Beyond Air, Inc. (NASDAQ:XAIR) Q2 2026 Earnings Call Transcript

Beyond Air, Inc. (NASDAQ:XAIR) Q2 2026 Earnings Call Transcript November 10, 2025

Beyond Air, Inc. misses on earnings expectations. Reported EPS is $-1.25 EPS, expectations were $-1.1.

Operator: Good afternoon, and welcome to the Beyond Air financial results call for the fiscal quarter ended September 30, 2025. [Operator Instructions] And now I would like to turn the call over to Garth Russell, Lifesci Advisors. Please go ahead.

Garth Russell: Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, after market close, we issued a press release announcing the operational highlights and financial results for Beyond Air’s second quarter of fiscal year 2026 ended September 30, 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 would 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-K 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, www.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 10, 2025. 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 the call over to Steve Lisi, Chairman and Chief Executive Officer of Beyond Air. Steve?

Steven Lisi: Thanks, Garth, and good afternoon to everyone. With me here today is Doug Larson, our Chief Financial Officer. We continue to receive highly encouraging feedback from hospitals using LungFit PH, reinforcing the clinical value and operations efficiency our technology delivers. Adoption is accelerating meaningfully over the past year, contributing to a 128% year-over-year revenue increase in the fiscal second quarter, reaching $1.8 million, up from $0.8 million for the same period last year. While we are pleased by the strong year-over-year growth, sequential growth was essentially flat compared to the prior quarter, reflecting the timing of hospital purchasing cycles and the natural variability in international shipments.

We view this stability as an encouraging baseline from which we expect sequential growth to resume over the coming quarters. We continue to navigate the inherent complexity of hospital sales cycles in the U.S. and internationally. These extended lead times and institutional decision-making processes have led to peaks and valleys in our quarterly sales performance as seen in the September quarter. Importantly, our sales pipeline remains robust, and we see substantial greenfield opportunities across the U.S. as awareness and interest in LungFit PH continue to build. Before getting into further details, let me highlight the changes that have occurred since our last update in August. We have raised $12 million in debt, and we’ll file a registration statement for an additional $20 million through an equity line of credit, both with Streeterville Capital, which solidifies our balance sheet.

We believe these additional funds will give us the ability to properly address the pace of sales growth with our first-generation system and prepare for the launch of our second generation system. LungFit PH has been placed in the first hospital outside the United States for commercial use. We have named our Board member, Bob Goodman as Interim Chief Commercial Officer, given the departure of David Webster. We are updating our fiscal year ’26 guidance to $8 million to $10 million. We introduced our capital purchase sales model in the United States and had our first hospital purchase of LungFit PH. We collected data from Beyond Cancer’s Phase Ia trial with 10 subjects with ultra-high concentration nitric oxide or UNO. That shows median survival has not yet been achieved and currently sits at 22 months.

These updates have put us in a very strong position and provide us the financial runway we need to optimize the Gen II launch in late calendar 2026 and drive our international business from the strong foundation we have already built. As you all know, we were awarded a national group purchasing agreement for therapeutic gases with Premier. Coupled with our agreement with Vizient, we now have access to nearly 3,000 hospitals. We are confident that our targeted commercial strategy, supported by the right people now in place and strengthened by our Premier and Vizient GPO contracts will begin to have a meaningful impact on revenue over the coming quarters. Our disciplined approach is allowing us to prioritize the highest value hospital opportunities while deepening relationships across our existing accounts.

This focused execution is already translating into broader market engagement and increased visibility of LungFit PH within key hospital systems. At the same time, we are preparing for the next major inflection point with our second-generation LungFit system, which is smaller, lighter and designed for both air and ground transportation, while maintaining all the revolutionary features of the first generation LungFit PH. We believe this next-generation platform will enable us to expand into larger hospitals and health systems, further accelerating adoption and cementing LungFit’s position as the standard for nitric oxide delivery. We anticipate commercial launch of the second-generation system in the U.S. market in late calendar year 2026, pending FDA approval.

As a significant aside, several of our existing customers have extended their annual contracts with multiyear agreements, while increasing anticipated annual volumes. We see this as a confirmation of the ease of use and the value proposition of LungFit PH, and we expect this trend to continue. During the quarter, we finalized and have since launched a new sales model that complements the traditional industry leasing model. Under this new approach, hospitals may now purchase LungFit PH systems outright while continuing to generate recurring revenue for Beyond Air through disposables and service agreements. Initial system sales occurred subsequent to quarter end, and the early reception has been extremely positive. We are very excited by the flexibility this dual model approach offers and the opportunity it creates to accelerate adoption of LungFit PH.

Today, we announced the appointment of Bob Goodman as Interim Chief Commercial Officer, following the departure of David Webster. Bob joined the Beyond Air Board earlier this year and brings deep commercial and operational expertise from leadership roles at BioTelemetry, Philips Healthcare, Cardiocore, Thermo Fisher Scientific and Pfizer. His experience spans public companies, private equity-backed businesses and early-stage ventures, where he has consistently driven innovation, operational scale and commercial success. We have greatly valued its contributions to the Board and look forward to the fresh perspective and leadership he brings as we ramp up commercial activities and, as I just mentioned, prepare for the highly anticipated launch of our second-generation LungFit PH.

A key driver of our long-term growth strategy over the past year has focused on the expansion of our global distribution network. During the September quarter, we added new distribution partnerships in Japan, South Korea, Mexico, Costa Rica, Guatemala, Panama and El Salvador. These new agreements significantly broaden our geographic reach and demonstrate growing demand from both mature and emerging health care markets seeking modern, cylinder-free nitric oxide delivery solutions. Importantly, we achieved our first international commercial placement of LungFit PH into hospitals outside the United States this quarter. These initial system sales marked a key validation of our technology’s global applicability and confirm that our value proposition, improve safety, reduce logistical burden and long-term cost savings is resonating strongly with hospital administrators and clinicians.

We continue to see excellent engagement from our distribution partners who are now actively seeking regulatory approvals or demonstrating LungFit PH in hospitals in their local markets. These latest agreements bring our total international coverage to 35 countries, representing a combined population of approximately 2.8 billion people, and we expect to reach our goal of 60 countries under partnership in calendar 2026. As local distributors begin converting opportunities into active installations and sales, we anticipate international revenue contribution to build steadily through fiscal 2026 with momentum accelerating into fiscal 2027. This growing global footprint positions Beyond Air to capitalize on significant untapped demand for LungFit PH and lays the foundation for broader global adoption following additional regional approvals.

To wrap up our remarks around LungFit PH, I have two more positive updates to share. We had a patent allowance for a design patent that covers our second-generation LungFit PH through 2040. And we had data shown by a physician at the Extracorporeal Life Support Organization Conference in September, which show positive results when LungFit was used in the ECMO sweet gas circuit on neonates. I would like to provide an update on the data from Beyond Cancer’s Phase Ia study. As a reminder, study enrolled 10 subjects at doses of 25,000 and 50,000 parts per million nitric oxide gas delivered over 5 minutes intratumorally. These patients all had metastatic disease and were heavily pretreated. The mean number of total prior surgeries, radiation and medications was 10.3 with a minimum of 4 maximum of 18.

The mean number of all prior medications only was 5.5 with a minimum of 2 and a maximum of 14. All subjects had a life expectancy of less than 12 months when we treated with UNO therapy. The only adverse event which occurred in one patient that was possibly attributable to nitric oxide was a Grade 3 vasovagal response. Otherwise, the safety profile is very clean for this patient population. With respect to overall survival, the median and mean are 22 months and 21.2 months, respectively. These survival numbers will continue to increase, but we have not yet reached the final median survival. Given these impressive data, we are assessing the best path forward for the program at this time. We remain dedicated to pursuing the Phase Ib combination study with anti-PD-1 therapy, and we will communicate more details as we progress.

With respect to NeuroNOS, we recently announced that the U.S. FDA granted Orphan Drug Designation to its investigational therapy, BA-101 for the treatment of glioblastoma. The NeuroNOS team is working closely with regulators, investigators, patient groups and the foundations to accelerate development of BA-101 towards a first-in-human study. This program is in addition to the development for BA-102, an investigational therapy for the treatment of Phelan-McDermid syndrome, or PMS, syndrome associated with autism. We expect the IND submission for the first-in-human study by the end of calendar 2026. As a reminder, the FDA has also granted orphan drug designation to BA-102 for PMS. I will wrap up by stating how energized we are following the financing, which will support the continued progress of our global commercial activities and help us prepare for the potential launch of the second-generation LungFit PH.

Promise of LungFit is apparent, and we are thankful to the team at Streeterville, taking the time to appreciate our vision to provide clinicians and patients around the world with the optimal NO system. Now I will turn it over to our CFO, Doug Larson.

Douglas Larson: Thanks, Steve, and good afternoon, everyone. Our financial results for the second quarter of fiscal year 2026, which ended September 30, 2025, are as follows: Revenue for the fiscal quarter ended September 30, 2025, increased 128%, $1.8 million compared with $0.8 million for the fiscal year ended September 30, 2024. We showed 3% growth versus last quarter. Steve mentioned how our revenue is a little chunkier now given an international ramp is never straight up. We are showing a gross loss of $0.3 million for the fiscal second quarter 2026 compared to a loss of $1.1 million for the same period last year. The improvement was primarily attributed to sales growth. Our margin slipped back negative this quarter due to costs required to upgrade our existing fleet of devices and provisions for excess inventory.

Turning to operating expenses. We continue to see cost reduction across the board, in SG&A, R&D and in our supply chain due to cost reduction initiatives we took in the last 12 months. For the second quarter of fiscal 2026, we reduced total operating expenses to just above $7.4 million from $11.7 million for the same period last year. This translates to a 37% reduction year-over-year, and greater than 56% reduction from a high of $17 million at its peak. Going forward, we anticipate R&D expenses will decrease slightly next quarter as the cost related to our Gen II device are mostly behind us. SG&A expenses will only move up in line with our commercial performance to maintain our excellence in service and take advantage of coming opportunities.

Research and development expenses were $2.5 million for fiscal quarter 2026 compared to $4.6 million for the same period last year. Half of the decrease of $2.1 million was due to a reduction in development costs for our Gen II device while the other half was mostly attributed to a decrease in salaries and stock-based compensation costs. SG&A expenses for the quarters ended September 30, 2025 and September 30, 2024, were $4.9 million and $7.2 million, respectively. Almost all of the decrease of $2.3 million was from a reduction in salaries and stock-based compensation costs. Only part of the business that saw an increase in SG&A was a NeuroNOS as they start to build a little bit of infrastructure to support the groundbreaking work being done there.

Other expense was $0.6 million compared to a $1.2 million expense for the same period a year ago. The decrease in expense of $0.6 million was primarily attributed to the prior period loss associated with the partial extinguishment of debt. Net loss attributed to common stockholders of Beyond Air, Inc. was $7.9 million or a loss of $1.25 per share, basic and diluted. Our net loss for the fiscal quarter ended September 30, 2024, was $13.4 million or a loss of $5.67 per share, basic and diluted. Please note that the per share results for both periods were calculated to reflect the company’s 1-for-20 reverse stock split, which became effective on July 14, 2025. Net cash burn for the quarter was $4.7 million, which is a 66% reduction versus a year ago.

We believe our overall cash burn will continue to reduce as revenue grows and will only get better until we get approval and start building inventory in preparation for the launch of Gen II. As of September 30, 2025, we reported cash, cash equivalents and marketable securities of $10.7 million. As Steve mentioned earlier, subsequent to the end of the second quarter, we announced closing a strategic financial agreement with Streeterville Capital, LLC. Under the terms of the agreement, we issued $12 million promissory note bearing a 15% annual interest rate. This note matures in 24 months from the issue date with no payments due for the first 12 months. In addition, we entered into a $20 million equity line of credit agreement with Streeterville Capital dependent on our filing an S-1 resale registration covering resale of the shares Streeterville Capital may receive under the e-lock.

This e-lock provides us with the right but not the obligation to sell up to $20 million of newly issued shares of our common stock over a 24-month period, subject to certain limitations. Following these recent financing agreements, we believe that our cash and existing financial vehicles will be sufficient to allow us to support our current operating plans well into calendar 2027 and potentially to profitability, providing we continue to hit our current revenue estimates continue to control costs at Beyond Air. With that, I’ll hand the call back to Steve.

Steven Lisi: Thanks, Doug. Operator, we’ll take questions.

Q&A Session

Operator: [Operator Instructions] The first question is from Justin Walsh from Jones Trading.

Justin Walsh: Without going into specific fiscal 2027 guidance, can you comment on the expected growth drivers leading into the potential approval of the second-generation LungFit PH? And then how you’re thinking about that trajectory after that second gen product is out?

Steven Lisi: Thanks, Justin. Appreciate that. So obviously, the trajectory once the second generation is out should be significantly steeper than what we’re seeing now. That’s our belief. And I think people know the attributes of that system versus the current system and the competition. So we’re confident in that. As for the growth drivers prior to that, I assume you’re asking for.

Justin Walsh: Yes.

Steven Lisi: Yes. We’re setting up internationally. We’re in 35 countries now with partners. We did just place systems in our first commercial hospital outside the United States. So it takes time to build that. We all wish we’d go a little faster, but it is being built, and our international team is doing a great job. So we’ve got a lot of seeds planted out there, I guess, you could say. And we anticipate that with fiscal ’27 coming up, we should be winning a lot of hospitals outside the United States where the competition is a little bit different than it is in the United States. So that’s one of the drivers for ’27. The other thing inside the United States, we did introduce a capital purchase model. Our system is now — and to a point where it’s extremely reliable, we’ve had interest, and we’ve actually had our first hospital purchase from us.

So that will be a capital equipment purchase. And then the filter and the other accessories would be the ongoing purchase. And those prices, I guess it depends on how much nitric oxide use in your hospital per year per system, but this is certainly very competitive from a per hour cost basis for nitric oxide. So I think this new offering in terms of how hospitals can pay in the United States, we’ve gotten some interest there and the ex U.S. will be the driver prior to Gen II being approved.

Justin Walsh: Got it. And one more question. You mentioned here that you’re hoping to commercialize the second-gen LungFit PH around end of calendar 2026, if I heard correctly. I’m just wondering if you can comment on kind of the thinking around this time and whether or not you’ve noticed any delays in your dealings with the FDA recently.

Steven Lisi: Yes, I think FDA is doing a great job. I don’t think the timing that we’re providing is FDA being a limiting factor. It’s more supply chain on our side. I think the environment is difficult to get the parts that we need, certainly doesn’t help with all the disagreements, I would say that are happening around the world with trade, government shutdown doesn’t help either. So I think just getting things in place for our ability to get our contract manufacturing in shape for inspection is what we’re doing. So it’s just a matter of time before that occurs. And I did mention — I mean you did mention we’d be launching before the end of the year. I think approval has to be a little bit earlier than December, obviously, for us to be able to launch by then.

We’re not going to launch the next day. It’s going to take a little bit of time. So — that’s kind of where we are right now, things can change, things can be better or worse in terms of timing. But as we sit here today, that’s the feeling that we have.

Operator: The next question is from I-Eh Jen from Laidlaw & Company.

Yale Jen: Steve, could you just do some comparison between the new model versus the prior ones? So give us a little bit more deep dive in terms of the benefits to the company or maybe for the market penetration? Then I have a follow-up.

Steven Lisi: Yes. Thanks, I-Eh. I mean the biggest difference — will, there’s a few, but the biggest differences are the size. So this second generation machine will be about 60% the size of the original. It will be what we’ve applied for. And I believe — we believe that upon approval, with approval from FDA, it would be approved for use in ground and air transportation. That’s critical. I think that’s probably the biggest difference maker for us. And the user interface has been upgraded based on feedback from our current customers and some future customers, I guess, who weren’t using our Gen I system, but did give us advice on Gen II. So we listen to them and we built this device based on their input. So we think that all of the functions of the device will be a little bit easier and a little bit better for the user.

One other thing that we have is that the maintenance interval will be longer, so that the disruption of swapping machines out for those high-volume users will be a thing of the past, let’s say. So when you have hospitals that are using an exceptional amount of hours per system per year, let’s say, way above what the average is, we’re bringing them in for maintenance fairly regularly. So — that’s a little bit of a disruption of the hospital, and we’re working to get Gen II out there. So that disappears.

Yale Jen: So actually, I try to get – I’m sorry, try to get a little bit about the new business — new business model can achieve that wasn’t really fully appreciated — can be appreciated by the existing one?

Steven Lisi: You mean Gen II versus Gen I, I-Eh?

Yale Jen: So — I mean you mentioned that the new business model, which is to purchase — machine. So I just want to get a sense of what does that — what the benefits of that versus the business operation you have done before this and what some additional benefits you can generate from that?

Steven Lisi: Yes. So look, the market was set up as essentially a leasing market before we enter the market. So we’re — we came in and we worked with hospitals based on what they were used to, and we get requests from hospitals, can we purchase the machine, can we purchase the machine. And we weren’t doing a purchase of the machine in the first 2 years because we were still making upgrades and tweaking the machine and it would have been difficult to sell something where you were still upgrading it and improving it. We’re at the point now where there really aren’t any more improvements to the Gen I machine a little tweak here or there is standard, maybe a software update or something. Those things are not major changes. So for hospitals that have been asking us if we take a purchase again, I don’t know on their side, they prefer to purchase and to buy the disposables at a much lower rate than the leasing model would have.

Again, that’s just their preference. So we are offering different models for using our system to the hospitals based on their needs. That’s all it is, yes. We’re not abandoning the leasing model in any way. So we have multiple different types of leases. So we’re really just trying to offer the hospitals what they’re asking for. So the latest one is the capital purchase model. So we introduced it a few months ago, and we’ve got hospitals that are taking advantage of it.

Yale Jen: Okay. Great. Maybe just a follow-up on the question. Next question is that you’ve got a lot of international deals signed, which is a great thing to happen. And because of the massive market over there, I assume most of these are distributor — distributors. So how should we think about modeling over the long term in terms of what sort of pricing that may generate versus the one in the United States, which is slightly different? And how was the filter — renewing filter fit into that model as well?

Steven Lisi: Yes. I mean the ex U.S. model for us, where we’re selling things to the distributors and then they’re using it in whatever model they like in their markets, whether it be a leasing model or a capital equipment purchase model or something else or some combination of that, that’s their business. So for us, though, they’re purchasing the machines like a capital equipment purchase. And then we’re also selling them the disposables, including the filter, which is obviously the most important disposable. So — that’s how you should think about it in terms of modeling. It’s more of a — just a repetitive revenue line, and I think that, that’s probably going to happen more in fiscal ’27 than now because we’re just getting the systems out there.

Once they’re placed in hospitals, you see that repeat business, but that’s not happening in fiscal ’26. It will be a fiscal ’27 phenomenon and picking up speed more in fiscal ’28 because we’re still awaiting regulatory approvals in many countries, and it takes time to get into these hospitals. So it is a long process, but that’s the way it goes.

Yale Jen: Okay. Great. That’s very helpful. And congrats on the fortify the balance sheet, which you can do a lot of good things. And congrats.

Operator: The next question is from Marie Thibault from BTIG.

Sam Eiber: This is Sam on for Marie. Maybe I can start on the updated guide, the $8 million to $10 million. Steve, would just love your thoughts on the visibility. You have given maybe some of the fluctuations in the hospital sales cycle? And then any thoughts on cadence for the back half of the year?

Steven Lisi: Thanks, Sam. Appreciate it. Well, look, we’ve got $3.6 million in the first half. So it’s not a large leap to get to the 8% plus range. But we have a transition at Chief Commercial Officer. So I’m sure everyone on the call wouldn’t expect Bob Goodman to hit the ground running on in week 1 or 2 and start ripping sales straight up. I think it will take a little bit of time for Bob to implement his processes here and get things moving in the right direction. So I think that when there’s a change like this, there’s going to be a little bit of disruption. So that’s part of the reason why the $8 million to $10 million is the new guidance.

Sam Eiber: Okay. Okay. That’s helpful. And then maybe I can just follow up here on the pace of contract renewals that are coming up. Are you seeing pretty strong renewal rates? Are customers exiting contracts at all would just love an update there as well?

Steven Lisi: Yes, the renewals are going well. We’ve had a bunch of renewals go from 1 year, they renewed for 3 years. We see that happening not with every contract, but a good number of them. And I think that getting on Premier is very helpful. We had a few hospitals that were premier hospitals that we had contracts with weren’t yet on Premier, so now being on Premier solidifies that. That’s very helpful. We look forward to hopefully getting on HealthTrust as well at some point, and that would give us the big 3 GPOs. That’s very helpful for being able to not only get hospitals, but maintain them. Sometimes they can contract out of their — outside of their GPO, which is rare. But when we do, when we get on the GPO, it’s obviously important.

So we haven’t really seen hospitals leaving us. It’s a very sticky business, I think. And I think it’s due to the team in the field, the machine’s performance, and my — the clinical team here at Beyond Air do an excellent job of supporting the hospitals when they need support.

Operator: 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.

Steven Lisi: Thanks, operator. Thanks, everyone, for joining. Look forward to speaking to you in the near future. Thank you.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.