Pulmonx(LUNG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Worldwide sales for the first quarter of 2025 reached $22.5 million, representing a 20% increase year-over-year and a 21% increase on a constant currency basis [6][30] - U.S. revenue for the first quarter was $14.2 million, an 11% increase from $12.9 million in the prior year [31] - International revenue was $8.3 million, a 39% increase from $6 million during the same period last year, and a 43% increase on a constant currency basis [31][32] - Gross margin for the first quarter was 73%, down from 75% in the prior year [32] - Total operating expenses were $30.9 million, an 8% increase from $28.6 million in the first quarter of 2024 [33] - Net loss for the first quarter was $14.4 million, or a loss of $0.36 per share, compared to a net loss of $13.7 million for the same period last year [34] Business Line Data and Key Metrics Changes - The company is executing its "acquire, test, and treat" strategy, focusing on increasing clinician and patient awareness to drive growth in the COPD market [7][11] - The company hosted over 40 peer-to-peer events to educate providers about the selection criteria and benefits of Zephyr Valves [9] - The company added 10 new U.S. accounts, ending the quarter with 285 active accounts [16] Market Data and Key Metrics Changes - The company identified a $12 billion market opportunity for COPD treatment [7] - International revenue growth was particularly strong in China, driven by underlying demand and increased distributor stocking [31][32] - The company is exploring targeted approaches to increase severe emphysema screening in existing accounts [19] Company Strategy and Development Direction - The company aims to build a strong foundation for sustained growth by increasing patient engagement and clinician education [7][11] - The strategy includes expanding the global footprint and seeking to expand indications for Zephyr valves [17][20] - The company is focused on establishing comprehensive lung health programs in hospitals to improve patient care [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the previously communicated revenue guidance of $96 million to $98 million for the full year 2025 [6][30] - The company anticipates that the second half of 2025 will see accelerated growth in the U.S. as patient engagement initiatives take effect [38][41] - Management noted that while U.S. growth has moderated, targeted initiatives are expected to set the foundation for future growth [22][27] Other Important Information - The company received notice from the U.S. Department of Justice that it formally declined to intervene in a civil investigative demand related to the False Claims Act [28] - The company ended the first quarter with $88.7 million in cash, cash equivalents, and marketable securities [36] Q&A Session Summary Question: Additional color on guidance outlook - Management reiterated the 2025 revenue guidance of $96 million to $98 million, citing the need to monitor the global macroeconomic environment [45][46] Question: Upside potential for full year guidance - Management indicated that upside could come from the adoption of initiatives in the U.S. and strong performance in international markets [48][50] Question: Impact of Acquire Test Treat strategy - Management highlighted the success of marketing and peer-to-peer education programs as impactful early initiatives [55][57] Question: International partners' response to tariffs - Management noted that there has been little change in ordering patterns from international partners, with most in a wait-and-see mode [61][64] Question: China sales metrics and future orders - Management indicated strong demand in China, with expectations for continued purchasing in Q2 [68][69] Question: Balancing SG&A leverage with expansion - Management emphasized a focus on operating leverage while investing in revenue-driving initiatives [74] Question: U.S. revenue performance and future expectations - Management attributed lower U.S. revenue growth to tough comparisons and expressed optimism about future initiatives [80][81]