Release Date: May 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pulmonx Corp (LUNG, Financial) reported a strong Q1 with $18.9 million in worldwide sales, marking a 30% growth year-over-year.
- The company is confident in achieving its full-year revenue guidance of $81 million to $84 million, reflecting its robust commercial strategy.
- Pulmonx Corp (LUNG) has expanded its market presence by adding nine new Zephyr Valve centers in the U.S., bringing the total to 346.
- Gross margin improved to 75% in Q1 2024 from 73% in the previous year, driven by favorable geographic mix and higher utilization.
- The company is making significant progress in international markets, particularly in Europe, with a 15% growth overall and 24% in key geographies.
Negative Points
- Despite strong sales growth, Pulmonx Corp (LUNG) reported a net loss of $13.7 million in Q1 2024.
- Operating expenses increased to $28.6 million, up 6% from the previous year, indicating higher costs associated with expanding commercial activities.
- The company anticipates a material revenue contribution from the Japanese market only by approximately 2026, suggesting a longer timeline for returns on investment in this region.
- Pulmonx Corp (LUNG) is still in the process of ramping up its new product, AirSeal, with expectations to complete enrollment in the pivotal trial by the end of the next year.
- While there is ongoing investment in R&D and commercial activities, the company is yet to achieve profitability, maintaining a focus on long-term growth over immediate financial returns.
Q & A Highlights
Q: Can you discuss the guidance for the year, particularly why the range was maintained despite a strong Q1?
A: Mehul Joshi, CFO, explained that while Q1 showed strong performance, particularly in the US, it's still early in the year to adjust guidance. They prefer to see continued momentum before making any changes.
Q: What are the strategic priorities moving forward, and do you anticipate major changes to the strategy?
A: CEO Steven Williamson indicated that the current strategy is effective, evidenced by past growth. Future adjustments might include refinements for clarity and specificity but the core strategy will remain.
Q: What are your thoughts on M&A opportunities?
A: Williamson is open to M&A but emphasized the current focus is on executing their existing strategy due to the significant untapped market and increasing physician buy-in.
Q: Could you elaborate on the areas you see potential for immediate impact or improvement within the company?
A: Williamson sees opportunities to innovate in how they interact with physicians and patients, and in refining sales processes. Each account may require tailored strategies based on its specific needs and maturity.
Q: What drove the improvement in gross margins this quarter?
A: CFO Joshi attributed the improved gross margins to favorable geographic sales mix and higher manufacturing capacity utilization. They anticipate further margin improvements as volumes increase.
Q: Can you explain the reduction in OpEx guidance?
A: Joshi clarified that the reduction was due to a change in accounting methodology for stock-based compensation (SBC) related to an executive transition, affirmed by their auditors. Non-SBC OpEx guidance remains consistent, supporting commercial and R&D activities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
