Outset Medical, Inc. (OM) Earnings Call Transcript & Summary

Good morning, everyone. I'm Steven Trainor, Vice President with Morgan Stanley. I'm happy to be hosting Outset Medical today. With us is Leslie Trigg, CEO; and Renee Gaeta, CFO. Before we dive in, I just want to note for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, let's get started. Thank you both for being here today.

Maybe to kick off, it would be great to get some overview on the history of Outset and how you guys have evolved since the IPO. A lot has changed over that time period. So maybe if you could provide investors some color on that to get started.

Sure. I'm happy to. Well, thanks again for having us. Maybe I'll take a quick step back and then kind of take a step forward. But the quick step back on what has not changed. We still operate in one of the largest markets in health care. We have a highly differentiated technology in a space that hasn't seen new technology in several decades with, as we sit here today, a paucity of competitors and a wide open runway for continued growth. So none of that has changed all in the best ways. What has changed principally, first and foremost is growth compared to kind of where we were in the 2020 IPO, Tablo is now used in over 900 hospitals and health care facilities across the country. As we closed '24, we had an installed base of roughly 6,000 consoles. And today, we are run rating to over 1 million treatments a year. So it's been really exciting to watch that develop and evolve in the acute in the post-acute settings. On the bottom line, we've made a lot of good progress as well. We started life as a public company with a negative gross margin back in 2020. And closed up last quarter, approaching 40% with a product gross margin just about touching 50%. So we're super proud of the team's efforts there and continue to make great progress. We also spent the last year to 18 months removing about $80 million of operating expenses and streamlining the business across the board which has put us in a really good shape to achieve profitability here in the near-term horizon.

That's great. I think a lot of those topics, we're going to dive in more, but that's a great overview.

Sounds good.

Thank you for that. So maybe talking about top line growth and the drivers really behind that. Last month, you reported Q2 results, which exceeded analyst estimates by 7%. So maybe just talk about what was driving that top line performance? And then how do you see that going forward in the second half of the year?

Sure. Yes. I mean we had tremendous results both in Q1 and in Q2. I think we've been really happy with, number one, our commercial transformation that we really started last year starting to present dividends this year, and we continue to expect that, that will present dividends going forward. Demand is strong for our product and growing. Our technology is really differentiated and our customers are starting to experience the significant financial, operational and clinical benefits of our products. And so as you look at our results for the quarter, we had product revenue growing at 20% year-over-year. Strong treatment utilization and growth of 17% for the quarter and for Q1 as well. So good, strong clean execution throughout the sort of revenue channels. And as we look forward to the back half of the year, that is certainly something that when we provided guidance, we do expect to see continued growth in 2025 and beyond.

Great. And maybe give us some color on when you think about the business model and going to market, how do you approach that? And obviously, console placement drives that. But maybe just give us some more color on how you go to market there.

Yes, I can start there. Well, so we operate in 2 very, very large end markets. The acute and the post-acute market, we sized at roughly about $2.5 billion and then the home market at over $9 billion. So starting there. The business model itself, and this is probably one of the most underappreciated aspects of Outset strength is the capital sale and recurring revenue model. And so we sell the capital upfront. And each one of those consoles when sold in place generates about $20,000 a year, effectively in perpetuity in the acute post-acute setting, and about $15,000 a year in disposables and service in the home. Together, those 2 components, capital sales driving this recurring revenue have resulted as we sit here today, an expectation that we will exit Q4 with over $100 million in recurring revenue alone. This is high margin, very predictable, very high visibility recurring revenue. We continue to add to that. It's a big part of our strategy. Our recurring revenue base, if you will, are the disposables, that are used during every treatment and then field service. Our field service team provides an exceptional experience that's translated in reattach rates annually for service that exceed 95%. So again, high visibility and high predictability there. But we continue to build incremental sort of recurring revenue streams around that in selling now EMR. We're fully connected and integrated in with Epic and Cerner. So that's a new recurring revenue stream and data analytics and things like implementation services as we move forward, all work together to give us a vision of higher and higher recurring revenue as a percentage of total revenue. But as we think about the acute market we're getting to go to market and what's really driving the uptake and the momentum there, it's really, as Renee alluded to, the financial, the clinical and the operational benefits that Tablo is providing. And the way that, that gets transmitted to hospitals is through a clinical service model change. Most hospitals for decades have outsourced dialysis to a third-party service provider such as DaVita or Fresenius or others. And it's really been kind of a set it and forget it model. These hospitals write very big checks every year for a third party to bring a nurse into the hospital to provide that dialysis treatment when it's needed. And that model does not always provide the highest clinical outcomes for the hospital. Patients often have to wait. And you can imagine somebody you know or yourself needing dialysis and having to wait in the IC or on the floor for 2, 3, 4, 10 hours for that outside nurse to come in and give you the treatment that you need. This service model in-sourcing dialysis and allowing the hospital to really control their own destiny they use their own nurses with Tablo to deliver the dialysis care that's needed when the patient needs it, not when it's convenient for the outside provider to provide it. So that's some of the clinical benefit. And then the financial cost reduction, we will typically see anywhere from, call it, a 50% to 75% reduction in the cost to the hospital dialysis when it is in-sourced with Tablo. So all of that is sort of fueling a value proposition that is evergreen, but probably never more important than it is today as many hospitals are looking for tangible ways to reduce cost and increase their margins.

That's great. I think we'll dive in the commercial organization a little bit more in a second. But going to gross margins, I know that's been a big theme for you this year in your earnings calls and also just in general since the IPO. But can you maybe talk about where you stand today, where you're trying to be longer term? And then what are you really doing to drive that expansion?

Yes, certainly. We are -- I would say, gross margin has been a point of pride for our organization. But we're not done yet. It is definitely a focus of ours. As Leslie mentioned, we went public with a negative gross margin, and we've been improving that and increase in gross margin every single year since. And we continue to plan to do so. So for the second quarter, we had a non-GAAP gross margin of 38.4%, which was 110 basis point improvement from the prior year. But also -- it still included a 100 basis point headwind from manufacturing under-absorption, which throughout 2026, will start to alleviate and go away. So we -- the team is absolutely focused to it every single day. Gross margin is impacted largely by not only console cost-down programs, efficiencies in our operations, but also, of course, revenue mix, what's the drivers of revenue. And so one of the things that we like to highlight and make sure people are aware, as we sort of reignite console growth on the revenue side, that will have a slightly dampening effect to gross margin in the near term and then -- but ultimately pulls through higher gross margin products when we get the treatment, the consumables and the service to pull through in the subsequent periods.

Great. And then maybe could you just unpack the aspect from the product and the service margin. And I think that's what you're getting at with as you implement them overtime?

Exactly. Yes. The product revenue specifically sort of the console aspect of it because that's the first item in a transaction that sort of gets sold. We've worked really, really hard to take the console and work down the cost and that the efficiencies, the scales and the manufacturing. And we've done, I think, a great job. We've got some -- probably some a little bit more tweaks to go there. We've also made significant efficiencies in our cartridge or treatment gross margins and then service, as you mentioned, is the third leg that we certainly highlighted in Q2, it is something that we saw a little bit of a retreatment there. It will ebb and flow and fluctuate, but we are 100% focused to it as an organization, how to optimize that service delivery, but also at the same time, ensuring that we continue to provide really strong customer service for those -- for our customers with regards to service and console uptime.

Great. And maybe moving to utilization. Can you talk about how that's trended and how that might look different in an acute and home?

Yes. It's remained remarkably consistent, I would say, just for some context to in the acute setting, it's roughly 4 to 5 treatments per week per console. And then in the home setting, it's about 3 to 4 treatments per week per console. Tablo is connected to the cloud. So we are able to track the identified information very closely, and we do so. We have noticed that once a console is placed, it is used.

That's great. And maybe let's talk more just about acute versus home more broadly and lending those markets. How are you growing today in each of those? And then longer term, how do you think about the penetration between those two?

Yes. I'll take that one. So in the acute and when we say acute just to define the terms we mean kind of critical care hospitals really of any size and then long-term acute care LTACs and rehab. And we've seen really strong growth across the board. To set the stage, we are now contracted with all 8 of the largest 8 players on the critical care side, all sort of brand names that you would be very familiar with across the country. And then we are also contracted with all 10 of the largest 10 LTACs and rehab. And again, many names that you would be familiar with there. So we size the acute, post-acute market on a console basis at about 40,000 to 45,000 consoles. So if you rewind the tape a bit and look at where we exited 2024 in terms of our installed base, we think we're about low double digits penetrated in the acute market. And again, what's really driving that rapid penetration is the value proposition. We are able to go into systems really of any size and pretty quickly tell them through some proprietary financial model that we have, exactly how much they're going to face through in-sourcing with Tablo. You're going to terminate your outsourced agreement with your third-party hire several dialysis nurses to work for the hospital, bring in Tablo and really, again, control your own destiny from a clinical standpoint, a financial standpoint and also an operational standpoint. One thing we've learned that I didn't know when we started all this, was that when hospitals have joint commission surveys, it is the one of the top 5 citations that hospitals typically get dinged on, is actually maintenance and the provision of dialysis. And if the hospital is outsourcing that, they don't control their own compliance either. And so I think this value proposition sort of continues to snowball and get stronger and stronger. We started with principally a financial value proposition, again, 50% to 75% cost reduction. What we have learned through our customers is how strong the clinical benefits are. For example, a growing number of hospitals through their Chief Nursing Officers has started to publish their results, for example, on a lower rate of hospital-acquired infections, a lower rate of dialysis patients coding during their visit kind of pre outsourced to post in-source much lower, lower length of stay. Because, again, those patients can be treated with dialysis when they need it, not when it's convenient for the outsource provider to deliver it. And so I think as more and more hospitals start to publish and share their results, we're starting to kind of see the beginning of a flywheel effect. That's only going to create more demand and allow us to progress those deals through the pipeline to close. So it's acute and post-acute, that's really fueling the majority of our growth. We view that as kind of Wave 1 of growth and we're, again, just getting started here with low double-digit penetration. And then kind of a Wave 2 is home. And these are interconnected because our intermediate to long-term vision is actually to work with the acute care customers to stand up their own home programs. Many, many health systems around the country do want to start their own home dialysis programs because increasingly, they are lacking ways to discharge dialysis patients as we're seeing waves of dialysis clinics continue to close, there's nowhere to discharge those patients. And so over the longer term, the acute and the home are actually knitted together using, again, our growing and increasingly large footprint of these 900 hospitals using Tablo for inpatient dialysis.

That's super helpful. And then you mentioned the Chief Nursing Officer. I know you're growing on full time. Maybe talk about how they've been effective in that role and how that -- you see that in the kind of sales process.

Sure. Yes. What we learned as we moved, I would say, from the super early adopters to the large health systems on mainstream adopters, what we really learned was how vital the Chief Nursing Officer, CNO, is to their decision-making. It's the CFO who's going to get excited about the financial cost reduction. It's the CNO that's going to do all the work. The Chief Financial Officer is not going to stand up a new insourced dialysis service line. It's the CNO. And that's one of the ways I think that we had to change and evolve in our sales process and understanding, hey, there's another really important stakeholder here that oftentimes we weren't paying enough attention to. And so as our footprint grew and we saw the vital importance of the Chief Nursing Officer to our sales process and increasingly by the CIO as well, and that was part of the reason why we went after this EMR integration. We realized that we would benefit as a team from having a Chief Nursing Officer, who had insourced with Tablo at a hospital. And that's exactly what she has done. And her own results were pretty stunning. I think her hospital experienced a 75% reduction in the CLAB stream or hospital-acquired infection rate. and something like almost a 300% increase in their patient volume in a 95-plus percent treatment success rate. So she's really been able to come in and kind of take her blueprint for success and implementation and share it with other CNOs at potential new customer sites. So it's been terrific to have her on board so far. But it really broadly speaks to, again, the importance of the CNO and kind of our C-suite sales process.

Great. And then obviously, your value proposition is very different than some competitors. But maybe just give us a view of the competitor landscape and then really what is the key thing you see when people are making decisions, why they picked Tablo?

Yes. It's something I was talking to some of the other day and they were asking the same question who's your competitor? And the truth of the matter is it's really behavior change is our competitor. And in that sense, we're no different than the other novel medical device company trying to get, whether it's a clinician or a health system executive just think about doing something different. But yes, I would say Inertia is our biggest competitor. It's kind of, well, this is the way we do it, and we've always done this way. And it's not working great, but it's fine. So that is our principal competitor. Now as we look kind of out onto the horizon kind of in the equipment space, we have sort of some of the incumbent players. As I mentioned, those technologies really have not materially evolved or advanced in decades. And we don't -- and we're not -- we're going to stay vigilant. We're certainly not going to take anybody for granted. But we don't see anybody on the device side that really has, I would say, the full package. And what do I mean by that? The technology is just the beginning, and this is something we've learned over the last 5 years of growing in this market, it goes far beyond the device. When you're helping a hospital make a, again, a clinical service model change, they need a trusted partner with know-how, and that know-how is actually around how do I insource a new service line? How do I terminate a service agreement with a third party and bring all this in-house? Where do I find the nursing staff? How do I train the nursing staff? What are all the steps and what's the right order of operations for those steps? And so we actually act as a change management partner now through that process. And we have kind of our own proprietary playbook for how to do this, number one. Number two, you need an incredibly strong service and support team. And as we now are supporting in the field an installed base of over 6,000 consoles, we've gotten really, really good at that. We provide an exceptional service experience day to day to day. We provide an immense amount of data now to the hospitals with proprietary data analytics, not only on all the clinical treatments. We have, I think, at last count, 3.5 or more trillion data points in our cloud. That's incredibly powerful for us and our customers, not only today, but moving forward, as you think about sort of the AI-enabled and machine learning algorithm tools that we can apply to the service experience and machine uptime that Renee alluded to, and even clinical data analytics in the future. And that's kind of everything that we bring to bear, really as a partner to these hospitals more than a advice provider. And that's quite unique, and those moats, we think, are going to be very durable for some time to come.

Great. And maybe just talking about the Tablo system itself. Like what makes it easy to use and maybe just explain how it's so different than some of the legacy systems that you're going in and helping change?

Well, I think it's evolved. I mean you've got sort of foundationally how is it different foundationally. It is the only system that in one small integrated 36-inch box, can -- but don't ask me that question, by the way, because this could be an hour just on the topic. But we were the first to have a single integrated system that purified water on demand, any kind of water. Made dialysis solution made the dialysate on demand customized to your prescription versus my prescription, that had never been done before. We were the first system to have 2-way wireless data transmission. So we, for example, all of our software updates are done OTA over the air, sort of Tesla style, which is now pretty commonplace across consumer products, but less so in the dialysis and critical care space. And we were the first to offer a system that was loaded up with over 70 sensors that automated a lot of the steps of set up. And so what's the so what who cares? Well, it has made it very fast to learn and maintain your competency on. There's nothing to memorize. There's no mental math. Tablo kind of almost does it all for you. And then how did we evolve it by putting again the kind of the rings of EMR interoperability around it, the data ring around it in data analytics, the field service experience and then later, our expertise around how you go from outsourced to insource. So the foundations remain highly differentiated, and those are still unique to Tablo. But we always kind of challenge ourselves how do we deliver more and how do we deliver more to our customers and to our patients, and we're not going to stop innovating.

Now maybe let's talk about the sales transformation. And as you penetrate these markets and getting people from outsourced to in-source, right? I know you've done a lot of work in the past year specifically and trying to change how you go about that. So maybe just give us an update on where that stands and what do you see that's left going forward for this year or next year on that specific transformation you're putting into place?

Yes, sure. Well, a little bit of the history behind it. It kind of goes back to your first question with sort of what's changed since the IPO. We grew very, very rapidly, early. And in hindsight, recognize where did that growth come from? In the acute space, it was really the classic early adopters. And our original sales team on the capital side did a great job with that customer segment. As we kind of earn the right to sell at an enterprise level, our deals now in our pipeline. What do I mean by enterprise level? I mean we're talking about health systems that may have dozens of hospitals. And their vision is, hey, we want to in-source, standardize to this notion of Tablo in-sourcing across the board. That is a very, very, very different sales process. You might be going back to the CNO, you might be dealing with 20 CNO and 20 CEOs and 20 CFOs because you've got to get buy-in kind of both at the local level and also at the corporate level. And that's a really different sales process. We didn't have that sales process. We had more of a classic device sales process, sort of 5 to 10 Tablos at one hospital and then you move on to the next hospital, the next hospital. So we recognized probably a bit too late, probably not probably, definitely too late that we needed a different skill set in our capital sales team. We needed a different sales process that was paired to the opportunity, this enterprise-wide opportunity. And we needed more powerful kind of data tools to help our team move those deals more predictably and more visibly through the sales process to close. And that is all the work that we undertook in late 2023 and through 2024. So where are we today, getting to the last part of your question, we've now had 3 quarters of -- and have a really, really good process. The leading indicators that we look to are #1, is the pipeline growing, is the customer demand growing, check. We grew the pipeline. We talked about this on the last earnings call. again sequentially and also year-over-year. So we do have the largest pipeline and amount of customer demand that we've ever had at least in several years, one. Two, we have more of those deals, a higher percentage of those deals in the later stages of our pipeline; and three, we're closing a higher percentage of deals. And so as we look to last quarter, it wasn't like we just closed one big deal and had a great quarter. I mean, the team closed a lot of business. And we saw existing customers expanding their use of Tablo within their network to new hospitals. And then we saw any number of like new larger customers coming to in-sourcing for the first time. So those are all the leading indicators that we look to having really now, I think, mostly accomplished what we set out to do across team and process and systems.

Great. And then maybe just talk about like the sales time line. And when you first reach out and obviously, it can be a long process of trying to get those decision makers on board, but maybe just give us a view of how that looks on average?

Sure. It's -- our typical sales process is somewhere in the 9- to 12-month range. That's actually been pretty stable and steady. We've been asked recently about capital spending and are we seeing any elongation in our sales cycle. And the short answer to that is no. We'll say knock on wood, so far so good. We haven't seen any change in the behavior in the acute world with regard to capital spending. So by and large, that 9 to 12 months has been very consistent for us. Do we see deals come in and close earlier than 9 months? Absolutely. Do we see bigger deals, hundreds of consoles that take longer than 12 months? Absolutely. And so there, of course, like anything else in life, there's a there's a range, but our mean has continued to hover in the 9 to 12 months to

Great. And in terms of the spending, there's been obviously talk on federal funding cuts impacting customers. I guess can you just talk about what you've seen there or heard or if you've seen any slowdown?

We have not. So we have not seen any slowdown. We are obviously keeping a very watchful eye in our weekly conversations with our acute and post-acute customers, but I have not seen any evidence for that. I think also what's really, again, unique about Tablo and our sales process is that we are delivering a very large amount of value to the customer in a very short amount of time. That hospital will see kind of day 1 dollar one savings. The cost reduction we're talking about is very tangible. It's -- we are going to invoice you less money for your supplies. You are going to be paying your own nurses less money than you're paying your outsourced providers. So it's very easy to see, and it shows up effectively the first day that they plug in Tablo and treat on it for the first time. So I think that's helpful. Also, a hospital is not spending millions of dollars on the capital acquisition of Tablo. So it's a relatively low capital acquisition cost. And when we've looked at the payback periods for most hospitals, it's inside of 12 months. That will vary by their volume, right? And their utilization, are they using Tablo in the ICU, where they have longer dialysis treatments, and so they're going to have a little fewer treatments per week versus outside the ICU, they're running regular 3- to 4-hour treatments and they might be using Tablo several times a day. So it is dependent on volume but across the board and our customer base, typically that payback period is under 12 months. So I think all of those things tend to kind of elevate Tablo up the priority list, if you will, as hospitals are thinking about their capital spending decisions.

Great. Talked about console growth margins. The other priority is obviously profitability. So let's maybe talk about that and how the plans to reach profitability? And then how do you feel like when you'll get there and what you're targeting over coming months?

Yes, sure. I mean, as we've talked about this sort of commercial transformation and all of the changes that the organization has gone through, one of those levers that we took was to really reduce the OpEx spend as well, really get narrowed focus on exactly knowing what we're going to execute on for 2025. And I can tell you across the organization, those are very clear. And so we've treated out about $80 million in OpEx spend out of the P&L. You can see that those decisions are materializing in our financial statements which is fantastic and the teams are definitely focused to it and executing consistently. We know that near-term profitability is important to not only us, to our shareholders as well. And I don't see any reason why that's not going to continue to execute for 2026 and beyond. We are marching towards it. I think importantly, to understand not only on the OpEx side, also on the cash burn side because that's important. We had over $100 million of cash burn in 2024. This year, we have committed to less than $50 million, and we are absolutely marching towards that. Those together in combination. I think that our cash burn will then even step down even lower in 2026 on an annual basis. So we are marching towards it and cannot wait to be excited enough to get to that point.

That's great. Maybe just talking about your guidance. So you raised and narrowed your guidance to $122 million to $126 million. This suggests some slower growth perhaps since the second half of the year versus the first half of the year. Can you just kind of talk about that? And then what's your philosophy on guidance overall? And how should the Street think about those numbers?

Sure. Yes, as we came into 2025, we did -- we set a range of $115 million to $125 million, a little bit of a wider range and had initially started with and have continued the messaging around being conservative for this year. We are executing against that plan, really excited about the momentum in the business. And I think one important point when you look at our updated guidance, the midpoint of our range does indicate a slight growth in the second half of the year versus the first half of the year. But again, back to the commitment to a conservative guidance and issuing guidance for the year and tracking against that goal.

Okay. And then what color could you maybe give on '26? I know you can't provide guidance yet, but how are you thinking about that? And then maybe just higher level on the growth profile for next year and the year

Yes. I think as you think about guidance, we've set for this year, you're right, quantitatively, we have not spoken to 2026. We will do that in due time, and we're really excited about that when we come through the beginning of the year, as we think about what are qualitatively sort of the drivers there. Everything that we've stated today and focused on for 2025, we'll continue to pay dividends into 2026 and beyond, quite frankly. Growth, return to revenue growth, seeing growth in all portions of our revenue stream, but in particular, that first initial sale into console growth is extremely important to us. And there is no reason that I see that we will not continue to be sort of in the range of med tech, high-growth companies. That is absolutely our target.

Great. And maybe just one more. I know you touched on cash and your goal of this year using under $50 million. But maybe just talk about how the balance sheet looks today and how you view that between now and becoming profitable?

Yes, with the recapitalization and we refinance the debt, our balance sheet is very strong. We have plenty of cash on the balance sheet to get us through to profitability and breakeven and we've sort of moderated or rightsize the debt position. That also includes the bad debt is interest-only during the term with the balloon payment at the end. So that gives us the flexibility to really run our business and make the strategic decisions that we need. And so we feel very comfortable with our balance sheet and therefore, the ability to continue to push and invest in growth but also optimize towards profitability ultimately.

Great. And then maybe we only have a few minutes left, just higher level, maybe give us some thoughts on the next 3 to 5 years, how you think about strategic priorities? And where do you really see the company going by 2030, for example?

Yes. Well, as I look out to 2030, which is even difficult to imagine, my first goal is to stay alive. So hopefully, that will materialize. But I think the picture I have a outset in my mind. Number one, we are the industry-leading partner for acute and post-acute care hands down. I envision that in-sourcing is so commonplace that it will seem weird if a hospital is still outsourced. In terms of our own growth, I would imagine that our market penetration, our share of the acute space would be commensurate with an industry-leading position, and there is no reason why that will not happen as we sit here today. I also think that as an organization, we will have the opportunity to realize this vision of acute to home and have an opportunity to change the channel through which patients can access home dialysis. Us as an organization, we will continue to grow in home and be able to realize the benefits, and that are pretty profound actually for patients who are able to leave a dialysis clinic and enjoy all of the very obvious benefits, again, around controlling their own destiny at home, and that we'll have an opportunity to do that in a multichannel fashion. In terms of the complexion of the organization, as Renee alluded to, I think we will be well into enjoying the many benefits of being a profitable organization, a sustainably profitable organization. that is still growing at a very differentiated rate compared to our med tech peers and has an enviable gross margin. So that's the vision. And there's no reason now as we sit here with the team transformed and the technology lead that we have kind of the experience and the know-how and the learning some of it through the school of Hard Knox, but we'll take it that we can't execute and reach that vision.

Great. Thank you. And then maybe just to close it out, any thoughts for investors maybe something that's less appreciated in the story or something that people should focus on more as they think about the opportunity?

Sure, well, maybe 2 things that come to mind to circle back. One, I think, is the strength of the recurring revenue business model. And even I underappreciated that when we first kind of got started. But as we sit here today with roughly kind of 65% of our revenue recurring, highly predictable, high gross margin and a lot of visibility to that. I think it speaks to the user experience as well. customers, whether patients or hospitals don't continue to use products that don't work. And so one of the reasons that I think we're really proud of the recurring revenue streams that we have is that it does speak to the retention, both retention at home being very, very high and retention of our acute customers being very, very high. So I think the recurring -- the power of the recurring revenue business model is probably a little underappreciated and I think the strength of Outset as a growing powerhouse in the acute care space is probably a little underappreciated and just how big this market really is. By the way, $2.5 billion, that's U.S. only, right? And so as we think out, whether it's 2030 or beyond, there's also a big bad world out there that we can take advantage of. So I think probably those are the 2 elements, kind of acute care powerhouse and the strength of the growing recurring revenue foundation that we're really proud of and maybe a bit underappreciated by investors.

Great. Thank you. Well, thanks for being with us today and really appreciate it.

Thank you so much. Appreciate it as well.