Nyxoah S.A. Q2 FY2026 earnings call

- U.S. Commercial Launch Progress * This was the second full quarter of U.S. commercialization, meeting the company's commitment of 25% sequential U.S. revenue growth. Added 15 new fully operational sales reps, expanding coverage to 200 high-volume accounts entering Q2 2026, with 40 total fully trained sales reps operational. * Key KPIs as of March 31, 2026: 62 new surgeons trained in Q1 (total 207 trained on the Genio system); 34 new accounts activated (total 91 active out of 125 initial targeted accounts); 241 new patients with submitted pending prior authorization; six months post-launch, average market share of 12-14% in active accounts. * Recent market research of 100 U.S. implanters confirms 88% of ENTs want multiple hypoglossal nerve stimulation (AGNS) options, 100% of Genio-trained surgeons plan to adopt Genio, with top adoption drivers being bilateral stimulation, no implanted battery, and alternative option availability.

- Reimbursement Update * Commercial payers (90% of Q1 cases): Coverage is broad and stable, with Genio claims processed under CPT codes 64568 or 64582, and United Healthcare added both codes to its policy. 100% approval rate on all reviewed prior authorization submissions. * Medicare (10% of Q1 cases): CMS issued a clear AGNS-specific facility C code (C8011) in February 2026, with facility pricing that achieves parity with competing devices. The CPT panel has confirmed no AGNS technology will be left without appropriate coding for 2028. * WISER program (CMS AI prioritization tool in 6 states): 100% approval rate for all submitted Medicare patients.

- International Operations * Revenue maintained sequential stability with Q4 2025, beating typical seasonal Q1 declines. Growth was driven by deeper penetration in Germany, continued adoption in the Middle East, and successful market entry in the UK and Netherlands. The company maintains a disciplined financial approach, with Germany already reaching break-even three years post-launch.

- Financial Discipline * Reduced non-GAAP cash operating expenses 300,000 euros sequentially from Q4 2025, and cut non-GAAP R&D expenses by 2.9 million euros sequentially to reallocate capital to U.S. commercialization. Long-term target is gross margins over 80% and break-even at below 150 million euros in total revenue.

For Q1 2026, the company reports two core geographic segments: 1) U.S. segment: Net revenue was 4.3 million euros, representing 67.2% of total worldwide net revenue, with 25% sequential growth over Q4 2025. This segment is the primary driver of overall company growth. 2) International segment: Revenue was consistent sequentially with Q4 2025, overcoming typical seasonal Q1 decline, representing the remaining 32.8% of total worldwide net revenue. Total worldwide gross revenue was 6.7 million euros, with 300,000 euros in deferrals for disposable patches, resulting in total net revenue of 6.4 million euros, a 13% sequential increase over Q4 2025. Gross margin for the total company was 57% in Q1 2026, down from 62% in Q1 2025, due to one-off production yield issues that have been resolved. Total operating expenses were 24.2 million euros (up from 21.4 million euros in Q1 2025), and non-GAAP cash operating expenses were 21.7 million euros (up from 19.5 million euros in Q1 2025), with the increase driven by U.S. commercial expansion investments.

- Q2 2026 U.S. net revenue is expected to grow 25-30% sequentially over Q1 2026, with sequential growth accelerating to the low 40% range in Q3 2026 and ~50% in Q4 2026. - Full year 2026 worldwide net revenue guidance is 36 million to 40 million euros, which is above current consensus analyst estimates, with stronger growth expected in the second half of the year. - Full year 2026 gross margin guidance is 60% to 62%. - Full year 2026 total operating expenses guidance is 97 million to 99 million euros, and non-GAAP cash operating expenses guidance is 88 million to 90 million euros, representing a 5-8% increase over 2025 non-GAAP cash operating expenses. - 2027 guidance: A step function improvement in gross margin to above 70% is expected following the launch of the Genio 2.2 upgrade in early 2027.

- Reimbursement coding for 2028 remains uncertain, with two possible pathways (dedicated CPT codes for each AGNS technology or a single comprehensive AGNS coding set) still under discussion by the CPT editorial panel. - VAC committee approval timelines for new accounts are variable, ranging from 1-2 weeks to multiple months, which can impact adoption speed. - Procedure scheduling depends on OR and surgeon availability at high-volume sites, which can create delays between patient approval and implantation. - Gross margin improvement is dependent on hitting volume-based pricing milestones with contract manufacturers and the successful launch of the Genio 2.2 upgrade in 2027.

Q: The 2026 full-year revenue guidance is above consensus, with sequential growth expected to step up in the second half. What gives management confidence to hit this outlook, given reimbursement uncertainty? / A: Management cites multiple leading indicators that support accelerating growth: 50 new trained sales reps now expand coverage to 200 high-volume accounts, existing active surgeons gain confidence and increase procedure volume after their initial cases, 91 of 125 initial targeted accounts are already active, and 241 patients are already waiting for approval entering Q2. Reimbursement is now fully clear and de-risked for 2026-2027 with 100% prior authorization approval to date, so it will not hinder growth. Sequential growth is expected to accelerate from 25-30% in Q2 to low 40% in Q3 and ~50% in Q4, which hits the full-year target.

Q: What is the long-term path for permanent CPT coding for Genio, given the competitor's separate dedicated code application for 2028? / A: Reimbursement is fully de-risked through 2027: 2026 has clear coding from CMS and commercial payers, and no Medicare coding changes are expected for 2027. For 2028, two pathways are under discussion: dedicated individual codes for all AGNS technologies or one comprehensive AGNS coding set. The CPT panel has confirmed no AGNS technology will be left without appropriate coding. Genio is prepared for either pathway, and management will follow the lead of physician specialty societies that are guiding the process.

Q: How long does it take to get approved patients implanted, what is the break-even expectation and cash outlook, and why is gross margin still low despite top-line growth? / A: There are 241 pending patients at end-Q1, up from 116 at end-Q4 2025; commercial payers respond within 30 days with 100% approval, but implantation takes 1-3 months due to OR scheduling constraints at high-volume sites. Q1 gross margin was depressed by one-off production yield issues from staff turnover and training that have now been resolved, so margins will rise back to the 63-64% range in the second half of 2026. The Genio 2.2 launch in early 2027 will lift gross margin to above 70%, and volume-based manufacturing pricing will eventually push margins over 80%. Break-even is expected at ~150 million euros in revenue, with total cash needed to reach break-even estimated at 100 million euros, and management is actively controlling operating expenses to extend cash runway.

Q: Given the large Q1 patient backlog, why is Q2 sequential growth guided to only 25-30% rather than a higher jump, and what is Medicare's expected share of full-year 2026 cases? / A: The backlog confirms strong early momentum, with April 2026 off to a very strong start, but growth is constrained by OR and surgeon scheduling availability at the high-volume sites the company targets, so growth builds gradually through the year. Medicare represented 10-12% of cases in Q1, and this share is expected to grow to ~20% by the end of 2026, with commercial payers remaining the largest majority of cases. The new CMS C coding has de-risked Medicare adoption, so the segment is poised for gradual growth.