We're obviously going to stay extremely vigilant in monitoring how everything is going but the headline value here I think is so far so good and we're really happy with the progress and the evidence that we have seen to date.
And have confidence in how it's going to continue to translate here through the remainder of the year.
Um, and and that showed up, you know, for us in a, in a really nice way, both in in the first quarter and again in the second quarter as um, these new tools and and the new sales process really, again aimed at success at the Enterprise sales level, um, did contribute to these are some of the things we we look at Rick, um, improved forecast, accuracy, um, more demonstrated visibility, predictability and control over how deals where our deals exactly in the sales process.
Thanks again.
Yeah. Thank you.
Okay.
Our next question comes from Marie Thibault at <unk>.
Good evening, thanks for taking the questions and congrats on a very nice quarter.
Wanted to ask here, a little bit more on some of the deal strength that you saw in the quarter absolutely.
I understand that your deal pipeline as diversified a lot coming from kind of enterprise sales.
Played here through the remainder of the year.
But just trying to understand how sustainable some of it is and also you know there was some commentary about strong asps on consoles.
Thanks again.
Yeah, thank you.
All of these new deals is there a lot of uptake of some of your newer products are newer upgrades, where you're able to get some of those those higher asp's things like tableau carton others.
Our next question comes from Marie, Thibault at btig.
Yes. Thanks for the question Murray and yes is the answer.
But let me give you a little bit more color behind that we.
We did have ASP strength due to a really nice attach rate.
Those on or said differently uptake for tableau cart and the tableau prep class.
<unk>.
Which did help fuel the ASP strength also I would be remiss if I didn't mention that our team continues to do a great job on ASP discipline.
Good evening. Thanks for taking the questions and congrats on a very nice quarter. Um, wanted to ask here a little bit more on, um, some of the deal strength that you saw in the quarter. Um, absolutely understand that your deal pipeline is Diversified a lot coming from kind of Enterprise sales, um, but just trying to understand how sustainable some of it is. And also, you know, there was some commentary about strong asps on consoles, um, of these new deals. Is there a lot of uptake of some of your newer products or newer upgrades, um, where you're able to get some of those, uh, those higher aspects like Tableau Carton and others.
Yes.
And I think the ASP strength is reflective is reflective of the results that the technology and sort of the proprietary ecosystem around it is driving for customers.
Customers.
Particularly in the acute and the post acute setting I think it is the nature of the question.
Really are experiencing and continuing to share actually more and more with their peers.
Very very tangible cost reduction operational efficiencies and I'll say you know what what is continuing to emerge or are these are these clinical outcomes.
Thanks for the question, Marie. And yes is the answer. Um, but let me give you a little bit more color behind it. Um, we did have ASP strength, due to a, a really nice attach rate, uh, both on or said differently uptake for, um, Tableau cart and, and the Tableau Pro Plus software, um, which which did help fuel the ASP strength. Uh, also I would be remiss if I didn't mention that, you know, our team continues to do a great job on. ASP discipline and I think, um, the ASP strength is reflective is reflective of the results.
More and more hospitals are reporting significantly lower class b rates lower rates of hospital acquired infection. When they have moved from an outsourced model to an in sourced model and so between I think that the way that we think about the pricing structure around tableau, the team's discipline and executing around it.
And the accessories and some of the software option all of those were key contributors to ASP strength now.
Now going to be getting part of your question on.
Sort of how durable I think and guide me if I'm not getting the first part of your question right, but yeah, yeah kind of the durability and sustainability of the pipeline and sort of a forward looking console sales.
The console revenue that we saw this quarter and that that we expect to see in two age is driven not only by strong asps.
But let me be clear by very strong console placements and strong console uptake. So that's that's a really important 0.1 0.2, when we look forward into the pipeline and I'll touch on this very large enterprise agreement that we signed this quarter.
That the technology and sort of the proprietary ecosystem around it is driving for customers. Um, customers. You know, particularly in the queue and the Post Acute setting. I think is, is the nature of the question. Um, really our experiencing and continuing to share actually more and more with their peers. Um, very, very tangible, uh, cost reduction operational efficiencies and I'll say, you know what, what is continuing to emerge? Are these are these clinical outcomes? Um, more and more hospitals are reporting significantly, lower Cloud. C rates, uh, lower rates of hospitals fired infection when they have moved, from an outsourced model to an insource model and so between, I think that the way that we think about the pricing structure around Tableau, the team's discipline and executing around it and um, the accessories and and some of the the the software options, all of those were key contributors to, um, ASP strength.
As I mentioned in the prepared remarks that dozens of facilities potentially and hundreds of consoles over time potentially and so with with several of our existing customers and new customers at the enterprise level.
We do take a view that this could provide a pretty interesting growth rate for us.
Now, going to the beginning part of your question on, um, sort of how durable I think. And, and, and guide me if I'm not getting the first period question, right? But yeah, yeah, kind of, uh, the durability and the sustainability of the, the pipeline and sort of, uh, forward-looking console sales, you know, the console Revenue that we saw this quarter and that that we expect to see in 2 H, um, is driven, uh, not only by, um, strong ASP, but but let me be clear by very strong consult, placements and strong consult uptick
For many quarters to come in the future.
That's really encouraging Leslie great to hear.
And then I guess I'd like to ask a little bit about your hiring.
Oh, the Chief Nursing officer during the quarter.
Great to see someone who believes in the tableau story, so much that they want to join the company what will be her focus is it.
Increasing home utilization is an increasing utilization in the acute care setting is it helping inside sales, what's kind of the focus of that role.
Yeah, I'm really glad you asked about that.
So that's that's a really important point, point 1 Point 2, when we look forward into um the pipeline and I'll touch on this very large Enterprise agreement that we find this quarter. Um as I mentioned in the prepared remarks that's dozens of facilities potentially and hundreds of consoles over time potentially and so with with several of our existing customers and new customers, at the Enterprise level, um, we do take a view that this could provide a pretty interesting growth rate for us, um, for, you know, many quarters to come in the future.
<unk>, what we've learned and I think we've talked about this a little bit in prior calls.
One of the things that we learned as a team really over the last 12 months to 18 months with just how critically important the role as the Chief Chief Nursing Officer is in moving from outsourcing to insourcing of dialysis, we we're finding over time that more and more of.
That's really encouraging Leslie. Great to hear. Um, and then I guess I'd like to ask a little bit about your hiring. Um,
Of our sales processes, we're involving a C.
Audience.
Of achieved nursing officer during the quarter. Um, you know, a great to see someone who believes in in the travel story so much that they want to join the company. What will be her focus? Is it you know increasing home utilization as an increasing utilization of the acute care setting is it helping inside sales what's kind of the focus of that role
They are the folks at the executive level that do ultimately own the implementation of the new from outsourcing to in sourcing and so it was really critically important that our team.
Focus on the Chief Nursing officer at any given hospital and we become really good at.
Explaining how the move really serve them and their nursing team.
So now looking forward in this new hire of a chief nursing officer and she.
Yeah, I'm really glad you asked about that. Um, the what we've learned and I think we've talked about this a little bit in Prior calls. Um, 1 of the things that we learned as a team, really over the last 12 to 18 months, was just how critically important, the role of the chief chief nursing officer is in moving from Outsourcing to insourcing of dialysis. We were finding over time that, you know, more and more um, of our sales processes were involving a
She will be really focused first and foremost on working with our sales organization and sharing her own experience in successfully moving from outsourcing to in sourcing with many of the customers the potential new customers in our pipeline and partnering with those CNS to really explain and help them with the <unk>.
<unk> management around that and helping them understand kind of the the key steps along the way from from outsource to in source and what her keys to success, where that did allow her hospital to materially lower their cost of dialysis their complexity of dialysis and also drive some pretty meaningful clinical improvements for patient care.
Alright, thank you.
Thanks Marie.
Okay.
Our next question comes from Josh Jennings at T D Cohen.
Hi, good afternoon, great to see the strong quarter.
The updated guidance.
Lastly, I would love to just.
Much on the enterprise channel or IBM.
<unk> I know.
And so, now looking forward and this, this new hire of achieve nursing officer. Um, she will be really focused, first and foremost on working with our sales organization, and sharing her own experience in successfully moving from Outsourcing to insourcing with, uh, many of the customers, the potential new customers in our Pipeline and partnering with those cnos to really explain um and help them with the change management around that and um helping them. Understand kind of the um the key steps along the way from from outsourced to insource. And what her keys to success were that did allow her hospital to materially lower their cost of dialysis, their complexity of dialysis and also Drive some pretty meaningful, clinical improvements for patient care.
<unk> had some big wins over the years and those windstream to continue in the first half of.
Very good. Thank you.
Thanks Marie.
25 pipeline, that's filling up with opportunities as sales pipeline with opportunities as well, maybe just talk about.
Our next question comes from Josh Jennings at TD Cohen.
The penetration.
In our enterprise channel and the go forward opportunity a little bit more I think you've touched on already and from your answers.
Hi, good afternoon. Uh, great to see this strong quarter.
You build and just how big of a opportunity.
From here you see that enterprise.
Large one.
Yeah sure. Thanks for the question Josh I'm.
I'm happy to so despite the successes that we've had here for the last couple of quarters in in pipeline expansion and in closing new deals.
And the updated guidance, uh, Leslie and Renee would love to just, um, touch on the Enterprise Channel or IBN opportunity. And I know you've had some big wins over the years. And, and those winds seem to continue in the first half of, uh,
Still I would still call. It an early innings in terms of the runway as we look at the total addressable market in the acute and sub acute and just to recap on terms in sub acute we include L tax at Rehabs for principally in that in that Tam number.
25 and and the pipeline is filling up with um opportunities itself pipeline up with opportunities. Well, maybe just talk about the penetration in this idn or Enterprise Channel and and the go forward opportunity. A little bit more. I think you've touched on already in some of your answers. Leslie would love to hear your build and and just how big of a of an opportunity. Um from here you see that Enterprise John clearly it's it's a large 1.
We would consider ourselves to be kind of in the low double digits in terms of market penetration. So that's what the that that is what really excites me. The most is we.
We've come a long way and with 900 sites now using tableau, both acute and post acute it is kind of amazing.
We're only low double digit penetrated which tells me we have a lot of exciting opportunity ahead.
A team now that is is really ready and capable to go after it.
I think that you know another thing I think about in terms of the Tam is theres a lot of Interconnectivity to think about too many health systems, one L tax many health systems one rehab.
Many of these health systems have or getting into the skilled nursing facility area.
Prologis that round in hospitals also round in the outpatient setting of home and have patients at home and so we really benefit greatly from the interconnectivity. Both at the clinician level and also at the IBM level, which I think is helping to fuel this flywheel.
Yeah, sure. Thanks for the question, Josh. Um, I'm happy to. So, despite the, uh, the successes that we've had here for the last couple quarters in in pipeline expansion and in closing New Deals. Um, we are still, uh, I would still call it an early innings. In terms of the runways, we look at the total addressable Market in the acute and Subacute and and, and just to recap on terms in Subacute, um, we include, uh, ltac, uh, rehabs principally in that in that Tam number. Um, we would consider ourselves to be kind of in the low double digits in terms of uh Market penetration. So that's what the that that is. What really excites me the most is um we've we've come a long way and with 900 sites. Now using Tableau both acute and post-acute. It is kind of amazing um that we're only low double digit penetrated. Um which which tells me we have a lot of exciting opportunity ahead um with a team now that is
I'll give you one last observation that I found pretty interesting Josh is we have for the last 12 months to 18 months seen a fair amount of executive leadership.
Migration executive leaders moving from one hospital to another or one health system to another and that has really started to pay dividends for us as well not that we had anything to do with that but you can imagine you know us as the CMO moves from hospital to hospital and hospital, a has successfully outsource with tableau and seen the bench.
FX at their first hospital, they're kind of bringing that experience that confidence and conviction to to their next hospital executive leadership role. So we have actually experienced some some tailwind and some benefit that I think is only going to continue as its footprint for us grows in the acute and post acute space and and.
Um, is really, uh, ready and capable to go after it. Um, I think that, you know, another thing I think about in, in terms of the Tam is there's a lot of interconnectivity to think about too. Uh, many Health Systems, um, own ltachs, many Health Systems, own rehabs. Um, many of these Health Systems have are getting into the Skilled Nursing Facility area, um, nephrologists that round in hospitals, also round, um, in the outpatient setting of home and have patients at home. And so, we really benefit greatly from the interconnectivity, uh, both at the clinician level and also at the ID and level, which I think is, is helping to kind of feel this flywheel. Um, another, um, I'll give you 1 last observation that I found pretty interesting. Josh, is, we have her last 12 to 18 months, seeing a fair amount of executive leadership. Um, migration, uh, executive Leaders Moving from 1 hospital to another or 1 Health System to another, and that has really started
In sort of thing with tableau becomes.
I had an interesting idea to the standard of care, which we fully intend to deliver on here in the in the coming future.
Excellent I'm sorry.
Well Tobey.
So the high level question, but.
You mentioned partnering up with number three.
Largest dialysis provider.
For patient access to tableau.
I was hoping you could.
To pay dividends for us as well. Not that we had anything to do with that. But um, you can imagine, you know, as as a CNO moves from hospital, a to hospital B and Hospital, a has successfully outsourced with Tableau and seeing the benefits um, at their first hospital. They're kind of bringing that experience that confidence, um, and conviction to um, to their next um, Hospital executive leadership role. So, we have actually experienced some, some tailwind and some benefits that I think is only going to continue as this footprint for us.
Just.
Provide a roadmap of help us think through the tailwind for home hemo.
Second half 'twenty five and into 2020, so clearly that's a nice tailwind for for Alex ship, and maybe maybe the market and then any other kind of wins for home hemo opportunity.
Grows in the acute and post-acute space. And and uh, insourcing with Tableau, um, becomes, you know, uh, an interesting idea to the standard of care, um, which we fully intend to deliver on here in the in the coming future.
excellent and sorry for another
Oh, that's opening up how do you see an opening up in any tailwind for outfits.
Relatively high level question. But um, you know, you mentioned partnering up with the number 3, uh, their largest dialysis provider.
<unk> specifically thank you.
Yeah sure I'm happy happy to I always love talking about home.
For patient access to Tableau, I was hoping you could...
just,
We have continued to make good progress in the home and market both with the we call. It mid sized dialysis organization or <unk> and then the skilled nursing facilities are safe and that continues to contribute about 15% to 20% of our revenue which is exactly in line with the expectations that we shared at the beginning of the year, our overarching goals for home.
Growth as we set up 2025, we're first and foremost and and at the risk of beating a dead horse I'm really passionate about this topic around retention I've always believed that sustainable longer term growth has to start with an industry leading retention rate so that you're always growing from a strong foundation.
Home chemo, uh, in second half 25, and in the 2026, clearly, that's a nice Tailwind for for outset, but maybe maybe the market and then any other Tailwind for, um, for the home email opportunity, how that's opening up, how you see it opening up? And and, and any Tailwind for for outsides on franchise specifically, thank you.
Sure, I'm happy. Happy to
We have maintained our <unk>.
90% or greater retention during the first 90 days, which all of the data suggests is sort of the leading indicator of longer term retention at home and we have maintained.
Very very differentiated Lee high retention rates at 12 months as well so the backbone of our growth is retention.
Regardless of the channel through which a com. Our second goal was to achieve partnerships with all of the largest <unk> in the country and as of Q2, we now can can check that box.
We continue to see more location growth depth.
Job number one is to contract with the largest <unk> and then job number two over time is to deepen their utilization and offer tableau in more and more and more of their location.
Um, we we have continued to make good progress, um, in the home and Market, both with the we call it. Midsize, dialysis organization, or mdos, and then the skilled nursing facilities or Sniff, and that continues to contribute about 15 to 20% of our Revenue, which is exactly in line with the, um, the expectations that we shared in the beginning of the year, our overarching goals for home growth. Um, as we set up 2025 were, um, first and foremost. And, and at, at the risk of beating a dead horse, I'm really passionate about this topic around retention. I've always believed that sustainable longer term growth, has to start with an industry-leading retention rate, so that you're always growing from a strong Foundation. Um, we have maintained a, a 90% or greater retention during the first 90 days, which all of the data suggests is sort of the leading indicator of longer term, retention at home. And we have maintained, um, very, very differentiated High retention rates at 12 months as well. So the backbone of our
And that's the next phase that we're focused on now that we have achieved the contracts that we were hoping to achieve and then the third thing is to begin our entry into <unk> that was the third goal for 'twenty five that does remain a very large but also obviously very new to us market.
The trappings are all there in.
In the sense that the value proposition is actually is quite similar to acute.
Lower and less complicated dialysis, which delivers a dramatically higher quality of life and and treatment benefit for patients.
And so we've gotten a good start to two capitalizing on that here in 2025 as I mentioned, we're seeing some good kind of tailwind even through our acute partnerships into Smith. In addition to sniff that want to directly manage dialysis in house and through service providers that are specifically focused on coming in house into this.
And providing dialysis there.
So that was a long answer Josh I apologize for that but I'll, just say that those were our three key goals to continue to develop this market.
Our growth is retention, um, regardless of the channel through which it comes. Uh, our second goal was to achieve Partnerships with all of the largest mbos in the country and as of Q2, we we now, can can check that box. Um, we continue to see more location growth depth. Uh, job number 1 is to contract with the largest mdos and then job number 2 over time, is to deepen the utilization and offer Tableau in more and more and more of their locations. Um, and that's, that's the next phase that we're focused on now that we have achieved, um, the contracts that we were hoping to achieve, and then the third thing is to begin our entry into, um, sniff. That was the third goal for 25 that does remain a very large, but also obviously very new to US market. Um, the, the trappings are all their, uh, in the sense that the value proposition, it actually is quite similar to accuse, uh, lower and less complicated, dialysis, which delivers age.
And penetrate into it with tableau over the longer term, but here in the near term I think the team is executing very well across all three of these sectors.
Thanks, Linda if I could just sneak one in and maybe too granular.
How should investors think about the growth.
Trajectory from here second half 'twenty five 'twenty six.
Dramatically higher, uh, quality of life and um, and treatment benefit for patients. Um, and so we, we've gotten a good start to to capitalizing on that here in 2025, as I mentioned, you know, we're seeing some good kind of Tailwind even through our acute Partnerships, um, into sniffs. Um, in addition to sniffs that want to directly manage Dialysis in house and through service providers that are, um, specifically focused on coming in-house into the sniffs and providing dialysis there.
Home unit versus acute channel.
So should that be kind of on par.
With home or acute.
Thanks.
Oh sure no problem yeah.
Broadly the same I would think about it in the same way that we've always talked about acute and sub acute.
So that was a long answer. Josh, I apologize for that, but I'll just say that those were our 3 key goals to continue to develop this Market. Um, and and, and penetrate into it uh, with Tableau over the longer term. But here in the near term, I think the team is executing very well across all 3 of these vectors.
Kind of our first wave of growth and we are still very very much in that first wave as I mentioned, just only low double digit penetrated here. So I would continue to expect our COO.
Yes, ma'am. If I could just sneak 1 in and maybe 2 Granary, I mean how should investors think about the growth? Um,
<unk> post acute to be in that 80, 85% of our revenue range.
With with home as the remainder so we don't expect any changes in that mix as.
Trajectory from here, second half 25 and the 26 for the home unit versus acute, uh, channel for outset. Should that be kind of on par or, or would home or acute, outpace the other thanks.
As we look forward here.
Oh sure, no problem.
Broadly.
Great. Thank you again.
Course.
Our next question, especially <unk> at RBC.
Thank you operator, and good afternoon, everyone. Thanks for taking the question. This is mo on for sure.
<unk>.
Congrats on the quarter I was wondering if you could touch a little bit deeper on some of the internal work.
You know, we've always talked about acute and Subacute um as kind of our first wave of growth and we are still very very much in that first wave, as I mentioned, just only, you know, low double digits penetrated here. So I would, um, continue to expect, uh, acute post-acute to be in that, you know, 8085 of our Revenue range, um, with uh, with home, is the remainder. So, we, we don't expect any changes in that mix. Um, as we look forward here,
Great. Thank you again.
But it's been done to transform our commercial organization you talked about the restructuring a little bit can you, maybe just tell us where you stand on those efforts and maybe try to quantify that a little bit. Thank you very much and I'll have one follow up.
Our next question comes from shagon Singh at RBC.
Of course, yes, I'm happy to.
I started to topline is for you the commercial organization itself.
Is is I would almost say dramatically different than it was just a relatively short time ago, and again credit to our commercial leader and and her regional leadership team for implementing any number of changes and improvements we looked at Mo to answer your question a little bit.
Thank you very much and I'll have 1 follow up.
More specifically, we restructured the team.
We looked at new a new enterprise skill set I've talked in the past about how our kind of original sales team was.
Less able to capitalize on these enterprise level opportunities that we had earned the right to get in front of them.
And just had a little bit of a different skill set probably a little bit more startup mode as I would describe it and so we needed.
We needed capital sales professional who had to put it.
Shortly you seen the movie before and have had success and a track record of end to end management of deals that were many dozens of tableau and dozens of facilities that would all be making the move from outsourcing to in sourcing and so I would say all of the work around.
In using our team with those new skill set is behind us that that that work can be called complete. In addition to that we introduced many new sales tools data driven sales tools that under our new Vice president of sales enablement who's done.
Of course. Yes, I'm I'm happy to, um, I I, I sort of to Top Line it, for you. The, the commercial organization itself, um, is is, I would almost say dramatically different, um, than it was just a, a, relatively short time ago. And again, credit to our our, our commercial leader and, um, and her Regional leadership team for implementing. Um, any number of changes and improvements, we looked at Mo to answer your question a little bit more specifically. Um, we restructured the team. Um, we looked at new and new Enterprise skill set. I've talked in the past about how our, our kind of original sales team was. Um, I think less able to capitalize on these Enterprise level opportunities that we had earned the right to get in front of. Um and just had a little bit of a different skill set, probably a little bit more startup mode um as I would describe it and so we needed, um we needed capital
Sales professionals. Who had, uh, to put it,
An absolutely terrific job.
At enabling our team to be more focused more targeted and more efficient through the pipeline management. The sales process management and also given the commercial and the finance organization.
Uh, shortly see in the movie before and had um, had success and a track record of um end-to-end management of deals that were you know, many dozens of Tableau and dozens of facilities that would all be making the move from Outsourcing to insourcing. And so I would say all of the work around infusing.
Data driven tools that have led to better forecasting.
And timing of close and lastly.
We talked about introducing a new sales process again this was aimed at.
A new segment of our audience sort of more of our mainstream adopters versus the early adopters and when we've mainstream adaptors are looking at moving from outsourcing to insourcing over as I said dozens and dozens of their hospital facilities. That's a different sales process, it's a really different sales process.
The work that we needed to do let's say in 2021 2022 earlier in our commercial penetration and so we introduced an entirely new sales process with a very very high level of inspection rigor and again data driven tools to ensure that we were moving across the <unk>.
Um, our team with those new skill sets is behind us that that, um, that work can be called complete. In addition to that, we introduced many new sales tools, data-driven sales tools that um, under a new, uh, Vice President of Sales enablement, who's done an absolutely terrific job, um, at enabling our team to be more focused, more targeted and more efficient through the pipeline management, the sales process management and also given the commercial and the finance organization, um, data driven tools that have led to better forecasting, um, and timing of clothes. And lastly, um, we talked about introducing a new sales process. Again, this was aimed at um, a a new segment of our audience, um, sort of more of our mainstream adopters versus the early adopters. Um, and when these mainstream adopters are looking at moving from,
Entry in every territory through an enterprise level sales process in the same way. So I'll stop there. This is a passion topic for me I could go on and on but I will I will stop there and hope that that gives you the color that youre looking for.
Surely.
We appreciate it and just a quick follow up you touched earlier on on your goal to use less than $50 million.
Of cash this year.
Are you able to maybe talk a little bit more about what the outlook would be into 2026 four for cash burn just directionally.
Outsourcing to insourcing over as I said, dozens and dozens of their Hospital facilities. That's a different sales process. It's a really different sales process than the work that we needed to do. Let's say in, you know, 2021 2022 earlier in our commercial penetration and so we introduced an entirely new sales process with, um, a very, very high level of inspection rigor. And again, data driven tools, um, to ensure that, uh, we were moving across
Any comments on that.
Yeah notice Renee happy to take this one at this stage, where we've given I think as much guidance as where we're going to get at this stage. We've been really pleased with the performance as you can see just in Q2, how much stepped down from Q1, and then we've given some sort of insight around what we expect for the back half of the year.
The country and every territory through an Enterprise level sales process in the same way. So I'll stop there. I this is a passion topic for me, I could go on and on but I will, um, I will stop there and and and hope that that gives you the color that you're looking for.
Early, really appreciate it and and just a quick follow-up, you've touched earlier on, on your goal to use less than 50 million dollars.
I wanted to get some comfort into 2026.
High level view that it might not be just $5 million a quarter going forward, we're going to have a little bit of elevation as we again ramp production.
Of cash this year. Um, are you able to maybe talk a little bit more about the outlook? Would it be into 2026 for cash burn? Just directionally, any comments on that?
To continue to move towards a sales growth and we get back to sort of a normalized state on inventory production.
As well as one off items that happened generally in Q1 at the moment, that's as much as we're going to give I think as we get to the end of the year, we're going to.
Absolutely be in a place to give additional guidance for 'twenty two I think.
That's extremely helpful really appreciate it.
Again, thank you very much.
Thank you.
I'm showing no further questions at this time I would now like to turn it back to Leslie trick for closing remarks.
Thanks, and thanks again to all of you for joining today I'd really like to close by thanking our entire team for the meaningful difference that they're making every single day in the lives of dialysis patients and their providers, who care for them I Hope you all have a great evening. Thanks again.
Yeah, Mo, this is Renee. Happy to take this one. You know, at this stage, we've given, I think, as much guidance as we're going to give. At this stage, we've been really pleased with the performance, as you can see just in Q2 how much step down from Team 1. Um, and then we've given some sort of insight around what we expect for the back half of the year. Um, you know, I wanted to give some comfort into 2026 and some high-level view that, you know, it might not be just $5 million a quarter going forward. We're going to have, you know, a little bit of elevation as we again ramp production to continue to move towards sales growth. And we get back to sort of a normalized state on inventory production. Um, as well as, you know, one-off items that happen generally in Q1. At the moment, that's as much as we're going to give. I think as we get to the end of the year, we're going to...
Absolutely be in a place to give additional guidance for 2026.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
That's extremely helpful. I really appreciate it, and congrats again. Thank you very much.
Thank you.
I'm showing no further questions at this time. I will now like to turn it back to Leslie trick for closing remarks.
Entire team for um the meaningful difference that they're making every single day in the lives of dialysis patients. And the providers who care for them. I hope you all have a great evening. Thanks again.
Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect