Nano-X Imaging Ltd. Q2 FY2026 earnings call

### Go-to-Market Strategy Updates - Restructured the U.S. commercial model to prioritize a multi-channel partnership approach that supplements direct sales and expands market coverage more efficiently; secured multiple commercial agreements with established U.S. medical equipment distributors in Q1 2026, representing potential for ~360 CapEx system sales over 2-3 years. - Prioritized Nanox.ARC deployments at high-visibility reference sites: a Nanox.ARC system is now in commercial use and integrated into routine clinical workflows at a RadNet (the largest U.S. outpatient imaging operator) facility, with expanded deployment and clinical research opportunities currently under discussion. - Launched the Nano-X Imaging Network focused on high-reimbursement segments including workers' compensation groups and concierge medical providers, with ongoing proof-of-concept engagements across multiple practice types. - Implemented a company-wide restructuring to optimize cost structure, improve capital efficiency, reduce cash burn, and align operations with long-term business goals.

### Commercial Expansion - Signed a new distribution agreement with TopMed SAC in Peru (Latin America) in late May 2026, with additional regional agreements in advanced negotiation; the new agreements are already growing the deployment pipeline and generating new sales leads. - Shifted to a more CapEx-driven commercial model supported by the partner network, which management expects to drive revenue growth, reduce future cash requirements, and accelerate the path to breakeven.

### AI and Health IT Progress - The ongoing clinical trial partnership with Cedars-Sinai has produced an ROI calculator for AI-powered cardiac aortic calcification detection that estimates $3.8 million in first-year downstream revenue for medical centers from early intervention for 49 severe cases out of 5,000 screened. - The 251st Hellenic Air Force General Hospital in Greece transitioned from a successful pilot to a revenue-generating commercial deployment of Nanox's AI bone fracture solution; clinical data shows the AI increases detected vertebral fractures 14-fold compared to radiologists without the tool, and 5-fold compared to endocrinologists without the tool. - Cross-division synergies are active: Nanox.AI has been integrated with a partner PACS system for customer demos, and cross-division lead generation is growing, with new business won for multiple divisions via collaborative opportunities. - Nanox Health IT has executed multiple new client contracts year-to-date, received add-on service orders from existing clients, launched implemented solutions for customers, and started generating monthly recurring revenue from these accounts.

### Technology and Other Operational Updates - Varex X-ray tubes are in final integration to become the main source for Nanox.ARC systems; Oak Ridge National Laboratory prototype tube assembly has started, with testing completion and delivery expected in early Q3 2026. - Technology assessments of Nanox's chip source technology are ongoing with multiple global industry leaders in the security and inspection fields. - South Korean operations restructuring implementation has commenced; management is evaluating additional options including a potential sale of operations/assets or an orderly wind-down, with no final decision made as of the call. - CFO Ran Daniel is transitioning out of his role, with new CFO Guy Nathansohn already on-board supporting a smooth handover.

Total company revenue for Q1 2026 was $4.3 million, up from $2.8 million in Q1 2025. 1. Teleradiology services: Revenue was $3.1 million (72.1% of total Q1 2026 revenue), up from $2.6 million in Q1 2025. GAAP gross profit was $0.7 million (24% margin), compared to $0.4 million (17% margin) year-over-year. Non-GAAP gross profit was $1.1 million (36% margin), compared to $1 million (39% margin) year-over-year. 2. Imaging systems and OEM services: Revenue was $167,000 (3.9% of total Q1 2026 revenue), up from $33,000 in Q1 2025. This includes $118,000 from two Nanox.CONNECT unit sales, $11,000 from imaging system deployment, and $38,000 from OEM services. 3. AI and software solutions (including Nanox Health IT): Revenue was $1 million (23.3% of total Q1 2026 revenue), up from $0.2 million in Q1 2025. $0.9 million of this revenue came from Nanox Health IT Inc. GAAP gross loss was $1.7 million, compared to a $1.9 million gross loss year-over-year. Non-GAAP gross profit was $0.3 million, compared to $81,000 year-over-year. Other financials: GAAP gross loss for the total company was $2.6 million, compared to $3 million in Q1 2025. Non-GAAP gross loss was $2.2 million, compared to $0.4 million in Q1 2025. GAAP net loss was $14.3 million, up from $13.2 million year-over-year. Non-GAAP net loss attributable to ordinary shares was $11.1 million, up from $9.4 million year-over-year. Research and development expenses were $4.8 million, down from $5 million year-over-year. Sales and marketing expenses were $2.2 million, up from $0.9 million year-over-year. General and administrative expenses were $5.2 million, flat compared to $5.1 million year-over-year.

- Management withdrew its previously announced full-year 2026 revenue target, as deployment, activation and revenue recognition timelines have been longer than anticipated, with significant variability driven by factors outside of the company's control including site readiness, infrastructure completion, customer schedules and third-party execution. - The company will not provide annual revenue guidance going forward, and will instead focus investor attention on more meaningful operational milestones including deployments, activations, utilization growth, customer adoption, service expansion, and execution against signed commercial agreements. - Gross profit break-even for the AI division is expected to occur earlier than full company break-even, as AI/IT gross margins are approximately 80%. Full company cash neutral/break-even, previously targeted for the end of 2026, is now expected in early 2027. - Management expects Q2 2026 total revenue to be higher than Q1 2026, with revenue ramp-up to accelerate in the second half of 2026 (Q3 and Q4) after Q2 partner onboarding and training is completed. - Total operating expenses and cash burn are expected to decline sequentially starting in Q2 2026 following cost restructuring actions including headcount reductions. - As of March 31, 2026, existing cash resources are sufficient to fund current operating plans for at least 12 months from the earnings call date.

- The company's current cash position raises substantial doubt about its ability to continue as a going concern; there is no guarantee that additional required funding will be secured on acceptable terms. - If additional funding is raised via equity sales, existing ordinary shareholder ownership will be diluted; if raised via debt, it may impose restrictive covenants and increase fixed payment obligations. If raised via partnerships or licensing arrangements, the company may be required to give up valuable rights to technology or future revenue on unfavorable terms. - If adequate funding cannot be secured when needed, the company may be required to delay, reduce, or eliminate product development or commercialization efforts, or license rights to products it would prefer to develop independently. - Revenue recognition timing is highly variable and dependent on multiple factors outside of the company's control, including regulatory approvals, site readiness, customer implementation schedules, and third-party execution, which can lead to missed performance expectations for reporting periods. - Commercial adoption of new medical imaging technology requires long timeline for customer education and behavior change, which can delay revenue growth.

Q: Jeffrey Cohen (Ladenburg Thalmann) asked for more detail on teleradiology business performance, including rates, customer count, volume, and utilization trends. / A: Since acquiring USARAD, teleradiology revenue has more than doubled, primarily from growing the customer base to a few hundred total customers, with revenue per customer ranging from a few thousand to a few hundred thousand dollars annually. The business is seeing volume growth shift to higher-priced MRI and CT scans compared to lower-priced X-rays, which is driving overall revenue increases, and weekly scan volumes are higher year-over-year. Cross-selling synergies are strong: USARAD generates leads for Nanox.ARC, AI and Health IT, and teleradiology services are often requested to read scans from newly deployed Nanox.ARC systems, driving additional teleradiology growth.

Q: Cohen followed up asking for expected deployment cadence of Nanox.ARC units for the rest of 2026. / A: The 360 contracted potential U.S. distributor systems are planned for deployment over 2-3 years, with distributors targeting 60 unit deployments in 2026, in addition to direct sales. Multiple international markets including Greece, Romania, Peru, Argentina, the Czech Republic, and France are in active planning for new deployments. RadNet plans to expand its existing commercial deployment to additional sites after successful initial implementation. The Nano-X Imaging Network plans to install 21 total sites; 1 retail site is already scanning, and systems have arrived at 2 additional sites that will come online once site preparations are complete.

Q: Scott Henry (A.G.P.) asked if total operating expenses will decline sequentially in the second half of 2026 following cost restructuring. / A: The answer is yes. Restructuring of South Korean operations and company-wide cost reduction efforts, including a 15-person headcount reduction in Israel and reduced scope of employment for other staff, are already implemented. Early June data indicates cash burn will decline moving forward.

Q: Henry also asked when the AI business will reach gross profit break-even. / A: AI and Health IT already have very high gross margins, around 80%, so the AI business will reach gross profit break-even much earlier than full company break-even. Early 2027 is the expected timeline for full company cash break-even, pushed one quarter from the prior end-of-2026 target.