Beyond Air - Earnings Call - Q1 2026

Executive Summary

• Revenue rose 157% year over year to $1.76M and 53% sequentially, modestly above consensus; EPS was a larger loss than expected as depreciation and financing costs weighed on results.
• Guidance reaffirmed: FY 2026 revenue $12–$16M; management expects sustained double‑digit sequential growth, supported by U.S. hospital adds, Premier GPO access, and the first quarter of international revenues.
• Commercial momentum: multi‑year contracts exceed 55%, two new U.S. starts and three renewals, and over 30 ex‑U.S. countries covered; Vanderbilt named first luminary site.
• Catalysts: Premier GPO (barrier removal for ~3,000 hospitals), PMA supplement filed for second‑gen LungFit PH2 (transport‑ready), ex‑U.S. tenders and distributor rollouts; financing runway supported by cost reductions and a warrant exercise in September 2025.

What Went Well and What Went Wrong

What Went Well

• Strong adoption drove revenue up 157% YoY to $1.76M; gross profit swung to +$0.16M from a loss, reflecting scale and improving unit economics.
• Commercial expansion: “We are driving strong market adoption of LungFit PH…expect sustained double‑digit sequential revenue growth and reaffirm our FY 2026 revenue guidance of $12 to $16 million.” — Steve Lisi, CEO.
• Structural access wins: Premier national GPO agreement “removes the big initial barrier” and streamlines pricing for member hospitals; multi‑year contracts now >55%.

What Went Wrong

• EPS missed Street expectations as other expense flipped from prior‑year income to a $0.5M expense, and device depreciation remained a headwind; net loss was ($7.69M), EPS ($1.53).
• International revenue contribution still early; tenders and hospital placements take multiple quarters, delaying larger OUS impact until later in FY26/FY27.
• Cash burn, while improved, remained $4.7M; liquidity at quarter‑end was $6.5M cash and equivalents with $11.6M long‑term debt (payments begin Oct 2026).

Transcript

Speaker 6

Good afternoon and welcome everyone to the Beyond Air Financial Results call for the fiscal quarter ended June 30, 2025. At this time, participants are in a listen-only mode. A question and answer session will follow the formal presentation. I would like to turn the call over to Corey Davis from LifeSci Advisors. Please go ahead.

Speaker 4

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, after the market closed, we issued a press release announcing the operational highlights and financial results for Beyond Air's first quarter of fiscal year 2026 ended June 30, 2025. A copy of this press release can be found on our website at www.beyondair.net under the News and Events section. Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects which constitute forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.

We encourage everyone to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website, beyondair.net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 12, 2025. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. With that, I'll turn the call over to Steve Lisi, Chairman and Chief Executive Officer of Beyond Air. Go ahead, Steve.

Speaker 3

Thanks, Corey, and good afternoon to everyone. With me here today is Doug Larson, our Chief Financial Officer. I will be brief today given the update just seven weeks ago on our fiscal earnings call. We continue to drive strong market adoption of LungFit PH, which was reflected in our financial results for the first fiscal quarter, including a 157% increase in revenue to $1.8 million, compared with $700,000 for the same period last year. On a sequential basis, we reported a 50% increase over the quarter ended March 31, 2025. As a reminder, it was only a year ago that we implemented broad changes to our sales team and strategy under the leadership of the new Chief Commercial Officer, David Webster. This strategy included building out our distribution network in the U.S. and internationally, focusing more heavily on fostering customer relationships.

While we quickly reported seeing positive market reactions to the new strategy and team, and our backlog of agreements started to build, it has only been over the course of the last two quarters that the financial performance of the company has really caught up. That said, our sales pipeline continues to build, and the more customers use LungFit PH, the more confidence grows in the product and our ability to provide top-tier service. The key takeaway here is that we are now well positioned to overcome the barriers to entry in the nitric oxide market with LungFit PH and are well on our way to becoming the market leader with the addition of LungFit PH2 in calendar year 2026, pending regulatory clearance. Considering this strong momentum in our business, we are reaffirming our revenue guidance of $12 to $16 million for fiscal year 2026.

I will dig a little deeper into the specific drivers behind our financial performance in the fiscal first quarter of 2026 and for the future. We continue to generate a steady flow of new hospital contracts in the U.S., with two new hospital starts and contract renewals with three hospitals. Some other important points I would like to put out there. One, more than 55% of our contracts are multi-year contracts. Two, this was the first quarter of international revenues being recorded. This comes after a tremendous amount of time spent working with our partners around the world, which we have documented on previous calls and in press releases. To put our current reach into perspective, we now have access to over 30 countries' distribution partners covering more than 2 billion lives. We expect growth each quarter going forward, with our momentum picking up substantially in fiscal 2027.

Turning back to the U.S., one of the market barriers we have focused on overcoming are the hospital networks and national purchasing groups. We have just been added to the Premier network, which gives us two of the big three, as we were added to Vizient two years ago. Combined, these two group purchasing organizations provide us with access to close to 3,000 hospitals. We still have to be highly selective in our targeting until we have the second-generation LungFit PH system, which is smaller, lighter, and designed for air and ground transportation, while still delivering all the revolutionary features of the first-generation machine. We believe that this system will offer capabilities that will allow us to penetrate larger hospitals and larger hospital systems. Overall, we anticipate FDA approval of the second-generation system and subsequent introduction to the U.S.

market will have a major impact on our market share, total NO volume, and logistics within the hospital. In regard to the Premier contract, we were awarded a national group purchasing agreement for therapeutic gases. This new agreement allows Premier members at their discretion to take advantage of special pricing and terms pre-negotiated by Premier for the LungFit PH system and disposable NO2 smart filters. This is a significant network for us to be aligned with, and we believe it will open a lot of doors for our sales team. Having this purchasing agreement will help streamline the sales process for Premier hospital network members as they contemplate converting their NO supply to LungFit PH. Turning to Beyond Cancer, we are assessing the best path forward for the program at this time.

Phase 1B combination study with anti-PD-1 therapy is the target, and we will communicate more details once we secure a clinical trial site. With respect to Neuronos, our subsidiary focused on therapies for autism spectrum disorders, I have no further update from the last time we spoke. As a reminder, Neuronos will meet with FDA later this year regarding its path to human studies, which we expect to begin by the end of calendar 2026. Our LungFit Go program is still on track for a pre-IDE submission to FDA prior to year end to discuss the clinical path forward. We continue to be encouraged by the progress across our business. LungFit PH is quickly gaining attention in hospitals across the U.S. and now the world. We look forward to continuing to take market share and build awareness for our system throughout the remainder of fiscal 2026.

Looking out to fiscal 2027, we see the introduction of LungFit PH2 putting us on a path to take the majority of market share over time in what we believe could ultimately be a $1 billion global NO market. Now, I will turn it over to our CFO, Doug Larson.

Speaker 0

Thanks, Steve, and good afternoon, everyone. Our financial results for the first quarter of fiscal year 2026, which ended June 30th, 2025, are as follows. Revenue for the fiscal quarter ended June 30th, 2025, increased 157% to $1.8 million, compared with $0.7 million for the fiscal quarter ended June 30th, 2024. We are showing a gross profit increase of approximately $0.5 million to $0.2 million for the first fiscal quarter of 2026, compared to a loss of $0.3 million for the same period last year. The gross profit increase was due to increasing revenues, partially offset by depreciation of additional LungFit devices. Turning to operating expenses, I just want to remind everyone that as we've talked about on previous quarterly calls, our team has been laser-focused on cost reduction in SG&A, R&D, and our supply chain.

Over the first half of calendar 2025, we reduced total operating expenses to just above $7.5 million in the June quarter, from $13 million for the same period last year. This translates to a 40% reduction year over year and greater than 55% reduction from a high of $17 million at its peak. We believe a trough in our operating expenses will be in the current quarter, which ends September 30th, 2025. Please do not interpret that expenses will be moving up significantly in the December quarter. We anticipate expenses will move up in proportion to our commercial performance to maintain our excellence in service and take advantage of upcoming opportunities. Research and development expenses were $3.1 million for the fiscal quarter in 2026, as compared with $6 million for the same period last year.

The decrease of $2.9 million was across the board, with decreases in salaries, stock-based compensation costs, clinical and preclinical expenses, professional fees, and Gen 2 device development costs. SG&A expense for the quarters ended June 30th, 2025, and June 30th, 2024, were $4.7 million and $7.2 million, respectively. The decrease of $2.5 million was attributed primarily to the reduction in salaries, stock-based compensation costs, marketing and advertising, and legal fees. Other expense was $0.5 million, compared with a $0.5 million income for the same period a year ago. The increase in expense of $1 million was mainly due to a prior period gain associated with the change in fair value of the derivative liability for $1 million. Net loss attributed to the common stockholders of Beyond Air Inc. was $7.7 million, or a loss of $1.53 per share, basic and diluted.

Our net loss for the fiscal quarter ended June 30, 2024, was $12.2 million, or a loss of $5.32 per share, basic and diluted. Please note that the per share results were calculated to reflect the company's one-for-20 reverse stock split, which became effective on July 14, 2025. We implemented this reverse stock split to regain compliance with NASDAQ listing ruling 555-0A-2. I am pleased to announce that NASDAQ has since notified the company that we are now back in compliance with all listing rules. Net cash burn for the quarter was $4.7 million, which is more than 60% lower than the first quarter of last fiscal year. This decrease reflects our reduction in operating expenses, including wrapping up spending on the development of our next-generation LungFit PH device in the June quarter.

We've reported a strong reduction in our cash burn in Q1 and expect to see continued drop again in Q2. As of June 30, 2025, we reported cash, cash equivalents, and marketable securities of $6.5 million. We believe that our cash and existing financing vehicles will be sufficient to allow us to support current operating plans well into calendar 2026 and potentially to profitability, provided we continue to hit our internal revenue estimates and control costs at Beyond Air. With that, I'll hand the call back to Steve.

Speaker 4

Thanks, Doug. We'll now take some questions.

Speaker 6

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question comes from the line of Marie Yoko Thibault from BTIG. Please go ahead.

Speaker 2

Hi, good evening, and congrats on a nice quarter. I wanted to ask kind of a big picture question here. I know you're confident in your guidance range for the year, and you had some very nice 50% sequential growth this quarter, so really great to see it. How should we think about, you know, the various growth drivers coming together this year, Steve? I'm thinking about existing contracts, things like the Premier agreement. Is this all sort of coming together now, or do we need to see new sources of growth, more acceleration in order for you to kind of hit that range? How are you thinking about it?

Speaker 3

Thanks, Marie. Look, we certainly need a little bit more throughout the next seven months of the fiscal year. We don't have the range set by what is in our pocket today. That's by design, obviously. We have a lot of open opportunities that are in front of us that we expect to win a certain percentage of and hit our numbers, and we feel very confident about that. Premier is a big piece of that. I don't think that Premier coming on in July is going to have a major impact on this fiscal year. It does take time. We've said in the past about four to twelve months from the first contact with the hospital, and now with Premier, we're able to have these conversations with their members. Prior to this, we may have had conversations, but really they were just introductory.

They really weren't much serious discussions until we got on with Premier. Those discussions are happening now. We think there could be some impact in this fiscal year, but obviously it'll be a much bigger impact next fiscal year. What we have in hand is very strong, and we're very confident that we'll hit the range, but I think it's unfair to say that Doug and I are sitting here with $12 to $16 in our pocket if nothing else happened from today. That's just not the truth. I don't think it needs to be the truth, Marie. We have a lot of time before the end of the fiscal year.

Speaker 2

Sure. Makes sense. Okay, you feel good with being on track here? Okay. I would ask a little bit about OUS. You called out some acceleration, I think, in the press release, and I know through your partners you have exposure to several countries. Are there certain countries we should be listening for? Are there opportunities for big tenders here over the coming quarters? I want to get a little smarter on the OUS.

Speaker 3

I think, as you mentioned, the tenders do take a little bit of time. Signing up a distributor, a distribution partner in a country doesn't mean sales are coming the next day, right? It does take some time. The initial sales to our distribution partners are through demonstration devices and training devices that they have for themselves. A few quarters after that, you'll start to get some victories with hospitals, tenders, however they do it in each country will be different. I think that we would anticipate some of these wins on hospitals coming towards the end of this fiscal year. Getting hospitals signed up in the June quarter or getting partners, excuse me, signed up in the June quarter would put us a couple of quarters later before we start winning hospitals. It does take time. We've got to get devices shipped. We've got to get everybody trained.

We've got to get marketing materials in their hands. It does take a couple of quarters. I think that we'll start to see the benefits of what we've put in place as we get towards the end of this fiscal year and into next fiscal year. The revenues you're seeing now are from us selling to our partners what they need for training and demonstration purposes in their countries.

Speaker 2

Understood. Thanks for the thoughts, Steve.

Speaker 3

Thanks, Marie.

Speaker 6

Thank you. The next question comes from the line of Jason Hart Wittes from ROTH Capital Partners. Please go ahead.

Speaker 5

Hi, thanks for taking the questions and a solid quarter. Just first off, now that you've kind of revamped this sales effort with the new CEO, can you give us a sense of how long it's taking to go from an initial contact with the customer to finally closing a deal and sending off the machines?

Speaker 3

Sure. Yeah, I mean, it's anywhere from four to twelve months. It does take time from the initial contact. Some are quicker than others, and some have a long process where they're taking bids from multiple companies, kind of like a tender overseas, a little different here, but those things do exist. It does take time.

Speaker 5

I mean, I take it you can tell who's going to take 12 months and who's going to take 4 months, depending on the hospital system generally, in terms of just your forecasting?

Speaker 3

Usually, we have a pretty good guess, yeah.

Speaker 5

Okay, sorry, just wanted to clarify that.

Speaker 3

Yeah.

Speaker 5

Secondly, if you could help us out on, you mentioned that SG&A operating expenses are basically going to grow with revenue. Any sense how we should model that? Does that mean, I mean, is that from a % basis, a quarterly basis, or maybe just a little more detail on how we should be thinking about the progression for the rest of the year, assuming, you know, we're all going to be modeling kind of within the guidance range you provided?

Speaker 3

I think that, like Doug mentioned, you'll see September tick down from the June quarter right now to the December quarter. It might be roughly around the September quarter for expenses, give or take. As we start to see the growth, there might be, for example, as we get higher sales, there are certain people and certain things we pay commission on. You'll see expenses tick up, and I don't think any of our cost cutting will offset that as we get towards the end of this fiscal year. You will see some movement. That's why December is kind of shaky on whether it's going to be higher or right around September. In the March quarter, last quarter of our fiscal year, you will see expenses moving up commensurate with the increase in revenues.

Speaker 5

Got it. I'll jump back in queue. Thanks for the detail.

Speaker 3

Thanks.

Speaker 6

Thank you. We take the next question from the line of Justin Howard Walsh from JonesTrading Institutional Services. Please go ahead.

Speaker 5

Hi, thanks for taking the question. You alluded to this, but I was wondering if you could comment on how your engagement efforts are being facilitated by your Premier agreement. Just wondering how much of it is a question of getting your foot in the door, raising awareness, and removing friction for these hospitals.

Speaker 3

I think just being on with Premier removes the big initial barrier. It's gone. Now we can have free discussions with them. One of the nice things about the group purchasing organizations is you set your pricing in the contract with them, so you have something to work off of right away. It does save a little bit of time. This is a big barrier removed. Without being on Premier, it's extremely difficult to contract with a Premier hospital.

Speaker 5

Great, thanks for taking the question.

Speaker 3

All right, thank you.

Speaker 6

Thank you. The next question comes from the line of I-Eh Jen from Laidlaw & Company (UK) Ltd. Please go ahead.

Speaker 1

Good afternoon, Steve, and congrats on the quarter. My first question is that last time in the middle of the quarter, you gave some guidance in terms of the top line. I just wonder whether this time you have any insights or look or can you review anything about all the sales so far in this quarter? I have a follow-up.

Speaker 3

Yeah, last when we reported our fiscal year earnings, I mean, there was like 10 days, 12 days left in the quarter. It wasn't a stretch for us to pre-announce that quarter. Now we're not even halfway through the quarter. I'm not going to be commenting on quarterly estimates. We're again at our fiscal year, which will be next June. We reiterated our fiscal year guidance and that should show our confidence.

Speaker 1

Sure, I agree, that looks good. Do you have any, could you give some guidance in terms of how many hospitals at this time already install the LungFit PH?

Speaker 3

I think we've given that exact number, but it's getting to be a pretty big number. I mean, I guess we could say dozens and dozens of hospitals. That would be good. I think that's about all hospitals there, yeah, but we're certainly growing the hospitals. There are a lot of them using LungFit PH, and the more that do, the more references we get and the more comfort people have with us as a company servicing them. It's certainly moving in the right direction.

Speaker 1

Maybe squeeze one more here. In terms of the 2 PMA filing, I know you hate to give guidance because that has sort of an unpredictable, but nevertheless, just curious what's your current sort of expectation, both for the cardiac surgery as well as for the second gen. Thanks.

Speaker 3

I'm definitely not going to give timing on this. We're not going to guess what the FDA is going to do, but I will say that our focus is on the second-generation machine. As a smaller company, we want to keep the FDA focused on what's important to us. Right now, the second-generation machine is more important to us than the cardiac indication. I think the cardiac indication loses a little bit of its luster with the second-generation machine in terms of the impact it will have. Right now, our focus with our team and with the FDA and talking to them is on Gen 2 and Gen 2 only.

Speaker 1

Okay, great. That's very helpful. Again, congrats and appreciate the confidence for the guidance.

Speaker 3

Thanks, Yale.

Speaker 6

Thank you. We take the next question from the line of Jason Hart Wittes from Piper Sandler & Co. Please go ahead.

Speaker 5

Hey, good afternoon. Steve, I wanted to start really to try to follow up on a few questions already. I think a lot of us are really trying to dial in on the guide just in the context of how the year started. You know, the nature of the business here requires these contracts to steadily build throughout the year and really tap into that nice razor-razor-blade business model you have. It seems like you need sequential revenue to grow at a 50% quarter-over-quarter pace in the next few quarters to finish near the midpoint of that reaffirmed guide today. I guess beyond that internal confidence, you're speaking to anything more tangible you can give us. I know Marie was asking some questions. There have been some others here.

Just, you know, anything beyond just like, you know, we're confident we can do this, that you can help us bridge that gap on, you know, getting to that 50% quarter-over-quarter growth that, you know, we need to see in the business.

Speaker 3

Yeah, I'll do my best. You know, we're now partnered in over 30 countries outside the U.S. All of these partners are going to be working with us and we will be training them. We have training sessions in Europe and in the U.S. We're moving quickly with our partners. We anticipate that the revenues from ex-U.S., just to get our partners up and running, are going to be strong throughout the rest of this fiscal year. We have a lot of confidence in that and we will be signing more partners before the end of this fiscal year. There's a lot of confidence on the international side from that perspective. Marie had asked about tenders and winning hospitals there. We have very limited amounts of wins in our guidance.

If we do get some wins, and I can say that there are some of the partners out there that have already put their hat in the ring for some tenders, it's early days, but they have in a few countries. We'll see. There's definitely some cushion there if we start winning tenders earlier than we expect to. It's definitely possible, but we're not counting on it, right? This is early days on the international side, so we don't want to make any large assumptions, and we haven't in our guidance. That's the international side. On the domestic side, we've been at this now for close to three years. We had to change our commercial team. Our Chief Commercial Officer has been here now 13 months. He's put a lot of things in place. I think we've already announced a lot of these things, right?

We talked about our partnership with TrillaMed. They're going to help us with the Department of Defense and the Veterans Administration. We did partner with Guam at the beginning of this year or end of last year. That was just the beginning. This was something that there was a need and we stepped up and took care of it. I think that the rest of the hospitals and the Department of Defense and Veterans Administration are probably going to follow what the normal rules are. It takes time to get on, kind of like we got on Premier and Vizient. It takes time to get on with the Veterans Administration and DOD. We expect that to occur at some point in this fiscal year and contribute. With Premier, we'll have more hospitals. I think we'll get some hospitals there. We've been talking to some before this happened.

I think there'll be some follow-through there before the end of the fiscal year. David, our new Chief Commercial Officer, has done a very good job with Vizient and refocusing our efforts and working with the Vizient team so we have a better relationship there. We see momentum. We see what's in the pipeline for us. We already have this vision of what's staring us in the face for the next six months. Our machine is performing extremely well. When you look back two years ago, we were still waiting for software updates from the FDA. Our incarnation of Gen 1 at its peak really started in May of last year. People are getting comfortable with it. We've signed our first luminary site in Vanderbilt. They've been very helpful. I think that there's a lot of momentum for us in the U.S. and internationally so we can get this done.

I'm doing my best here. I don't want to give too much information. Everyone's listening. We have competitors. I'd like to keep it to what I've said. I hope that satisfies your question.

Speaker 5

If I could follow up maybe to tease it out just a bit more and feel free to share what you're comfortable with. Can you talk about the attribution you'd give to international out of that $12 to $16 million? If you're comfortable, the pacing of maybe when you think that some of that might layer in throughout the course of fiscal 2026. Point two, you didn't mention it. I don't know if it's possible that you have visibility on contract renewals. You referenced some in your prepared remarks for the first quarter. Are economics there superior to what they were previously? Is that contributing? Where these are expanded relationships or just better economics for Beyond Air that are also embedded in that $12 to $16 million outlook?

Speaker 3

In the outlook, we don't count on contracts being renewed above where they were before. We don't count on renegotiated contracts. It does happen. I would say that some of our renewals, you know, the hospitals use more than they thought in their first year. We will, you know, recontract with them or renew them at higher rates, higher amounts of hours. It is more money. We don't have that in our forecasts. We don't count on that. Doug's looking at me, you know, like, you know, we definitely have a couple of our customers that are asking us to give them longer-term contracts because they're using too much. They want to make sure that they have certainty of payments, right? They want to pay the same price every month. They get to month eight or nine, and they've used up all the hours that they're supposed to have.

We will work with them and try to come up with a way to make it easier on them. Again, we're not, we don't have penalties. We don't have extra costs at the end of a contract. They just kind of keep paying at this roughly the same hourly rate that they were paying after their year. They just have to keep paying that rate if they're using more hours. Sometimes for hospitals, it's difficult because they want to just keep the same payment every month. We do have this happen every month or two. There's somebody asking us this question. We work with them, and we come up with ways to make it work for them and work for us. That can help us from a fiscal year standpoint. It's not something that Doug and I have really dialed into the model because it's unpredictable.

We certainly have some hospitals that will help us from that front.

Speaker 5

All right. Thanks, guys.

Speaker 3

All right, great. Thank you.

Speaker 6

Thank you. At this time, we are showing no further questioners in the queue. This concludes our question and answer session. I would now like to turn the call back over to Steve Lisi for any closing remarks.

Speaker 3

I'd like to thank everyone for joining in. Have a great evening.

Speaker 6

Thank you. Ladies and gentlemen, the conference of Beyond Air has now concluded. Thank you for your participation. You may now disconnect your lines.