Beyond Air, Inc. (XAIR) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates positive developments: significant reduction in SG&A expenses, improved net loss, and strong cash position. The Q&A reveals strategic efforts in market penetration and international expansion, with optimistic guidance for FDA approval and partnerships. Although some concerns remain about sales cycle length and SG&A impact, the overall sentiment is positive, especially with international growth and financial improvements. The stock is likely to see a 2% to 8% increase over the next two weeks.
Key Financial Performance
Revenue Revenue for the fiscal quarter ended December 31, 2025, increased 105% to $2.2 million compared with $1.1 million for the fiscal quarter ended December 31, 2024. The increase is attributed to scaling adoption and expanding awareness of LungFit PH in clinical settings.
Gross Profit Gross profit increased to $300,000 for fiscal third quarter 2026 compared to a gross loss of $200,000 for the same period last year and a gross loss of $300,000 in the prior quarter. This improvement is due to increased revenue and cost management.
Operating Expenses Total operating expenses for the fiscal third quarter of 2026 were reduced to approximately $6.9 million, down from $10.7 million for the same period last year, translating to a 36% reduction year-over-year. The reduction is due to cost reduction initiatives and decreased R&D costs related to the Gen II device.
Research and Development Expenses R&D expenses were $2.4 million for fiscal third quarter of 2026 compared to $3 million for the same period last year, a decrease driven by lower development costs associated with the Gen II device and a decrease in headcount and related costs.
SG&A Expenses SG&A expenses for the quarters ended December 31, 2025, and December 31, 2024, were $4.5 million and $7.7 million, respectively, a decrease of 42% year-over-year. The decrease was primarily due to a reduction in employee-related costs.
Other Expense Other expense was $1 million compared to $2.4 million for the same period a year ago, a decrease of $1.5 million primarily attributed to the prior period loss associated with the extinguishment of debt of $1.9 million.
Net Loss Net loss attributed to common stockholders of Beyond Air was $7.3 million or a loss of $0.85 per share basic and diluted compared with $13 million or a loss of $2.96 per share basic and diluted. The improvement is due to increased revenue and reduced operating expenses.
Net Cash Burn Net cash burn for the quarter was $4.3 million, a reduction of over 40% versus a year ago. This reduction is attributed to revenue growth and cost control measures.
Cash Position As of December 31, 2025, cash, cash equivalents, restricted cash and marketable securities were $17.8 million. Subsequent to the end of the third quarter, a $4.5 million equity financing was completed, providing a cash runway into calendar year 2027.
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Operating Highlights
LungFit PH adoption: Revenue increased 105% year-over-year to $2.2 million, with over 45 hospitals adopting the first-generation LungFit PH system. Retention exceeds 90%, and more than half of customers are under multiyear agreements.
Second-generation LungFit PH system: Anticipated FDA decision by the end of 2026. The system offers reduced size and weight, simplified operation, extended service intervals, improved backup functionality, and compatibility with air and ground transport.
Global distribution expansion: Expanded LungFit PH distribution network to 40 countries, including new agreements in Canada, Germany, Brazil, Austria, the Netherlands, and Sri Lanka.
VA Medical Center sale: Completed the first sale of LungFit PH to a VA Medical Center, establishing a foothold in the federal healthcare system.
Cost reduction initiatives: Operating expenses reduced by 36% year-over-year, with significant reductions in SG&A and R&D costs.
Revenue growth: Revenue increased 105% year-over-year and 21% sequentially, with gross profit improving to $300,000 from a gross loss in the prior year.
NeuroNOS subsidiary sale: Sold NeuroNOS subsidiary to XTL Biopharmaceuticals for equity, $1 million in cash, and up to $31.5 million in milestone payments.
Beyond Cancer updates: Presented data on nitric oxide gas therapy for metastatic disease at AACR Annual Meeting, with promising survival data and plans for a Phase Ib combination study.
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Risk or Challenges
Regulatory Approval for Gen II System: The anticipated FDA decision for the second-generation LungFit PH system is critical for future growth. Delays or failure in obtaining regulatory clearance could hinder the launch and adoption of the Gen II system, impacting revenue and market expansion.
Supply Chain and Cost Management: While cost reduction initiatives have been implemented, any disruptions in the supply chain or unexpected increases in costs could negatively affect operations and profitability.
Market Adoption and Competition: The company is heavily reliant on the adoption of its LungFit PH system. Failure to expand its customer base or increased competition in the nitric oxide solutions market could adversely impact revenue growth.
Financial Sustainability: Although the company has reduced its cash burn and extended its cash runway, it remains dependent on hitting revenue estimates and controlling costs to achieve profitability. Any deviation from these targets could strain financial resources.
International Expansion Risks: The company is expanding its global footprint, but challenges such as regulatory hurdles, market-specific competition, and operational complexities in international markets could impede growth.
Dependence on Key Partnerships: The company relies on partnerships with organizations like TrillaMed and international distributors. Any disruption or failure in these partnerships could affect market access and sales.
NeuroNOS Transaction Uncertainty: The pending acquisition of NeuroNOS by XTL Biopharmaceuticals involves milestone-based payments and equity stakes. Any delays or issues in this transaction could impact expected financial benefits.
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Guidance & Outlook
FDA decision for second-generation LungFit PH system: The company anticipates receiving FDA approval for its second-generation LungFit PH system before the end of calendar 2026, subject to regulatory review and clearance.
Expansion of Gen 1 system utilization: The company aims to continue expanding the utilization of its first-generation LungFit PH system through calendar 2026 in the U.S. and internationally, while preparing for the potential launch of the second-generation system.
Second-generation LungFit PH system enhancements: The Gen II system is designed to offer reduced size and weight, simplified operation, extended service intervals, improved backup system functionality, and compatibility with both air and ground transport. These enhancements are expected to expand the addressable market and support broader adoption over time.
Global distribution network expansion: The company has expanded its global LungFit PH distribution network to cover 40 countries, including new agreements in Canada, Germany, Brazil, Austria, the Netherlands, and Sri Lanka. This expansion is expected to lay the groundwork for long-term growth and serve a significantly larger addressable market.
Beyond Cancer Phase Ib combination study: The company remains dedicated to pursuing the Phase Ib combination study with anti-PD-1 therapy and will provide more details as progress is made.
NeuroNOS acquisition by XTL Biopharmaceuticals: The company expects NeuroNOS to serve as XTL's flagship platform for autism and neuro-oncology development following the acquisition. Consideration includes a 19.9% stake in XTL, $1 million in cash, and milestone-based contingent payments totaling up to $31.5 million.
Cash runway and profitability: The company believes its current cash position, along with recent financing, provides a runway into calendar year 2027 and potentially to profitability, provided revenue estimates are met and costs are controlled.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How does the company plan to penetrate systems rather than a single hospital at a time in the VA system?
A:The company is leveraging the ECAD system catalog, which simplifies the process for customers to access their product directly. They are also competing with other RFPs and utilizing different contracting methods within the VA system.
Q:How does the company identify and target facilities most likely to acquire their system?
A:The company uses prospecting tools, CRM rigor, and demand generation processes to identify potential customers. They focus on pipeline discipline, ensuring their teams are in the right places at the right times to engage with customers effectively.
Q:Has there been any change in the length of the sales cycle?
A:The sales cycle remains largely the same, typically around 6 to 9 months, though it can be shorter (4-5 months) if the timing aligns with expiring contracts and organized customers. The company is working to streamline the process by engaging with customers early and demonstrating the value of their product.
Q:Is there a concern about customers delaying purchases until the next-generation system is available?
A:The company is currently focusing on their first-generation product, which has been well-received. Conversations about the next-generation system (Gen II) are being deferred, as it targets a different market segment, such as transportation systems.
Q:What is the status of communications with the FDA regarding the Gen II process?
A:The company has had consistent communication with the FDA and is confident in the timeline for approval by the end of the calendar year. The main gating factor is the completion of work with their contract manufacturer for inspection.
Q:Are there any updates on international efforts and partnerships?
A:The company has achieved recent wins internationally, with distributors now equipped with demo devices. Customers in regions like Europe, the Middle East, and Australia are reordering filters, indicating product deployment and growing stickiness in hospitals.
Q:What attracted XTL Biopharmaceuticals to the NeuroNOS opportunity?
A:XTL was drawn to the strong science behind the NeuroNOS opportunity, including landmark papers and a clear path to human trials. The focus is on treating autism and glioblastoma, with Beyond Air retaining a 20% stake in the new entity.
Q:What are the company's expectations for COGS (Cost of Goods Sold) in the near and long term?
A:In the near term, COGS will remain similar to Q3 levels. Long-term, the company aims for a 60% margin with Gen I and up to 70% with Gen II, though this depends on market pricing.
Q:How does increasing SG&A (Selling, General, and Administrative expenses) impact revenues?
A:The company did not provide a clear answer to this question due to technical difficulties during the call.
Q:What is the potential for extending service intervals with the Gen II system?
A:The Gen II system is expected to extend service intervals from 1,000 hours to at least 3,000 hours, reducing the frequency of machine swaps and improving gross margins. This is not a gating factor for FDA approval.
Q:Will the company start a Phase Ib oncology study later this calendar year?
A:The company is not committing to a timeline for the Phase Ib study. While they have a strong balance sheet, they are prioritizing commercial operations and may revisit funding the study once they are closer to profitability.
Q:Review of Unclear Management Responses
A:The company did not provide a clear answer to the question about how increasing SG&A expenses would impact revenues due to technical difficulties during the call.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AACR
CEO Chairman
Chief Commercial
Commercial Officer
Gen system
Goodman
NeuroNOS
RD
SGA
VA
XTL
access
adoption
agreement
awareness LungFit
care system
clinician
confidence
customer
decision
detail
engagement
equity
exchange
expense period
financing
health care
hospital LungFit
hospital United
launch
milestone
network
order
oxide solution
patient
period decrease
period loss
role
subject
subsidiary
support
survival
value
vision
XAIR Transcript
Beyond Air, Inc. (XAIR) Q4 2026 Earnings Call Transcript
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Beyond Air, Inc. (XAIR) Q3 2026 Earnings Call Transcript
Positive2-13
The earnings call indicates positive developments: significant reduction in SG&A expenses, improved net loss, and strong cash position. The Q&A reveals strategic efforts in market penetration and international expansion, with optimistic guidance for FDA approval and partnerships. Although some concerns remain about sales cycle length and SG&A impact, the overall sentiment is positive, especially with international growth and financial improvements. The stock is likely to see a 2% to 8% increase over the next two weeks.
Beyond Air, Inc. (XAIR) Q2 2026 Earnings Call Transcript
Positive11-10
The earnings call summary indicates strong financial performance with a 128% YoY revenue increase, reduced gross losses, and significant cost reductions. The Q&A section reveals positive sentiment towards the second-gen LungFit PH, expected to drive further growth, despite supply chain challenges. The company's strategic international expansion and new business model also contribute positively. However, the vague management responses and updated guidance suggest some uncertainty, tempering the overall sentiment. Considering these factors, the stock price is likely to experience a positive movement, especially given the significant revenue growth and cost control.
Beyond Air, Inc. (XAIR) Q1 2026 Earnings Call Transcript
Positive8-12
The earnings call presents strong revenue growth, optimistic guidance, international expansion, and reduced expenses. The Q&A section reveals confidence in achieving guidance, despite some uncertainties in hospital contracts and PMA filings. Cash reserves are solid, supporting operations well into 2026. The company's strategic moves, including the Premier agreement and international partnerships, are expected to drive growth. While management's lack of specific details could be a concern, the overall sentiment is positive, with potential for stock price appreciation in the coming weeks.
XAIR Report
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