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Beyond Air, Inc. (XAIR)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue grew 34% sequentially to $1.07M and +174% YoY, driven by six new U.S. hospital starts and an improving commercial engine; EPS improved to $(0.15) vs $(0.28) in Q2 and $(0.50) YoY .
  • International expansion accelerated: CE Mark in the EU (triggering a $1.0M milestone in fiscal Q4) and Australian TGA authorization; initial shipments to begin in 1H CY2025, setting up a stronger 2H FY2026 contribution .
  • Gross margin remained negative due to device depreciation and one-time upgrade costs; cash burn declined to $7.6M, and management expects continued sequential revenue growth and lower burn near term .
  • Catalysts and stock reaction drivers: PMA supplement filing for the next-gen transport-capable LungFit PH, potential U.S. cardiac surgery label expansion, and the start of international shipments; management plans to reintroduce formal revenue guidance in June .

What Went Well and What Went Wrong

What Went Well

  • Sequential revenue growth and an expanding U.S. customer base: “We expect to continue generating double digit sequential quarterly revenue growth for the foreseeable future” .
  • Regulatory momentum and monetization: EU CE Mark approval and Australian TGA authorization, with a $1M milestone from Getz and future double-digit royalties .
  • Commercial execution improvements and partnerships: 6 new hospital starts and signed partnerships with Healthcare Links, TrillaMed, and Middle East distributors to widen access and accelerate adoption .

What Went Wrong

  • Gross margin headwinds: cost of revenue exceeded revenue due to roughly $0.3M one-time device upgrade costs and ~$0.5M non-cash depreciation of devices not yet deployed .
  • Elevated other expense: $2.4M vs $0.3M YoY, driven mainly by non-cash loss on extinguishment of debt (Avenue Capital) .
  • Continued operating losses despite cost reductions: operating expenses at $10.7M and net loss of $13.3M, though YoY improvements are evident .

Financial Results

Quarterly Comparison (oldest → newest)

MetricQ1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Revenue ($USD Millions)$0.683 $0.798 $1.072
Gross Profit ($USD Millions)$(0.332) $(1.084) $(0.215)
Total Operating Expenses ($USD Millions)$13.247 $11.748 $10.737
Net Income - (IS) ($USD Millions)$(13.055) $(14.029) $(13.333)
Diluted EPS - Continuing Operations ($USD)$(0.27) $(0.28) $(0.15)
Cash And Equivalents ($USD Millions)$4.161 $28.447 $4.601
Total Debt ($USD Millions)$14.946 $10.940 $11.860

YoY Snapshot (Q3)

MetricQ3 FY2024 (Dec 31, 2023)Q3 FY2025 (Dec 31, 2024)
Revenue ($USD Millions)$0.391 $1.072
Cost of Revenues ($USD Millions)$0.748 $1.287
Gross Profit ($USD Millions)$(0.356) $(0.215)
Net Loss ($USD Millions)$(17.258) $(13.333)
EPS ($USD)$(0.50) $(0.15)

Segment Breakdown

  • Not disclosed/applicable; Beyond Air reports consolidated results centered on LungFit PH .

KPIs and Operating Metrics

KPIQ1 FY2025Q2 FY2025Q3 FY2025
Quarterly revenue growth vs prior quarter+45% QoQ +17% QoQ +34% QoQ
New hospital starts (U.S.)——6 starts
Annualized contracted revenue (as of Oct 1, 2024)—$3.5M —
Cash burn (quarter)$13.1M $11.5M (ex-financing/one-time) $7.6M (ex-financing/extinguishment)
CE Mark milestone—CE Mark decision expected YE24 $1.0M triggered, payable fiscal Q4 FY2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025≥ $10M (Q1 guide) No formal update in Q3; management expects double-digit sequential QoQ revenue growth and will provide guidance in June Guidance not reiterated; qualitative outlook maintained
Net Cash BurnFY2025< $30M; CF breakeven targeted Q4 FY2026 Q3 burn $7.6M; expect lower burn in March quarter (less magnitude due to next-gen submission costs) Trend lower near term; long-term target unchanged
International milestoneFY2025 Q4—$1.0M CE Mark milestone payable fiscal Q4 FY2025 New cash inflow
Cardiac surgery label (U.S.)N/AFDA review ongoing Interactive FDA discussions continue; timeline uncertain Maintained (in review)
Next-gen LungFit PH (transport)N/ASubmission anticipated CY Q1 2025 Submission “shortly”; discussed at AARC with strong interest Near-term submission timing affirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY2025)Previous Mentions (Q2 FY2025)Current Period (Q3 FY2025)Trend
Commercial executionOptimized LungFit PH; +45% QoQ; >$5M contracted through FY2027; >55 hospitals; 10 states +17% QoQ; hospital contracts +60%; partnerships (Healthcare Links, TrillaMed, Business Asia Consultants) 6 new hospital starts; momentum and culture shift driving sequential growth Improving
International expansionCE Mark expected YE24 CE Mark decision expected YE24 CE Mark approved; TGA Australia authorization; $1M milestone; distributors in Middle East; shipments in 1H CY2025 Accelerating
Next-gen transport-capable LungFit PHSubmission by YE24/early 2025 Submission anticipated CY Q1 2025 Submission “shortly”; strong user interest post AARC demo Near-term
Cardiac surgery PMA supplement (U.S.)FDA decision expected YE24 FDA review ongoing Interactive FDA discussions continue; timeline uncertain Delayed/uncertain
Cost controls and cashHeadcount reduced >25%; capital conservation Strengthened balance sheet; retired Avenue debt; insider-led loan Cash burn down to $7.6M; expect further decline in March quarter; runway into spring 2026 Improving
Beyond Cancer / UNOPhase 1a ongoing; encouraging biomarker data Preclinical LV UNO data at SITC; Phase 1b planned post Israel approval Phase 1b regulatory approval in Israel; topline data late CY2025/early 2026 Progressing

Management Commentary

  • “We expect to continue generating double digit sequential quarterly revenue growth for the foreseeable future” — Steve Lisi, CEO .
  • “Receiving CE Mark triggered a $1 million milestone payment from Getz Healthcare, our Asia Pacific distribution partner, which we will receive in the March quarter.” — Steve Lisi .
  • “Net cash burn in the quarter was $7.6 million… We anticipate cash burn to continue the trend lower in the March quarter… due to the one-time costs required to complete the submission of our next-generation LungFit PH to FDA.” — Doug Larson, CFO .
  • “The most important thing is the culture shift and our ability to have superior customer service… the machine is performing beautifully.” — Steve Lisi on commercial improvements .

Q&A Highlights

  • CE Mark revenue timing: Minimal impact in March quarter, modest in June, ramping in September/December as shipments begin; shipments start in 1H CY2025 .
  • Expenses and burn: OpEx trending down; expect lower burn in March quarter though less steep due to next-gen submission costs .
  • Guidance: Formal revenue guidance to be reintroduced in June; management reiterated confidence in momentum without pre-announcing specifics .
  • U.S. vs. international mix: Too early to gauge; guidance likely on total worldwide revenue; international rollout varies by country/regulatory timing .
  • Contracting cadence: Limited seasonality; timing remains “chunky”; typical contract starts within 30–60 days, with occasional longer deferrals due to existing commitments .
  • Debt structure: ~$11M outstanding with payments starting Oct 2026 via 8% royalty on net sales; company-friendly terms .

Estimates Context

  • S&P Global consensus estimates were unavailable at time of analysis due to data access limits; comparisons vs Street consensus cannot be provided here (SPGI request limit exceeded). Management noted “the Street is around $4 million” for FY2025 revenue during Q&A, but did not confirm or endorse specific numbers .

Key Takeaways for Investors

  • Sequential momentum is intact and accelerating, with Q3 revenue +34% QoQ and YoY improvement; watch for continued double-digit sequential growth in March and June quarters .
  • International catalysts are material: CE Mark and Australian TGA authorization unlock shipments starting 1H CY2025, with a $1M milestone in fiscal Q4 and future royalties supporting cash runway .
  • Near-term margin headwinds are transitory: depreciation on not-yet-deployed devices and one-time upgrade costs pressured gross margin; as deployment increases, margin trajectory should improve .
  • Operating discipline is gaining traction: cash burn fell to $7.6M, with further declines expected next quarter; cash and equivalents of $10.9M plus milestone and royalty inflows extend runway into spring 2026 .
  • Regulatory milestones to watch: PMA supplement submission for transport-capable LungFit PH and progress on U.S. cardiac surgery label; either would be meaningful for adoption and market share .
  • Partnerships broaden access: Healthcare Links and TrillaMed open GPO/IDN and VA/DoD channels; Middle East distributors and Getz Healthcare underpin ex-U.S. scale-up .
  • Set up for guidance in June: Formal revenue guidance to be provided at FY2025 year-end call; monitor international ramp and U.S. hospital additions as key inputs .