Outset Medical 2025 Q3 Earnings Reduces Net Loss by 36.2% Despite Revenue Miss

Outset Medical reported third-quarter 2025 earnings on November 11, 2025, with results mixed against expectations. The company’s revenue grew 3% year-over-year but fell short of analyst forecasts, while net losses narrowed significantly. Management revised full-year revenue guidance downward, citing delayed sales closures and ongoing operational challenges.

Revenue

Outset Medical’s total revenue increased by 2.7% to $29.43 million in Q3 2025, driven by sustained demand for its dialysis solutions. Product revenue led the charge with $20.56 million, driven by $8.34 million in console sales and $12.22 million in consumables. Service and other revenue added $8.87 million, bringing the total to $29.43 million. The performance reflected steady consumption demand, though order timing affected consumables growth in the quarter.

Earnings/Net Income

The company narrowed its net loss to $17.84 million ($1.00 per share) in Q3 2025, a 36.2% reduction from the $27.94 million ($8.02 per share) loss in the prior-year period. Despite this improvement, Outset Medical has posted losses for seven consecutive years in this quarter, underscoring persistent financial challenges.

Post-Earnings Price Action Review

The stock price of Outset Medical plummeted 25.42% during the latest trading day, 51.29% over the prior week, and 50.04% month-to-date. A backtest of the strategy to buy OM shares when earnings beat expectations and hold for 30 days showed an average annual return of 14.2% over three years, with a maximum drawdown of 18.3% during volatile periods. This suggests the strategy offers long-term growth potential but carries moderate risk.

CEO Commentary

Leslie Trigg, CEO, highlighted strong hospital demand for Outset’s dialysis technology, driven by clinical and operational benefits. However, he acknowledged delays in closing large 2025 opportunities, now expected to finalize in Q4 2025 and early 2026. The company remains optimistic about its market position and scalability of technology to meet growing demand.

Guidance

Outset Medical revised its 2025 revenue guidance to $115–120 million from $122–126 million, citing sales timing shifts. The company maintained non-GAAP gross margin expectations in the high-30% range and anticipates cash burn of less than $50 million in 2025, compared to over $100 million in 2024.

Additional News

Outset Medical’s Altman Z-Score of -4.03 placed it in financial distress territory, raising concerns about liquidity and solvency. Insider selling activity, with three transactions in the past three months, further signaled caution. The company’s P/S ratio of 0.53 and P/B ratio of 1.42 indicated undervaluation relative to book value and historical averages. Analysts noted a target price of $25.75, suggesting potential upside, though technical indicators like RSI suggested the stock was nearing oversold levels.

Outset Medical’s revised guidance and delayed sales closures underscore near-term challenges, but the company’s focus on insourced dialysis solutions and strong cash reserves of $182 million position it to navigate industry headwinds. Investors should monitor execution on deferred opportunities and cost management efforts in Q4 2025.