LUNG — Pulmonx Corporation

Pulmonx Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $20.6 million, a 9% decrease from $22.5 million in Q1 2025; down 12% on a constant currency basis.
• U.S. Revenue: $13.3 million, a 7% decrease from $14.2 million in Q1 2025.
• International Revenue: $7.3 million, a 12% decrease from $8.3 million in Q1 2025; down 21% on a constant currency basis, primarily due to halted sales in China.
• Gross Margin: 78%, up from 73% year-over-year, attributed to a lower mix of distributor sales.
• Operating Expenses: $29 million, a 6% decrease from the prior year, including $1.4 million in one-time restructuring costs.
• Net Loss: $13.7 million ($0.33 per share), an improvement from a net loss of $14.4 million ($0.36 per share) in Q1 2025.
• Adjusted EBITDA Loss: $8.5 million, consistent with Q1 2025; excluding restructuring charges, the loss was $7 million, an 18% improvement year-over-year.
• Cash Position: $61.6 million, down $8.2 million from the end of 2025.

2. Strategic Updates and Business Highlights

• Sales Team Stabilization: The company has filled all sales leadership and most field sales positions, leading to improved team culture and reduced turnover.
• U.S. Sales Growth Strategy: Focus on high-quality valve programs, engagement with COPD clinicians, and direct-to-patient efforts in key geographies.
• AeriSeal Program: Progressing well with the CONVERT II pivotal trial, expected to expand the total addressable market by approximately 20% globally.
• Cost Alignment Initiatives: Implemented a cost reduction strategy to improve operating leverage and reduce cash burn while maintaining investments in growth drivers.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Reiterated guidance of $90 million to $92 million, anticipating sequential quarterly improvement and a return to year-over-year growth in the second half of 2026.
• Operating Expenses: Expected to be between $113 million and $115 million for the full year, including approximately $19 million in noncash stock-based compensation.
• Cash Burn: Projected to be around $23 million for 2026, down from $32 million in 2025.

4. Bad News, Challenges, or Points of Concern

• Revenue Decline: Overall revenue and U.S. sales have decreased year-over-year, indicating ongoing challenges in sales performance.
• China Market: Significant revenue decline attributed to the absence of sales to a distributor in China, pending renewal of the registration certificate expected in the second half of 2026.
• Sales Productivity: New sales hires typically take 6-9 months to reach full productivity, which may impact short-term revenue growth.
• Operational Challenges: The company has faced internal operational and executional challenges leading to recent underperformance.

5. Notable Q&A Insights

• Sales Strategy: Management emphasized a narrowed focus for the sales team, concentrating on high-impact activities and improving account engagement.
• Account Additions: 15 new U.S. treating centers were added in Q1, with expectations of maintaining a target of approximately 10 new accounts per quarter moving forward.
• Long-term Growth Aspirations: Management expressed confidence in returning to double-digit growth, particularly in international markets, contingent on overcoming current challenges.
• LungTraX Program: The program is being refocused to target specific accounts where it has proven effective, rather than a broad application across all accounts.

Overall, Pulmonx is navigating a challenging environment with a focus on stabilizing its sales force, improving operational efficiencies, and strategically expanding its market presence while managing short-term revenue declines.