Beyond Air Financial Results for the Quarter Ended September 30, 2026 - BEYOND AIR INC

Explicit Guidance:

• Reaffirmed calendar year 2026 revenue guidance of $8 million, explicitly excluding revenue from the second-generation LungFit PH system.
• Reaffirmed calendar year 2027 revenue guidance of $16–$18 million, which includes anticipated revenue from the second-generation system (projected to contribute only in Q2, Q3, and Q4, excluding Q1).
• Fiscal year-end transition to December 31 will be effective December 31, 2026; results for the nine-month transition period will be reported on Form 10-K-T.

Business-Segment Outlook:

• U.S. Commercial Pipeline: Pipeline volume has grown close to fourfold since Q1 2026 (more than doubled after sanitization of legacy deals); anticipating accelerated conversion of new account wins and renewals into recurring revenue.
• Product Launch: Planned commercial launch of second-generation OneFit PH is pending FDA approval; the system is positioned to serve as a single-source nitric oxide provider across routine care and patient transport (air/ground) once FDA labeling is expanded.
• International Sales: Partnerships cover >40 countries; international revenue is currently recognized immediately upon direct sale (VA system and global distribution), contrasting with the U.S. subscription model.
• LungFit Go: Received FDA Breakthrough Device designation for non-tuberculosis mycobacterial pulmonary disease (NTMPD); no resource allocation for further development in 2027.
• Subsidiaries: No further investment in Neuronos Israel following the sale of controlling interest to Univoe Pharmaceutical Industries; Beyond Cancer is evaluating partnerships but remains secondary to core LungFit PH commercialization.
• Deal Metrics: Current average U.S. deal size is approximately $250,000 (range $30k–$1M+); expects average deal size to increase significantly with the second-generation product launch.

Market and Competitive Outlook:

• Competitive Landscape: Anticipates higher win rates due to reduced competition in the field and strong customer reception of the first-generation product's ease of use.
• Adoption Drivers: Expect expansion in hospital systems driven by operational efficiencies, recurring revenue models, and referenceable customer base (hundreds of units deployed).
• GPO Integration: Second-generation system integration into Global Provider Organization (GPO) formularies is expected to be a nominal, quick process involving simple extensions of existing agreements.

Macro / Industry Outlook:

• Regulatory Timeline: Audit readiness to be completed in mid-December 2026; audit duration expected to be ~1.5 days due to co-located R&D and manufacturing facilities (1.5 hours apart), with a signature process expected to follow within a few weeks.
• FDA Approval Expectation: Management anticipates FDA decision (if positive) likely in the first quarter of 2027, noting no anticipated delays or additional audit requirements beyond the current schedule.
• Testing Completion: All altitude, operational, and performance testing regarding transport use (air/ground) has been completed and documented in the PMA supplement paperwork.

Strategic Initiatives:

• Second-Gen Product: Launch of a smaller, lighter, simplified second-generation system with expanded labeling for air/ground transport to enable single-source coverage for U.S. hospital systems.
• Commercial Expansion: Building in-house sales team supported by national GPO agreements to deepen hospital relationships; accelerating conversion of hospital interest into signed multi-year agreements.
• Divestiture/Restructuring: Completed agreement to sell controlling interest in Neuronos Israel to Univoe Pharmaceutical to provide dedicated resources for Neuronos development.
• Fiscal Year Change: Transitioning fiscal year-end from March 31 to December 31 to align with market cycles.

Risks and Headwinds to Outlook:

• FDA Approval Uncertainty: The timing and outcome of the PMA supplement review (including final audit and inspections) remain subject to the FDA; delays could impact 2027 revenue realization.
• Launch Timing: 2027 guidance assumes second-generation revenue begins in Q2; a push-out of FDA approval would leave a gap in revenue for Q1 2027 (though management notes Q1 revenue is excluded from current guidance).
• Resource Allocation: Continued focus on commercial execution may limit resources for secondary programs like LungFit Go and Beyond Cancer.
• Financial Performance: Net loss and operating expenses remain significant; guidance assumes continued financial discipline and resource prioritization on commercial growth.

Management Tone on the Future:

• Confidence Level: High confidence in the commercial foundation and pipeline, describing the current stage as an "inflection point" with record pipeline growth and a "nice bump" in win rates.
• Certainty: Stated explicitly that they are "not expecting to be pushing anything out" regarding the 2027 guidance, citing built-in cushion for Q1 and strong Gen 1 pipeline conversion.
• Regulatory Outlook: Optimistic regarding the speed of the FDA audit process due to operational proximity of R&D and manufacturing, expecting a "quick response."
• Strategic Focus: Clear prioritization of the second-generation LungFit PH launch and U.S. commercial expansion over other development programs for the 2027 calendar year.

Miscellaneous:

• Financial Position: Cash, cash equivalents, restricted cash, and marketable securities totaled $18.5 million as of September 30, 2026 (including $4.8M restricted).
• Cost Structure: R&D expenses decreased to $1.6M (from $2.5M) as Gen 2 development is complete; SG&A decreased to $4.6M due to lower stock-based compensation.
• International Revenue: Noted as a key driver for immediate revenue recognition compared to the U.S. subscription model.