Pulmonx Q1 Earnings Call Highlights

Key Points

• Pulmonx reported Q1 revenue of $20.6 million (down 9% YoY) but reiterated full‑year 2026 revenue guidance of $90–$92 million and expects to return to year‑over‑year growth in the back half as U.S. sales hiring finishes and treating‑center additions continue.
• International revenue declined primarily because of the pause in sales to its China distributor while Pulmonx awaits renewal of the Chinese registration certificate (expected H2 2026); excluding China, international markets grew 22% YoY.
• Management cut costs, closed a new $60 million five‑year credit facility, and finished Q1 with $61.6 million in cash, saying 2026 cash burn should be about $23 million (down from $32 million in 2025) to extend the company’s runway.

Pulmonx NASDAQ: LUNG reported first-quarter 2026 worldwide revenue of $20.6 million, as management emphasized early progress on commercial execution, continued advancement of its AeriSeal clinical program, and actions to reduce spending and extend its cash runway. Executives reiterated full-year 2026 revenue guidance of $90 million to $92 million and said they expect a return to year-over-year growth in the back half of the year.

First-quarter results and revenue drivers

Chief Operating Officer and Chief Financial Officer Derrick Sung said total revenue of $20.6 million was down 9% from $22.5 million in the prior-year quarter, and down 12% on a constant-currency basis.

U.S. revenue was $13.3 million, a 7% decrease from $14.2 million a year earlier. Sung noted the company added 15 new U.S. treating centers during the quarter.

International revenue was $7.3 million, down 12% from $8.3 million in the prior-year period and down 21% on a constant-currency basis. Sung said the international decline was “fully attributable” to the absence of sales to Pulmonx’s distributor in China as the company awaits renewal of its Chinese registration certificate, which it expects in the second half of 2026.

Excluding China, Sung said international markets “grew 22%” year over year (and 9% on a constant-currency basis), adding that performance was solid across the rest of the international footprint.

Commercial execution: re-accelerating U.S. growth

President and CEO Glendon French said the company remains focused on three priorities: “re-accelerating U.S. sales growth,” advancing market-expanding clinical initiatives, and aligning the cost structure “to drive profitability.” He said Pulmonx has “filled with top talent all our sales leadership positions and substantially all our U.S. field sales roles,” and described improvements in commercial culture and retention.

French said sales turnover has stabilized over the last six months, which he attributed to increased leadership transparency and streamlined selling priorities. He outlined a “near-to-far approach” that includes:

• Setting up “high quality and efficient” valve programs
• Engaging COPD-oriented clinicians aligned with hospital systems that offer Zephyr valves
• Working with physician champions to educate service line administrators and secure appropriate resourcing
• Concentrating direct-to-patient efforts on geographies with established treating centers that can accommodate demand

In response to a question from Stifel’s Rick Wise on the sales ramp and guidance assumptions, Sung said Pulmonx has narrowed what it asks the U.S. sales force to do, after concluding there were “too many balls in the air” last year. Sung said the company is “right where we expected to be at this point,” with sales hiring largely complete and new reps moving up the learning curve.

On the expected cadence for 2026, Sung said Pulmonx expects “sequential quarterly year-over-year improvement in growth” through the year, with growth turning positive in the back half and “exiting the year with double-digit growth, both U.S. and international.” He pointed to improving U.S. comparisons—U.S. revenue was down 7% in Q1 versus a decline of 11% in Q4—as an indication the company “bottomed in Q4” on a year-over-year growth-rate basis.

Asked by Canaccord’s John Young about the pace of U.S. treating-center additions after 15 were added in Q1, French said the company is maintaining its previously communicated expectation of about 10 new centers per quarter, while noting some Q1 additions may have shifted from late 2025.

Clinical initiatives: AeriSeal and CONVERT II

French said expanding the addressable market through Pulmonx’s AeriSeal program remains a key focus. He said the company’s CONVERT II pivotal trial is “progressing well,” and that enrollment has accelerated after bringing in new leadership within clinical affairs.

French added that Pulmonx is “highly confident” it can complete enrollment in 2027, which he said would move the company closer to expanding its total addressable market by approximately 20% globally. He described AeriSeal as having potential to be “both a revenue driver and a market expander” for Zephyr valves over the medium to long term.

Margins, cost actions, and balance sheet updates

Gross margin was 78% in the first quarter, up from 73% a year earlier. Sung attributed the year-over-year improvement primarily to a lower mix of distributor sales in international markets. For full-year 2026, he said Pulmonx continues to expect gross margin of about 75%, “trending higher in the first half” and “lower toward the second half” based on distributor-sales mix.

Total operating expenses were $29.0 million, down 6% from the prior-year quarter. Sung said operating expenses included $3.8 million in non-cash stock-based compensation and about $1.4 million in one-time restructuring costs. Excluding stock-based compensation and restructuring costs, operating expenses declined 8% year over year. The company reiterated expected 2026 operating expenses of $113 million to $115 million, inclusive of about $19 million of non-cash stock-based compensation.

R&D expense was $4.9 million, compared with $4.8 million a year earlier. Sales, general and administrative expense was $24.1 million, down from $26.1 million in the prior-year quarter.

Net loss was $13.7 million, or $0.33 per share, compared with a net loss of $14.4 million, or $0.36 per share, in the prior-year period. Adjusted EBITDA loss was $8.5 million, consistent with Q1 2025; excluding one-time restructuring charges, adjusted EBITDA loss was $7.0 million, which Sung said was 18% favorable to the prior year.

Pulmonx ended March 31, 2026 with $61.6 million in cash, cash equivalents, and marketable securities, down $8.2 million from the end of 2025. Sung said the company executed a cost restructuring initiative that reduced ongoing operating expenses by “over 10%,” and closed a $60 million credit facility with a five-year interest-only structure, extending debt maturity to 2031 and providing access to an additional $20 million in undrawn capital subject to certain revenue milestones. With those measures, he said Pulmonx expects to burn roughly $23 million of cash in 2026, down from $32 million in 2025.

China timing, LungTraX focus, and longer-term growth comments

On China, Sung said the renewal of the Chinese registration certificate is “an administrative process” and that the company has no reason to believe it will not be renewed in the back half of 2026. He added that Pulmonx is not expecting a sudden surge in China sales after renewal; instead, he expects a “very gradual” resumption, and said the company’s guidance does not assume a significant contribution from China even in the second half.

During Q&A, French addressed LungTraX Detect, saying the company had previously spent a “disproportionate amount” of time promoting it and has since refined its approach based on learnings from pilots. He said the technology works well in a subset of accounts and that the company is targeting those situations where there can be a strong return for hospitals. French said Pulmonx does not report what percentage of accounts are using it, while adding that accounts running the technology appear to see it contribute to the company’s efforts.

Asked about longer-term growth aspirations, French said he expects Pulmonx to return to double-digit growth, citing prior disruptions such as doing too many initiatives at once and losing too many sales reps, particularly in the U.S. Sung added that the company’s 2026 guidance contemplates exiting the year with double-digit growth, but he did not provide guidance beyond 2026.

Management closed the call by reiterating that the company is “right where we expected to be at this point,” with priorities centered on ramping U.S. sales, advancing clinical programs, and delivering financial leverage.

About Pulmonx NASDAQ: LUNG

Pulmonx Corporation is a commercial-stage medical device company focused on bronchoscopic lung volume reduction for patients suffering from severe emphysema. The company's flagship therapy, the Zephyr® Endobronchial Valve System, employs one-way valves delivered via a minimally invasive bronchoscopic procedure to collapse diseased portions of the lung, reducing hyperinflation and improving respiratory function. Complementing this treatment, Pulmonx offers the Chartis® Pulmonary Assessment System, which provides clinicians with quantitative measurements of collateral ventilation to aid in patient selection and optimize clinical outcomes.

The Zephyr Valve received the CE mark in Europe in 2008 and FDA approval in the United States in 2018, and it has since been adopted by leading respiratory and thoracic centers across North America and Europe.

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