After signing to Independiente, they took time working on new material, until early 2004, when they recorded their next album at Olympic Studios in London with producer Martin "Youth" Glover.

In the early months of 2005, the band toured the UK a third time, "Looking as You Are" was released as the third single from the album in February 2005, and they played their first-ever shows in the United States.

He acknowledged that while Embrace had made a third album, the general music-buying "public had lost interest in their melodramatic epic rock and moved on".

McNamara mentioned that he had been spending sometime in London writing material while the other members were building a recording studio, and that they were aiming to release a new single later in the year.

[11][13] According to McNamara, MacDonald told the band he was impressed with their live performances and that they had high-quality songwriting but had "never made a classic album", which was something he wanted for the label.

[12][14] Bassist Steve Firth said by this point, they had grown accustomed to outside opinions, something they used to block out, allowing for an easier process when working with Youth.

[12][15] Clive Goddard served as engineer, while Paul "P Dub" Walton recorded the strings; they were assisted by Phillipe Rose, Sam Miller and Bea Kenkel.

[19] The Guardian writer Dorian Lynskey said in a "revisionist twist [Embrace] are being spoken of not as post-Oasis stragglers but as big-hearted forbears of Keane and Coldplay".

[20][21] Adam Knott of Sputnikmusic said the guitars aim for the "rafters of packed arenas, layered and interesting but never dense enough for their effect to become masked", while the piano parts "max out the heart, whether that be in search of a massive crescendo or a gentle introduction".

Wil Malone served as orchestra leader and wrote the majority of the string arrangements, bar the ones for "Someday" and "Spell It Out", which were done by keyboardist Mickey Dale.

Close to the end of the recording sessions, they jammed material as a unit for an hour at the encouragement of Youth, resulting in two songs, namely "Near Life" and "Out of Nothing".

[12] Out of Nothing opens with the pop rock song "Ashes", which Pitchfork reviewer Sam Ubl said "captures the feel of post-personal disaster perspective-shift", and was compared to "Pounding" (2002) by Doves.

[38] Richard McNamara described the song as Mercury Rev-like vocals over a guitar riff styled after "Everybody Wants to Rule the World" (1985) by Tears for Fears.

[19][27][40] When Dale heard it, he asked the band if they were attempting to recreate the sound of Harvest (1972) by Neil Young, which Youth thought was a good idea.

[41] "Keeping" is a love song about an ex-partner that PopMatters' Michael Franco said starts off with a "recurring instrumental melody, then builds to a lofty chorus, spacious guitars, and really pretty crescendos", which he felt also described the following track, "Spell It Out".

[21][42] The latter was originally named "Pocket to the Sun" and written by Richard McNamara on a piano, which Dale thought it was similar to the work of the Flaming Lips.

[51] They promoted the "Gravity" single with a one-off show at the Shepherd's Bush Empire venue in London, prior to the release of Out of Nothing on 13 September 2004.

[21] To promote the album, the band told fans via text messages about secret gigs they were holding, one of which including a performance in Mallorca.

[55] They closed out the year appearing at a benefit gig for Shelter, alongside Kasabian and the Zutons, and a secret show at the Carnglaze Caverns in Cornwall.

[62][63] Following a warm up gig at a fan's house, the band played two hometown shows in Leeds at the Millennium Square, which were dubbed A Glorious Day, at the end of May 2005.

[68] The two A Glorious Day shows were released on DVD in 2005 through the company Eagle Vision, which also included all of the musics from Out of Nothing as well as a documentary and a fan film.

[77] The music video for "Gravity", which features a cameo from Youth, was filmed at Abbey Road Studios the previous month and shows the band performing the track.

[81] Two versions were released on CD: the first with "Maybe I Wish", and the second with "Flaming Red Hair" and a live cover of "How Come" by D12 as the B-sides, alongside the music video for "Ashes".

[82][83] The "Ashes" video sees the band performing in a dark, dusty, abandoned theatre that subsequently restores itself and gets brighter as the song plays out.

[40] Karim Adab of Stylus Magazine wrote that the album "sees them take off like an Exocet, obliterate all targets and then ricochet off under their own control".

[99] Laut.de writer Vicky Butscher noted that it was "faster and louder" than their second studio album Drawn from Memory (2000), which she felt minimized the "emotional power of the balladesque pieces".

[20] Franco added to this, saying that "all the ingredients of the [Coldplay] recipe are here, right down to the lazy rhymes, cornball lyrics, 'uplifting' choruses, and all manner of inspirational platitudes".

[21] The staff at Uncut said that after the opening three tracks, the album "sags—the old, pedestrian Embrace return, and Danny McNamara's mawkish lowing grates".

Launch reviewer Adam Webb said the track names "reveals a band with little imagination beyond recycling 'meaningful' clichés" as it "really detracts from the heartfelt nature of the music".

[102] Stephen Ackroyd of This Is Fake DIY summarised his criticism of the album as: "there are well crafted songs here, good arrangements - the basic parts are all there.