Pulmonx Corp. Q3 FY2024 earnings call

• Commercial strategy built on 3 pillars: training high-performing Zephyr Valve centers, automating patient workflows with LungTraX Platform, and building awareness of Zephyr Valves.
• Added 15 new accounts in the U.S. in Q3, ending the quarter with 280 active accounts.
• LungTraX Platform in pilot release, with LungTraX Connect streamlining workflows and LungTraX Detect screening for severe emphysema in chest CTs.
• Clinical data: AeriSeal CONVERT I trial showed 77.6% successful collateral ventilation conversion; Zephyr LIBERATE study showed 5-year durable benefits and reduced severe exacerbations.
• International revenue grew 12% Y/Y, with progress in Japan post-market study and growth in Europe.

Worldwide revenue for the third quarter ended September 30, 2024, was $20.4 million, a 15% increase year-over-year. U.S. revenue was $13.8 million (+17% Y/Y), and OUS revenue was $6.6 million (+12% Y/Y). Gross margin for Q3 2024 was 74%, same as the prior year. Total operating expenses were $29.2 million, a 3% increase Y/Y. Excluding stock-based compensation, operating expenses increased 5% Y/Y. R&D expenses were $3.7 million, a 11% decrease Y/Y. SG&A expenses were $25.4 million, a 6% increase Y/Y. Net loss for Q3 2024 was $14.1 million or $0.36 per share. Adjusted EBITDA loss was $8.1 million, a 10% improvement Y/Y.

• Reiterated full-year 2024 revenue guidance of $81 million to $84 million.
• Gross margin expected to be approximately 74%.
• Operating expenses range from $122 million to $124 million, including ~$22 million non-cash stock-based compensation. Focus on operating leverage through SG&A and lower stock-based compensation.

Material risks and uncertainties associated with forward-looking statements, including clinical trial timing, expense management, market opportunity, etc. Refer to SEC filings for detailed risks.

Q: Annie on for Rick asks about guidance reiteration despite solid performance.

A: Steve says Q1 outperformed, Q3 had seasonality, and guidance remains unchanged as it aligns with current expectations.

Q: Jason Bednar asks about guidance adjustments.

A: Mehul says OpEx guide reduction is from SG&A, lower stock-based comp, and distributor OpEx. Focus on operating leverage.

Q: Zachary on for John asks about OUS 2025 outlook.

A: Steve says OUS growth expected to continue, with progress in China and Europe, but guidance for 2025 will be provided in Q4.

Q: Frank asks about 2025 expectations and economic benefits for C-suite.

A: Mehul says 2025 guidance will be provided in Q4, but strategic drivers like high-performing centers, workflow automation, and awareness are in progress and expected to materialize later in 2025. Steven elaborates on economic benefits resonating with C-suite through underserved patient population, procedure economics, and building lung health programs.