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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: international revenue growth is strong, but U.S. growth is lagging, and gross margins have declined. The reaffirmed guidance and cash flow breakeven target are positive, but the Q&A reveals uncertainties in U.S. growth and StratX trends. The flat Q3 outlook and cautious guidance for the second half, along with increased expenses, suggest a balanced sentiment. Without a market cap, the stock's reaction is uncertain, but the overall sentiment appears neutral, with no strong catalysts for significant movement in either direction.
Total worldwide revenue $23.9 million, a 15% increase from $20.8 million in the same period of the prior year and an increase of 13% on a constant currency basis. This reflects sustained adoption of Zephyr Valves and continued execution across the organization.
U.S. revenue $14.7 million, a 6% increase from $13.9 million in the prior year period. Growth was below expectations due to challenging prior year comparisons and slower-than-expected growth in procedure volume.
International revenue $9.1 million, a 32% increase compared to $6.9 million in the same period last year and a 27% increase on a constant currency basis. Growth was driven by robust demand across Europe and Asia and strengthening commercial execution outside the U.S.
Gross margin 72%, compared to 74% in the same period last year. The decline was primarily due to an anticipated shift in geographic revenue mix with international markets accounting for a larger share of total revenue.
Total operating expenses $32 million, a 3% increase over $30.9 million in the second quarter of 2024. The increase was driven by continued investment in commercial efforts, including direct-to-patient outreach and clinician awareness initiatives.
Research and development expenses $5.3 million, compared to $5.6 million in the prior year period. The decline was due to a one-time noncash impairment charge in Q2 2024. Excluding this, R&D spending increased 36% year-over-year due to higher clinical trial activity and ongoing R&D investments.
Sales, general and administrative expenses $26.7 million, up 5% from $25.3 million in the second quarter of 2024. The increase was driven by enhanced direct-to-patient outreach and targeted initiatives to increase clinician awareness and adoption of Zephyr Valve therapy.
Net loss $15.2 million or a loss of $0.38 per share, compared to a net loss of $15.3 million or a loss of $0.39 per share in the same period of the prior year. This reflects a slight improvement in loss per share.
Adjusted EBITDA loss $8.4 million, compared to $7.6 million in the second quarter of 2024. This reflects increased investment in growth initiatives.
Cash, cash equivalents, and marketable securities $84.2 million, down $4.5 million from March 31, 2025. Total cash utilization for the first half of 2025 was $17.3 million, in line with the 2025 operating plan.
Zephyr Valves: Continued adoption with a 15% increase in revenue year-over-year. U.S. revenue grew by 6%, while international revenue grew by 32%, driven by strong demand in Europe and Asia.
LungTraX Detect: AI-powered screening tool for identifying emphysema patients from routine CT scans. Early site data shows promising results, with several hospitals adopting the technology.
AeriSeal: CONVERT II trial progressing to unlock treatment for patients with collateral ventilation. Enrollment expected to complete in 2026.
International Expansion: International revenue reached $9.1 million, a 32% increase year-over-year, with strong performance in Europe and Asia. Investments in education and market development are scaling effectively.
Japan Market: Post-approval study ongoing to unlock access to an estimated 100,000 BLVR-eligible patients. Enrollment expected to complete in 2026.
Direct-to-Patient Campaigns: Engaged over 70,000 first-time patients through digital and traditional outreach methods, contributing to 1/3 of treated patients in 2025.
Therapy Awareness Specialist (TAS) Role: Deployed to bridge gaps between community pulmonologists and treatment centers, resulting in a 19% increase in patient workups in targeted territories.
Physician Training: Trained 26 new physicians and opened 12 new screening centers in Q2 2025 to expand treatment capacity.
Revenue Guidance Revision: Full-year 2025 revenue guidance revised from $96-$98 million to $90-$92 million due to slower-than-expected ramp-up of U.S. initiatives.
Collaboration with Jaeger: New partnership to embed BLVR screening logic into pulmonary function testing platforms, targeting a broader patient base.
Slower-than-expected U.S. growth: U.S. revenue growth was below expectations due to slower procedure volume, driven by capacity constraints at interventional pulmonology centers and a decline in StratX scans. This has led to a revision of the full-year revenue guidance.
Operational pressures in interventional pulmonology centers: Increased focus on robotic bronchoscopy and lung cancer screening has constrained bronch suite availability, diverting attention from emphysema procedures.
Delayed impact of new commercial initiatives: New initiatives like direct-to-patient outreach and LungTrax Detect are taking longer to convert into procedure volume, impacting short-term revenue.
Geographic revenue mix impact on gross margin: A higher proportion of international revenue, including distributor sales, has led to a slight decline in gross margin.
Cash burn and financial discipline: The company is utilizing cash reserves to fund growth initiatives, but cash burn remains a concern, with $17.3 million used in the first half of 2025.
Regulatory and operational hurdles for new technologies: The adoption of LungTrax Detect involves multiple stakeholders and complex workflows, delaying its broader implementation.
Uncertainty in global trade and tariffs: While no immediate impact is anticipated, evolving global trade policies could affect international revenue and supply chain costs.
Revenue Guidance Revision: The company revised its full-year 2025 revenue guidance from $96-$98 million to $90-$92 million, reflecting a delay in the expected timing of U.S. growth initiatives.
U.S. Market Outlook: The company anticipates a slower-than-expected rebound in U.S. performance due to capacity constraints and evolving priorities in interventional pulmonology centers. However, it expects long-term growth driven by new commercial initiatives, including direct-to-patient outreach and AI-powered tools like LungTraX Detect.
International Market Growth: International revenue is expected to moderate in the second half of 2025 after strong performance in the first half. Continued momentum is anticipated in direct markets across Europe and Asia.
Gross Margin Outlook: The company reaffirmed its full-year gross margin outlook of approximately 74%, with sequential improvement expected in the second half of the year.
Operating Expense Guidance: Full-year 2025 operating expense guidance was revised down from $133-$135 million to $128-$130 million, reflecting targeted cost efficiency initiatives.
Long-Term Growth Drivers: The company is investing in initiatives like the CONVERT II trial for AeriSeal, expected to complete enrollment in 2026, and a post-approval study in Japan, also expected to complete in 2026. These efforts aim to unlock new patient segments and expand market access.
AI and Technology Integration: The LungTraX Detect AI tool is being adopted by hospitals to identify emphysema patients from routine CT scans. Early results are promising, and the company is building a pipeline of hospitals for future adoption.
Collaboration with Jaeger: A new collaboration with Jaeger aims to embed BLVR screening logic into pulmonary function testing platforms, potentially identifying a significant number of new patients eligible for treatment.
The selected topic was not discussed during the call.
The earnings call reveals mixed financial results with modest revenue growth and increased expenses, particularly in R&D. The guidance revision downward and management's inability to provide clear answers during the Q&A suggest challenges in execution and strategic direction. While international growth and gross margin improvements are positives, the lack of clarity on U.S. growth and strategic pathways, along with cash burn, contribute to a negative sentiment. The market is likely to react negatively to these uncertainties, resulting in a potential stock price decline of -2% to -8%.
The earnings call presents a mixed picture: international revenue growth is strong, but U.S. growth is lagging, and gross margins have declined. The reaffirmed guidance and cash flow breakeven target are positive, but the Q&A reveals uncertainties in U.S. growth and StratX trends. The flat Q3 outlook and cautious guidance for the second half, along with increased expenses, suggest a balanced sentiment. Without a market cap, the stock's reaction is uncertain, but the overall sentiment appears neutral, with no strong catalysts for significant movement in either direction.
The earnings call presented mixed signals. Financial performance showed growth in sales but a slight decline in gross margin and increased net loss. Guidance was reiterated, with potential upside from U.S. initiatives. Regulatory issues and competitive pressures pose risks, while no shareholder return plans were announced. The Q&A highlighted management's confidence in future growth but lacked specifics on key metrics. Overall, the absence of strong positive catalysts or severe negatives suggests a neutral sentiment.
The earnings call reveals several concerns: competitive pressures, supply chain challenges, and market adoption risks. Financial performance shows increased revenue but also rising expenses and a consistent net loss. The Q&A highlights uncertainty in guidance, lack of clarity on key initiatives, and potential tariff impacts. Despite some positive developments, such as international revenue growth, the overall sentiment is negative due to ongoing operational challenges and financial health concerns.
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