Beta Bionics, Inc. Q1 FY2026 earnings call

• Q1 performance exceeded expectations with revenue driven by new patient starts and recurring revenue from pharmacy install base. - Gross margin was strong due to pharmacy install base and lower material costs. - Operating expenses increased, with sales and marketing driven by expanding field sales team, R&D by mint and bi-hormonal projects, and G&A by scaling. - Remediation efforts ongoing for FDA warning letter, including work on complaint handling. - Pipeline updates: Mint patch pump advanced toward 2027 launch, bi-hormonal system initiated phase 2A feasibility trial, Bionic Insights launched in healthcare provider portal, and continued interest in type 2 diabetes indication.

In Q1, the company delivered $27.6 million in net sales, growing 57% year over year. Revenue growth was driven by new patient starts and the growing pharmacy install base. Q1 gross margin was 59.5%, expanding 864 basis points year over year. The pharmacy install base generated high margin recurring revenue and crossed a threshold where it became accretive to gross margin. Lower cost of materials for the islet and one-time gross margin tailwinds also contributed. New patient starts declined more than 10% but less than 20% compared to Q4 2025, with a high 30s percentage of new patient starts accessing islet through the pharmacy channel, an increase from prior quarters. Approximately 70% of new patient starts came from people with diabetes using multiple daily injections prior to starting the islet.

• Revised full year 2026 revenue guidance raised to $131 - $136 million from prior $130 - $135 million. - Pharmacy mix guidance raised to 37 - 39% of new patient starts reimbursed through pharmacy from prior 36 - 38%. - Gross margin outlook raised to 57.5% - 59.5% from prior 55.5% - 57.5%. - Operating expenses expected to accelerate growth for remainder of the year due to sales force expansion, marketing investment, and spending on mint and bi-hormonal programs.

• Ongoing need to fully address FDA warning letter concerns, including work in other areas besides complaint handling. - Unpredictability in gross margin due to possible discrete and semi-unpredictable one-time charges in cost of sales. - Potential challenges in managing customer acquisition costs as the market becomes more competitive.

Q: Mike Crackey asked about pharmacy channel new start percentage and Salesforce expansion.

A: Pharmacy channel new start percentage has a B2B sales, long cycle, and guidance acknowledges that. Salesforce expansion has more to happen with most expansion in first half of the year.

Q: David Roman asked about ADA guideline changes, GLP-1s, and OPEX.

A: ADA guideline changes not significantly impacting prescribing patterns. GLP-1s have limited impact on type 1 and insulin-managed type 2. OPEX will grow due to sales force expansion and direct-to-consumer advertising, with customer acquisition costs expected to decrease through building install base and brand.

Q: Frank Takanan asked about gross margin and cash burn.

A: Q1 had one-time gross margin tailwinds, and cash burn in Q1 was higher due to cash bonuses and working capital differences.

Q: John Block asked about sales revenue cadence and gross margin.

A: Not giving quarterly revenue guidance but first half of 2026 expected to have more revenue. Gross margin expected to uptick quarter over quarter from normalized Q1 number.

Q: Richard Newitter asked about pharmacy channel competition and economics.

A: More competitors in pharmacy channel make it more normal, and insulin pumps are non-commoditized limiting downward price pressure.

Q: Jeff Johnson asked about pharmacy rebates and mint timing.

A: Rebates balanced with copay assistance, and mint on track with timeline for 2027 launch.

Q: Jeffrey Cohen asked about cost of materials and bi-hormonal trials.

A: Lower cost of materials due to scale, and bi-hormonal trials updates not to be published.

Q: Matthew Blackman asked about new patient ads and Salesforce expansion.

A: Not commenting on new patient ads quantification, and Salesforce expansion involves both white space filling and replacing in covered areas.

Q: Travis Steed asked about revenue guidance and new patient starts.

A: Revenue guidance can be exceeded by islet confidence, clinical results, and new store sales. Q1 is weakest seasonally with uptick expected in subsequent quarters.

Q: Ryan Schiller asked about competition.

A: No recent impactful changes in competitive environment, focusing on getting word out about differentiated islet system