Nyxoah Third Quarter 2026 Earnings Conference Call - NYXOAH SA

Financial Performance:

• Third quarter 2026 net revenue was €9.2 million, representing 365% year-over-year growth and 19% sequential growth.
• U.S. net revenue reached €6.7 million, showing 29% sequential growth, while international revenue grew to €2.5 million (42% year-over-year).
• Gross margin improved to 63.1% in Q3 2026 from 60.5% in Q3 2025, driven by economies of scale on cost of goods sold.
• Total operating loss narrowed to €21.9 million from €24.4 million in the prior year period.
• Cash, cash equivalents, and financial assets totaled €77.1 million as of September 30, 2026, down from €97.8 million at the end of Q2 2026.
• The company reported an annualized run rate of nearly €27 million (approx. $31 million) based on Q3 performance.

Guidance and Future Outlook:

• Full-year 2026 global net revenue guidance was lowered to a range of €33 million to €35 million from previous expectations.
• Full-year 2026 gross margin guidance is maintained at 60% to 62%.
• Management clarified that systematic quarterly revenue pre-announcements are not intended going forward.
• 2027 outlook emphasizes continued sequential growth, expanded gross margins, and disciplined operating expense management, with specific 2027 guidance expected at the Q4 report.
• Primary growth drivers remain the U.S. commercial launch expansion and international market penetration.

Business Segments and Product Lines:

• The U.S. launch remains the primary strategic priority, focusing on deepening utilization in existing accounts rather than solely acquiring new ones.
• Commercial infrastructure expanded to 55 sales representatives serving 233 active accounts.
• Surgeon training reached 342 total trained surgeons, with 80 new surgeons trained in Q3.
• The GenioAccess program currently has 447 patients in the prior authorization pipeline.
• The "Genio" device is the only bilateral hypoglossal nerve stimulation (HGNS) therapy on the market, targeting complete concentric collapse (CCC) patients.
• A PMA supplement submission to the FDA is pending to expand indications to CCC patients, who account for roughly 25% of evaluated patients.
• The "BREATHE" post-approval study was initiated to generate real-world evidence for bilateral HGNS.

Market and Competitive Landscape:

• The obstructive sleep apnea (OSA) market is described as large and under-penetrated, with demand for therapy choices beyond unilateral options.
• CCC patients currently have no hyperglossal nerve stimulation option in the U.S., presenting a specific unmet need.
• Management views the market as capable of supporting multiple players, believing new entrants will expand rather than contract the overall market.
• International markets are performing in line with expectations, serving as a secondary growth engine.

Risks and Challenges:

• Revenue guidance was adjusted downward to reflect slower ramp rates for new technology adoption among physicians and centers.
• Continued reliance on U.S. commercial execution success; delays in PMA approval for CCC indication could impact growth timelines.
• Ongoing management of cash burn while transitioning from an R&D-centric to a commercial-centric cost structure.
• Forward-looking statements carry risks related to regulatory approval, market acceptance, and execution assumptions.

Management Commentary and Tone:

• Liam Kelly, new President and CEO, expressed strong confidence in the product's differentiation and the team's execution capabilities.
• Tone was optimistic regarding the commercial launch momentum despite the guidance adjustment, highlighting "best in class" run rates.
• Management emphasized a strategic pivot to a "commercially-centric organization" while maintaining fiscal discipline.
• Acknowledged the strong foundation built by previous leadership while committing to new objectives of US market penetration and margin expansion.

Analyst Questions and Answers:

• Tommy Han (Baird): Asked about excitement for the new role and 2027 guidance expectations.
• Response on Role: CEO cited the U.S. market penetration opportunity and the potential to address the CCC patient pool as key draws.
• Response on 2027 Guidance: Management declined to provide specific 2027 numbers but expressed confidence in achieving forward guidance based on Q4 results, citing strong recruiter productivity and new center activations.
• Response on Guidance Philosophy: Clarified that guidance changes reflect realistic ramp expectations for new technology rather than execution failures.

Other Key Points:

• CMS final rule for 2027 increases hospital outpatient reimbursement for the Genio procedure by approximately 11% ($31,526 to $35,072) and surgical center reimbursement by approximately 13% ($27,563 to $31,283).
• Clinical data presented at the International Surgical Sleep Society meeting showed a 77.2% AHI responder rate and 87.7% ODI responder rate at 12 months for CCC patients, with zero device-related serious adverse events.
• The company is shifting spending away from clinical R&D toward commercial infrastructure investment.
• The CEO noted that the Genio product is differentiated by being the only bilateral therapy, contrasting with unilateral competitors.