Beyond Air Q2 2027 Earnings Call Transcript

Beyond Air (NASDAQ:XAIR) reported second-quarter financial results on Wednesday. The transcript from the company’s second-quarter earnings call has been provided below.

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Summary

Beyond Air reported record quarterly revenue of $2.3 million for Q3 2026, marking a 28% year-over-year increase and a 31% increase from the previous quarter, driven by market expansion and hospital agreements for the LungFit PH system.

The company is preparing for the commercial launch of its second-generation LungFit PH system, pending FDA approval, and has expanded its U.S. commercial pipeline and international partnerships.

Despite a net loss of $7.8 million, Beyond Air improved its gross margin to 8% from a negative margin the prior year and reduced R&D and administrative expenses.

The company reaffirmed revenue guidance of $8 million for 2026 and $16-18 million for 2027, factoring in potential sales from the second-generation LungFit PH system.

CEO Robert Goodman highlighted the positive reception of the LungFit PH system, strong customer satisfaction and strategic focus on commercial execution over further development of LungFit Go within the next year.

Full Transcript

OPERATOR

Good afternoon, everyone, and welcome to the Beyond Air financial results call for the quarter ended September 30, 2026. 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.

Corey Davis (Investor Relations at LifeSci Advisors)

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Earlier today we issued a press release announcing the operational highlights and financial results for Beyond Air’s quarter ended September 30, 2026. A copy of this press release can be found on our website, 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. 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-Q and Form 10-K, 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 the live broadcast, November 11, 2026. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

With that, I’ll turn it over to Robert Goodman, Chief Executive Officer at Beyond Air. Bob, go ahead. The floor is yours.

Robert Scott Goodman (Chief Executive Officer)

Thanks, Corey, and good afternoon, everyone. I’m pleased to speak with you today and provide an update on what has been a productive and meaningful period for Beyond Air. With me today is Dan Moorhead, our Chief Financial Officer. I’ll begin with an update on our recent activities and commercial execution for LungFit PH before turning the call over to Dan to discuss our financial results for the quarter ended September 30, 2026. We’ll then open the call for questions.

Throughout the third quarter, we continued to focus on positioning the company for its next phase of growth as we prepare for the planned commercial launch of our second-generation LungFit PH system, pending FDA approval. Our priorities remain focused on expanding market penetration, deepening relationships with hospitals and health systems, and growing our commercial pipeline while building on the momentum of our first-generation LungFit PH system.

These efforts contributed to record quarterly revenue of $2.3 million in the September quarter, up approximately 28% year over year and 31% from the June quarter. We achieved this growth while maintaining financial discipline and prioritizing resources to support commercial execution and preparations for the potential launch of second-generation LungFit PH. Underlying these results is the progress we are making in expanding market penetration and converting hospital interest into signed customer agreements that support recurring revenue over multiple years. Our in-house sales team is building these relationships, supported by national GPO agreements that broaden our reach across hospitals and hospital systems. Our U.S. commercial pipeline is expanding, reflecting accelerated demand for our first-generation system and strong receptivity to our technology and the operational efficiencies it offers.

We are especially pleased with the pace of new account wins and the rate of renewals, which speak to the acceptance of our innovative technology and delivery of iNO, resulting in exceptional customer satisfaction, which gives us a foundation to build on as we prepare for the potential launch of the second-generation LungFit PH. International distribution is another important opportunity for growth. We have partnerships in place covering more than 40 countries, and international sales during the quarter were one of the highest to date. Looking ahead, pending FDA approval, we believe our second-generation system has the potential to substantially expand our market opportunity and accelerate growth. The system is smaller, has reduced weight, simplified operation, longer service intervals, and expanded operational flexibility.

Our PMA supplement seeks expanded FDA labeling that would permit use during patient transport by air and ground. Turning to the regulatory process, our PMA supplement for the second-generation LungFit PH remains under FDA review. We remain encouraged by the progress we’re making toward completing the remaining steps of the review process. We expect to complete our audit readiness process in mid-December. The system would then remain subject to FDA inspections and final approval. The timing and outcome of these steps remain subject to the FDA’s review. We are excited to be at these final steps of the process.

As I mentioned a minute ago, the second-generation LungFit adds transport capability. This is important as it will enable us to serve as a single-source nitric oxide provider across routine care and patient transport, which is the current standard across most U.S. hospital systems. This will strengthen our competitive position and support broader adoption of our cylinder-free technology. Turning to another development program within our LungFit platform, LungFit Go received FDA Breakthrough Device designation during the quarter for the treatment of nontuberculous mycobacterial pulmonary disease, or NTM-PD. We believe this designation underscores a significant unmet need in NTM-PD and builds upon clinical data generated with LungFit Go in this patient population. While we are encouraged by this designation, we do not currently plan to allocate resources to further development of LungFit Go in 2027.

Our focus remains on commercial execution for LungFit PH and preparations for the launch of our second-generation system, pending FDA approval. Let me now provide a brief update on our two indirect subsidiaries focused on development programs outside of our core LungFit business. During the September quarter, we entered into a definitive agreement under which Univo Pharmaceutical Industries would acquire our controlling interests in Neuronos Israel. The transaction is intended to provide Neuronos with dedicated resources, funding, and strategic focus to advance its development programs.

In terms of Beyond Cancer, we’re evaluating potential development partnerships and other strategic arrangements to support continued advancements of its pipeline while maintaining Beyond Air’s focus and resource allocation on the commercialization of LungFit PH. Before turning the call over to Dan, I want to emphasize how encouraged we are by the progress we’re making with the current LungFit PH offering and the foundation we are strengthening for the potential launch of our second-generation system, pending FDA approval. With this progress, we are reaffirming our revenue guidance of $8 million for calendar year 2026, which excludes revenue from the second-generation system. We are also reaffirming our revenue guidance of $16 to $18 million for calendar year 2027, which includes anticipated revenue from the second-generation system, pending FDA approval.

With that, I’ll turn the call over to Dan for a review of our financial results. Dan.

Daniel Moorhead (Chief Financial Officer)

Thanks, Bob, and good afternoon, everyone. Let me take this time to walk through our financial results for the quarter ended September 30, 2026. Revenue for the quarter was $2.3 million, compared with $1.8 million for the same period last year. This represents growth of approximately 28% year over year and 31% from the June 2026 quarter. Gross margin for the quarter was approximately 8%, compared with negative 16% for the same period last year. Gross profit was $200,000, compared with a gross loss of $300,000 in the prior-year quarter.

Research and development expenses were $1.6 million, compared with $2.5 million for the same period last year. The decrease was primarily attributed to lower costs related to the second-generation LungFit PH, as the majority of the development is complete. Selling, general and administrative expenses were $4.6 million, compared with $4.9 million for the same period last year. The decrease was attributed primarily to lower stock-based compensation costs, partially offset by increased salaries in our sales organization as we build out our commercial team.

Other expense for the three months ended September 30, 2026 was $2.2 million, as compared to other expense of $600,000 for the three months ended September 30, 2025. The increase in expense was attributed primarily to an increase in interest expense and a charge for scrap materials. Net loss attributed to common stockholders of Beyond Air for the three months ended September 30, 2026 was $7.8 million, or a loss of $3.76 per basic and diluted share, compared with a net loss of $7.9 million, or a loss of $24.98 per basic and diluted share, for the three months ended September 30, 2025.

As of September 30, 2026, we reported cash, cash equivalents, restricted cash and marketable securities of $18.5 million, which includes $2.7 million of cash held by Neuronos, which is shown within current assets held for sale on the balance sheet, and also includes $700,000 held by Beyond Cancer. This total also includes $4.8 million of restricted cash. As a reminder, we are transitioning our fiscal year-end from March 31 to December 31, effective December 31, 2026. We expect to report results for the nine-month transition period ending December 31, 2026 on a Form 10-KT. The revenue guidance Bob discussed is on a calendar-year basis.

With that, we will now open the call for questions.

OPERATOR

Thank you. And at this time we will begin with the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

And your first question comes from Yale Jen with Laidlaw and Company. Please state your question.

Yale Jen (Analyst at Laidlaw & Company)

Great, thanks for taking the questions. Just two. The first one is that in terms of the FDA review, given that you are going on the go, you suppose you will finish the audit readiness by mid-December, and was there any other things that the FDA may look for, or simply just an inspection and then they will make decisions? And I have a follow-up.

Robert Scott Goodman (Chief Executive Officer)

Yeah, it’s pretty much just that, Yale. The audit will follow right after we announce our readiness, as you mentioned, in the middle of December, and nothing that we know that would be in addition to that. So just a standard audit and feedback.

Yale Jen (Analyst at Laidlaw & Company)

Okay. Just given the timing and given the holidays to come, presumably would that be the best scenario, FDA make hopefully positive decisions maybe in the first quarter, maybe even in the early first quarter of next year?

Robert Scott Goodman (Chief Executive Officer)

Yeah, I mean that’s up to the FDA, as you know. But yeah, we’re expecting to have a quick response. We’ve been communicating with them directly with all of our paperwork, a couple of questions back and forth. We’ve satisfied those questions, so we’re in great shape there. It’s now just the audit part, and the good news is the audit, it’s a quick audit, used to be up to a five-day period but because a lot of it is done, you know, via paperwork back and forth for a couple of days, the actual audit’s only like a day and a half long.

And so once that happens, we expect to hear back from them within a few weeks and then there’s just a signature process. So yeah, to your point in your timeline, that’s right around what we’re pointing at. Yeah, no, so yeah, we’re sticking with our 16 to 18, and that includes Gen 2 only in the second, third, and fourth quarter. So we do not have in our guidance, you know, Gen 2 revenue in that first quarter. So we’re not expecting to push anything out. And yeah, in fact our pipeline has grown really, really dramatically over the last couple of quarters. So we’ve had a really nice increase with our Gen 1 pipeline as well as our new wins there. So, you know, we have, and we’ve been planning on that.

So that’s where our coverage has been along the way. And yeah, no, we’re not expecting to be pushing anything out at least at this point. Of course. Yeah, yeah, we built that just to—as we mentioned a few months ago—we didn’t want to expect revenue on day one, Q1, but we know the pipeline will be able to still, from Q4 to Q1, with our real strong Gen 1. So we have Gen 2 coming in, like I said, Q2, 3, and 4.

Corey Davis (Investor Relations at LifeSci Advisors)

Okay, great. Thanks a lot. Let’s get back to the queue.

Robert Scott Goodman (Chief Executive Officer)

Yeah, you got it.

OPERATOR

Your next question comes from Frank Tachian with Lake Street Capital Markets. Please state your question.

Frank Tachian (Analyst at Lake Street Capital Markets)

Great, thanks for taking the questions. Was hoping to follow up on your comments, Bob, about some of the record pipeline that you’re referencing. Curious if you can put any numbers around that, whether that be kind of percent up year over year, quarter over quarter, number of units in backlog. Just help us understand just how significant that pipeline is right now and when that could start to convert. Thanks.

Robert Scott Goodman (Chief Executive Officer)

Yeah, sure. So the pipeline from Q1 of this year, it’s grown close to fourfold. All right. We actually—it’s more than doubled in the U.S.—but what we had done is, you know, we did a real sanitation from the legacy team with respect to just some old deals and cleaned up a little bit of pipeline, put a little bit more rigor and definition into our pipeline. So we had taken it down and then we built it up a bit. But we’ve now more than doubled it since then.

And so yeah, we’re at a nice inflection point with respect to the growth there. Was there another part of that question? What was that?

Frank Tachian (Analyst at Lake Street Capital Markets)

Just thoughts around when that could start to translate to revenue.

Robert Scott Goodman (Chief Executive Officer)

Yeah, so we’re already starting to see that, you know, translation. In fact, you know, we have the range for next year, as mentioned, for the 16 million to 18 million, and we have our range within Q1, and based off of some of the recent wins we have right now as far as our pipeline build, you know, we’re very, we’re really bullish around how these deals are going to be converting, you know, in the quarter we’re in now and next quarter. We don’t have those yet and we can’t, you know, obviously share.

But yeah, our win rate is growing, it’s increasing, and we’re expecting to have that conversion reflected. So yeah, it’s a nice bump up because there are a couple of aspects or reasons for that, not just the increase in the pipeline, but the fact of the matter is there are fewer competitors in the field right now. So we’re expecting, just based off of that, to have a higher win rate.

Frank Tachian (Analyst at Lake Street Capital Markets)

Got it. Very helpful. Was hoping to shift over to Gen 2. Once that is through the approval process, how should we think about what is required to get on formulary with the GPOs? I assume the Gen 1 doesn’t suffice and you’ll have to do some sort of amendment to include the Gen 2. But maybe any clarifying commentary around that would be helpful. Thanks.

Robert Scott Goodman (Chief Executive Officer)

Yeah, that’s just a quick update with the GPOs. They’re really used to doing this, so it’s really just an extension of what we have. It’s nominal as far as time and effort, and then it’s just a matter of… And really, that’s it. It’s a pretty simple process.

Frank Tachian (Analyst at Lake Street Capital Markets)

Okay, fair enough. And then just last one from me, and apologies in advance—this is splitting hairs a little bit, I think. In the last conference call, the calendar Q2 conference call, we were talking a fair bit about the audit readiness process. And at least at that point in time, it seemed like it was kind of a near-term event, that that was going to be complete in a few months. And it feels like that maybe took a little bit longer than anticipated.

Any additional color related to maybe what happened there and why that might have taken a little bit longer?

Robert Scott Goodman (Chief Executive Officer)

Yeah, it’s not necessarily that it took longer. You know, there’s a lot of rigor that’s involved with this. You have the install qualification aspects of a build of a product, the operational qualifications building up to the performance and the process readiness. You know, we didn’t underestimate anything. In fact, if anything, we knew where we’d be, and it would be in this part of the second half of the year. And we’re expecting it to be right around where we’re at now.

But no, nothing was slowed down or anything like that. We did a lot of repeatability testing and a lot more stability testing—wanted to make sure that all of our testing was tight—and so no, nothing. No surprise, let’s put it that way.

Frank Tachian (Analyst at Lake Street Capital Markets)

Okay, great. Thanks for taking the questions.

Robert Scott Goodman (Chief Executive Officer)

Yeah, yeah, you got it.

OPERATOR

Just a reminder to the audience, to ask a question press star-one on your phone. To remove yourself from the queue, press star-two. Your next question comes from Mike King with Rodman & Renshaw. Please state your questions.

Mike King (Analyst at Rodman & Renshaw)

Hey guys, thanks for taking the question. I also want to drill down a little bit more on this FDA review process. Bob, we met with you and Dan a couple of weeks ago. We were discussing the necessity for FDA to get comfortable that the units could be used in ambulances and on helicopters and that kind of thing. Is that still part of it, or is there something new that’s arisen, or is this all part of the same process that you’re going through with the auditing?

Robert Scott Goodman (Chief Executive Officer)

Yeah, no, nothing’s new. That was part of our PMA supplement paperwork build as well as our testing. So we did a lot of altitude testing. We worked all of that months ago—that was part of this process—and that’s all been documented and part of our paperwork. So that’s actually all behind us. And this audit part is really just the back end of the high-level assembly assessment and audit. But that’s all done. We’re completely done with that and we’re really happy with how that all worked out.

So we’re past all that.

Mike King (Analyst at Rodman & Renshaw)

And are there any personnel limitations or other aspects of the device division in FDA that are making turnaround times longer than you would anticipate?

Robert Scott Goodman (Chief Executive Officer)

I don’t think so. What I do know is on the speed side, and something that’s going to bode well for us, is that our R&D facility is an hour and a half away from our contract manufacturer. So what ends up happening when you get into the audit phase—often, for a situation like this, when you’re dealing with a medical device—you could have a research and development division that’s in California, but the contract manufacturer could be in Massachusetts.

And then you have to deal with two different audit teams in order to manage that. Or it could be an overseas and U.S. location, whereas ours are an hour and a half away from each other. So this is actually going to, if anything, speed up the audit process because it’ll be one team. And again, that day-and-a-half process really is something that works well for us.

Mike King (Analyst at Rodman & Renshaw)

Okay, and then just real quick on the win rate side, can you just talk about what’s responsible, what’s driving that? Is it the GPO partnerships, hospitals, a better understanding of the device? And maybe you can talk a little bit about the win rate.

Robert Scott Goodman (Chief Executive Officer)

Yeah, I mean, our technology has been really well received, and the ease of use with respect to our product is just really well received. So our customers are really happy with that. They’re really happy with how easy it is to use, and that’s helping us with win rates because as you start growing your customer base—remember we just started putting this product out a few years ago, the first-generation product—the first year, those few sites were using the product, and now we have dozens and dozens of hospitals with that many more sites.

So we have a couple hundred units that are out there that are being used, and we have so many more referenceable customers that are out there that are speaking on our behalf. And that’s really helping because people are saying, hey, listen, it’s not just that this is a real innovative product; it’s actually really easy to use on top of being innovative. As you know, this is a drug that’s being delivered through a medical device that we’re creating out of thin air. Well, that’s all well and good, but if you’re not doing that easily for the customer, all that is is really kind of a catchy phrase. And we’re able to kind of win on both ends there, and that reflects and goes right to the customer and the customer sees that, and that’s what’s helping our win rates.

Because, you know, as we’re getting into conversations with hospital systems that might be across the city or across the state, or it might be a respiratory therapist who knows somebody in that hospital across the country, they’re calling each other and they’re hearing really good things about us, and that’s why we’re winning. So, yeah, it’s pretty good stuff.

Mike King (Analyst at Rodman & Renshaw)

Gotcha. Also, can you say—I don’t know if revenue is still kind of small, so I don’t know if it’s really relevant right now—but can you say anything about sort of your average ticket size? Is your average sale increasing, or is it more unit volume that is driving the revenues? Thank you.

Robert Scott Goodman (Chief Executive Officer)

Yeah, so it’s just two things. It’s the volume and it’s the international business that’s driving our revenue up. Right now our average deal size is about the same, you know, and I could say roughly it’s right around 250,000 as the average deal size. We have these deals anywhere from, you know, 30,000 to north of a million and can go way higher than that. And we’re working on a number of larger deals, but the net of it is our average deal size is about 250.

We do know when we have our next-generation product, we’re going to be competing for much larger deals, which will definitely increase our overall deal size. So our average deal size will be bumping up, you know, way up from the 250. Our international business is really helping as well as far as, you know, revenue, because that is immediate recognized revenues, you know, where we get direct sales internationally. We get direct sales also in the VA system where we’ve had a couple of recent wins there as well.

And that drops right to the revenue line there, different than, of course, as you know, the U.S. business, which is, you know, subscription model. That said. Yeah, you got it.

OPERATOR

Thank you. And we have reached the end of the question and answer session. I will now turn the call over to Robert Goodman for closing remarks.

Robert Scott Goodman (Chief Executive Officer)

All right. I want to thank everybody for joining the call today for all your support and all your interest and look forward to speaking with everybody next quarter. Have a great night. Thank you.

OPERATOR

Thank you. All parties may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.