Nyxoah S.A. (NASDAQ:NYXH) Q1 2026 Earnings Call Transcript

Nyxoah S.A. (NASDAQ:NYXH) Q1 2026 Earnings Call Transcript May 12, 2026

Nyxoah S.A. beats earnings expectations. Reported EPS is $-0.43, expectations were $-0.54.

Operator: Good day. And thank you for standing by. Welcome to the Nyxoah First Quarter 26 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 again. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker today, Pearson Dennis. Please go ahead.

Pearson Dennis: Thank you. Good afternoon, everyone. And I welcome you to our first quarter 26 earnings call. Participating from the company today will be Olivier Taelman, chief executive officer and John Landry, chief financial officer. During the call, we will discuss our operating activities and review our first quarter 26 financial results. Released after US market closing today. After which, we will host a question and answer session. The press release can be found on the Investor Relations section of our website. This call is being recorded and will be archived in the Events section on the Investor Relations tab of our website. Before we begin, I would like to remind you that any statements that relate to expectations or predictions of future events market trends, results or performance are forward looking statements.

All forward looking statements are based upon current estimates and various assumptions. These forward looking statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. All forward looking statements are based upon current available information and the company assumes no obligation to update these statements. Accordingly, should not place undue reliance on these forward looking statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our form 20-F file, which was filed with the Securities and Exchange Commission on March 26, 2026.

With that, I will now turn the call over to Olivier.

Olivier Taelman: Thank you, Pearson. Good day, everyone, and thank you for joining us for first quarter 26 earnings call. Let me start with the Q1 26 overview. The 2026 marks our second full quarter of US commercialization. And we are encouraged by the strong execution of our US launch. Specifically, we delivered on our commitment to drive 25% sequential U. S. Revenue growth in the 2026 versus the 2025. In The US, we are seeing consistent momentum across our key commercial indicators. Including surgeon training, account activation, patient prior authorization submissions, and procedure volumes. Internationally, our revenue in the 2026 was consistent with the 2025, which represents strong performance as we were able to grow the business and avoid the typical sequential quarter decline from the fourth quarter to the first quarter.

On a worldwide basis, I am pleased to report that we grew our revenue by 13% sequentially from the fourth quarter. Of 2025. Let’s now dig into the US commercial update. The US launch remains the primary driver of our worldwide revenue growth and a key priority. During the quarter, we continued to execute on our focused commercial launch strategy and further expanded our US commercial field presence with an extra 15 sales reps who are now fully operational enabling us to cover up to 200 high-volume hypoglossal neurostimulation accounts entering Q2. I am pleased to report on our US launch key performance indicators as of March 31, 2026. We have trained Bringing the total of 62 new surgeons in Q1, to 207 surgeons trained on the Genio system. We have activated a total of 34 new accounts in Q1, of 91 active accounts out of over 125 targeted accounts.

Active accounts are defined as surgeons trained and VAC committee approved. We have 241 new patients submitted under prior authorization and still pending at the end of Q1. We have trained 15 new sales reps, bringing our total to 40 fully operational sales reps as we enter Q2. 6 months post launch, in the accounts where we are already active, we estimate our market share to be between 12% to 14% on average. With the addition of 15 new sales representatives, in The US, who are fully trained in Q1 we will be able to cover 200 out of the 400 high-volume AGNS accounts beginning in Q2. We also recently conducted a market research study of over 100 U.S. hypoglossal neurostimulation implanters. We learned that 88% of ENTs believe it is important to have multiple hypoglossal neurostimulation options for their patients.

All Genio-trained surgeons plan to adopt Genio in their practice. The top cited reasons for adopting Genio was bilateral stimulation, no implanted battery, and offering an alternative option. Sleep medicine is the single biggest source of their patient referrals, And 84% of surgeons collaborate with sleep medicine colleagues to manage AGNS patients. The results of this market research confirms that our focused launch strategy on high-volume will also launch stimulation implant centers, in combination with building sleep physician partnerships will drive further Genio adoption. Let me now cover 1 of the hot topics of Q1. The hypoglossal neurostimulation reimbursement landscape. In order to provide you with a structured update I would like to split it up between commercial payers Medicare, and the WISER program.

Starting with commercial payers, They represent approximately 90% of our cases in Q1. Coverage is broad and stable. Genio claims continue to be processed under the CPT code 64.6 thousand or even the CPT code 64.6 thousand. Depending on payer policy, and individual case review. For example, UnitedHealthcare recently added CPT 64.6 thousand back to their existing AGNS policy in parallel to CPT 64.6 thousand. So both codes are available for AGNS. UnitedHealthcare represents 1 of several commercial payers which have both CPT 64.6 thousand and the 64.6 thousand listed as available codes for AGNS procedures including Genio. Through the end of the first quarter, we maintained a 100% approval rate on the reviewed prior authorization submissions. Now moving into the Medicare side.

Which only represent approximately 10% of our cases in Q1. The year started with coding uncertainty, negatively impacting AGNS implants. On February 26, however, CMS provided clarity by issuing AGNS specific c codes for facilities. Claims for genial implantation, are submitted under the C-code C9.79 thousand. This code represents a facility fee mapped to the APC level 6, at $35.1 thousand in the hospital outpatient setting. and $31.2 thousand in the ASC setting. This is equivalent to the existing CPT code 64.6 thousand hospital settings, and slightly higher than the CPT code 64.6 thousand in the ASC setting. This results also in price parity at facility level for genio and competition. Next, from a physician fee perspective, claims continue to be submitted under CPT 64.6 thousand at $732.

When it comes to the use of modifiers, let me reiterate that it is a physician decision based on the specific surgeon work performed and that Nyxoah is not advising to use a modifier. As to the newly established WISER program, being an AI supported prior authorization tool, rolled out by CMS in 6 different states since January 1, 2026, we have achieved a 100% approval rate of our submitted Medicare patients. The fact that reimbursement did not hinder our Q1 launch momentum is the result of the expertise of our market access team, the collaborations with experts in that field, or participation in the FDA early payer feedback program, and the proactive education of all our customers. Because of these factors, we expect continuity for 26, and 2027.

As part of the ongoing CPT editorial panel discussion, regarding the future of AGNS coding, the panel has indicated that there is no intention to leave any AGNS technology orphaned without appropriate coding. For 2028, we understand that there are currently 2 paths to support continued coding being dedicated CPT codes, for the different AGNS technologies, or creating a comprehensive AGNS coding set, following the model laid out in the CMS c codes, we learned that competition has chosen to seek its own dedicated code. Which we are prepared for as well. Alternatively, specialty societies may seek to engage in a broader exercise, to provide further clarity regarding coding in the AGNS space, creating comprehensive AGNS code set. We will take our lead on the specialty societies, including AAO-HNS, since their actions are driven by the physicians performing these procedures.

Let me now move to an international update. Internationally, we are seeing continued growth and we managed to overcome seasonality versus Q4 25. This was driven by strong performance in Germany, where we are going deeper in existing accounts, continued therapy adoption in The Middle East, and successful entries in The UK and The Netherlands. However, we maintained a disciplined financial approach focused on reaching breakeven. As demonstrated in Germany 3 years post-launch. With that, I will now turn the call over to John for a detailed overview of our financial results.

John Landry: Thank you, Olivier. For the first quarter of 2026, gross revenue was €6.7 million before €300 thousand in deferrals due to the delivery of disposable patches which are delivered over time, resulting in net revenue of approximately €6.4 million This represents 13% sequential worldwide growth compared to 2025. U. S. Net revenue was €4.3 million, representing approximately 25% sequential growth compared to €3.4 million in 2025. Our U. S. Revenue growth reflects continued expansion in account activation, increasing procedure volumes, and growing surgeon adoption. Gross margin in 2026 was 57% as compared to 62% in 2025. The decrease in gross margin was due to production yield issues in the quarter, which have been addressed.

Operating expenses were €24.2 million in 2026 as compared to €21.4 million in 2025. The increase in operating expenses was driven by increased investment in U. S. commercial organization, including sales, marketing, and market access functions. Non-GAAP cash operating expenses were €21.7 million in 2026 as compared to €19.5 million in 2025. The increase in non GAAP cash operating expenses also reflects increased investments in The U. S. Commercial organization. As of March 31, 2026, cash and cash equivalents and financial assets totaled €25.9 million In the 2026, we expect to draw approximately €13.8 million from the second tranche of our European Investment Bank loan Now let’s turn to guidance. We expect U. S. Net revenue for the 2026 to grow approximately 25% to 30% sequentially over 2026 for the full year 2026, we expect worldwide net revenue in the range of €36 million to €40 million We expect gross margin in the range of 60% to 62%.

We expect total operating expenses in the range of €97 million to €99 million We expect total non GAAP cash operating expenses in the range of €88 million to €90 million Please note that our total non GAAP cash operating expenses for full year 2026 reflect a 5% to 8% sequential increase over non GAAP cash operating expenses of €83.5 million for fiscal year 2025, Strategically, we will focus our investments in supporting our U. S. Commercial activities including sales, marketing and market access, as well as key R&D initiatives, including our 2.2 upgrade which includes a new sleep wearable with upgraded software, and a low cost disposable patch to be launched in early 27. We decreased our total non GAAP cash operating expenses by €300 thousand to €21.7 million from 2025 to the first quarter 26 We also decreased our non GAAP cash R&D expenses by €2.9 million sequentially from the fourth quarter 25 and reallocated its capital into our U.

S. Commercialization efforts. Are applying the same principle for the G&A portion of our SG&A operating expenses, which, if we were to break them out separately, you would be able to see the transition from G&A related expenses to US commercial activities. Long term, we expect to drive gross margins over 80%, and we will continue to manage our non GAAP cash operating expenses tightly while investing in growth, gross margin improvement drivers. We believe this disciplined approach will allow us to achieve revenue breakeven below €150 million in revenue. With that, I would now like to turn the call back over to Olivier.

Olivier Taelman: You, Jon. As we enter Q2, our priorities remain clear. Further execute the current launch momentum in The US, capture greater market share in our targeted high volume accounts, maintain a disciplined financial approach to OpEx, and cash management. Before closing, I would like to thank the Nexo employees for their contribution in making Q1 a successful quarter. With that, I would like to open the line for Q&A.

Q&A Session

Operator: You will then hear the automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. Our first question today will be coming from the line of Adam Maeder of Piper Sandler. Please go ahead.

Analyst (Adam Maeder): Hi. Good afternoon, Olivier and John, and thank you for taking the questions. Congrats on the solid progress. 2 for me. The first 1 is on the guidance front. I wanted to ask about the full year 2026 revenue guidance that you provided. And that is above where the Street is currently sitting. If you look at kind of where you have guided Q2 U. S. Revs, it does imply a bit of a step up in the back half of the year. I know Q4 is typically a seasonally stronger quarter, but maybe just talk about the confidence in achieving the full year outlook especially in light of the ongoing reimbursement situation and talk about some of the kind of key drivers of the ramp and any help on quarterly phasing would be appreciated.

Olivier Taelman: Thank you, Adam. So let me start by answering the question. So first of all, as we already communicated, we continued adding salespeople. Into our– into the field. So we added 15 new sales reps, bringing our total to 40 salespeople, which enable us to cover 200 out of the 400 high-volume accounts. As you also know, surgeons, when they start implanting, they go to their surgical learning curve. This takes roughly 2 to 3 implants, and then you also see that they are scaling up. What we have learned in Q4 and in Q1 is that we got a lot of positive feedback from surgeons, after their first cases. And on top, after seeing the first patient activations what was confirming the strong airway openings that they saw during the surgery gave them even more confidence and start treating immediately more new patients.

So that is 1 aspect. So you have more feet on the street, and you also have more experienced surgeons in parallel, the VAC approvals you know, that we cannot control the timelines. Sometimes it varies from 1 to 2 weeks all the way up to a couple of months. Also here, we are seeing great progress made, and we have now 91 active accounts already out of the 125 targeted sites. With our initial 25 sales reps. So also this is driving an acceleration in adoption and, of course, in the end, there is also the patient and also the patient referral part. Coming from sleep physicians. I am extremely pleased also that I was able to announce that we have 241 real patients with the submitted prior authorization file to a commercial payer in our testing and pending queue So if you add those leading indicators up, that is giving us confidence in Q2 and beyond.

of showing continued strong double digit growth even further accelerating in the second half of the year.

John Landry: But now John will add some numbers to this as well to answer your questions. Excellent. Yeah. Thanks for thanks for the question, Adam. In terms of where we are at and what we are looking for, productivity, we expect in the back half of the year, to your point, we expect to see our revenue growth accelerate given the fact that we have our new training class that is now productive in the second quarter this year. Then we will ramp up over the rest of the year. So the sequential growth and great rate I mentioned, 25% to 30% for the second quarter, we would see that accelerate in the third quarter. To probably about the low 40s to 45% range, and then in the mid-50% range, you know, into the fourth quarter of the year, which as you know is a seasonally stronger year, especially in The US as people have fully exhausted their deductibles.

So when run that math, that is what helps provide some of that back end. Growth that you will see in the model to achieve that US revenue target.

Olivier Taelman: And maybe, Adam, last on this 1, let’s also not forget that I think we can say that reimbursement now is fully clear and supported from both CMS and the c codes and also from commercial payers. So also this is definitely not the hindering factor. As we experienced already in Q1. Not to be hindering factor.

Analyst (Adam Maeder): Fantastic. that is a lot of very helpful color. I appreciate all that. For the follow-up, I wanted to switch over to reimbursement, everyone’s favorite topic. Olivier, I guess the question is really around kind of the longer term strategy for Genio and kind of how you are thinking about you know, a permanent CPT code and I know in your prepared remarks, you mentioned the AMA CPT panel meeting earlier this month. We did see the proposed meeting agenda, and there was a hypoglossal nerve code on that agenda. But from our vantage point, that actually seemed to kind of describe the competitor device versus Genio. So would you agree or disagree with that assessment? And then just any help that you can give us in terms of you know, pathway forward to kind of a more permanent reimbursement coding solution and timelines for Genio would be appreciated. Thank you.

Olivier Taelman: Yeah. No. No. Thanks, Adam, for this. So I do think that for 2026, everything is very clear now. CMS has the c codes. We know the WISER program. There we have obtained the whole number of like, care prior authorization approval ratio. And we also know with commercial payers that we are both covered under the CPT 64.6 thousand and 64.6 thousand. So 2026, I do think, is crystal clear in going forward, and completely de-risked. Now. We were also participating during the editorial CPT panel discussion And, of course, there we were listening and actively participating in this discussion focused on 2027 and even 2028. So for 2027, we expect no change on the Medicare side. The C code framework and the physician payment under the CPT 64.6 thousand are in place and operational.

On the commercial side for 2027, just in listening, to what was discussed, and also talking with experts We do think that the CPT 64.6 thousand will be revised and will apply solely to your vagus nerve stimulation. Directing all AGS procedures away from that code and the code would migrate into the 64.6 thousand code. Now in going to 2028, and that is also touching to the remark that there was a competitor’s CPT application. For a dedicated new CPT code which is correct. I mean, that was part of the agenda of the editorial panel discussion. So, for 2028, what we are hearing is that there are 2 roads in going forward. 1 would be there is the move in the direction of dedicated CPT codes for CPT codes for all in those AGNS technologies. The second road would be that there would be a more comprehensive AGNS coding set where also all reimbursed AGNS technologies would fit but that needs to be further clarified.

But when it comes to Genio, when we go to a CPT dedicated code, we intentionally did not yet submit this on the agenda of the editorial panel. But we are well prepared and we will be submitting this in going forward. On the other hand, we will always take our lead from specialty societies including AAO-HNS, since their actions are driven by physicians performing the procedures. So the conclusion is 2026 we know that everything is derisked reimbursement wise. 2027 we see it the same way. Medicare side, completely clear. From the commercial payers There are all coatings in place. It might be that everything is more migrated to the 64.6 thousand code. And in 2028, I am sure that editorial panel will continue discussing They made it already clear that there will be no orphan AGNS technology.

And whether it evolves into dedicated codes, we will be prepared for this. Whether it evolves to more comprehensive AGNS coding set we will follow the lead. From society in this. I hope this is answering your question.

Analyst (Adam Maeder): Perfect. that is very helpful. Thank you.

Operator: Thank you. 1 moment for the next question. Our next question will be coming from the line of Jonathan Block of Stifel. Please go ahead.

Analyst (Jonathan Block): Olivier, the first 1 is the 41 patients submitted under prior authorization at the end of 2026, Can you remind us what that number was at the end of 2025, sort of apples to apples? And then how long does it take to get those patients through the approval process, which I believe you said you know, is still sitting at around a 100% from your vantage point.

Olivier Taelman: Yes. So when leaving Q1. As I was saying, when we were leaving Q4, we had approximately 100 patients on the scribe authorization. And how long does it take? I mean, commercial payers, they have up to 30 days to come back. With the approval As a reminder, so far, we have a 100% prior authorization approval rate. And then it depends from hypoglossal site to hypoglossal site because we are talking about high volume sites in getting an implant time planned. Also getting surgical time, because it is not only the site that is high-volume site, also the surgeon is a high volume surgeon doing all the procedures as well next to the hypoglossal nerve stimulation or the Genio procedure. So we see that this varies between 1 to 2 months before those patients are getting implanted.

Analyst (Jonathan Block): Okay. Thank you. that is helpful color. And then maybe just to pivot you know, John, pro forma for the European second tranche, I think you have got about €40 million, call it, of cash. You know, the roughly €26 million plus the 13.8. Maybe if you could remind us what the breakeven point for the company is your views on cash burn going forward? And then just to tack on the gross margin continues to perplex me. You know, when I look at the P&L, when you guys had €4 million in 2023, your gross margin was 62%. And here we are approaching €40 million in 2026. And it cannot get out of its own way in this sort of low 60% range plus. So, you know, what is preventing gross margins from improving as a company is sort of improved the top line? And then how do we think about it going forward and sort of that inflection that you guys anticipate is going to take place in subsequent years? Thank you.

John Landry: Sure. Yep. Thanks for the questions, John. So, let me start with gross margin. So with regard to gross margin, we did have some issues with production yields in the quarter due to some turnover and some training issues, which have been all resolved, at this point. So we expect to see our gross margins increase going forward, beginning in the second quarter and for the rest of the year. I think as I mentioned on the last call, we have our 2.2 new disposal patch and activation chip, which will be a major step function improvement in our gross margin profile. That will be coming online in early 27, so that will provide us that uplift from the low 60s to north of 70 at that point in time with that improved patient experience plus significantly cost reduce profile.

So that is how we are thinking about gross margin. Then also in terms of the next step up in step up in gross margin improvement will be driven by the cost reduction on the implant which we have contractual volume based pricing as we hit different volume milestones in our contract with our contract manufacturers. So that is the gross margin outlook and that we have a high degree of confidence we will get to 80%-plus in our gross margin profile. On the backs largely of those 2 initiatives. In terms of cash burn, we are very focused on managing our cash burn. So, as you can see, we held our cash operating expenses. We actually slightly decreased them from the fourth quarter to 2026, and that is reflective of the incremental 15 sales reps that we added in The US.

So we have been very focused on making sure that we are investing strongly in US commercialization efforts, reallocating capital to that from other parts of the business. And we really want to basically extend our cash runway as long as possible. While supporting the investments in the U. S. Commercial organization which is the growth engine for us and not sacrificing the improvements in gross margin drivers. So that is how we are thinking about it. As we think about cash operating expense, going forward, you will be we mentioned a 5 percent to 8 percent sequential increase this year. We would expect somewhat similar increases going forward, although not providing guidance. But as we are thinking about it, we want to be very mindful of our cash operating expense.

That way, we can get to a revenue breakeven point of approximately €150 million in revenue that is allows us, at that point, to have an 80% gross margin. made possible through tight cash OpEx management, that allows us to get it to breakeven. And knock down the total cash that we need to get to that point. To somewhere in the range of €100 million to get there. So, that is how we are thinking about it and, you know, looking at managing our P&L levers that we have available to us.

Analyst (Jonathan Block): Great. Thanks for the color, guys. Thanks, John. Thank you.

Operator: Thank you. 1 moment for the next question. Our next question is coming from the line of Suraj Kalia of Oppenheimer, please.

Analyst (Suraj Kalia): Hi, Olivier. John, can you hear me alright?

Olivier Taelman: We can hear you well, Suraj.

Analyst (Suraj Kalia): Congrats on a strong start to the year. Olivier, I want to follow-up on John’s question earlier, right? Your Q2 guidance, U. S. Guidance is plus 25% to 30%. 241 patients in the queue as of the end Obviously, you guys are gonna add more patients as Q2 works its way. If we assume 100% approval just the patients at the end of Q1 would imply about €6 million in U.S. revenues, and that is a 50% sequential jump. So maybe you can if you could, thread the needle for us as to what are your core assumptions here Also, Olivier or maybe John in terms of your Medicare patient funnel, what are your expectations for the full year? And I have a follow-up.

Olivier Taelman: Yes. So, Suraj, let me start by commenting on the first part of the question, and I think you are totally correct. So we are seeing strong ramp up And I am not going into Q2 already, but it is clear that with the patient’s funnel and the pre authorization is in place, and also the spillover from Q4 and Q1, and from Q1 to Q2, we already saw this translated a very strong April. So that is correct. No. How fast will continue ramping up further? Again, as I was mentioning, will all be also defined by the surgical time the lock time that we can get because once again, we are working with high volume sites and high volume surgeons. But To that point, April started already very strong on this 1, and it said it is showing already at the ramp is kicking in. The other parts, I will turn it over to John to answer this 1.

John Landry: Yeah. In terms of the in terms of the ramp, I think, you know, we are looking at, again, stepping up the ramp. In the back half of the year with regard to sequential quarter growth. So as we think about it, you know, first, second quarter, we are looking at 25% to 30% sequential growth and bumping that up to low 40s and then upper 40s, pushing 50% in the fourth quarter to get to our total number for the year. So that is how we are that is how we are thinking about the staging of that, Suraj. Hope that answers the question.

Olivier Taelman: Yeah. And then Medicare percentage, that was the last part of the question. So in Q1, it is around 10% to 12%, still a minority. We also see that this will continue growing. In value of scaling up. And I do think that towards year end, this will also be more in the range of 20% But our commercial players will stay predominant It will be the biggest part of the business. But also know with the c coding, in place I do think that is also completely derisked and we already had the first 2 MACs that I was very positive integrating all the c codes in their Genio in their policy as well. So we are looking with a lot of confidence into the next portfolio, to the rest of 2026.

Analyst (Suraj Kalia): Got it. And, Olivier, in terms of,, Genio, and Inspire, What is the dynamic in the field in terms of selection of the device? Because a lot of sites have these Inspire days booked I guess what I am trying to understand is do you all see any early signs of patient selection migrating towards Genio. And by the same token, how do you all squeeze your way in with Genio? Is it displacing an Inspire case on these HGNS days, or help us understand how the dynamic as it stands currently. Thank you for taking my question.

Olivier Taelman: Okay. So Suraj, that was also 1 of the reasons we recently conducted a market research study with 100 U.S. HGNS implanters also to, in fact, do a sanity check whether launch strategy, and more specifically, also the referral strategy is really the right approach, is making sense, and is impactful. And it was really to our pleasure to see that I do think we can say that by involving sleep physicians in the management of patients, and that starts with patient selection, So CPAP quitting patients, but it also continues post surgery in patient management. And what we are doing is go even 1 step further when we train physicians we do not only train surgeons. We combine this surgeon training together with their sleep physician partners.

Now, the dynamic with competition– it is also clear that for now, our investments in DTC were extremely limited. So the majority of patients that are arriving in hospital, they are coming for an AGNS solution. But they are not coming through DTC for Genio at this moment. So where the conversion takes place is when they are in the site, and they are explained the different optionalities that are currently available We see that there is already a high percentage that automatically or spontaneously goes to Genio. Driven by not having an implanted battery driven also by the bilateral stimulation and software upgrades. So those are the main components that was confirmed in our market research as well. Now in going forward, we will continue focusing on sleep medicine involvement, We also know that we did the first therapy and the first patient activation and this is going extremely fast.

That we do not need to search to find the correct titration, that in the majority of those patients, the settings are exactly the same as they were seeing during the surgery. And this is also giving a lot of confidence to sleep physicians also to refer first patients. So if you combine all this strategy is focused on high volume implanters, We partner them up with their sleep medicine physicians from the beginning. Then we make sure that there is a clear and defined role in patients phenotyping by sleep physicians, before patients are selected after quitting their CPAP, and we make sure the sleep physician is actively involved also in post surgery patient management. And then, of course, by seeing the first activations also the ease of finding the correct titration settings this is giving a lot of confidence.

We will continue with this strategy, and we will keep our DTC spending very limited. Thank you.

Operator: 1 moment for the next question. And our next question will be coming from the line of David Rescott of Baird. Your line is open.

Analyst (David Rescott): Great. Thanks for taking the questions. John, I want to follow-up on the comments around gross margin. I believe you said there was a production yield issue maybe in the quarter that has since been fixed or alleviated. I guess depending on where you shake out for the year, I guess, first part is, is that impact expected to continue into Q2? And then fully revert back in the back half of the year. And I ask that in the context of, again, where you shake out for the full year. You know, you could be somewhere in the mid-60s by the end of the year if you get to the upper end of that 60% to 62% range. So just trying to get a sense for what the adjusted maybe cadence looks like as you get through the year on the gross margin? And then I had a follow-up.

John Landry: Sure. So, yes, so thanks for the question, David. In terms of the gross margin impact, there will be a slight gross margin impact in Q2 because some of those units that were built in Q1 will run through our P&L in Q2. So the slight impact there. The rest of the year, we will start to see it get back to where essentially we were in you know, Q3, Q4 time frame, which was in the 63% to 64% type range from a gross margin perspective. And then we will we will hang out there for the back half of 2026, before we implement the Genio 2.2 disposable patch and activation chip, which will again provide a step function improvement in 2027 up into the low 70s.

Analyst (David Rescott): Okay. And then I guess just thinking on the P&L here. Looking at this adjusted OpEx number for Q1 and relative to the guidance, for the full year. You annualize the Q1 number, you are pretty much getting toward that low end of what the full year non GAAP guide is. So just trying to get a sense for why we should not be anticipating maybe a bigger step up on a sequential basis as you go through the year on the OpEx line? Is it fair to assume that a lot of this SG&A investment is already in the business? Or is it more of a, hey, we will step up SG&A as sales increase, but you now have some offsetting more on the R&D front. And then as that relates into you know, where you step off when you look into the 2027 timeframe. Thank you.

John Landry: Absolutely. So again, we have been thoughtful about managing our cash runway and being disciplined with our cash operating expenses. So a large driver of OpEx growth is really regarding the investments we made in 2027. So that will run pretty consistent over the course of the year. Which leads to the, essentially, the 4x on Q1 results on the low end of the guide. We will make selective investments over the course of the year. Maybe being at the low end somewhere in the middle of that range from an OpEx perspective. But, again, we will be thoughtful and disciplined in our approach there. And there are a number of items in the business that we made significant investments in 2025. Across the board, across a number of supporting functions throughout the organization that we fully expect to leverage in 2026.

As the organization scales using the existing that is been built out in 2025. Which then does not require incremental investments here in 2026. So, as we think again about 2027, we want to take the same approach in 2027 and try and redeploy as much capital as we can. And leverage the noncommercial parts of the organization that have been built out and have the scale and capability to continue to support the business and redeploy that capital into the growth drivers vis-a-vis revenue and or margin improvement initiatives. that is how we are thinking about it. We want to be conscientious of that.

Olivier Taelman: I think that was answering the question since the silence. So I do not know if there are more people lined up for questions. That concludes today’s Q&A session.

Operator: And this also concludes today’s programming. You may all disconnect. Thank you. Thank you.