Outset Medical Inc shares sank as much as 40% in pre-market trading on Friday after the medical technology company reported lower-than-expected preliminary third-quarter 2023 revenue of $30.4 million and warned of reduced capital spending in 4Q.
Outset also said it now expects revenue for 2023 to be about $130 million, down from the company’s previous forecast of $144 million to $150 million in August.
"Growth in the quarter was dampened by a larger-than-expected impact in the field from the recent FDA warning letter, and early signs of a more cautious outlook on capital spending that we see as a headwind continuing through the fourth quarter," Outset Medical CEO Leslie Trigg said in a statement.
"Importantly, we did not see deals fall out of our pipeline and our economic value proposition remains resonant and differentiated."
In August, Outset announced that it has paused the shipment of TabloCart with Prefiltration, an accessory for the Tablo System, pending the Food and Drug Administration’s clearance of a 510(k) premarket notification, which Outset said it planned to submit later in the month.
During 2Q, the company saw its net revenue rise 44% year over year to $36.0 million.
Outset Medical is pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis.
Shares of Outset Medical have fallen 73% year to date as of Thursday’s closing price of $6.77.
Contact Sean at sean@proactiveinvestors.com