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Beyond Air, Inc. (XAIR)·Q2 2026 Earnings Summary

Executive Summary

  • Revenue grew 128% YoY to $1.82M, but was roughly flat sequentially and missed consensus ($2.54M), while EPS loss of ($1.25) was narrower YoY but missed consensus (-$0.79). Management cut FY26 revenue guidance to $8–$10M from $12–$16M, citing sales cycle variability and a CCO transition, and highlighted negative gross margin driven by device upgrades and excess inventory provisions . Consensus data from S&P Global show the revenue and EPS misses (3 estimates each)*.
  • Commercial progress continued: first international commercial placement, distribution now spans 35 countries (~2.8B population), and a new capital purchase model (first hospital purchase post-quarter) alongside Premier and Vizient GPO access (~3,000 hospitals) .
  • Liquidity extended via $12M promissory note (15% coupon, 24-month maturity, no payments first 12 months) and a $20M equity line; pro forma cash, equivalents, restricted cash and marketable securities were $22.9M at 9/30/25; quarterly cash burn held at $4.7M .
  • Key medium-term catalyst remains second‑generation LungFit PH (smaller, lighter, transport-ready); PMA supplement submitted in June 2025 with targeted U.S. launch in late calendar 2026, subject to FDA clearance and supply chain readiness .

What Went Well and What Went Wrong

What Went Well

  • Strong YoY top-line and expense discipline: revenue +128% YoY to $1.8M; total opex down ~37% YoY to ~$7.4M as cost actions flowed through R&D and SG&A .
  • Commercial progress and stickiness: “several of our existing customers have extended their annual contracts with multi-year agreements,” and the company added a capital purchase option alongside leasing to accelerate adoption .
  • International expansion and validation: “first international commercial placement… outside the United States,” and distribution now covers 35 countries (~2.8B population) with momentum expected to build into FY27 .

What Went Wrong

  • Revenue and EPS missed Street consensus; gross margin negative. CFO cited one‑time device upgrade costs and excess inventory provisions driving the gross loss (−$0.3M) despite higher sales . Consensus revenue ($2.54M) and EPS (−$0.79) were not met*.
  • Guidance cut: FY26 revenue outlook lowered to $8–$10M (from $12–$16M) reflecting variability in hospital sales cycles and leadership transition in commercial organization .
  • Execution timing/constraints: management noted supply chain and manufacturing readiness as pacing items for Gen 2, not FDA review timing, which could affect launch timing toward late 2026 .

Financial Results

Income statement progression and margins

MetricQ4 FY25 (Mar 2025)Q1 FY26 (Jun 2025)Q2 FY26 (Sep 2025)
Revenue ($USD Millions)$1.152 $1.760 $1.818
Gross Profit (Loss) ($USD Millions)-$0.032 $0.156 -$0.298
Gross Margin %-2.8% (computed from rev/gross) 8.9% (computed) -16.4% (computed)
Total Operating Expenses ($USD Millions)$7.142 $7.773 $7.363
Net Loss Attributable to Beyond Air ($USD Millions)-$8.035 -$7.691 -$7.940

Notes: Management attributed Q2 gross margin deterioration to one‑time fleet upgrades and excess inventory provisions .

Actual vs Consensus (S&P Global) – Q2 FY26

MetricActualConsensusSurprise
Revenue ($USD Millions)$1.818 $2.536* (3 est.)-$0.718M (≈ -28%)
Primary EPS ($)-$1.25 -$0.79* (3 est.)-$0.46

Values marked with * retrieved from S&P Global.

KPIs and balance sheet/liquidity

KPIQ4 FY25Q1 FY26Q2 FY26
Cash, Cash Equivalents & Marketable Securities ($M)$6.9 (as of 3/31/25) $6.5 (as of 6/30/25) $10.7 (as of 9/30/25)
Net Cash Burn ($M)$7.6 (Q3 FY25 ref.) $4.7 $4.7
Long‑Term Debt Outstanding ($M)$12.2 (as of 3/31/25) $11.6 (as of 6/30/25) $10.1 (as of 9/30/25)
International Distribution Coverage (countries)—“30+” 35
New Financing Facilities——$12M note (15%, 24‑mo, no payments first 12 months) + $20M ELOC

Segment breakdown: not disclosed.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2026$12–$16M (reaffirmed in Aug 2025) $8–$10M (Nov 2025) Lowered

Management context: H2 cadence tempered by CCO transition and sales cycle variability; H1 revenue totaled ~$3.58M .

Earnings Call Themes & Trends

TopicQ4 FY25 (Previous‑2)Q1 FY26 (Previous‑1)Q2 FY26 (Current)Trend
Commercial execution / GPOBuilding U.S. installs; CE Mark opened EU; targeting double‑digit seq growth Premier GPO added (with Vizient); targeting ~3,000 hospitals; 4–12 month sales cycles Emphasis on Premier + Vizient reach; several contracts extended to multi‑year Improving access, increasing contract duration
International expansionCE Mark EU; Australia authorization; initial shipments planned >30 countries under distribution; early rev from demo/training; tenders ramp later First commercial placement OUS; 35 countries; expect momentum into FY27 Broadening footprint; rev ramp expected FY27
Second‑gen LungFit PHPMA supplement planned/ongoing; cardiac surgery supplement review ongoing Focus on Gen 2; approval/launch expected to be pivotal Target U.S. launch late CY26; FDA not pacing; supply chain/manufacturing readiness is Execution toward submission/launch
Business model—Primarily leasing; preparing for broader penetration post‑Gen 2 Adds capital purchase model; first hospital purchase post‑quarter More flexible sales models
Financing / LiquidityFY25 year‑end cash $6.9M; debt $12.2M Cash & securities $6.5M; burn reduced $12M note + $20M ELOC; runway into calendar 2027 Strengthened balance sheet
R&D (Beyond Cancer / NeuroNOS)UNO Phase 1a ongoing; cardiac surgery supplement review NeuroNOS ODD BA‑102; planning FIH by end‑2026 UNO mOS not yet reached (~22 months to date); ODD BA‑101 GBM; BA‑102 ODD PMS Early‑stage progress; optionality

Management Commentary

  • “Adoption has accelerated… contributing to a 128% year‑over‑year revenue increase… While… sequential growth was essentially flat… reflecting the timing of hospital purchasing cycles and the natural variability in international shipments.” — Steven Lisi, CEO .
  • “We are updating our fiscal year 2026 guidance to $8–$10 million.” — Steven Lisi, CEO .
  • “We finalized and launched a new sales model… hospitals may now purchase LungFit PH systems outright… Initial system sales occurred subsequent to quarter‑end.” — Steven Lisi, CEO .
  • “Our margins slipped back negative this quarter due to costs required to upgrade our existing fleet of devices and provisions for excess inventory.” — Douglas Larson, CFO .
  • “We believe… cash and existing financial vehicles will be sufficient… well into calendar 2027 and potentially to profitability, providing we continue to hit our current revenue estimates and… control costs.” — Douglas Larson, CFO .

Q&A Highlights

  • Growth drivers pre‑Gen 2 and trajectory post‑launch: International hospital wins expected to accelerate in FY27; capital purchase model adds demand option; Gen 2 should steepen adoption curve post‑approval .
  • Gen 2 timing factors: FDA not pacing; supply chain and contract manufacturing readiness are; late CY26 U.S. launch target remains contingent on earlier approval and ramp .
  • Business model rationale: Capital purchase added by hospital request; leasing remains; designed to match hospital preferences without abandoning legacy structures .
  • International monetization: Distributors purchase systems and disposables (filter) from Beyond Air; expect more repetitive revenue in FY27 as placements convert to usage; country approvals/tenders take time .
  • Guidance cadence and renewals: H1 revenue ~$3.6M; updated FY26 $8–$10M reflects CCO transition; renewals trending from 1‑year to 3‑year at some accounts; Premier access helps maintain and expand contracts .

Estimates Context

  • Q2 FY26 missed on both revenue and EPS vs S&P Global consensus: $1.82M vs $2.54M revenue; ($1.25) vs ($0.79) EPS (3 estimates each)*. Management cited one‑time device upgrades and inventory provisions for negative gross margin, and noted variability in sales cycles (domestic and OUS) .
  • Target Price Consensus Mean was $10.33 across 3 estimates during the period*, suggesting medium‑term optimism anchored to Gen 2 and international ramp.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup: fundamental narrative mixed. Strong YoY growth and cost discipline contrast with a revenue/EPS miss and negative gross margin tied to one‑time factors; FY26 guide cut is the principal stock reaction catalyst .
  • Liquidity and runway de‑risk execution: $12M debt plus $20M ELOC and $10.7M cash/securities at quarter‑end support operations “well into calendar 2027,” enabling commercial build and Gen 2 launch prep .
  • Commercial flywheel forming: multi‑year renewals, dual leasing/purchase model, and Premier/Vizient access could improve conversion and retention; watch for U.S. hospital adds and OUS country approvals converting to revenue in FY27 .
  • Gen 2 is the medium‑term catalyst: smaller, lighter, transport‑ready system with transport labeling targeted; supply chain/manufacturing readiness is the gating factor, not FDA review pace, per management .
  • International optionality: 35 countries under distribution with first OUS commercial placement; model for OUS is capital equipment + disposables sold to distributors; expect repetitive revenues to show in FY27 .
  • Watch gross margin normalization: one‑time upgrade/inventory provisions hurt Q2 margin; absent these, mix and scale should improve gross margin as installed base expands .
  • Execution risks: sales cycle variability and leadership transition could weigh on near‑term cadence; supply chain/macros remain external swing factors .

Supporting Detail and Additional Disclosures

  • Q2 FY26 press release and financial statements (8‑K Item 2.02/Ex. 99.1) report revenue $1.818M, gross loss $0.298M, opex $7.363M, net loss attr. to XAIR $7.940M, EPS ($1.25), and FY26 guidance $8–$10M; liquidity and debt terms detailed .
  • Q1 FY26 8‑K showed revenue $1.760M, gross profit $0.156M, opex $7.773M, net loss $7.691M; reaffirmed FY26 $12–$16M at that time .
  • FY25 materials provide trend baselines: Q4 FY25 revenue $1.152M; YOY annual rev +220% to $3.7M; CE Mark and OUS expansion groundwork .
  • Relevant press releases: September 2025 warrant exercise yielded ~$3.25M gross proceeds; H.C. Wainwright conference participation .

Values marked with * retrieved from S&P Global.