Beyond Air Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
November 11, 2024

There are 9 speakers on the call.

Operator

Good afternoon, and welcome everyone to the Beyond Air Financial Results Call for the Fiscal Quarter Ended September 30, 2024. At this time, participants are in a listen only mode. A question and answer session will follow the formal presentation. And now, I would like to turn the call over to Corey Davis, LifeSci Advisors. Please go ahead.

Speaker 1

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, we issued a press release announcing the operational highlights and financial results for Beyond Air's Q2 of fiscal year 2025. A copy of this press release can be found on our website, www.beyondair.net under the News and Events section. Before we begin, I'd 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.

Speaker 1

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 ks 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 this live broadcast, November 11, 2024. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

Speaker 1

With that, I'll turn the call over to Steve Lisi, Chairman and Executive Officer of Beyond Air. Go ahead, Steve.

Speaker 2

Thanks, Corey, and good afternoon to everyone joining us. With me here today is Doug Larson, our Chief Financial Officer. I'm excited to report that the Beyond Air team is successfully executing our commercial strategy and building positive momentum. As a result, during the quarter ended September 30, 2024, we increased our total number of hospital clients by over 60%. This is a tremendous signal to our team that the recent improvements we implemented in our marketing and customer education programs are striking the right tone with our customer base.

Speaker 2

Also, we are pleased with how our LungFit PH device is operating following the upgrades we made about 6 months ago. As all of you may recall, our new Chief Commercial Officer joined us in July and we are very pleased that the strategic initiatives put in place are having an immediate impact on customer receptivity, which has started to flow through the channel in the form of contract negotiations. We expect this success will continue to drive accelerated top line revenue growth over the following quarters as our recent sales and marketing initiatives mature. In addition, we announced several partnerships including with Healthcare Links, a renowned healthcare advisory and contracting firm that works with GPOs and IDNs and Trilament to help us engage with and distribute to the military and veterans administration hospitals. And we're teaming up with business Asia consultants to provide LungFit PH to hospitals in Europe, South America, the Asia Pacific region and the Gulf Coast region where many hospitals are unable to obtain nitric oxide supply or use No due to the difficulties associated with legacy cylinder systems that can't generate No from ambient air like LungFit PH.

Speaker 2

We are also implementing additional strategic initiatives over the next few months that are expected to build on our momentum that will further separate us from the competition. So stay tuned. To best position ourselves for success, we recently announced 3 separate financial agreements that are expected to extend our cash runway. First, we completed a private placement equity offering for $20,600,000 with a select group of healthcare focused investment funds and company insiders. 2nd, we reached an agreement with Avenue Capital to extinguish their senior secured term loan for a one time payment of $17,850,000 This agreement eliminates payments that would have been made from October 1, 2024 through June 30, 2026 of approximately $12,000,000 Avenue Capital also participated in the private placement equity transaction I just mentioned.

Speaker 2

3rd, we entered into an $11,500,000 royalty funding agreement led by certain Beyond Air Board members. This debt will carry a 15% interest rate with 12% being payment in kind until the September 2026 quarter. Actual cash payments for all interest and principal will commence after the September 2026 quarter and will be determined based on an 8% royalty rate on sales of LungFit PH. These royalty payments will continue only until principal and interest are paid off. The outcome of these financial agreements combined with the cost reduction measures taken earlier this year and anticipated revenues is that we expect to have sufficient cash for about 18 months as we ramp up our global commercial execution plan.

Speaker 2

Before turning it over to Doug, I want to touch on some growth drivers we are expecting in the relative near term. Our PMA supplement for the expansion of the LungFit PH label to include cardiac surgery was accepted and is under review by the FDA. As a reminder, a PMA supplement is a submission for when there is a change to an already PMA approved medical device. While there is no firm date for FDA to complete its review, we can say that as of today, we have answered all questions posed by FDA and we await their feedback. We will work with FDA to provide the quickest timeline possible, but cannot give a specific date for an FDA decision.

Speaker 2

As you may recall, there are no nitric oxide products currently approved for cardiac surgery in the United States. So if granted, this would represent the first formal FDA approval among any of the current players in the market. CE Mark, the regulatory changes in the EU from medical devices have been difficult for everyone. However, we believe that we will receive a final answer before the end of this calendar year. I know the frustration from investors on this topic, but from my view, the Beyond Air team's performance was a lesson in patience, perseverance and being an expert at your craft.

Speaker 2

Before the end of the March 2025 quarter, we will file a PMA supplement to the FDA for our next generation LungFit PH system. We look forward to demonstrating this system next week at the AARC annual meeting in Orlando for those attending our private meetings. We believe and we expect those of you who attend AARC and see for yourselves will agree that this superior system will be rapidly adopted in the global nitric oxide market. Moreover, it can provide No to areas of the world where cylinders just can't be used and this will result in lives saved. Turning to Beyond Cancer, they are awaiting regulatory approval in Israel for their UNO program in combination with anti PD-one therapy in late stage cancer patients, which remains an area of high unmet patient need.

Speaker 2

Just the other day at the Society For Immunotherapy of Cancer meeting, compelling survival data in both rats and mice were presented. We're encouraged to see that the amount of used was less than 10% of the amount of gas used in the Phase 1a uno monotherapy human study where an acceptable safety profile was demonstrated. This lower volume administration may be even safer and allow for tumors to be treated in more areas of the body than just cutaneous and near cutaneous. I encourage all of you to visit the Beyond Cancer website and get better educated as 2025 should be transformational for this potentially groundbreaking therapy for those suffering from solid tumors. I'm also pleased with the advances that Neuranas, our subsidiary focused on therapies for autism spectrum disorders is making.

Speaker 2

Great early stage work continues at Neuranas and I encourage you all to visit their website to get a better understanding on what is to come over the next 12 to 24 months. In closing, let me summarize my comments on LungFit PH sales by saying our commercial operations in the U. S. Turned to page about 6 months ago We are energized by the steady flow of high quality engagements with potential new customers and by the extremely positive feedback from existing U. S.

Speaker 2

Customers. In addition, the interest we are seeing outside the U. S. Is quickly gaining traction since our system upgrade and we anticipate signing new ex U. S.

Speaker 2

Agreements over the next 6 to 12 months and to begin shipping systems overseas in the first half of calendar twenty twenty five. In addition, we have several upcoming regulatory and product development milestones that are expected to drive increased growth. When we take all of these factors together, I hope you see why we're so excited about what we are planning over the next year. Now I will turn it over to our CFO, Doug Larson.

Speaker 3

Thanks, Steve, and good afternoon, everyone. Our financial results for the Q2 of fiscal year 2025, which ended September 30, 2024 are as follows. Revenue for the 2nd fiscal quarter of 2025 was $800,000 as compared with $200,000 in our fiscal Q2 of 2024. We're showing a $1,100,000 loss in gross margin for the fiscal Q2 of 2025 compared to a $200,000 loss for the same period last year. Cost of revenue in the current fiscal year exceeded revenue primarily due to a $700,000 of one time costs required to upgrade our existing fleet of devices, plus $800,000 of non cash headwinds, either provisions for excess inventory or depreciation of devices purchased but not yet deployed.

Speaker 3

We expect gross margins to turn positive in the March 2025 quarter. Research and development expenses for the 3 months ended September 30, 2024 were $4,600,000 as compared to $7,100,000 for the 3 months ended September 30, 2023. The decrease of $2,500,000 was primarily attributed to a decrease in spend in salaries, stock based compensation and preclinical studies. SG and A expenses for the 3 months ended September 30, 2024 and September 30, 2023 were $7,200,000 $10,200,000 respectively. The decrease of $3,000,000 was attributed primarily to a decrease in stock based compensation costs.

Speaker 3

Other expense for the 3 months ended September 30, 2024 was $1,200,000 compared with an other income of $100,000 for the 3 months ended September 30, 2023. The increase in expense of $1,300,000 was mostly non cash and attributed primarily to the partial extinguishment of the Avenue loan. Net loss attributed to the common stockholders of Beyond Air, Inc. For the 3 months ended September 30, 2024 was $13,400,000 or a loss of $0.28 per share basic and diluted. Our net loss attributed to common stockholders of Beyond Air Inc.

Speaker 3

For the 3 months ended September 30, 2023 was $16,200,000 or a loss of $0.51 per share basic and diluted. Net cash burn in the quarter ended September 30, 2024, excluding one timers and the impact of the financing transaction Steve mentioned earlier was $11,500,000 We hit the brakes hard on spend in the last two quarters, closing 2 offices, reducing staff levels by over 30% across the company, putting our VCAP study on hold and adjusting our production forecasts. We'll get a full quarter of benefit from all of our actions and expect to see a reduction in cash burn in Q3 by at least 1 third. As of September 30, 2024, the company had cash, cash equivalents and marketable securities of $28,400,000 Due to the timing of cash settlements associated with the financial transactions mentioned earlier, certain settlements were completed subsequent to quarter end. Thus, on a pro form a basis, for September 30, 2024, cash was $18,500,000 And with that, I'll hand the call back to Steve.

Speaker 2

Thanks, Doug. We will now take any questions you may have.

Operator

Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Jason Wits with Roth Partners. Please proceed with your question.

Speaker 4

Hi, thanks for taking the questions.

Speaker 3

Just first off, I think you said

Speaker 4

at the beginning a 60% increase in contracts. How does that what does that say about momentum for the rest of the year? Should we expect to flow through for the remaining quarters? Or how should we think about sort of the progression as we go from Q1 to 4th?

Speaker 2

Yes. Hey, Jason, thanks for the question. I think that momentum will continue. Again, it's every contract has its own value. So I think that the volume is very good.

Speaker 2

And I think the volume will continue at this pace. Obviously, as the as the nominee gets bigger, maybe the percentage may not keep up. But number of contracts that we're adding every quarter will continue. The current quarter that we're in is close to what we had last quarter, not quite there yet, but we still have another 7 weeks left.

Speaker 4

Okay. And then you mentioned several strategic partnerships. Just curious how they might work, especially with the VA. Are you in the VA now or is the TrilliumMed partnership going to get you into the VA?

Speaker 2

Yes. We do not have any, VA hospitals yet. I think the relationship with Trilimed has just gotten started. We did Trilimed was instrumental in us getting the naval hospital in Guam. So that was great.

Speaker 2

But I think there's a little bit of work to do with the VA. So I wouldn't expect a big impact in the December quarter from the VA at all. We just again, the Trilimed agreement just got started. So I think there's some work we need to do with them before they go out in full force.

Speaker 4

Okay. And I think also you mentioned for the PMA for cardiac surgery. I guess timing depends largely on the FDA right now or how should we think about and I don't know if you can give any more color in terms of how you think that might go?

Speaker 2

Yes. I mean, look, we've given them everything that they've asked for. It's in their the ball is in their court, so to speak. But this is a device, not a drug. So there's no hard PDUFA date.

Speaker 2

So I just don't know. I wish I could be more specific, but we've tried to give guidance in the past on regulatory timing and it just hasn't gone well. So we're just going to let you guys know what we know, which is that we've given them everything they've asked for and now we just wait.

Speaker 4

Okay, great. And I'll ask one more question, I'll jump back in queue. And that's just on the you mentioned I appreciate the commentary on cash burn. I think you said it will reduce by about a third.

Speaker 2

Yes, I know, at least

Speaker 3

1 third.

Speaker 4

At least 1 third. Most of that is in the SG and A line or how would that be I assume that's where we see most of that reduction or anywhere else we might see it?

Speaker 3

Yes. You're going to see it all over the place. I mean, Steve and I went through with a nice basically to the entire P and L. So we've looked at everything where we could make savings. So you're going to see it in the R and D line, you're going to see it in G and A.

Speaker 4

Okay, great. I'll jump back in queue.

Speaker 2

Thanks,

Operator

Jason. Thank you. Our next question comes from the line of Jason Vidner with Piper Sandler. Please proceed with your question.

Speaker 5

Hey, guys. How's it going? This is Joe on for Jason. I just had a couple of questions on the competitive landscape here. So one of your big peers referenced some good traction with the recent product launch.

Speaker 5

Can you talk about what you're seeing out there in the market with respect to competitive dynamics and whether the presence of this new offering is leading to any longer contract negotiations with hospitals? Thanks.

Speaker 2

Yes, I don't know who's gaining traction in the market. I don't know who said who's who that might be. So I don't really unless you have a specific competitor you want to talk about, I don't know who's gaining traction. So we I don't think the hospitals look at money raises by companies on Wall Street as much as you think. Our relationship with hospitals and our customers and potential customers is the same as it was before the money raises as it is after.

Speaker 2

We haven't noticed anything different. What we've noticed different is that the implementation of the new tactics we started back late in the spring and have been augmented greatly by our new Chief Commercial Officer, who came on in July. We're seeing a lot of good feedback from these initiatives and the upgraded machine. So we seem to be picking up a lot of momentum with customer discussions in the U. S.

Speaker 2

We feel real good about it. And I think like we said in the prepared remarks, on the international side, we're getting a lot of activity much more than we had 6 months ago, that's for sure. So if you have anything more specific on particular competitor, I'm happy to talk about it if you have something.

Speaker 5

No, we can take that offline, Steve. That's all right. But I appreciate the color there. And just to follow-up to that one, can you also talk a little bit about contract pricing with the uptick in activity in the most recent quarter kind of piggybacking off the last question? Has there been any moving up and down here in pricing versus earlier this year?

Speaker 5

And can you talk about how this pricing is fluctuating across account sizes? Thanks.

Speaker 2

Yes. I think that the pricing is as expected on a per hour basis. I don't think we're seeing anything different than we saw 6 months ago or 12 months ago. It seems to be pretty stable from our perspective. But obviously the size of contracts are dependent on the volume of hospitals and the higher the volume lower the price of course, but we like the higher volume ones because they're bigger.

Speaker 2

But we'll you guys will see how those that's playing out for us over the next quarter or 2 in terms of the size that we're getting.

Speaker 5

Great. Appreciate that.

Speaker 2

Thanks.

Operator

Thank you. Our next question comes from the line of Marie Thibault with BTIG. Please proceed with your question.

Speaker 6

Hi. I appreciate you taking the questions this evening. I wanted to ask a qualitative question here on some of the changes David has made to the commercial organization. What strategies specifically are working well? Where are you finding success?

Speaker 6

And where is there sort of more to come? I assume that he hasn't had time to deploy all his strategies yet. So love to hear a little bit more about what's going on behind the scenes.

Speaker 2

So we mentioned a partnership with an international distribution firm that will manage our relationships outside the United States. That's a big win for us. It's not like there's hundreds of them you can choose from and there's very few high quality companies out there like BAC. So that's David bringing that in and it takes time to win those partners and then implement it. So I think you'll see some activity on the international front over the next 3 to 6 months.

Speaker 2

And of course, we have Trilimed and Healthcare Links that will be helping us with not just the VA and Department of Defense, but of course GPOs and IDNs. Those things are very important. David and again, you're not seeing anything this particular quarter from those agreements other than the naval hospital base in Guam. But you'll start to see that pick up as we go forward. And David has been able to generate more leads in the United States with some of the things he's implemented already.

Speaker 2

He just got that started up maybe a month or so ago. And I want to say exactly what that is. I don't want to steal his thunder or give away his secrets, but he's done a really good job of generating more leads and interest for our commercial team, for the sales team. So again, that will start to bear fruit over the next 3 to 6 months. So I think the groundwork he's laid is fantastic and we already started to see it here.

Speaker 2

It's just reporting this quarter is just too early to see the benefits of what David has done.

Speaker 6

Of course. Well understood. Thanks for that, Steve. A question for Doug then. Can you talk to us a little bit about gross margins and how we might expect some of that to be impacted by say both higher volumes to come, but also some of these label expansions, the transport ready system, the CE Mark and selling abroad, any impact to gross margins to expect over the next few quarters?

Speaker 6

Thanks so much.

Speaker 3

Sure. So as mentioned in the prepared remarks, there's a couple headwinds that we've got. Some the one timer basically being us having to upgrade systems that we have in stock. So that was $700,000 That's I wouldn't call it exactly a one timer because we're not completely finished yet, which is why we're calling for gross margins to turn positive in the March quarter and not necessarily the December quarter. So there's going to be a little additional cost next quarter and then that it's going to for all intents and purposes disappear in the March quarter.

Speaker 3

Also mentioned the there's about $500,000 of depreciation in this quarter. That's basically on systems that we've built that are ready to be deployed and it's already kind of a drag on our gross margin. So the good news there is as we expand into the market, we don't have to build as many machines that are already built. We can deploy them and that drives that's going to go straight into margin, right. We can generate revenue on them without having that additional depreciation cost in gross margin.

Speaker 3

So that's going to have very positive upside. The other thing we used to talk about a little bit, it's going to have a lesser effect, but we do also have some fixed warehousing costs that are in our gross margin base. And as we grow those geographical regions, we penetrate more in the regions where we're already existing. We can do that without adding additional cost. So again, that gross margin, the gross margin rate is going to go up from that.

Speaker 3

As we go internationally, you are going to see a little bit of a drag on the gross margin as opposed to where we'll be in the U. S. Because the business model there is a little bit different. And so we won't be seeing the same margin rates outside of the U. S.

Speaker 3

As we see inside the U. S. That's going to grow slowly over time, right. So both between now and the end of the fiscal year, you're not going to see a huge drag from that because we're only going to start shipping in the March quarter. So it will have a minimal impact.

Speaker 3

But going forward, it's definitely something to put in the models that there will be a little bit of impact from that, the more successful we are in international.

Speaker 6

Very helpful. Thanks for taking the questions.

Speaker 3

Thank

Operator

you. Our next question comes from the line of Dale Jen with Laidlaw and Company. Please proceed with your question.

Speaker 7

Good afternoon and thanks for taking the questions. Steve, when you mentioned that there is a 60% increase, could you give a little bit more color in terms of that whether that 60% is from last year or how should we just think about that the basis for that number?

Speaker 2

Yes. So the base is just our total customers as of June 30 versus our total customers at September 30. That's all.

Speaker 7

Okay, great. So basically the quarter over quarter, I guess, that's one way to look at

Speaker 3

it? Yes.

Speaker 7

Okay, great. That's very helpful. And also on the press release, you're talking about annualized revenue in October. Could you elaborate a little bit more on that specific aspect? It seems like the over $800,000 a quarter.

Speaker 7

Would that be something we look into the Q3 of fiscal Q3 or that's something we underestimate?

Speaker 2

Yes, I mean, we did 800 this quarter and the run rate would put us more like 875. And we did say that we have some more starts after October 1. So the number will be higher than that. How much higher? We don't know because we don't know all the starts.

Speaker 2

We may get some hospital starts in December right now. So we're still waiting. So yes, I mean, we'll be talking about that kind of a run rate thing every quarter. So you can see how we progress. So we think that every quarter it's going to continue to rise.

Speaker 7

Okay, great. That's hopefully helpful. And then maybe the last question here is in terms of your international sales, I know you have a trail map plus the consultant. Are you guys going to have using this firm to expand the footprint to other countries or you were still seeking any kind of formal sort of collaborator partners and that kind of things? And just want to get a little bit color as you guys move forward go beyond the U.

Speaker 7

S. Borders? And thanks.

Speaker 2

Yes. Thanks, Yale. So BAC is more of an intermediary between us and the actual distributor in each country. We started to see the demand come in as we showed our upgraded system back in spring. And we had one person doing international for us.

Speaker 2

We had the GETS deal in Southeast Asia. We had a few other things that were happening. And it just became apparent to us over the summer that he's only one man. So we needed some help. And that's why we contracted with this group.

Speaker 2

And they can handle any volume that comes our way. We're fortunate to have as much as we think. So they're the intermediary. They've got a great track record and we're looking forward to them getting going over the next 30 to 60 days.

Speaker 7

And maybe just tag on one more here. Do you need additional approval in overseas countries or you feel that the U. S. Application, maybe the EU application, I mean approval will be able to cover a lot of these ex U. S.

Speaker 7

Countries or territories? Thanks.

Speaker 2

Yes. So FDA approval covers some. I think the CE Mark and the EU covers more than just FDA approval. And there is another regulatory approval, it's called MDSAP. We anticipate having that as well sometime next calendar year, maybe late next calendar year, which will open up a few other countries.

Speaker 2

But in most countries, you still need to go through their licensing process, Yale. So it may take a couple of months to maybe even a year in some places. So every country is different. And of course, as you know, Japan has their own process. So FDA and Europe will not make a difference there and there might be 1 or 2 other countries where it's going to be a long process.

Speaker 2

But for the vast majority of countries, it's a couple of months to maybe a year. And once we get our CE mark, we'll have most of the countries in the world covered outside the U. S.

Speaker 7

Okay, great. Well, appreciate it. And again, congrats on all the progress at this moment.

Speaker 2

Great. Thanks, Yale.

Operator

Jim. Thank you. And our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Speaker 8

Hey, guys. Thanks for taking the question. Can you talk a little bit more about the next generation device, the transport ready device and the PMA supplement that you expect to submit, I guess, in the Q1 of next year? Is that could that review the since it's a supplement, the faster than the first gen?

Speaker 2

Thanks for the question, Matt. Boy, it better be faster than the first one. First one was torturous. But again, that was a difficult time for FDA with the pandemic and lots of changes going on over there. So I think they're in better shape staffing wise than they were back then.

Speaker 2

So we're looking forward to working with them on the supplement. But yes, it is a supplement. It's not a new product. So it should be a little bit smoother. I don't know the timing.

Speaker 2

I don't want to speculate. Let's just get it to them and see what they think of the filing of the quality of it and we'll go from there. But this is a product that we'll be showcasing next week at the American Academy of Respiratory Care in Orlando. So if anybody wants to make the trip down to Disney, you can come see us and we'll give you a look at this system. It is ready.

Speaker 2

It's ready to go. So you'll see it fully functioning next week. And we're just putting together all the external testing from our external partners who do these testing for us and then we'll put it into them in a couple of

Operator

months. Okay.

Speaker 8

And then you spoke in your prepared remarks about expected accelerated top line revenue growth in the coming quarters. Can you give a little more color to that? Is it going to be chunky as you sign new deals? Or do you expect it kind of today? Just give us some more color on that.

Speaker 2

Sure, Matt. I wish I could. I mean, I'd love for it to be as smooth as it can be and give you a nice little chart, but it never works that way. It's probably going to be chunky. We may 1 quarter get 1 or 2 real big contracts and the next quarter still keeping up volume with hospitals growing, but we might not hit a big home run-in the next quarter.

Speaker 2

So you just don't know. I wish I'd give you more insight into how smooth it is, but the size of contracts range from less than $100,000 a year to over $1,000,000 a year. So you just don't know which ones are going to hit in what quarter. But we're talking to as many hospitals as we can, trying to reach out to as many potential customers as possible. And there are potential wins in across the range of size of hospitals.

Speaker 2

So we just have to see how they come in.

Speaker 8

Okay. And then last question in terms of you mentioned or I guess it was mentioned in the prepared remarks that March 25, you expect margins to turn positive. How should we think about it for the calendar year 2025 is how should your margins evolve?

Speaker 3

Thanks, Matt, for the question. So we're thinking you're asking about calendar 'twenty five. So we'll be turning positive in the March quarter. Going forward, you're going to see I hate to give percentages out. You're going to see margins that you've probably been expecting from us, how's that starting in the Q1 of fiscal 'twenty six?

Speaker 2

And let me just help out here. I mean, we've said publicly in the past that we're targeting with our 1st generation product 60% to 65% gross margins. So that's the target. And I think by the end of calendar 2025 on a GAAP basis, you probably could see that. I think giving Doug a little wiggle room here, the international impact, there is always the cost plus component of international.

Speaker 2

So that may bring the margin down. It just depends on how we structure the back end of that, whether it be a royalty or we're doing a razor razorblade type model as to whether the impact on the gross margin will be muted or not. So it might be a good thing if that gross margin is a little bit light because we're so strong internationally. So we'll just have to see how it plays out. But I think that by the December quarter of calendar 2025, you should see us close to that 60% -ish number.

Speaker 8

Okay. That's great. That's helpful. Thanks. Thanks for taking questions.

Speaker 2

Great. Thanks, Matt. Appreciate it.

Operator

Thank you. At this time, we are showing no further questions in the queue. And 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 2

Thanks for joining today everyone. Look forward to speaking to you in a couple of months. Thanks.

Operator

Thank you. And ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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Beyond Air Q2 2025
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