Outset Medical, Inc. Revenue Disclosure
3. Revenue from Contracts with Customers
Disaggregation of Revenue
Revenue by source consisted of the following (in thousands):
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Years Ended December 31, |
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2025 |
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2024 |
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2023 |
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Consoles |
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$ |
30,733 |
|
|
$ |
29,832 |
|
|
$ |
61,331 |
|
Consumables |
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|
54,075 |
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|
|
51,145 |
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|
|
42,206 |
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Total product revenue |
|
|
84,808 |
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|
|
80,977 |
|
|
|
103,537 |
|
Service and other revenue |
|
|
34,668 |
|
|
|
32,712 |
|
|
|
26,839 |
|
Total revenue |
|
$ |
119,476 |
|
|
$ |
113,689 |
|
|
$ |
130,376 |
|
Remaining Performance Obligations and Contract Liabilities
As of December 31, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations related to service agreements that are unsatisfied or partially unsatisfied was $14.2 million, which is recorded as deferred revenue on the Company’s balance sheet. Of that amount, $13.8 million will be recognized as revenue during the year ended December 31, 2026 and $0.4 million thereafter.
The contract liabilities consist of deferred revenue which represents payments received in advance of revenue recognition. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $11.2 million, $11.6 million and $8.7 million, respectively, of previously deferred revenue.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.