Outset Medical, Inc. (NASDAQ:OM) Q4 2022 Earnings Call Transcript

Rick Wise: Got you. And one last one for me. I think in recent months you talked and maybe I missed it in your prepared comments. You had said you were something like 30 states and you had hoped to be in €“ or expected to be in 50 states by year end €˜22. I just want to be clear, did you achieve that? Number one. And number two, maybe relate that back to an aspect of operating leverage that struck me. That you can now, because of the size of your sales force, you can now penetrate accounts if I heard you correctly, without adding new reps. So if you have to add new states, how would you not need to add new reps? And maybe just expand on that, because I think it’s an important point. Will the sales force not need to grow from here? Thank you.

Leslie Trigg: Oh sure, yes sure, I’ll give some color and then kick it over to Nabeel to see specifics. I think what we were trying to point out €“ well, I’ll start on the acute side with sales force productivity, is that when you have a really, really strong foundation up in a large base of existing customers, as they start to proliferate Tablo programs across other hospitals in their network, you know there’s sort of a formula there. You don’t need to invent the wheel every single time, as a health system is expanding to hospital eight, nine, 10, 12, 25, etc. And so that makes our team much more efficient, because we’ve really got quite a good recipe book down in terms of how do you insource with Tablo and how do you make it a success.

And so that’s just an example of how our team has become much more efficient, which therefore allows us to do more with fewer. We do have broad coverage now. Tablo is used widely across the country, and yes Rick, you’re right, that also gives us some geographical test across the sales force and yes, it does allow us to expand without necessarily making a lot of additions to the sales force. We absolutely will continue to add to the team as needed, but those will be variable expenses that are tied to expansion revenue. So we don’t foresee big, big jumps in the size of the sales force, which is great news, and we’ve always talked about from an operating margin perspective, the fact that at scale we would start to see advantage from not necessarily needing to employ an army of thousands to reach our revenue target.

So, I continue to believe that this model is one that will €“ has already and will continue to produce operating leverage as we go forward.

Rick Wise: Great, thank you.

Operator: Thank you. One moment for our next question, please. It comes from the line of Shagun Singh with RBC Capital Markets. Please proceed.

Shagun Singh: Great! Thank you so much for taking the questions; one for Leslie and one for Nabeel. Leslie, could you talk about your home strategy in 2023 in maybe a little bit more detail; you know maybe the different buckets, the U.S. hospitals expanding to the home as well as how you’re thinking about opportunities with the dialysis clinic, perhaps with partnerships and just how you the incumbent in the home setting to respond? And you know as you think about the strategy in 2023, are there any major pushback that you expect? Anything in terms of risks that may be on top of your mind as you think about executing the home strategy? And then I have a question for Nabeel.