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01/11 03:39
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents strong revenue growth, optimistic guidance, international expansion, and reduced expenses. The Q&A section reveals confidence in achieving guidance, despite some uncertainties in hospital contracts and PMA filings. Cash reserves are solid, supporting operations well into 2026. The company's strategic moves, including the Premier agreement and international partnerships, are expected to drive growth. While management's lack of specific details could be a concern, the overall sentiment is positive, with potential for stock price appreciation in the coming weeks.
Revenue Revenue for the fiscal quarter ended June 30, 2025, increased 157% to $1.8 million compared with $0.7 million for the fiscal quarter ended June 30, 2024. The increase was attributed to strong market adoption of LungFit PH and the implementation of a new sales strategy under the leadership of the Chief Commercial Officer.
Gross Profit Gross profit increased by $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 improvement was due to increasing revenues, partially offset by depreciation of additional LungFit devices.
Operating Expenses Operating expenses were reduced to just above $7.5 million in the June quarter from $13 million for the same period last year, representing a 40% reduction year-over-year. This was achieved through cost reductions in SG&A, R&D, and the supply chain.
Research and Development Expenses R&D expenses were $3.1 million for the fiscal quarter in 2026 compared with $6 million for the same period last year, a decrease of $2.9 million. The reduction was across salaries, stock-based compensation costs, clinical and pre-clinical expenses, professional fees, and Gen II device development costs.
SG&A Expenses SG&A expenses for the quarters ended June 30, 2025, and June 30, 2024, were $4.7 million and $7.2 million, respectively. The decrease of $2.5 million was attributed to reductions in salaries, stock-based compensation costs, marketing and advertising, and legal fees.
Net Loss Net loss attributed to common stockholders was $7.7 million or a loss of $1.53 per share basic and diluted, compared to a net loss of $12.2 million or a loss of $5.32 per share basic and diluted for the fiscal quarter ended June 30, 2024. The improvement was due to increased revenue and reduced operating expenses.
Net Cash Burn Net cash burn for the quarter was $4.7 million, more than 60% lower than the first quarter of last fiscal year. This decrease reflects reduced operating expenses and the completion of spending on the development of the next-generation LungFit device.
Cash, Cash Equivalents, and Marketable Securities As of June 30, 2025, the company reported $6.5 million in cash, cash equivalents, and marketable securities. This is expected to support current operating plans well into calendar 2026, provided internal revenue estimates are met and costs are controlled.
LungFit PH: Achieved a 157% increase in revenue to $1.8 million compared to $700,000 in the same period last year. Sequentially, revenue increased by 50% over the previous quarter. The product is gaining strong market adoption, with a growing sales pipeline and increasing customer confidence.
LungFit PH II: Expected to launch in calendar year 2026, pending regulatory clearance. It is designed to overcome market barriers with features like smaller size and suitability for air and ground transportation.
LungFit GO: On track for a pre-IDE submission to FDA by year-end to discuss the clinical path forward.
International Expansion: Recorded first quarter of international revenues. Distribution network now covers over 30 countries, reaching more than 2 billion lives. Growth is expected to accelerate in fiscal 2027.
U.S. Market Access: Added to the Premier network, providing access to close to 3,000 hospitals. This complements the existing Vizient network, enhancing market penetration.
Cost Reduction: Achieved a 40% year-over-year reduction in operating expenses, from $13 million to $7.5 million. R&D expenses decreased by $2.9 million, and SG&A expenses reduced by $2.5 million.
Cash Burn: Net cash burn reduced by over 60% compared to the first quarter of the previous fiscal year, reflecting cost control and reduced development spending.
Strategic Partnerships: Awarded a national group purchasing agreement with Premier for therapeutic gases, streamlining the sales process for Premier hospital network members.
Beyond Cancer Program: Currently assessing the best path forward, with plans for a Phase Ib combination study with anti-PD-1 therapy.
NeuroNOS Program: No updates since the last call. FDA meeting planned later this year to discuss the path to human studies, expected to begin by the end of calendar 2026.
Regulatory Approval Delays: The company is awaiting FDA approval for its second-generation LungFit system, which is critical for penetrating larger hospitals and hospital systems. Any delays in regulatory clearance could impact market share and revenue growth.
Market Barriers: The company faces challenges in overcoming hospital networks and national purchasing groups, which are critical for expanding its market presence. Despite recent progress, these barriers could slow down adoption rates.
Supply Chain and Cost Management: While the company has reduced operating expenses significantly, any disruptions in the supply chain or unexpected cost increases could impact profitability and operational efficiency.
Financial Sustainability: The company reported a net loss of $7.7 million for the quarter and is relying on existing cash and financing vehicles to sustain operations into 2026. Failure to meet revenue estimates or control costs could jeopardize financial stability.
Competitive Pressures: The nitric oxide market is competitive, and the company’s ability to maintain and grow its market share depends on the successful adoption of its LungFit systems and the introduction of its second-generation device.
Clinical Development Risks: The company is still in the process of securing clinical trial sites for its Beyond Cancer program and awaiting FDA meetings for its NeuroNOS subsidiary. Delays or failures in these areas could impact future growth opportunities.
Revenue Guidance: Reaffirmed revenue guidance of $12 million to $16 million for fiscal year 2026.
Market Expansion: Anticipates growth each quarter going forward with momentum picking up substantially in fiscal 2027. International revenues recorded for the first time, with access to over 30 countries and distribution partners covering more than 2 billion lives.
Product Development: Plans to introduce the second-generation LungFit PH II system in calendar year 2026, pending regulatory clearance. This system is expected to penetrate larger hospitals and hospital systems, significantly impacting market share and logistics.
FDA Approvals: Anticipates FDA approval of the second-generation LungFit system and subsequent introduction to the U.S. market, which is expected to have a major impact on market share and total NO volume.
Market Share Goals: Expects the introduction of LungFit PH II in fiscal 2027 to put the company on a path to take the majority of market share over time in a $1 billion global NO market.
Clinical Trials: Plans to begin human studies for NeuroNOS by the end of calendar 2026, pending FDA meeting later this year. LungFit GO program is on track for a pre-IDE submission to FDA prior to year-end to discuss the clinical path forward.
Operational Efficiency: Expects continued reduction in cash burn and operating expenses, with a potential path to profitability by calendar 2026, provided internal revenue estimates are met and costs are controlled.
The selected topic was not discussed during the call.
The earnings call summary indicates strong financial performance with a 128% YoY revenue increase, reduced gross losses, and significant cost reductions. The Q&A section reveals positive sentiment towards the second-gen LungFit PH, expected to drive further growth, despite supply chain challenges. The company's strategic international expansion and new business model also contribute positively. However, the vague management responses and updated guidance suggest some uncertainty, tempering the overall sentiment. Considering these factors, the stock price is likely to experience a positive movement, especially given the significant revenue growth and cost control.
The earnings call presents strong revenue growth, optimistic guidance, international expansion, and reduced expenses. The Q&A section reveals confidence in achieving guidance, despite some uncertainties in hospital contracts and PMA filings. Cash reserves are solid, supporting operations well into 2026. The company's strategic moves, including the Premier agreement and international partnerships, are expected to drive growth. While management's lack of specific details could be a concern, the overall sentiment is positive, with potential for stock price appreciation in the coming weeks.
Despite a strong revenue increase and reduced losses, concerns like logistical challenges, unclear FDA approval timelines, and lack of immediate impact from new product versions temper enthusiasm. The financial performance shows improvement, but the absence of a share repurchase program and management's vague responses during the Q&A add uncertainty. Thus, a neutral stock price movement is expected over the next two weeks.
The earnings call presents a positive outlook with a 175% revenue increase and improved net loss figures. The company's strategic plans, including international expansion and partnerships, are promising. However, uncertainties in regulatory timelines and lack of specific shareholder return plans temper enthusiasm. The Q&A suggests optimism about future growth and expense reductions, despite some unclear management responses. Overall, the positive revenue growth and strategic initiatives outweigh the concerns, suggesting a positive stock price movement in the near term.
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