Q3 2025 Outset Medical Inc Earnings Call

Presentation, there will be a question and answer session to ask a question. Please press star one on your telephone you will then hear an automated message advise your hand is raised to withdraw your question. Please press star one again, please be advised that today's conference is being recorded.

I'd now like to hand, the conference over to your Speaker today, Jim Missoula head of Investor Relations. Please go ahead Sir.

Speaker #1: After the speakers' presentation, there will be a question-and-answer session. To ask a question, please press *11 on your telephone. You will then hear an automated message advising that your hand is raised.

Good afternoon, everyone and welcome to our third quarter 2025 earnings call here with me today as always are lovely 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 in the investor pages about pet medical Dot com.

Leslie Trigg: Importantly, our technology, insourcing expertise, and customer experience moat is getting wider and deeper. All of this progress sets a powerful foundation for value creation over the long term. Customer demand for what only Outset can offer continues to grow. Providers, including some of the largest health systems in the country, are realizing the enormous clinical, financial, and operational advantages that insourcing with Tablo can deliver. The market opportunity remains wide open for us as we continue to improve our execution, which I believe will enable us to make significant progress in 2026 and beyond. I think we are ready for Q&A. Operator, please open the lines, if you will.

Speaker #1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jim Mazzola, Head of Investor Relations.

Call is being recorded and will be archived on the investors section of our website. 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 1095. These statements relate to expectations or predictions of future events are based on our current estimates and various assumptions and involve material risk.

Speaker #1: Please go ahead, sir.

Speaker #2: Good afternoon, everyone, and welcome to our third quarter 2025 earnings call. Here with me today, as always, are Leslie Trigg, Chair and Chief Executive Officer, and Renee Gaeta, Chief Financial Officer.

Speaker #2: We issued a news release after the close of market today, which can be found on the investor pages of Outset Medical.com. This call is being recorded and will be archived on the investor section of our website.

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 a list and description of the risks and uncertainties associated with their business. Please refer to the risks risk factors section of <unk> public filings with the Securities and Exchange Commission, including our <unk>.

Speaker #2: our intent that all forward-looking statements made during today's call be protected under the Private Securities Litigation Reform Act of 1995. These statements relate to expectations or It is 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.

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Rick Wise with Stifel. Your line is open. Please go ahead.

<unk> annual and quarterly reports.

Leslie.

Thanks for your patience, everybody and thanks again for joining us.

Speaker #2: Outset assumes no obligation to update these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risks Factors section of Outset's public filings with the Securities and Exchange Commission, including our latest annual and quarterly reports.

Rick Wise: Good afternoon, Leslie. Hi, Renee. There's a lot of questions. Just maybe, and I think you make a persuasive case for, and you know, for the factors behind the quarter performance, the change in guidance, and the positive outlook, but maybe come at this from a couple of directions. The guidance trim, the $6 or $7 million at each end of the range, is that one order, three orders? Is it, you know, I mean, is that all reflective of that, or is there extra insurance baked in? You know, it must be incredibly frustrating. How conservative are you being about this since you have, as you cited, that one headquarters approval, and you're just getting the signatures on the other 12 hospitals? Just maybe talk us through all that, if you would, for starters.

Before I get into the details of the quarter and our revised revenue guidance I'd like to begin with a few key takeaways.

First while we have made significant progress transforming our sales process and strengthening our team our third quarter results show that there is still work ahead, several large opportunities that remain in the final stages of our sales process were forecasted for the third and fourth quarters, and we now expect them to close over the fourth quarter and into 2026.

Speaker #2: Leslie?

Speaker #3: Thanks, Jim. Good afternoon, everyone, and thank you for joining us. Before we get into the details of the quarter and our revised revenue guidance, I'd like to begin with a few key takeaways.

Speaker #3: significant progress transforming our sales process and strengthening our First, while we've made team, our third quarter results show that there's still work ahead. Several large opportunities that remain in the final stages of our sales process were forecasted for the third and fourth quarters, and we now expect them to close over the fourth quarter and into 2026.

The shift in timing not in our expectations for closing the significant in sourcing opportunities with large nationally recognized health systems.

We've shifted towards selling enterprise wide in sourcing we are managing very large opportunities that often span dozens of hospitals within a large health system. For example, an opportunity we had forecasted to close in the third quarter required approvals from the executive leadership of more than a dozen different hospital after approval at the corporate level.

Speaker #3: This is a shift in timing

We need to and I fully expect we will better anticipate these deal dynamics going forward.

We continue to make good progress on this particular opportunity, which we expect to realize via multiple orders spanning the remainder of the fourth quarter and into next year.

Speaker #1: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Please remain on your line. Your conference will resume momentarily. Ladies and gentlemen, please stay on your line.

Renee Gaeta: Sure, Rick, this is Renee. I'll start sort of on the numbers commentary, then I'll let Leslie sort of comment on our overall thinking beyond that. Certainly, the shortfall, the way we look about it is, first of all, just what happened in the quarter, right? If you just look at Q3, a primary driver for the shortfall is a large console opportunity flipping from the third quarter into the fourth. We then took a step back, and of course, when we're trying to think about guidance for the remainder of the year, we're looking at all of those deals that were slated for the back half of the year that didn't close in Q3 and then anticipated to close in Q4. Where are we at with those deals?

Second hospital demand continues to grow as a result of the clinical operational and financial benefits that can be achieved by in sourcing dialysis without that's proven technology expert knowhow and exceptional service. We continue to see clear evidence that acute customer demand for and sourcing with tableau is growing and we expect this will support growth for many years.

To come Tableau console sales increased 8% in the third quarter, our pipeline grew meaningfully over last year and the average size of our sales opportunities increase more than 20%.

<unk>, we serve are large and we are changing practice within them.

Renee Gaeta: I would say there are, again, sort of a couple of these larger enterprise deals where we are trying to change the standard of care and therefore identifying that, just being realistic about where we think that those are at. I would say factoring in the departure of our head of sales, that this is a disruptive, or could be a disruptive situation, and we're just being mindful of that when we forecast the remainder of our guidance for the year.

Third our ability to expand gross margin to our next milestone of 50% comes into clearer focus with each subsequent quarter progress.

Reaching nearly 40% non-GAAP gross margin in the third quarter and remaining disciplined in expense management provide fuel on our path to profitability.

Turning to commercial execution, our third quarter results fell short of our expectations.

Last week I accepted the resignation of our head of sales who has made the decision to retire.

Rick Wise: Gotcha. No, that's clear. I didn't know whether you wanted to say something, Leslie, or shall I go ahead?

We have a strong sales leadership team in place that will now report to me directly as we conduct a search process, which is already underway.

Leslie Trigg: Oh, keep, yeah, please go ahead, Rick. I thought that was well said by Renee.

Rick Wise: Yeah, very clear. I'm going to ask a couple of questions if I could, but console revenues were better than we were thinking this quarter. I mean, I'm not sure how to balance the third quarter performance with the order timing commentary. I mean, that was encouraging, as was the service. Can you talk more about what you're seeing and just help us better understand the individual moving numbers and what we're looking at and how that fits into this larger narrative you're sharing today?

Leadership change May result, in some internal disruption in the fourth quarter, which is a factor. We felt was prudent to take into account as we considered our approach to guidance for the remainder of the year.

What I can assure you is that our team has an unwavering commitment to our customers and the patients they serve and I expect we will demonstrate that commitment as we move through the fourth quarter and into next year.

Taking a closer look at the third quarter revenue was $29 4 million, which represents 3% growth over the third quarter of last year treating.

Treatment utilization was strong and we remain disciplined in our pricing across console and consumables.

Renee Gaeta: Sure. Yes, we did see an increased growth in console revenue over the third quarter of last year, which felt very positive. At the same time, as you noted, we were very frustrated and not pleased with our own execution in terms of our ability to consistently predict the timing of deal close. We have more work to do there. We can be better, and we will be better. I think it is important to recognize as we look forward that, and I noted in the prepared remarks, the order size, the order sizes of the individual deals in our pipeline, it has grown substantially. The average deal size has grown by about 20%. That has some implications, both sort of both good and challenging.

Speaker #1: Your conference will resume momentarily. Ladies and gentlemen, please stand by. Your conference call will resume momentarily. Again, ladies and gentlemen, please stand by. Ladies and gentlemen, please stand by.

We believe AFP strength indicate that customers see tableau appropriately priced for the value delivered and consistent utilization reinforces that once the unit is installed it's used and provides a long tail of recurring revenue.

We also were pleased with our progress executing against a clear path to cash flow breakeven and then profitability this topic and the topline growth and gross margin expansion. It includes disciplined spend management and it shows up in the both the significant reduction in cash used we project for 2025 and in the leverage we see to the bottom.

Why.

Additionally, our base of clinical financial and operational evidence supporting the advantages of in sourcing continues to grow last week. There were three new datasets presented at the annual kidney week conference.

Among the findings we presented data from more than $1 million tableau treatments across approximately 750 facilities that show the clinical effectiveness of in source dialysis in achieving rigorous treatment goals, including up to 24 hour treatment that typically involve the most critically ill patients.

Renee Gaeta: I think great in the sense that we are seeing demand and very high interest, as we noted, from the largest health systems in the country. We also have to be ready for the challenges of being able to predictably and consistently call the timing of when those deals are going to close. While I think we have made a really meaningful amount of progress, foundational progress over the last year, implementing a new sales process, new sales tools, hiring to a different sales profile, getting our organization really proficient at selling at the enterprise level, all those changes have taken root, and they really have helped to transform the organization. Our work is not done, and now it's time to refine and continue to improve our ability to control the deal timing and predict time to close. That's our next step here.

One of our customers adverse health also presented data from the conversion of their Ocala, Florida site to an in source dialysis service line with tableau.

Their results over five years showed a 94% reduction in serious cardiac or respiratory events a sustained reduction in central line bloodstream infections are very high nurse retention rate with greater than 95% dialysis staff satisfaction and a strong return on investment.

And the first two years of operation.

These results support the sentiment we hear from many nurse leaders, who believe that in sourcing with tableau should be the standard of care at any hospital that provides inpatient dialysis.

Rick Wise: Gotcha. Maybe just last for me for now, in looking for a new sales leader, Leslie, what kind of individual are you looking for? What kind of experience? What do you need them to bring? The unfair part of the question is, how quickly do you think you can make this happen? What are the implications of this sales leader transition for 2026? Are we more anxious now? Should we be more anxious about either the outlook for 2026, or the magnitude of 2026, or the way the 2026 year could unfold because of this particular issue? Thanks.

With that I'll turn it over to Renee for more detail on the quarter before I provide closing comments.

Thank you Leslie and good afternoon, everyone.

Revenue for the third quarter of $29 4 million consisted of $26 million in product revenue, which was slightly ahead of $20 3 million in the prior year period product revenue included console sales of $8 3 million in consumable sales of $12 2 million.

Service and other revenue of $8 9 million grew 6% from $8 4 million in the prior year period recurring revenue from the sale of tableau consumables and service was $21 1 million slightly ahead of the third quarter of 2024.

Speaker #1: Your conference call will resume momentarily. And pardon me, Jim.

Renee Gaeta: Of course. Sure. I'm happy to address all of that. Maybe I'll take it from the top. In terms of the criteria for our search, and I'll emphasize that the search is already underway, I'll address your question there in a second, Rick, around timing, but the search is underway. I don't think any of the criteria will surprise you, but I'll take you through it. First and foremost is a background in capital equipment. Number two, a background and strong track record in enterprise sales. Total conversion of health systems, total standardization of health systems, the ability to convert many hospitals inside a health system to standardization around one technology and one care delivery model.

Third quarter recurring revenue was dampened by ordering patterns for treatments across our large volume acute care customers that don't always perfectly mirror underlying utilization for example, during the quarter data from connected tableau consoles showed that several of our large acute care.

Customers performed twice as many treatments as they ordered.

Thus far in the fourth quarter, we have seen treatment orders accelerate.

To better match actual utilization, we expect treatment revenue to normalize next year as we lap the comparison to an unusually strong fourth quarter in 2024, and we see orders from our larger acute care customers catch up with our usage data.

Speaker #2: Oh, there we go. We're back. Can you hear us?

Speaker #1: We can, sir. If you want to just have Leslie start with her section, sir, we heard your portion and the line cut out when Leslie started.

Speaker #2: Okay. Yeah, we're ready to go, sir. Are you putting us back in the main, or are we back on?

Renee Gaeta: I would say maybe three, who has the capacity to act very strategically, but at the same time is extremely immersed in the details, sort of obsessed with the details and involved with the customer and with our sales team every step of the way. Last, I'll say somebody who is an exceptional coach, somebody who's an exceptional leader developer and will ensure that we continue to preserve what's great about Outset and our sales team right now, which is who they are as individuals, and in the collective from a culture standpoint. That's what we're going to have our eye on there, Rick, as we move forward in our search. I will say in terms of impact, let me start by several of our sales VPs were hired prior to Laura joining.

We also believe there are steps, we can take to help the ordering patterns of our customers more closely align with actual utilization.

Speaker #1: Yep, you guys are all good to go.

Speaker #2: Okay. Thank you.

Speaker #3: Go ahead. Thank you. Thanks, Jim, and.

To assist us with better visibility and forecasting.

We will be working to make these improvements during 2026.

Next I will 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.

non-GAAP gross margin expanded another 350 basis points from last year, reaching 39, 9% for the quarter, even with a 130 basis point headwind from the under absorption of manufacturing overhead.

Speaker #1: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Pardon me. Please stand by. Your conference will resume momentarily. Thank you for your patience, and please stand by.

Excluding the manufacturing headwind, we would have seen non-GAAP gross margin above 41% for the first time.

Renee Gaeta: I think it's important to note that we have really good tenure and, importantly, experience, both in acute and home in these top roles. I want to emphasize that. At the same time, we have many other very valuable team members who are serving in important roles and making meaningful contributions that remain very committed to Outset and our mission, and the opportunity here. I am very much looking forward to, as I know Renee is as well, getting even more directly engaged with the team, with the sales team now reporting to me and sales operations reporting to Renee, and getting even deeper engagement with our customers. That said, as Renee noted, whenever you make a change in sales leadership, you do see the potential for some distraction. What does that all mean in a practical level?

Product gross margin increased 250 basis points year over year to 45, 7% from 43, 2% in the third quarter of 2024.

Service and other gross margin was 24, 8% more than doubling from the 12, 5% we reported in the third quarter of 2024. This progress keeps us right on our path to the next milestone of 50%.

We are making progress against our plan to optimize inventory levels and gradually increased production, which further mitigates the gross margin impact of the manufacturing under absorption we have discussed all year.

For the full year I continue to expect a headwind of approximately 150 basis points, which will have a diminishing effect in 2026.

Renee Gaeta: It can mean fewer selling hours, right, as everybody sort of digests the change and gets ready for new leadership. We did feel it was prudent to account for this in our revised guidance. I am very confident that hiring a new sales leader will take us to the next level and help us get to the state of predictability and consistency around deal close timing that we're looking for.

Moving to operating expenses, we continue to see the positive impact of actions taken primarily during the second half of 2024 remove $80 million of annualized spend.

For the quarter non-GAAP operating expenses declined 17% to $22 1 million compared to $26 5 million in the third quarter of 2024.

Rick Wise: Thank you.

Renee Gaeta: Yeah.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Shagun Singh with RBC. Your line is open. Please go ahead.

non-GAAP operating loss was $10 4 million over 35% below the operating loss of $16 1 million in the prior year period.

non-GAAP net loss.

Shagun Singh: No, great. Thank you so much. Leslie, I just wanted to kind of touch on the visibility and the growth outlook for your business here. In 2025, you're delivering about 3% growth off of pretty easy comms last year. You're exiting the year with a 9% year-over-year decline. Firstly, what does that imply for 2026? I think consensus is at 10.5% year-over-year growth. Also, how do you think about the long-term growth of this business? Is this mid-single digit, high single digit, low double digit growth business? How should we think about it? It's definitely a large market opportunity, but how do you give investors conviction in the execution?

It was $12 4 million was 39% lower than $22 million in the third quarter of 2020 for these.

These measures reflect the positive results of our drive to profitability.

Moving to our balance sheet, we ended the quarter with $182 million in cash cash equivalents short term investments and restricted cash we used approximately $6 million in cash during the quarter driven by expanding gross margin lower operating expenses and the optimization of inventory levels.

Turning to our guidance for 2025, considering the factors Leslie and I have covered.

We revised our 2025 revenue guidance to a range of $115 million to $120 million from our prior guidance of $122 million to $126 million.

Renee Gaeta: Yeah, sure. Well, I'll start by reiterating something that you won't be surprised to hear me say. We haven't obviously provided guidance for any period past 2025, and obviously, we look forward to doing that in the future. I'm glad you touched on what hasn't changed, which is demand is growing. Despite the setback this quarter with deal timing, the deals in the pipeline are progressing, and the size of those deals continues to get larger. Our competitive differentiation, our insourcing ecosystem and moat, is getting wider, wider, and deeper. The console utilization remains very high and really consistent, which we've always felt is extremely important because utilization is the most direct reflection of the customer experience. It's something we're really proud of, and it continues to feed that foundation of recurring revenue.

We continue to expect gross margin for the full year to be in the high 30% range.

With.

Guards to operating expenses, we remain on track in the low $90 million range for 2025, the combination of revenue growth gross margin expansion and expense discipline means that we continue to expect to use less than $50 million of cash in 2025.

As a reminder, we used more than $100 million in 2024.

So we are trending towards more than a 50% reduction in operating cash use we continue to believe our cash balances are sufficient through cash flow breakeven and beyond.

With that I'll turn the call back over to Leslie for closing comments.

Thanks Renee.

Renee Gaeta: Obviously, what we saw this quarter is we still have work to do on this final piece of the commercial transformation, but we believe that work can be accelerated under new leadership. We do remain as optimistic and confident as ever about our future as we look forward because what we saw in the quarter, I don't want to trivialize it. We're not happy with it. We're not pleased with the execution, but what we saw in the quarter was a shift in timing. We do know we have more work to do on capital sales execution to better anticipate these deal dynamics with these larger and larger deals. That said, nothing has changed in our market opportunity, our technology, or know-how.

I want to close.

And that we operate in two large end markets, where we remain the clear technology leader. We are now approaching a thousand acute sites using tableau on a run rate of a million treatments per year, and we expect to close the year, having performed more than 3 million cumulative treatments on tableau systems.

We are gaining scale with significant growth runway ahead, as our installed base matures with hundreds of customer master sales and service agreements already in place or expansion opportunity within our current customer base alone is significant and on top of that we continue to convert new customers in this multibillion dollar acute care market.

Gross margin has reached a new high our operating expenses have been right sized and we are well capitalized with cash that puts us in a strong position to deliver on our long term mission and importantly, our technology in sourcing expertise and customer experience moat is getting wider and deeper.

Renee Gaeta: The core customer demand from larger and larger health systems really gives us even more confidence in our ability to grow revenue at differentiated rates in the future. That being said, I'll maybe transition from sort of my color over to Renee for any other comments. Yeah, sure. I think as you think about just reflecting on the update that we've provided with our 2025 guidance and the trim on that number, it's a good starting point for how we should be thinking about 2026. Of course, highlighting all of the factors that we talked about today. Change in sales leadership is something that you should probably also factor in in the near term.

All of this progress that's a powerful foundation for value creation over the long term customer demand for what only outset can offer continues to grow providers, including some of the largest health systems in the country are realizing the enormous clinical financial and operational advantages that in sourcing with tableau can deliver the market opportunity remain.

Wide open for us as we continue to improve our execution, which I believe will enable us to make significant progress in 2026 and beyond and with that I think we are ready for Q&A. Operator. Please open the lines if you will.

Renee Gaeta: I would just sort of reiterate around we aspire to be a higher growth, a company that has higher growth than 5% or 10%, and we believe that we've got the marketplace to do that. We just need to have some execution here on deal timing. The market has not changed, and the product has not changed.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.

Shagun Singh: Got it. Just a clarification question with respect to your comment on there is work remaining to be done. Have the forecasting changes or anything that you're doing in the background, is that completed? Is that behind you? You did talk about some ordering patterns and that you would work through that in 2026. Does that mean we should expect 2026 to be a transition year in any way, maybe first half, second half, any color? That would be great. Thank you for taking the questions.

Our first question is going to come from the line of Rick Wise with Stifel. Your line is open. Please go ahead.

Good afternoon.

Hum.

A lot of questions.

Maybe.

I think you make a persuasive.

Case for them.

Renee Gaeta: Yeah, sure. I think it really sort of depends on which revenue stream you're speaking to. I think on the console side, it's clear that deal close and transition of close to shipment is of most importance. That is something that we need to continue to refine. I would say it's probably the heaviest lift here in front of us. On the treatment side or the consumables, we get a ton of data from our connected Tablo devices and watch that on a monthly, if not daily, basis at this point, and notice that utilization remains strong. Really, it is just a timing issue with regards to the ordering pattern of a few large customers that didn't materialize in Q3. We have seen that those orders, Q4 orders, are beginning to more closely match utilization.

For the.

The factors behind the quarter performance and the change in guidance and the positive outlook, but.

Maybe come at this from a couple of directions.

Hum.

Speaker #1: Ladies and gentlemen, sorry for the inconvenience and the technical difficulties, but I would now like to let you know that our conference is will be resuming.

The guidance trim, the $6 million to $7 million at each end of the range is that.

One order three orders.

Speaker #1: Leslie, please go ahead, ma'am.

Okay.

Sure.

Speaker #3: Thank you. As they say, third time's the charm. Or I hope the third time is the charm. We'll see. Thanks for your patience, everybody, and thanks again for joining us.

Is that all reflective of that or is there extra insurance baked in.

Sure.

Must be incredibly frustrating.

Speaker #3: Before I get into the details of the quarter and our revised revenue guidance, I'd like to begin with a few key takeaways. First, while we've made significant progress transforming our sales process and strengthening our team, our third quarter results show that there's still work ahead.

Now.

Conservative are you being.

About this since you have as you cited.

One headquarters or per well youre, just getting the signatures and the other probe hospitals.

Maybe just talk us through all of that if you would for starters.

Renee Gaeta: Specific to that order or that area where we absolutely do need to do a bit more refinement, we need to get closer to our customers, more visibility. We believe that we're going to be able to take those steps to help understand their ordering patterns, their supply chain management, etc., so that we can fully have better forecasting on the treatment side. The consoles are being used. They are high utilization. That's remained consistent, and that's what's given us the strength for the opportunity ahead. I'll just maybe chime in one other thought, Shagun, on the console side because you had asked about, hey, is there sort of more new, kind of more foundational changes that are needed in this commercial transformation journey? I would say no. I mean, we have work to do to further cement the impact of all the changes.

Speaker #3: Several large opportunities that remain in the final stages of our sales process were forecasted for the third and fourth quarters, and we now expect them to close over the fourth quarter and into 2026.

Sure. Rick This is Renee I'll start sort of on the number of commentary and then I'll, let Leslie you sort of comment on our overall thinking beyond that but certainly the shortfall. The way we look about it is first of all with just what happened in the quarter right and so if you just look at Q3.

Speaker #3: This is a shift in timing, not in our expectations for closing these significant insourcing opportunities, with large nationally recognized health systems. As we've shifted towards selling enterprise-wide insourcing, we are managing very large opportunities that often span dozens of hospitals, within a large health system.

The driver for the short fall is a large console opportunity slipping from the third quarter into the fourth and so then we then took a took a step back and of course, when we're trying to think about guidance for the remainder of the year. We're looking at all of those deals that were slated for the back half of.

Speaker #3: For example, an opportunity we had forecasted to close in the third quarter required approvals from the executive leadership of more than a dozen different hospitals after approval at the corporate level.

The year that didn't close in Q3, and then anticipated to close in Q4 in <unk>.

Speaker #3: We need to, and I fully expect we will, better anticipate these deal dynamics going forward. We continue to make good progress on this particular opportunity, which we expect to realize via multiple orders spanning the remainder of the fourth quarter and into next year.

Where are we at with those deals and I would say there are again in sort of a couple of these larger enterprise deal, where we're trying to change.

The standard of care.

Renee Gaeta: Look, I mean, a lot of really great foundational work has taken place and taken root from sales process to enterprise selling, the sales rep profile, the sales rep structure. I mean, we would not have been able to get this far over the last year without all of it. Now we need to kind of fine-tune, focus on predictability, and the ability to better forecast the timing of deal close. There are certainly, suffice it to say, some lessons here from Q3 that we can and will apply to the predictability of deal close going forward, and we are going to get better as a result. There are no profound or foundational changes incremental to what we've already implemented here over the last year, Shagun. I just wanted to clarify that as well.

And therefore identifying that just being realistic about where we think that those are at.

Speaker #3: Second, hospital demand continues to grow. As a result of the clinical operational and financial benefits that can be achieved by insourcing dialysis without such proven technology, expert know-how, and exceptional service.

I would say factoring in the departure of our head of sales, but this is a disruptive could be a destructive situations and we're just being mindful of that when we forecast the remainder of our guidance for the year.

Speaker #3: We continue to see clear evidence that acute customer demand for insourcing with Tableau is growing, and we expect this will support growth for many years to come.

Got you.

Clear.

I don't know, whether you wanted to say something Leslie or shall I go ahead.

Oh, Yes. Please go ahead, Rick I thought that was great that by Rene Yes, very clear.

Speaker #3: Tableau Consult sales increased 8% in the third quarter, our pipeline grew meaningfully over last year, and the average size of our sales opportunities increased more than 20%.

I'm going to ask a couple of questions if I could but console revenues were better than we were thinking this quarter.

Speaker #3: The markets we serve are large, and we are changing practice within them. Third, our ability to expand gross margin to our next milestone of 50% comes into clear focus with each subsequent quarter of progress.

Again, I'm not sure how to balance the third quarter performance with the order timing commentary.

Operator: Thank you.

Renee Gaeta: Yeah.

That was encouraging.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Marisa, I thought, with BTIG. Your line is open. Please go ahead.

Speaker #3: Reaching nearly 40% non-gap gross margin in the third quarter and remaining disciplined and expense management provides fuel on our path to profitability. Turning to commercial execution, our third quarter results fell short of our expectations.

As the service can you talk more about what Youre seeing.

And just help us better understand the individual moving numbers and what we're looking at how that fits into this larger narrative youre sharing today.

Marie Thibault: Hi, good evening. Thanks for taking the questions. Just wanted to follow up to understand the consumable sales order timing issue a little bit more closely. Is that just sort of an issue of the hospitals maybe overordered, weren't as good on their own forecasting? I don't recall really hearing of this sort of difference between the treatment patterns and the order pattern happening in the recent past. Just want to understand that, what's being done to prevent it, and then sort of the timing of that coming back, right? Should we think of Q4 being order and revenue very similar to what we're used to seeing on utilization? Is there some pull forward or making up for some of the missed revenue in Q3? Does that extend into 2026? Just a little more clarity on that.

Speaker #3: Last week, I accepted the resignation of our head of sales. It was made the decision to retire. We have a strong sales leadership team in place that will now report to me directly as we conduct a search process, which is already underway.

Sure.

Yes, we did see.

And increased growth in console revenue over the third quarter of last year, which felt felt very positive.

And at the same time as you noted we were very frustrated and not pleased with our own execution in terms of our ability to consistently predict the timing of deal closed we have more work to do there we can be better and we will be better.

Speaker #3: This leadership change may result in some internal disruption in the fourth quarter, which is a factor we felt was prudent to take into account as we considered our approach to guidance for the remainder of the year.

Speaker #3: What I can assure you is that our team has an unwavering commitment to our customers and the patients they serve, and I expect we will demonstrate that commitment as we move through the fourth quarter and into next year.

I think it is important to recognize as we look forward.

Speaker #3: Taking a closer look at the third quarter, revenue was $29.4 million, which represents a 3% growth over the third quarter of last year. Treatment utilization was strong, and we remain disciplined in our pricing across consults and consumables.

And I noted in the prepared remarks that the <unk>.

Order size the order sizes of our individual deals in our pipeline. It has grown substantially the average deal size has grown by about 20%.

Renee Gaeta: Sure. I'm really happy to help give some more information and highlights here. I think ultimately, this is a limited group of higher volume customers that we saw for Q3, where we ultimately expected in that third month of the quarter for an additional order to be materialized, and that just didn't happen. Each customer is unique, right? They've got their own supply chain policies, practices, and management of their own balance sheets. We're going to get closer to that information. We're going to work on that incrementally to providing our customers with all of the information that we have on our side that we're seeing from a forecasting perspective and just having closer collaboration. This is, I would say, a defined set of customers that we need to go after and tackle this work, and we are absolutely committed to doing that for 2026.

That has some implications, but both sort of both good and challenging I think great in the sense that we are seeing demand and very high interest as we noted from the largest health systems in the country.

Speaker #3: We believe ASP's strengths indicate that customers see Tableau appropriately priced, for the value delivered, and consistent utilization reinforces that once a unit is installed, it's used, and provides a long tail of recurring revenue.

And we also have to be ready for the challenges of being able to predictably and consistently called.

Speaker #3: We also were pleased with our progress executing against a clear path to cash flow breakeven and then profitability. This path begins with top-line growth and gross margin expansion and includes disciplined spend management. It shows up in the significant reduction in cash use we project for 2025 and in the leverage we see to the bottom line.

Paul the timing of when those deals are going to close and so while I think we have made a are.

A really meaningful amount of progress foundational progress on over the last year implementing our new sales process, new sales tools hiring to a different sales profile getting our organization really proficient at selling at the enterprise level.

Speaker #3: Additionally, our base of clinical, financial, and operational evidence supporting the advantages of insourcing continues to grow. Last week, there were three new data sets presented at the annual kidney week conference.

All of those changes have taken root and they really have helped to transform the organization.

Renee Gaeta: I think what we're predicting for the back half of this year within our guidance range is more of a normalized what we saw for Q1 and Q2 of this year. To date, for the quarter, we have not seen any significant orders that we were in absence of what happened in Q3. We've seen, again, just very consistent ordering coming through in Q4, matching utilization, incrementally to, I think, how customers think about their balance sheets and their policies, right? They're also trying to predict the amount of activity that they're going to have in their hospitals. What does flu season look like? What do they expect just coming through the door? We just need to get closer to that information.

Our work is not done and and now it's time to refine and continue to improve our ability to to control the deal timing and predict kind of clock and that's.

Speaker #3: Among the findings, we presented data from more than 1 million Tableau treatments across approximately 750 facilities, that show the clinical effectiveness of insourced dialysis in achieving rigorous treatment goals including up to 24-hour treatments that typically involve the most critically ill patients.

That's our next step here.

Sure.

Last for me.

For now.

And looking for a new sales leader Leslie.

Speaker #3: One of our customers, Advent Health, also presented data from the conversion of their Ocala, Florida site to an insourced dialysis service line with Tableau.

What kind of individual you're looking for what kind of experience.

What do you need them to bring in.

And sort of the unfair part of the question is how quickly do you think you can make this happen and what are the implications of this.

Speaker #3: Their results over five years showed a 94% reduction in serious cardiac or respiratory events, a sustained reduction in central line bloodstream infections, a very high nurse retention rate, with greater than 95% dialysis staff satisfaction, and a strong return on investment in the first two years of operation.

Sales leader transition.

For 2006, our re more anxious now.

Renee Gaeta: I think our sales group has done a great start, and we just need to continue to get closer to the customer, specific to treatment utilization and treatment buying.

Should we be more anxious about.

The outlook for 'twenty, six or the magnitude of 26 or.

Speaker #3: These results support the sentiment we hear from many nurse leaders who believe that insourcing with Tableau should be the standard of care at any hospital that provides inpatient dialysis.

The way the 26 year could unfold because of this particular issue.

Operator: Okay. Understood. Thank you for that, Renee. A follow-up here on the console side and the head of sales resignation. When exactly in the quarter did that happen? Is there a way to sort of size up some of the guidance cut? How much of that is coming from sort of the timing issues around console orders closing versus some uncertainty about Salesforce disruption? Is there a way to kind of parse out what you're assuming in that $6 million guidance cut? Thanks again for taking the questions.

Thanks.

Of course sure I'm happy to address all of that maybe I'll take it from the top in terms of the criteria for our search and I'll emphasize that the searches is already underway and I'll address your question there in a second Rick around timing, but the search is underway.

Speaker #3: With that, I'll turn it over to Renee for more detail in the quarter. Before I provide closing comments.

Speaker #2: Thank you, Leslie. And good afternoon, everyone. Revenue for the third quarter of 29.4 million consisted of 20.6 million in product revenue, which was slightly ahead of 20.3 million in the prior year period.

Don't think any of the criteria will will surprise, you, but I'll take you through it.

First and foremost is a background in capital equipment.

Speaker #2: Product revenue included consult sales of $8.3 million and consumable sales of $12.2 million. Service and other revenue of $8.9 million grew 6% from $8.4 million in the prior year period.

Number two our background and strong track record in.

Renee Gaeta: Oh, of course. Yeah. Why don't I—I can start by addressing your first question, then Renee, if you have thoughts on guidance, I'll transition over to you. Marisa, to answer your question, the change in our sales leader occurred after the close of the quarter recently here. It was actually last week, so it was very recent. I think, look, I'm only reflecting back historically as I've seen these sorts of changes and evolutions in the past that there can be some time in the follow-on quarter where members of the commercial team naturally need time to kind of digest and absorb. That can, not always, but can lead to some distraction and less time available for selling forward. We were just trying to be cognizant of that and consider it as a factor, potential factor for the remainder of this year.

In enterprise sales total conversion of health systems total standardization of health systems.

The ability to convert.

Speaker #2: Recurring revenue from the sale of Tableau consumables and services was $21.1 million, slightly ahead of the third quarter of 2024. Third quarter recurring revenue was dampened by ordering patterns for treatments across our large-volume acute care customers that don't always perfectly mirror underlying utilization.

Many hospitals inside a health system to standardization around one technology in one click.

Care delivery model and someone I would say, maybe three who has the capacity to act very strategically but at the same time is extremely immersed in the details.

Sort of obsessed with the details and involved.

Speaker #2: For example, during the quarter, data from connected Tableau consults showed that several of our large acute care customers performed twice as many treatments as they ordered.

With the customer and with our sales team every step of the way.

And last I'll say somebody who has an exceptional coach.

Somebody who is an exceptional leader developer and will ensure that we continue to preserve.

Speaker #2: Thus far, in the fourth quarter, we have seen treatment orders accelerate, to better match actual utilization. We expect treatment revenue to normalize next year as we lapse the comparison to an unusually strong fourth quarter in 2024, and we see orders from our larger acute care customers catch up with our usage data.

What's great about that and our sales team right now, which is who they are as individuals and in the collective from a culture standpoint.

Renee Gaeta: I don't know if you want to pick up on anything further on the guidance.

What we're going to have our eye on their records we.

We move forward in our search I will say in terms of impact let me start by.

Operator: Yeah. I would say, Marie, specific to the console activity for third quarter, you might not be surprised in that console activity, because it's a capital sale, is generally in the third month of the quarter where we start to see visibility and what orders are going to be coming in. Late in September was that sort of where that activity fell through, similarly on the consumables, treatment ordering as well, sort of all late in the third month of the quarter. As we then looked towards what should we update guidance for for the year, what is our full year forecast, we took that into consideration as well as, as I mentioned, our full set of deal review for what was anticipated now for Q4. Where are those at? Current conversations, getting really close to the sales organization is to the timing of that event.

Speaker #2: We also believe there are steps we can take to help the ordering patterns of our customers more closely align with actual utilization, to assist us with better visibility and forecasting.

Several of our sales vps were hired prior to Laura joining so I think it's important to note that we have really good tenure and importantly experience both in acute and home and these top roles. So I want to emphasize that at the same time, we have many other very valuable team members, who are serving an important roles and.

Speaker #2: We will be working to make these improvements during 2026. Next, I will 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 gap to non-gap measures.

Making meaningful contributions that remain very committed to outset, our mission and the opportunity here.

I am.

Very much looking forward to either no rain at <unk> as well as getting even more directly engaged with the team with the sales team now reporting to me and sales operations, referring to Renee.

Speaker #2: Non-gap gross margin expanded another 350 basis points from last year, reaching 39.9% for the quarter, even with a 130 basis point headwind from the under absorption of manufacturing overhead.

And getting even deeper engagement with our customers.

That as Randy noted whenever you make a change in sales leadership.

Speaker #2: Excluding the manufacturing headwind, we would have seen non-gap gross margin above 41% for the first time. Product gross margin increased 250 basis points year over year, to 45.7% from 43.2% in the third quarter of 2024.

You do see the potential for some distraction what does that all mean in a practical level. It can mean for you.

Operator: That plus the resignation of our sales leader, we factored all of those in, and that's how we've come up with the guidance range of $115 to 120.

We're selling hours right as is everybody sort of digest the change in and get ready for new leadership. So we did feel it was prudent to account for this in our revised guidance, but I am I am very confident that.

Operator: Thanks so much. Thank you. One moment for our next question. Our next question comes from the line of Josh Jennings with TD Cowen. Your line is open. Please go ahead.

Speaker #2: Service and other gross margin was 24.8%, more than doubling from the 12.5% we reported in the third quarter of 2024. This progress keeps us right on our path to the next milestone of 50%.

Hiring a new sales leader will take us to the next level and help us get to the state of predictability and consistency around deal close timing that we're that we're looking for.

Josh Jennings: Good afternoon. Thank you. I was hoping to just follow up on the update on the guidance and just make sure that you're not seeing any orders fall out of the pipeline, not seeing any order cancellation. I believe you may have commented on that, but just to circle back on that if you haven't. Also, just on the Salesforce, have you seen much transition through the quarter? Is it really just the head of the sales organization that's departed? Is there any other transitions that you guys are considering in the guidance? Sorry, that's two questions in one, but I have one more.

Thank you.

Yes.

Thank you and one moment for our next question.

Speaker #2: We are making progress against our plan to optimize inventory levels and gradually increase production, which further mitigates the gross margin impact of the manufacturing under-absorption we have discussed all year.

Our next question comes from the line of shotgun thing with RBC. Your line is open. Please go ahead.

Great. Thank you so much Leslie I, just wanted to kind of touch on.

Speaker #2: For the full year, I continue to expect a headwind of approximately 150 basis points, which will have a diminishing effect in 2026. Moving to operating expenses.

The visibility and the growth outlook for your business here.

And 25 year, delivering about 3% growth off of pretty easy comps last year.

The year over the 9% year over year decline. So firstly, what does that imply for 2006 I think consensus is at 10, 5% year over year growth and then also how do you think about the long term growth of this business is this.

Speaker #2: We continue to see the positive impact of actions taken primarily during the second half of 2024 to remove 80 million of annualized spend. For the quarter, non-gap operating expenses declined 17% to 22.1 million, compared to 26.5 million in the third quarter of 2024.

Renee Gaeta: You're efficient, Josh. Thank you. Thanks for asking about the deal flow and sort of the deal progress. Short story long, no. None of the deals that were projected to close in Q3 and in Q4 have dropped out of the pipeline. The deal that we saw as a timing shift around out of Q3 forward specifically remains in the final stages of our sales process. I think we've given some color to that in the script just to hopefully provide some context about as we get up into these enterprise-wide deals with a dozen or dozens of hospitals, there are more and more stakeholders, and a much greater number of approvals as appropriate. It's a big decision on the part of the health system to downselect to one technology and in-source. We continue to work through all of those steps.

Mid single digit high single digit low double digit growth business, how should we think about it its definitely.

Large market opportunity, but how do you give investors conviction in the execution.

Speaker #2: Non-gap operating loss was 10.4 million, over 35% below the operating loss of 16.1 million in the prior year period. Non-gap net loss was 12.4 million, was 39% lower than 20.2 million in the third quarter of 2024.

Yeah.

Yeah, sure well I'll start.

Bye bye.

By reiterating something that you won't be surprised to hear me say, we haven't obviously provided guidance.

For any period past 2025, and obviously, we look forward to doing that in the future.

I'm glad you touched on what Hasnt changed.

Speaker #2: These measures reflect the positive results of our drive to profitability. Moving to our balance sheet. We ended the quarter with 182 million in cash, cash equivalents, short-term investments, and restricted cash.

Is demand is growing.

Despite the setback this quarter with with deal timing the deals in the pipeline are progressing and the size of those deals continues to get larger.

<unk> competitive differentiation.

Speaker #2: We used approximately 6 million dollars in cash during the quarter. Driven by expanding gross margin, lower operating expenses, and the optimization of inventory levels.

In sourcing ecosystem and moat is getting wider and wider and deeper in the console console utilization remains very high and really consistent which we've always felt is extremely important because utilization is the most direct reflection of the customer experience. It's something we're really proud of and it continues to feed.

Renee Gaeta: I think our sales team is taking all the right steps to close them. None of these opportunities have fallen out of the pipeline, which we feel very good about. In terms of the change in sales leadership, this is our primary change. As I mentioned, we have several of our sales vice presidents who were hired prior to Laura joining, so we do have really good tenure, experience, and commitment at that level. We do not have any other significant changes at this time at the VP level. We know we have a very, very committed team who believes in the change, that this is hard work. We are changing a space that has not changed in 40 years, and that is never easy to do.

Speaker #2: Turning to our guidance for 2025. Considering the factors Leslie and I have covered, we revised our 2025 revenue guidance to a range of 115 to 120 million, from our prior guidance of 122 to 126 million.

That foundation of recurring revenue.

Obviously, what we saw this quarter is we still have work to do.

Speaker #2: We continue to expect gross margin for the full year to be in the high 30% range. With regards to operating expenses, we remain on track in the low 90 million dollar range for 2025.

The final piece of the commercial transformation, but we believe that work can be accelerated under new leadership and so we do remain optimistic and confident as ever about our future as we look forward because what we saw in the in the quarter I don't want to trivialize. It we're not happy with it we're not pleased with the with the.

Speaker #2: The combination of revenue growth, gross margin expansion, and expense discipline means that we continue to expect to use less than $50 million of cash in 2025.

Execution, but what we saw in the quarter was a shift in timing.

Speaker #2: As a reminder, we used more than $100 million in 2024. So, we are trending towards more than a 50% reduction in operating cash use.

Do know we have more work to do on capital sales execution to better anticipate these deal dynamics with these larger and larger deals.

Speaker #2: We continue to believe our cash balances are sufficient through cash flow breakeven and beyond. With that, I'll turn the call back over to Leslie for closing comments.

But that said nothing has changed in our market opportunity our technology, our knowhow and the core customer demand from larger and larger health systems really gives us even more confidence in our ability to grow revenue at differentiated rate in the future, but that being said I'll maybe transition for my sort of my color over to Renee for any other comment.

Renee Gaeta: This is a resilient team, and this is a team who has never been more motivated to kind of make a permanent and profound change in this industry, both acute and home, for the benefit of ultimately the benefit of patients. We have a team that is ready to execute and ultimately to deliver on our long-term mission and achieve the differentiated growth rates we know are capable in such a large market with a technology leader.

Speaker #1: Thanks, Renee. I want to close by saying that we operate in two large end markets where we remain the clear technology leader. We are now approaching 1,000 acute sites using Tableau on a run rate of a million treatments per year.

Sure I think as you think about just reflecting on the update that we provided with our 2025 guidance and the trim on that number is a good starting point for how we should be thinking about 2026 of course, highlighting all of the factors that we talked about today. So no change in sales leadership is something that you.

Speaker #1: And we expect to close the year having performed more than 3 million cumulative treatments on Tableau systems. We are gaining scale with significant growth runway ahead as our install-based matures.

Josh Jennings: Thanks for that. Maybe just lastly, to circle up on just the home channel and your success there in Q3, and outlook for Q4, it sounds like the turbulence was in the acute channel. You have these MDO contracts in place with the five largest organizations. Anything of note to provide more detail there, and also in the SNIF channel? Thank you.

Speaker #1: With hundreds of customer master sales and service agreements already in place, our expansion opportunity within our current customer base alone is significant. And on top of that, we continue to convert new customers in this multi-billion dollar acute care market.

Probably also factor in in the near term and I would just sort of reiterate around we aspire to be a higher growth.

The company that have higher growth than five or 10% and we believe that we've got the marketplace to do that and we just need to have some execution here on deal timing and the market has not changed and the product has not changed.

Speaker #1: Gross margin has reached a new high. Our operating expenses have been right-sized, and we are well-capitalized with cash that puts us in a strong position to deliver on our long-term mission.

Renee Gaeta: Yes. Sure. Yes. Thanks for the question. On the home side, we always start by talking about the retention rate, which is foundational to growth. We have seen, again, this past quarter, very stable and high retention rates in the home population, even as that home population continues to grow, which is great to see. We have continued to see growth in the home programs of our largest MDO customers, which, again, we see as a direct reflection of their experience, and the experience of their patients. We continue to hear from the MDOs that their patients talk about a materially easier training time, materially easier use, day-to-day use, and this feeling better effect, which we do not talk about quarter over quarter on earnings calls.

Got it.

Speaker #1: And importantly, our technology insourcing expertise and customer experience moat is getting wider and deeper. All of this progress sets a powerful foundation for value creation over the long term.

Just a clarification question.

We expect to your comment on that.

There is work remaining to be done.

The forecasting changes or anything that youre doing in the background is that is that completed is that behind you and then you did talk about some ordering patterns and that you would work through that in 2026. So does that mean, we should expect six to be a transition year in any way maybe first half second half any color there would be great. Thank you for take.

Speaker #1: Customer demand for what only Outset can offer continues to grow. Providers, including some of the largest health systems in the country, are realizing the enormous clinical, financial, and operational advantages that insourcing with Tableau can deliver.

Speaker #1: The market opportunity remains wide open for us as we continue to improve our execution, which I believe will enable us to make significant progress in 2026 and beyond.

The questions.

Yeah sure I think it really depends on which revenue stream youre speaking to I think on the on the console side, it's clear that deal close and transition of close to shipment is of.

Speaker #1: And with that, I think we are ready for Q&A, Operator. Please open the lines, if you will.

Most important side is something that we need to continue to refine and I would say probably the heaviest lift here in front of us on the treatment side or the consumables.

Speaker #2: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Renee Gaeta: This feeling better effect has stayed with us, really, literally from patient one, talking about feeling physiologically better on Tablo at home and in the acute setting. We feel really good, actually, about the progress across the home and across these MDO customers, and into the SNIF opportunity, which we continue to look at as a whole future vector of additional growth in the home channel. Thanks for the question.

We get a ton of data from our connected tableau devices and watch that on a monthly if not daily basis at this point and noticed that utilization remained strong and so really it is just a timing issue with regards to the ordering pattern of a few large customers.

Speaker #2: One moment while we compile our Q&A roster. Our first question is going to come from the line of Rick Wise with Stifel. Your line is open.

Speaker #2: Please go ahead.

Speaker #3: Good afternoon. Leslie. Hi, Renee. A lot of questions just maybe—and I think you make a persuasive case for the factors behind the quarter performance, the change in guidance, and the positive outlook.

It didn't materialize in Q3, and we have seen that those orders Q4 orders are beginning to more closely match utilization.

Josh Jennings: Thank you, Dana.

Renee Gaeta: Yeah.

Specific to that order or that area, where we absolutely do need to do a bit more refinement, we need to get closer to our customers more visibility.

Josh Jennings: Thank you.

Operator: Thank you. One moment for our next question. We have a follow-up question from the line of Shagun Singh with RBC. Your line is open. Please go ahead.

Speaker #3: But maybe come at this from a couple of directions. The guidance trim, the six or seven million that each end of the range, is that one order, three orders, is it I mean, is that all reflective of that, or is there extra insurance baked in?

We believe that we're going to be able to take those steps to help understand their ordering patterns.

Shagun Singh: Great. Thank you so much. Just a quick follow-up on 2026. I think you said 2025 is a good proxy for 2026 as of now. I just wanted to make sure I heard that correctly. Also, just anything you can share on Q1, would you expect some of the orders that did not come in 2025 or Q4 to come in Q1 2026? We should expect a stronger Q1 versus the balance of the year. I know that this year in 2025, you started with a pretty broad range of 1% to 10%. Should we expect a wide range in 2026? Just any directional color on guidance philosophy would be helpful. Thank you.

Their supply chain management.

Et cetera, so that we can we can fully have better forecasting on the treatment side, but the consoles are being used they are high utilization that's remained consistent.

That's what's give us the strength for the opportunity.

Speaker #3: And it must be incredibly frustrating how conservative you are being about this since you have—as you cited—that one headquarters approval and you're just getting the signatures from the other 12 hospitals.

I'll, just maybe chime in one other thought on the console side because you had asked about hey is there.

More new kind of more foundational changes that are that are needed.

The commercial transformation journey, and I would say no I mean, we have work to do to further cement the impact.

Speaker #3: Just maybe just talk us through all that, if you would. For starters.

Speaker #1: Sure, Rick. This is Renee. I'll start sort of on the numbers commentary and then I'll let Leslie sort of comment on our overall thinking beyond that.

Of all the changes that but look I mean, a lot of really great foundational work has taken place.

<unk> and taken root from sales process to enterprise selling the sales rep profile of the sales rep structure. I mean, we we would not have been able to get this over the last year without without all of it and now we need to kind of fine tune focus on predictability and the ability to better forecast the timing of deal flows and there are certainly suffice it to say some lessons.

Renee Gaeta: Sure. I think to clarify on my statement specific to 2025, a good place to start is I specifically said we reduced 2025 guidance by, let's just calculate it, roughly $7 million. That's a good place for you to start when you're thinking about 2026 forward. I would say at this point, as we updated the orders from Q3 and Q4, they have now flipped into Q4 and into 2026. At this point, sort of forecasting forward into Q1 and specifically what our guidance range is going to be at that point, I'm just going to reserve the right to talk about that when we've got a full update on 2026 guidance.

Speaker #1: But certainly, the shortfall—the way we look at it is, first of all, just what happened in the quarter, right? And so if you just look at Q3, a primary driver for the shortfall is a large console opportunity.

Speaker #1: Flipping from the third quarter into the fourth. And so then we then took a step back. And of course, when we're trying to think about guidance for the remainder of the year, we're looking at all of those deals that were slated for the back half of the year that didn't close in Q3 and then anticipated to close in Q4.

Here from Q3 that we can and will apply to the predictability of deal close going forward and we are going to get better as a result, but.

There are no.

Profound or foundational changes incremental to what we've already.

Speaker #1: And where are we at with those deals? And I would say there are, again, sort of a couple of these larger enterprise deals where we are trying to change the standard of care and therefore identifying that just being realistic about where we think that those are at.

Implemented here over the last year as chicken, so I just wanted to clarify that as well.

Thank you.

Yes.

Thank you and one moment for our next question.

Operator: Thank you. Thank you. I would now like to—oh, hold on a moment. I see another follow-up. Just a moment. We have a follow-up question from the line of Rick Wise with Stifel. Your line is open. Please go ahead.

Our next question will come from the line of <unk> <unk>. Your line is open. Please go ahead.

Speaker #1: And I would say, factoring in the departure of our Head of Sales, that this is a disruptive, could be a disruptive situation, and we're just being mindful of that when we forecast the remainder of our guidance for the year.

Hi, good evening, thanks for taking the questions just wanted to follow up to understand the consumable sales order timing issue a little bit more closely.

Speaker #3: Gotcha. No, that's clear. I didn't know whether you wanted to say something, Leslie, or shall I go ahead?

Rick Wise: Sorry to put you on the spot, folks, but just listening to Shagun's question, I'm sort of thinking, is it impossible? Is it highly improbable that the $7 million or whatever the number is, is it impossible that it falls into the fourth quarter? I mean, or does it seem highly likely it won't? I mean, you see where I'm getting at. Sorry to put you on the spot.

Is that just sort of an issue of the hospitals, maybe over ordered werent as good on their own forecasting I don't recall really hearing of this sort of.

Speaker #1: Oh, yeah, please go ahead, Rick. I thought that was well said by Renee.

Speaker #3: Yeah, very clear. And I'm going to ask a couple of questions, if I could. But console revenues were better than we were thinking this quarter.

No difference between the treatment patterns on the order pattern happening in the recent past so just want to understand that what's being done to prevent it and then sort of.

The timing of that coming back right should we think of <unk>.

Speaker #3: Again, I'm not sure how to balance the third quarter performance with the order timing commentary. I mean, that was encouraging, as was the service.

Q4, being order and revenue very similar to what we're used to seeing on utilization is there some pull forward or making up for some of the missed.

Renee Gaeta: Oh, no, that's fine, Rick. As we were thinking about how to guide for the remainder of the year and for 2025, our philosophy took into account, again, the fact that we are changing the sales leadership and that some of these deals will close in Q4 and some will close into Q1. That new range of $115 to 120 million does not assume that all of the deals, again, if you think about a $7 million reduction, it does not assume that all those come into Q4. It's not to say that it's impossible or it could never happen, but, again, given all the factors at play here for the remainder of the year, we felt it was prudent to take this approach.

Speaker #3: Can you talk more about what you're seeing and just help us better understand the individual moving numbers and what we're looking at, and how that fits into this larger narrative you're sharing today?

Revenue in Q3 does that extend in the 2026, just a little more clarity on that.

Sure Murray happy to help give some more information and highlights here I think ultimately this is a.

Speaker #1: Sure. Yes, we did see an increased growth in console revenue over the third quarter of last year, which felt very positive. At the same time, as you noted, we were very frustrated and not pleased with our own execution in terms of our ability to consistently predict the timing of deal close.

Limited group of higher volume customers that we saw for Q3, where we ultimately expected in that third month of the quarter for an additional order to be materialized and that just didn't happen.

Each customer is unique right they've got their own supply chain policies and practices and management of their own balance sheets, and so we're going to get closer to that information.

Speaker #1: We have more work to do there. We can be better, and we will be better. I think it is important to recognize as we look forward that, and I noted in the prepared remarks, that the order size, the order sizes of the individual deals in our pipeline have grown substantially.

We're going to work on that incrementally to providing our customers with <unk>.

All of the information that we have on our side that we're seeing from a forecasting perspective, and just having closer collaboration this is I would say.

Rick Wise: Gotcha. Thank you, Leslie.

Renee Gaeta: Of course.

Operator: Thank you. I am now showing no further questions, and I would like to hand the conference back over to Leslie Trigg for closing remarks.

A defined set of customers that we need to go off after and tackle this work and we are absolutely committed to doing that.

Renee Gaeta: Thank you. Thank you again for your patience and bearing with our tough technical start there. I do appreciate everybody joining today, and I'd like to close by thanking our customers and our team for the meaningful difference they make every day in the lives of dialysis patients. Thank you all, and have a great evening.

Speaker #1: The average deal size has grown by about 20%. And that has some implications. But both sort of both good and challenging. I think great in the sense that we are seeing demand and very high interest as we noted from the largest health systems in the country.

For 2026 I think.

But.

What were predicting for the back half of this year within our guidance range is.

More of a normalized what we saw for Q1 and Q2 of this year.

To date for the quarter, we have not seen any significant orders in the world.

Speaker #1: And we also have to be ready for the challenges of being able to predictably and consistently call the timing of when those deals are going to close.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great evening.

In absence of what happened in Q3, we've seen again, just very consistent ordering coming through in Q4, 19 utilization incrementally to I think how customers think about their balance sheets and their policies right. They're also trying to predict.

Speaker #1: have made a really meaningful amount of progress foundational progress on over the last year implementing a new sales process, new sales tools, And so while I think we hiring to a different sales profile, getting our organization really proficient at selling at the enterprise level, all those changes have taken root and they really have helped to transform the organization.

The amount of activities that they are going to have in their hospitals, what as flu season look like what does what do they expect.

Just coming through the door and so we just need to get closer to that information I think our sales group has done a great start and we just need to continue to get closer to the customer specific to.

Speaker #1: Our work is not done. And now it's time to refine and continue to improve our ability to control the deal timing and predict time to close.

Treatment utilization and treatment buying.

Okay understood. Thank you for that and a follow up here on the console side and the head of sales resignation one exactly in the quarter did that happen and is there a way to sort of size up some of the guidance cut how much of that is coming from sort of the timing issues around console orders closed.

Speaker #1: And that's our next step here.

Speaker #3: Gotcha. And maybe just last for me, for now, in looking for a new sales leader—Leslie—what kind of individual are you looking for? What kind of experience?

Speaker #3: What do you need them to bring? And sort of the unfair part of the question is, how quickly do you think you can make this happen?

<unk> versus.

Some uncertainty about sales force disruptions or a way to kind of parse out what you're assuming in that $6 million guidance. Thanks again for taking the questions.

Speaker #3: And what are the implications of this sales leader transition for '26? Are we more anxious now? Should we be more anxious about either the outlook for '26 or the magnitude of '26 or the way the '26 year could unfold because of this particular issue?

Oh of course, yeah, why don't I I can start by addressing your first question. The M&A. If you have thoughts on guidance I'll transition over to you.

So marine out to answer your question.

The change in our sales leader occurred.

After the close of the quarter recently here.

And it was actually last week. So so it was it was very recent.

Speaker #3: Thanks.

Speaker #1: Of course. Sure. I'm happy to address all of that. Maybe I'll take it from the top. In terms of the criteria for our search, and I'll emphasize that the search is already underway and I'll address your question there in a second, Rick, around timing.

And.

I think.

Look I'm only reflecting back historically as I've seen these sorts of changes.

And evolutions in the past that there.

There can be some.

Time, and the follow on quarter, where.

Speaker #1: But the search is underway. I don't think any of the criteria will surprise you, but I'll take you through it. First and foremost is a background in capital equipment.

Members of the commercial team naturally need need time to kind of digest and.

Absorb and that can can not always that can lead to some distraction and less time available for.

For selling forward and so we were just trying to be.

Cognizant of that and consider it as a factor potential factor for the remainder of this year I don't know if you want to pick up on.

Are there on the guidance I would say Marie specific to the council activity for third quarter, you might not be surprised in that comparable activity because of the capital sale is generally in the third month of the quarter, where we start to see visibility in.

What orders are going to be coming in so late in September was that sort of where that activity fell through similarly on the consumables treatment ordering as well sort of all late in the third month of the quarter.

And as we then look towards what should we update guidance for for the year was our full year forecast.

We took that into consideration as well as as I mentioned, our full set.

Set of deal review for what was anticipated now for Q4, where are those that current conversations.

We're getting really close to the sales organization as to the timing of that event.

And that plus the resignation of our sales leader, we factored all of those in and that's how we've come up with the guidance range of $1 15 to 120.

Thanks, so much.

Thank you and one moment for our next question.

Our next question comes from the line of Josh Jennings with TD Cowen. Your line is open. Please go ahead.

Hi, Good afternoon. Thank you I was hoping to just follow up on the.

The update on the guidance just to make sure that youre not seeing any orders falling out of the pipeline I'm seeing any order cancellation. Please you may have comment on that.

Sure back on that if you have it.

And then also just on the.

On the sales force have you seen much transition.

For the quarter or is it really just the head of the sales organization and Thats. The part is there any other transitions that you guys are considering the guidance.

Two questions in one and then one more [laughter] youre efficient Josh Thank you [laughter].

Thanks for asking about the deal flow and sort of the deal progress.

Short story long no none of the deals that were projected to close in Q3, and Q4 have dropped out of the pipeline.

The the deal that we saw at the timing shifts around out of Q3 forward specifically remains in the final stages of our sales process and I think we've given some color to that in the script just to.

Hopefully provide some context about as we get up into these enterprise wide deals.

With a dozen or dozens of hospitals, there are more and more stakeholders and a much greater number of approvals.

Appropriate it's a big decision on the part of the health system.

Oh great, thank you so much. Um, Leslie. I just um, wanted to kind of touch on uh, you know, the the visibility and the growth outlook for your business here. Uh, you know, in 25 year delivering about 3% growth off of pretty easy. Coms last year, you know, exiting the year with a 9% year-over-year decline. So firstly, you know, what does that imply for 26? I think consensus is at 10 and a half percent year-over-year growth and then also, how do you think about the long-term growth of this?

<unk> to <unk>.

Down select to one technology and in source and so we continue to work through all those steps I think our sales team is taking all the right steps to close them.

None of these opportunities have fallen out of the out of the pipeline, which is which we felt we feel very good about.

Business is this, uh, mid single digit, High single digit, low, double digit growth business. You know, how should we think about it? It's definitely, uh, a large Market opportunity but, uh, you know, how do you give investors conviction in the execution?

Yeah, sure. Well, I'll start

And then in terms of the the change in sales leadership.

This is our this is our primary change as.

As I mentioned, we have.

Several of our sales Vice president.

Who were hired.

Prior to Lora Lora, joining and so we do have really good tenure experience and commitment at that level.

We don't have any other significant changes that at this time at the VP level and.

We know we have a very very committed team who believes in the change of it. This is this is hard work we are changing.

That hasnt changed in 40 years, and that's never easy to do.

But this is a resilient team and this is a team who has never been more motivated.

To kind of make a permanent and profound change in this industry, both acute and home for the benefit of ultimately the benefit of patients. So we have a team that is ready to execute and ultimately deliver on our long term mission and achieve the differentiated growth rates. We know we're capable in such a large market with.

With a technology leader.

And obviously we look forward to doing that in the future. Um, I I'm glad you touched on what hasn't changed, um, which is, you know demand is growing uh, despite the setback this quarter with um, with deal timing, the deals in in the pipeline are progressing and the size of those deals continues to get larger. Um, our competitive differentiation um, are you know, insourcing ecosystem, and moat um, is getting wide wider and wider and and deeper, and the con, the console utilization remains very high and really consistent, which we've always felt is extremely important. Because utilization is the most direct reflection of the customer experience that something we're really proud of. And it continues to feed that Foundation of recurring Revenue. Um, obviously, you know what we saw this quarter is we still have work to do um on um this this final piece of the commercial transformation um but we believe that work can be accelerated um under new leadership. And and so we do remain as optimistic and confident as ever about our

Thanks for that.

Just lastly to circle up on just the home channel and your success, there and three Q an outlook for <unk> it sounds like.

<unk> in the acute channel.

You have these MTO.

Contracts were pleased with the five largest organizations.

Yes.

Of note two to provide more detail there and then also in the Snip channel.

Thank you, yes sure yes. Thanks for the question on the home side, we always start by talking about the retention rate, which is foundational to growth and we have seen again this past quarter.

Future as we look forward. Um because you know what we saw in the in the quarter I don't want to trivialize it, we're not happy with it. We're not pleased with the with the execution, but what we saw in the quarter was a shift in timing. Um we do know we have more work to do on Capital sales execution to better anticipate these deal Dynamics with these larger and larger deals. Um but that said nothing has changed in our Market opportunity or technology or know-how and the core customer demand for from larger and larger Health Systems, um, really gives

<unk> stable and high retention rates in the home population, even as that population continues to grow which is great to see.

We have continued to see growth.

In the home programs of our largest customers, which again, we see as a direct reflection of their experience.

And the experience of their patients and we continue to hear from the MD <unk> that their patients talk about a materially easier training time materially easier use day to day use.

And its feeling better effect, which we don't talk about quarter over quarter on earnings calls.

Us even more confidence in our ability to grow Revenue at differentiated rates in the future. But that being said, I'll maybe transition from my sort of my color over to, um, Renee for any other comments. Yeah, sure. I think, as you think about, you know, just reflecting on the update that we've provided with our 2025 guidance and the, the trim on that, number it. It's a good starting point for how we should be thinking about, uh, 2026, of course, highlighting. All of the factors that we talked about today, so, you know, changing in sales leadership, would is something that you should probably also factor in, um, in the near term. And I would just sort of, reiterate around, you know, we aspire to be a higher growth, uh, a company that is have higher growth than 5 or 10% and we believe that we've got the marketplace to do that. Um, we just need to have some execution here on on Deal timing. And the market has not changed in the product has not changed.

But this feeling better effect has stayed with us really literally from patient one talking about feel.

Feeling physiologically better.

On tableau.

At home and in the acute setting and so we feel really good actually about the progress.

Across the home and across these end customers and into the SNP opportunity, which we continue to look at as a whole future vector of additional growth in the home channel.

Got it and, uh, just a clarification question. Um, you know, with respect to your comment on, you know, there is work remaining to be done. Um, have the the forecasting changes or anything that you're doing in the background? Is that is that completed? Is that behind you? And then you did talk about uh some ordering patterns and that you would work through that in 2026. So does that mean we should expect 26 to be a transition year in in any way? Maybe first top second half, any any color? That would be great. Thank you for taking the questions.

But thanks for the question.

Yeah.

Thank you.

Thank you and one moment for our next question.

We have a follow up question from the line of shotguns thing with RBC. Your line is open. Please go ahead.

Great. Thank you so much just a quick follow up on 26 I think you said 2025 is a good proxy for 2006 as of now.

I just wanted to make sure I heard that correctly and then also.

Just anything you can share on Q1.

Do you expect some of the orders that didn't come into <unk> and.

2025, Q4 to come in Q1, 26, so we should expect a stronger Q1 versus the balance of the year.

And then I know that this 225, you started with a pretty broad range of 1% to 10% should we expect a wide range in 2026, just any directional color on guidance philosophy would be helpful. Thank you.

Sure I think to clarify on my statement specific to 2025.

Yeah sure. I I think it really sort of depends on which Revenue stream, you're, you're speaking to I think on the on the console side it's clear that deal flows. Um, and transition of close to shipment is, um, of most importance. That is something that um, we need to continue to refine and I would say it's probably the the heaviest lift um, here in front of us on the treatment side, or the consumables. Um, you know, we we get a ton of data from our connected Tableau devices and watch that on a monthly, if not a daily basis at this point and notice that utilization remains strong. And so really, it is just a timing issue with regards to the ordering pattern of a few large customers, um, that that didn't materialize in in Q3. And we have seen that those orders, um, Q4 orders are beginning to more closely match utilization. Um, so specific to that order or that area, where we absolutely do need to do a bit more refinement. We need to get closer to our customers.

And the good place to start.

I, specifically said, we reduced 2025 guidance.

By let's just calculated roughly $7 million and so that's a good place to for you to start when you when youre thinking about 2026 forward.

And I would say at this point as we updated the orders from Q3 and Q4.

More visibility. Um, and we believe that we're going to be able to take those steps to help understand their ordering patterns, um, their supply chain management. Um, Etc. So that we can we can fully um, have a better forecasting on the treatment side. But the consoles are being used, um, they are high utilization, that's remain consistent and that's what's give us the strength for the opportunity ahead.

Have now flipped into Q4 and into 2026.

At this point sort of forecasting forward into Q1, and specifically what our guidance range is going to be at that point I'm just going to reserve the right to talk about that when we've got a full update on 2026 guidance.

Thank you.

Thank you and I would now like to hand hold on a moment.

Another follow up just a moment.

And we have a follow up question from the line of Rick Wise with Stifel. Your line is open. Please go ahead.

Yes.

Sorry to put you on the spot folks but.

Just listening to saga and discretion I'm sort of thinking.

Is it impossible is it highly improbable.

The $7 million or whatever the number is.

Sure.

And the ability to better forecast, the timing of deal flows. And there are certainly suffice it to say uh some lessons here from Q3 that we can and will apply to the predictability of deal closed going forward. And and we are going to get better as as a result. But um I there are no um,

Is it impossible, but it falls into the fourth quarter.

Or is it seems highly unlikely it wont I mean.

You see where I'm getting sorry to put you on the spot.

Profound or or foundational changes. Incremental to what we've already, uh, implemented here over the last year at Michigan. So I just wanted to to clarify that as well.

Thank you.

Oh, no that's fine.

Yeah.

As we were thinking about.

Thank you. And 1 moment for our next question.

How to guide.

For the remainder of the year and for 25.

Our next question will come from the line of Murray. Felt was btig. Your line is open. Please go ahead.

Our philosophy took into account again to the fact that we are changing the sales leadership and that some of these deals.

We'll close in Q4, and some will close into Q1, and so that new range of $1 15 to $1 20.

Does does not assume that all of the deals are again, if you think about a $7 million reduction it does not assume that all those come into Q4 as not to say that it's impossible or it could never happen, but again given all the factors at play here for the remainder of the year.

Hi, good evening, thanks for taking the questions. Um, just wanted to follow up to understand the consumable sales order timing issue a little bit more closely. Um, is that just sort of an issue of, you know, the hospitals, maybe over ordered, uh, weren't as good on their own forecasting. I don't recall really, really hearing of this sort of, um, you know, difference between the treatment patterns and the order patterning happening in the recent past. So I just want to understand that what's being done to prevent it and then sort of um, the timing of that coming back, right? Should we think of

We felt it was it was it was prudent to take this approach.

Gotcha. Thank you Melissa.

Of course.

Thank you and I am now showing no further questions and I would like to hand, the conference back over to Leslie trick for closing remarks.

Q4 being, uh, order and revenue, very similar to what we're used to seeing on utilization. Is there some pull-forward or making up for some of the missed, um, you know, revenue in Q3? Does that extend into 2026? Just a little more clarity on that?

Okay. Thank you and thank you again for your patience and bearing with our top technical start there.

I do appreciate everybody joining today and I'd like to close by thanking our customers and our team for the meaningful difference. They make every day and the lives of dialysis patients. So thank you all and have a great evening.

This concludes today's conference call. Thank you for participating and you may now disconnect everyone have a great evening.

Sure Marie. Happy to to help, give some more information and highlights here. I think, ultimately, this is a, a limited group of higher volume customers that we saw for the for Q3 where we ultimately expected in that third month of the quarter for an additional order to be materialized and that just didn't happen. Um, each customer is unique right. They've got their own supply chain policies and practices and managing of their own balance sheets. And so, we're going to get closer to that information. Um, we're going to work on that incrementally to providing our customers with all of the information that we have on our side that we're seeing from a forecasting perspective and and just having closer collaboration, this is, I would say um, a defined set of customers that we need to go off after and Tackle this work. And we are absolutely committed to doing that, um, for 2026, I think.

You know what, we're predicting for the the back half of this year within our guidance range is, you know, um, more of a normalized. What we saw for q1 and Q2 of this year, um, we to date for the quarter. We have not seen any significant orders that we were a, a, an absence of what happened in Q3. Um, we've seen again, just very consistent ordering coming through in Q4 19. Utilization. Um, incrementally to I think how customers think about their balance sheets and their policies, right? They're also trying to predict, um, the the amount of activities that they're going to have in their hospitals. What is flu season look like? What does you know, what do, what do they expect? Um, just coming through the door and so, we just need to get closer to that information. Um, I think our sales group, um, has done a great start, and we just need to continue to get closer to the customer specific to, um, treatment utilization, uh, and treatment buying

Okay, understood, thank you for that Renee. And and a follow up here on, uh, the console side, uh, and and the head of sales resignation when exactly in the quarter did that happen, and is there a way to sort of, uh, size up? You know, some of the guidance cut, how much of that is coming from? Sort of the timing issues around console orders closing versus, you know, some uncertainty about Salesforce disruption? Is there a way to kind of uh, parse out what you're assuming in that, uh, 6 million dollar, guidance cut and thanks again for taking the questions

Oh of course. Yeah. Um why don't I I can start by addressing your first question then Renee if you have um thoughts on guidance, I'll transition over to you. Um, so Mara to answer your question, um the change in our sales leader occurred. Um after the close of the quarter uh recently here, um, and it was actually last week. So um so it was it was very recent and um I think you know I

Consider it as a factor potential Factor, um, for the remainder of this year. Um, I don't know if you want to pick up on anything further on the guidance, I would say, Maurice specific to the the console activity, for third quarter. You might not be surprised in that, um, console activity because it's a capital sale is generally in the third month of the quarter where we start to see visibility and and what orders are going to be coming in. Um, so late in September was that sort of where that activity fell through. Similarly, on the consumables, uh, treatment ordering as well, sort of all late in in the third month of the quarter. Um and as we then looked towards, what should we update guidance for? For the year, what is our full year forecast? Um, that we took that into consideration as well as um, as I mentioned, our full

Set of Deal review for what was anticipated. Now for Q4, where those at current conversations um getting really close to, the sales organization is to the timing of that event. Um and that plus the resignation of our sales leader. We've factored all of those in um and that's how we've come up with the guidance range of 115 to 120.

Thank you. 1 moment for our next question.

Our next question comes from the line of Josh Jennings with TD cow and your line is open. Please go ahead.

Hi, good afternoon, thank you. I was hoping to just um follow up on

the, uh, the update on, on the guidance and just just make sure that you're not seeing any orders fall out of the pipeline, not seeing any order cancellation, I believe you may have comment on that, but just to

Circle back on that if you have it. And, um, and then also just on the, um, on the sales force, have you seen much transition through the quarter? Is it really just the the head of the sales organization that that's departed? Is, is there any other transitions that you guys are considering in the guidance? Sorry that's a

2 questions and 1 but I am and I have 1 more. You're efficient. Josh. Thank you.

Um, I'm thanks for asking about the deal flow and answer. The deal progress, um, short story long, uh, no, none of the deals that were projected to close in Q3 and and, and in, in before I have dropped out of the pipeline, um, the the the deal that we saw at the timing shift um around out of Q3 forward, specifically remains in the final stages of our sales process. And I think we'd given some color to that in the script just to um

Hopefully provide some context about as we get up into these Enterprise wide fields. And, you know, with with a dozen or dozens of hospitals, there are, you know, more and more stakeholders, and a, a much greater number of approvals. Um, as as appropriate, it's a big decision, um, on the part of the health system to um, to to down select to 1 technology and insource. And so, we continue to work through all of those steps in our sales team is, is taking all the right steps to close them. Uh, none of these opportunities have, um, have fallen out of the, out of the pipeline, which is, uh, which we feel. We feel very good about

Um, and then, in terms of the, um, the change in sales leadership, um, this is our, this is our, our primary change. Um, as I mentioned, we have, uh, several of our sales vice presidents, um, who were hired, um, prior to Laura joining. Um, and so we do have really good tenure experience and commitment at that level. Um, we we don't have any other a significant changes that at this time at the VP level. And, um, we know we have a very, very committed team, who believes in the change, is that this is this is hard work, we are changing um, a a space that hasn't changed in 40 years and that's never easy to do. Um, but this is a resilient team, um, and this is a team who has never been more motivated, um, to kind of make a permanent and profound change in this industry, both acute and home.

Um, for the benefit of, ultimately, the benefit of patient. So, um, we, we have a team that is ready to execute and ultimately to deliver on our long-term Mission and achieve the differentiated growth rates. We know are capable in such a large Market with, um, with the technology leader.

Thanks for that. And just lastly to...

Circle up on just the the home Channel and your success there in in 3 q and outlook for 4 q sounds like,

Thank you. Yeah, sure, yeah. Thanks for the question. Um, on the home side, we, we always start by talking about the retention rate, which is foundational to growth. And, um, we have seen again, this this past quarter, very, um, stable and and high retention rates, um, in the home population, even as that home population continues to grow, which is great to see. Um, we have continued to see growth, um, in the home programs of our largest, um, mdo customers which again, we see as a direct reflection of their experience, um, and the experience of their patients and we continue to hear from the M's that their patients talk about, um, a materially easier, training time, material easier, use a day-to-day use, um, and that's feeling better, in fact, which we don't talk about how quarter of a quarter on earnings calls. Um, but this feeling better effect has stayed with us. Um, really literally from patient 1 talking about

Uh, feeling physiologically better, um, on Tableau, um, at home and in the acute setting. And so we feel really good, um, actually about the progress, uh, across the home and across these MDO customers, and into the SNIP opportunity, which we continue to look at as, um, a whole, uh, future vector of additional growth in the home channel.

But thanks for the question.

Yeah.

Thank you.

Thank you. And 1 moment for our next question.

Uh, great. Thank you so much. Um, just a quick follow-up on, on 26. I think you said 2025 is a good proxy for 26 as of now. Um, uh, you know, I just wanted to make sure I heard that correctly and then also, uh, you know, just anything you can share on, on q1. You know, would you expect some of the orders that didn't come into into in 2025, or Q4 to come in q1 26? So we should expect a stronger q1 versus, uh, the balance of the year. Uh, and then I know that this year in 25, you started with a pretty broad range of 1 to 10%, should be expect a wide range in 2026. Just any directional color on guidance, philosophy would be helpful. Thank you.

Sure, I I think to clarify on my statement specific to 2025, um, and, and the good place to start is, um, I specifically said we were reduced 2025 guidance, uh, by let's just calculate it, roughly 7 million dollars. And so, that's a good place to for you to start when you when you're thinking about 2026 forward. Um, and I would say, you know, at this point as we have updated, the orders from Q3 and Q4, um, have

Now slipped into Q4 and into 2026. Um at this point sort of forecasting forward into q1 um and specifically what our guidance range is going to be at that point. I'm I'm just going to reserve the right to to talk about that when we've got a full update on 2026 guidance.

Thank you.

Thank you. And I would now like to have, oh, hold on a moment.

I see another follow-up. Just a moment.

uh,

sorry to put you on the spot folks, but uh, just listening to shagga in this question, I'm sure I was thinking.

Is it impossible? Is it highly improbable?

That the 7 million or whatever the number is, um, uh, is it impossible that it falls into the fourth quarter? I mean, or is it seemed highly likely, it won't? I mean, you you see where I'm getting at, sorry to put you on the spot.

Oh no, that's fine Rick. Um, as we were thinking about, um, how to guide, uh, for for the reindeer of the year, and for 25, um, our philosophy took into account again, the the fact that we are, you know, changing the, the sales leadership and

That um, some of these deals you know, will will close in Q4 and some will close in a q1 and so that new range of of 115 to 120. Um, does does not assume that all of the deals. Uh, again if you think about a 7 million, um, reduction it does not assume that all those come in to, to Q4, as not to say that it's impossible or it could never happen. But again, given all the factors, um, at play here for the remainder of the year, um, we felt it was, you know, it was, it was prudent to take this approach.

Gotcha, thank you Leslie.

Of course.

Back over to Leslie trick for closing remarks.

Okay. Thank you and and thank you again for your patience um and bearing with our our top technical support their. Um, I do appreciate everybody joining today and I'd like to close by thanking our our customers and and our team for the meaningful difference. They make every day in the lives of dialysis patients. Thank you all and have a great evening.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great evening.