Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Pulmonx Corp (LUNG, Financial) achieved worldwide sales of USD20.4 million, representing a 15% growth over the same period of the prior year.
- The company added 15 new accounts in the US in Q3, ending the quarter with 280 active accounts.
- Pulmonx Corp (LUNG) is piloting its Lung Track platform, which is designed to streamline customer workflows and identify patients eligible for Zephyr valves.
- The company reported a 150% increase in patient engagement through targeted direct-to-patient initiatives.
- Pulmonx Corp (LUNG) delivered international year-over-year revenue growth of 12% in Q3, fueled by recurring orders from a new distributor in China.
Negative Points
- Despite strong performance, Pulmonx Corp (LUNG) did not raise its sales guidance for the year, citing seasonality and conservatism.
- The company is not yet generating direct revenue from its Lung Track platform, and it will take time to integrate and launch it broadly.
- Operating expenses for the third quarter of 2024 were USD29.2 million, an increase of 3% over the prior year period.
- Pulmonx Corp (LUNG) reported a net loss for the third quarter of 2024 of USD14.1 million or a loss of 36¢ per share.
- The company anticipates that it will take time to grow widespread awareness of its new treatment option in Japan, with more material revenue contribution expected in 2026.
Q & A Highlights
Q: Could you explain why Pulmonx Corp has not raised its sales guidance despite strong performance for three consecutive quarters?
A: Steve Williamson, Chief Executive Officer, explained that despite overperformance in Q1 and significant seasonality in Q3, the company is in line with its annual guidance. Therefore, they did not find it prudent to adjust the guidance at this time.
Q: Can you provide more detail on the decision to adjust the gross margin and operating expenses guidance but not the revenue guidance?
A: Mehul Joshi, Chief Financial Officer, stated that they are comfortable with the midpoint of the 20% growth guidance. They considered narrowing the guidance but decided to maintain the original range to focus on achieving the set expectations.
Q: What factors contributed to the reduction in operating expenses guidance by about $5 million?
A: Mehul Joshi noted that the reduction is primarily due to lower non-revenue generating spend, decreased stock-based compensation expense, and lower distributor operating expenses due to a new arrangement in China. They are also managing headcount carefully to drive operating leverage.
Q: How does Pulmonx Corp view the growth potential for its international markets in 2025?
A: Steve Williamson highlighted several positive indicators, including the implementation of successful US sales processes internationally, growth in China, and positive developments in European markets like the UK's targeted lung health check program. However, he emphasized that significant growth will likely continue to be driven by the US market.
Q: What economic benefits of the Zephyr Valve are resonating most with hospital C-suite executives?
A: Steve Williamson explained that the C-suite is interested in the large underserved patient population and the strong economic value proposition of the procedure, including good reimbursement and the status of Zephyr Valves as the standard of care in the gold guidelines for severe emphysema.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
