Nuwellis, Inc. Q1 FY2026 earnings call

Strategic Transition from Reset to Execution

• 2025 was a year of structural repositioning to simplify operations and refocus the company on the cardiorenal care continuum; Q1 2026 marked the start of active strategic execution of this refocused strategy.

Leadership, Governance and Capital Strengthening

• Appointed Carissa Schultz as permanent CFO, bringing deep public healthcare finance experience to improve forecasting rigor, capital allocation and financial visibility.
• Completed a $5 million private placement and warrant inducement transaction to add working capital for strategy execution.
• Strengthened the board of directors with the addition of Martin Emerson and reappointment of David McDonald, adding relevant expertise in medical technology commercial scaling and capital markets.
• Expanded commercial coverage to the new South Texas territory by rehiring a highly experienced top-performing former sales leader, and added three other experienced sales leaders with deep Aquadex expertise and established customer relationships to drive utilization growth in high-priority accounts.

Financial and Commercial Performance

• Delivered 26% year-over-year revenue growth and a 14 percentage point improvement in gross margin, driven by improved pricing, favorable product mix, and completed transition to KDI contract manufacturing.
• Confirmed increasing clinical adoption of Aquadex, with a growing number of patients treated each quarter.
• In response to current cash burn, the company is developing a plan to reduce monthly cash burn by approximately 50% by Q4 2026, while preserving resources for highest-priority growth areas.

Cardiorenal Platform Expansion

• Completed the acquisition of RendiaTek in March 2026, adding automated kidney function monitoring technology that complements Aquadex's core precision fluid removal capability, advancing the company's broader cardiorenal patient management platform vision.
• Appointed Dr. Stuart Goldstein, an internationally recognized nephrology pioneer, as Director of Clinical Strategy to align the company's clinical roadmap across adult and pediatric critical care.

Pediatric Growth Validation

• Pediatrics now accounts for 50% of total U.S. revenue, with the pediatric clinical footprint expanded to 47 centers nationwide, including six top-ranked U.S. children's hospitals.
• Secured a new U.S. patent for advanced pediatric extracorporeal therapy safety design, strengthening the IP portfolio for the in-development Vivian pediatric CRRT system and supporting long-term growth in the high-need pediatric category.

New Ellis reports only a single core product segment centered on the Aquadex cardiorenal therapy platform for Q1 2026: Total segment revenue was $2.4 million, a 26% year-over-year increase from $1.9 million in Q1 2025. Console sales contributed 15 units sold during the quarter (including upgrades from FlexFlow to SmartFlow systems, new placements at both pediatric and adult accounts), which drove the majority of the year-over-year revenue growth. Circuit sales grew 15% year-over-year, reflecting an increase in the number of patients treated with Aquadex therapy. The Aquadex platform delivered a gross margin of 70.1% in Q1 2026, a 14 percentage point improvement over the prior year quarter. The pediatric sub-segment of Aquadex contributes approximately 50% of total U.S. revenue for the company as of Q1 2026.

• Management reaffirmed its priority of disciplined capital allocation, cash burn reduction, and focused growth in high-adoption clinical segments, with a specific target of cutting monthly cash burn by 50% by the fourth quarter of 2026.
• Management guidance for the RendiaTek kidney monitoring product confirms a planned commercial launch in the U.S. market in 2027, with no upward or downward revision to this timeline provided.
• No formal full-year 2026 revenue or profit guidance was provided in the call, beyond the stated expectation of continued disciplined execution and progress toward stated strategic and operational targets.

• All forward-looking statements made in the call are explicitly noted to carry material risks and uncertainties that could cause actual results to differ materially from management's current expectations, with key risks referenced in the company's SEC filings including its latest 10-K report.
• The company reported cash and restricted cash equivalents of only $2.2 million as of March 31, 2026, with no outstanding debt, creating reliance on the planned 50% monthly cash burn reduction by Q4 2026 to extend the company's financial runway.
• The acquired RendiaTek technology is still in active development, with commercial launch not scheduled until 2027, carrying development and commercialization risk that the product will not be successfully brought to market as planned.
• Revenue growth remains dependent on continued expansion of clinical adoption and utilization of the core Aquadex platform, which is subject to variable clinical adoption trends and competitive pressures.

Q: Management was asked to explain the South Texas territory expansion and outline other targeted regions for future sales growth. / A: The South Texas territory expansion was enabled by the return of a former top-performing New Ellis sales rep who had previously built the company's high-performing New York territory. The existing Texas-Oklahoma territory was split, with the existing rep retaining northern Texas and the returning rep covering South Texas from Houston. The highest growth focus remains the Northeast, particularly the New York, Washington D.C., and Philadelphia regions, which have added large new pediatric accounts. The company also opened a new Western territory last year that has gotten off to a strong start, especially in the Seattle area with the Seattle Children's account.

Q: The analyst asked for an update on RendiaTek integration and commercialization plans for the acquired products with New Ellis' existing customer base. / A: RendiaTek, an Israeli firm that was previously bankrupt, had two products: a marketed critical care urine collection product, and an in-development automated bedside kidney function and urine analyte monitoring product. New Ellis acquired the company primarily for the in-development monitoring product, which complements Aquadex by providing immediate bedside kidney health data instead of waiting for off-site lab results. Inventory has been brought back to the U.S. from Israel, development of the monitoring product is ongoing, and a U.S. commercial launch is planned for 2027; the product has not yet been introduced to the U.S. market.

Q: The analyst requested the total number of Aquadex units sold in Q1 2026. / A: New Ellis sold 15 Aquadex console units in the first quarter of 2026.