Beyond Air(XAIR) - 2026 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the fiscal quarter increased 105% year-over-year to $2.2 million, compared to $1.1 million for the same period last year, and a sequential increase of 21% from the previous quarter [15][16] - Gross profit increased to $300,000, compared to a gross loss of $200,000 for the same period last year [16] - Total operating expenses were reduced to approximately $6.9 million, down from $10.7 million for the same period last year, translating to a 36% reduction year-over-year [16][17] - Net loss attributed to common stockholders was $7.3 million, or a loss of $0.85 per share, compared to a net loss of $13 million, or a loss of $2.96 per share for the same period last year [18] Business Line Data and Key Metrics Changes - The core business, particularly the LungFit PH system, has seen significant adoption with over 45 hospitals now utilizing the first-generation system [5][6] - Customer retention exceeds 90%, with more than half of customers under multi-year agreements, indicating strong market acceptance [6] Market Data and Key Metrics Changes - The company has expanded its global distribution network for LungFit PH, now covering 40 countries, with new agreements in Canada, Germany, Brazil, Austria, the Netherlands, and Sri Lanka [9] - The first sale to a VA Medical Center establishes a foothold in the largest healthcare network in the U.S., potentially leading to broader adoption [9] Company Strategy and Development Direction - The company has made a strategic decision to sell its Neuronas subsidiary, which is expected to provide up to $32.5 million in upfront payments and equity, strengthening its balance sheet for commercial execution [5][13] - The focus remains on expanding the utilization of the first-generation LungFit PH system while preparing for the anticipated FDA decision on the second-generation system, expected by the end of calendar 2026 [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, citing strong customer feedback and the dedication of the team as key factors for future growth [10] - The company is optimistic about the upcoming FDA approval process for the second-generation system, with ongoing positive interactions with the FDA [36] Other Important Information - The company completed a $5 million financing in January 2026, along with a $32 million equity line of credit, providing resources to support commercial execution and readiness for the second-generation LungFit PH system [14][19] - The company reported cash and cash equivalents of $17.8 million as of December 31, 2025, which is expected to provide a runway into calendar year 2027 [19] Q&A Session Summary Question: Sales process and penetrating healthcare systems - Management discussed the sales process for the VA system, highlighting the ease of access through the ECAT system, which allows for direct customer engagement without an RFP process [22][24] Question: Identifying target facilities for sales - The company has refined its commercial organization and uses prospecting tools and CRM systems to identify and engage potential customers effectively [26][27] Question: Length of the sales cycle - The sales cycle remains around 6-9 months, with efforts to streamline the process by identifying customer needs early [28][29] Question: Concerns about next-generation system affecting current sales - The focus is on the first-generation product, which is well-received, while discussions about the next-generation system are being kept separate for now [30][31] Question: FDA communications regarding the second-generation system - Management confirmed ongoing positive communications with the FDA and expressed confidence in meeting regulatory requirements [36] Question: International market wins and catalysts - Recent wins in international markets were highlighted, with customers beginning to reorder filters, indicating product stickiness [41] Question: Interest from XTL Biopharmaceuticals in Neuronas - The attractiveness of the Neuronas opportunity was attributed to strong scientific foundations and a clear path to human studies, with XTL providing necessary funding for advancement [48][50] Question: Cost of goods sold (COGS) performance - Long-term expectations for COGS are in the 60-70% range, with current levels expected to grow as revenue increases [53][54] Question: Impact of SG&A on revenue - Management discussed the sensitivity of sales cycles to increased SG&A, indicating that additional capital deployed in sales could translate into higher revenues [58]