Summary of Beyond Air (XAIR) Q3 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: Increased 105% year-over-year to $2.2 million, up from $1.1 million in Q3 2025. This also reflects a 21% sequential increase from the previous quarter.

Gross Profit: Improved to $300,000, compared to a gross loss of $200,000 in Q3 2025 and a gross loss of $300,000 in the prior quarter.

Operating Expenses: Reduced to approximately $6.9 million, down 36% year-over-year from $10.7 million.

Net Loss: $7.3 million, or $0.85 per share, improved from a loss of $13 million, or $2.96 per share, in the prior year.

Cash Position: As of December 31, 2025, cash and equivalents totaled $17.8 million, with a subsequent $4.5 million equity financing providing a runway into 2027.

2Strategic Updates and Business Highlights

Core Product: Continued adoption of the LungFit PH system, now in over 45 hospitals, with customer retention exceeding 90%. More than half of customers are under multiyear agreements.

NeuroNOS Sale: The strategic sale of the NeuroNOS subsidiary to XTL Biopharmaceuticals includes a 19.9% equity stake and potential milestone payments totaling up to $32.5 million, aimed at enhancing focus and funding for NeuroNOS's pipeline.

Second-Generation System: Anticipated FDA decision for the second-generation LungFit PH system expected by the end of 2026. This system promises improved features, including longer service intervals and compatibility with transport.

3Forward Guidance and Outlook

Revenue Growth: Management expects continued revenue growth from the first-generation system while preparing for the second-generation launch.

Cost Management: Operating expenses are expected to remain controlled, with ongoing reductions in SG&A and R&D costs.

Market Expansion: Plans to expand international distribution and capitalize on new agreements with group purchasing organizations, targeting nearly 3,000 hospitals in the U.S.

4Bad News, Challenges, or Points of Concern

Net Loss: Despite revenue growth, the company continues to report significant net losses, indicating ongoing financial challenges.

Sales Cycle: The sales cycle remains lengthy, typically around 6 to 9 months, which could hinder rapid revenue acceleration.

FDA Approval Risks: While management is confident about the FDA process, any unforeseen regulatory hurdles could delay the launch of the second-generation system.

5Notable Q&A Insights

Sales Strategy: The team is refining its targeting strategy to identify hospitals likely to adopt the LungFit PH system, focusing on demand generation and pipeline discipline.

International Growth: Positive feedback from international distribution partners, with repeat orders for accessories indicating growing market traction.

NeuroNOS Collaboration: XTL's interest in NeuroNOS was driven by promising scientific research and a clear path to human trials, which could lead to significant advancements in treating autism and glioblastoma.

Cost of Goods Sold (COGS): Long-term expectations for COGS are around 60% for Gen I and up to 70% for Gen II, with ongoing assessments influencing these projections. Overall, Beyond Air is experiencing significant revenue growth and strategic advancements while managing ongoing financial losses and the complexities of regulatory approvals and market penetration.