Beyond Air Cuts Costs, Grows Revenue, Eyes FDA Approval by End of 2026

Date of Call: Feb 13, 2026

Financials Results

• Revenue: $2.2M, up 105% YOY and up 21% sequentially
• EPS: -$0.85 per share basic and diluted, compared to a loss of -$2.96 per share YOY
• Gross Margin: Gross profit of $300,000, compared to a gross loss of $200,000 YOY and a gross loss of $300,000 sequentially

Business Commentary:

Revenue Growth:

• Beyond Air reported a 105% year-over-year increase in revenue to $2.2 million for the fiscal quarter ended December 31, 2025.
• The growth was driven by the scaling adoption and expanding awareness of the LungFit PH system in clinical settings, with over 45 hospitals now using the first-generation system.

Cost Reduction Initiatives:

• The company achieved a 36% year-over-year reduction in operating expenses, decreasing from $10.7 million to $6.9 million.
• This was primarily due to cost reduction initiatives taken over the past 12 months, including a decrease in R&D costs related to the Gen II device and a reduction in employee-related costs in SG&A expenses.

International Expansion:

• Beyond Air expanded its global distribution network, securing new agreements in Canada, Germany, Brazil, Austria, the Netherlands, and Sri Lanka, covering a total of 40 countries.
• The international expansion is positioning the company for long-term growth and broader adoption of the LungFit PH system, with repeat orders for accessories already being received in several countries.

FDA Approval Timeline and Gen II System:

• The company is confident in receiving FDA approval for the second-generation LungFit PH system before the end of calendar 2026.
• The Gen II system is designed to address market demands with features like reduced size and weight, extended service intervals, and compatibility with both air and ground transport, which is expected to expand the addressable market.

Sentiment Analysis:

Overall Tone: Positive

• "I am pleased to speak with you today and provide an update on what has been a productive and meaningful period for our company." "...recent events have strengthened our ability to execute our commercial strategy and create long-term value for our shareholders." "...I share Steve's enthusiasm about the opportunities ahead for Beyond Air." "...we believe this agreement provides the potential to create meaningful value for our shareholders." "...I see a bright future ahead as the team continues to execute on our growth strategy."

Q&A:

• Question from Michael G King (Rodman & Renshaw): Could you talk more about the sales process for penetrating systems rather than single hospitals? What needs to happen to win more than one facility at a time?
  Response: The VA channel provides direct access, but the company still competes for RFPs. The focus is on refining commercial processes with CRM rigor, demand generation, and pipeline discipline to reach the right customers.

• Question from Michael G King (Rodman & Renshaw): How do you identify facilities most likely to acquire the system and target them?
  Response: The company is refining its prospecting tools, customer intelligence, and commercial processes to ensure the right reach and frequency in engaging potential customers.

• Question from Michael G King (Rodman & Renshaw): Has there been any appreciable change in the length of the sales cycle?
  Response: The sales cycle remains around 6 to 9 months, with the company working to identify customers early and manage expectations to potentially streamline the process.

• Question from Michael G King (Rodman & Renshaw): How do you segment the next-gen system to avoid sales holding off until it's available?
  Response: Focus is on selling the first-generation product to non-transport systems first, while keeping conversations open with transport-focused systems for future engagement.

• Question from Marie Thibault (BTIG): Any updates on FDA communications for Gen II, confidence in the timeline (end of calendar 2026), and post-clearance steps for inventory build and launch?
  Response: FDA interaction is positive with no major hurdles. The gating factor is the contract manufacturer inspection. The timeline is still viewed as highly confident.

• Question from Marie Thibault (BTIG): What are the catalysts or wins on the international side?
  Response: Recent partnership wins and expansion to 40 countries are progressing. Product is now being deployed in hospitals, leading to repeat accessory orders and increased stickiness.

• Question from Justin Walsh (JonesTrading): What attracted XTL Biopharmaceuticals to NeuroNOS, and how will collaboration look going forward?
  Response: XTL was attracted by the strong science and clear path to human trials for autism and glioblastoma. The transaction provides Beyond Air with a 20% stake, funding development while reducing its own financial burden.

• Question from Jason Kolbert (D. Boral Capital): Can you talk about COGS performance and a sustainable COGS outlook over the next couple of years?
  Response: Long-term target for Gen II COGS is ~70%, with Gen I aiming for ~60%, though near-term margins will depend on market pricing dynamics.

• Question from Jason Kolbert (D. Boral Capital): How sensitive is the sales cycle to increasing SG&A and hiring more salespeople?
  Response: The call was cut off before a full response; no answer provided.

• Question from Yale Jen (Laidlaw & Company): Can you elaborate on the potential for extended service intervals with Gen II?
  Response: Gen II service intervals are expected to extend from 1,000 hours to at least 3,000 hours (~3x longer), reducing service frequency and improving hospital convenience and gross margins.

• Question from Yale Jen (Laidlaw & Company): Is the extended service interval required for Gen II FDA submission, or could it be added later?
  Response: The reliability hurdle for FDA is already passed; extended service intervals are a customer service guide, not a regulatory gating factor.

• Question from Yale Jen (Laidlaw & Company): On the oncology side, should we think about the Phase Ib study starting later this calendar year?
  Response: No specific timeline was given. The company is in discussions but would not fully fund the study at this time, focusing capital on commercial operations and path to profitability first.

Contradiction Point 1

Growth Trajectory and International Expansion Timeline

Contradiction on when international expansion becomes a major revenue driver.

Can you discuss your outlook for the quarter? - Marie Thibault (BTIG)

2026Q3: Recent wins have been achieved, and the company is now seeing repeat orders for accessories, indicating product deployment and customer stickiness in international markets. - [Robert Goodman](CCO)

Are there any notable international successes or catalysts? - Justin Walsh (Jones Trading)

20251111-2026 Q2: This is expected to be a major revenue driver starting in fiscal 2027. - [Steven Lisi](CEO)

Contradiction Point 2

Sales Cycle Disruption and Cadence

Contradiction on the impact of leadership transition on sales cycle and growth cadence.

What are your key takeaways from the recent earnings report? - Michael G King (Rodman & Renshaw)

2026Q3: The sales cycle remains around 6 to 9 months, with some variability. The team is organized with clinical support to engage customers early, aiming to streamline the process. - [Robert Goodman](CCO)

Has there been a significant change in sales cycle duration? - Sam Eiber (BTIG, on for Marie Thibault)

20251111-2026 Q2: It will take time for the new interim CCO (Bob Goodman) to implement his processes and for sales to ramp up, leading to some expected disruption and a more measured growth trajectory. - [Steven Lisi](CEO)

Contradiction Point 3

Gen II Product Launch Timeline and Gating Factors

Contradiction on whether FDA approval or supply chain is the primary constraint for the Gen II launch.

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2026Q3: Communication with the FDA is constant and positive, with no major hurdles. The PMA has been filed, and the gating factor is awaiting contract manufacturer inspection. Confidence remains in the timeline for approval before the end of calendar 2026. - [Steven Lisi](CFO)

Have there been any communications with the FDA regarding the Gen II timeline, and what post-clearance steps are needed for inventory build and launch ramp? - Justin Walsh (JonesTrading Institutional Services, LLC, Research Division)

2026Q2: The timeline is more constrained by supply chain challenges (difficulty sourcing parts due to global trade issues) and preparing the contract manufacturing site for inspection, rather than FDA delays. - [Steven Lisi](CFO)

Contradiction Point 4

International Expansion Revenue Visibility and Cadence

Contradiction on the expected timing and contribution of international revenue.

Could you provide more details on the recent cost optimization initiatives and their impact on operating expenses? - Marie Thibault (BTIG)

2026Q3: Recent wins have been achieved, and the company is now seeing repeat orders for accessories, indicating product deployment and customer stickiness in international markets. - [Robert Goodman](CRO)

What international successes or key factors should be considered? - Yale Jen (Laidlaw & Company (UK) Ltd., Research Division)

2026Q2: International revenue is expected to build steadily in FY26 and accelerate in FY27. - [Steven Lisi](CFO)

Contradiction Point 5

Sales Cycle Duration

Contradiction on the typical length of the sales cycle.

How do you assess the latest earnings report, Michael G King (Rodman & Renshaw)? - Michael G King (Rodman & Renshaw)

2026Q3: The sales cycle remains around 6 to 9 months, with some variability. - [Robert Goodman](CRO)

Has there been a noticeable change in sales cycle duration? - Jason Hart Wittes (ROTH Capital Partners)

2026Q1: The sales cycle ranges from 4 to 12 months, depending on the hospital's procurement process. - [Steven Adam Lisi](CEO)