Pulmonx Corp — Call Transcript 2026

Good day, and thank you for standing by. Welcome to the Pulmonx first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. To participate, you will need to press Star 11 on your telephone. You will hear a message advising your hand is raised. To withdraw the question, press Star 11 again. Please be advised that today's conference is being recorded. It's my pleasure to hand the conference to Brian Johnston with Investor Relations. Please go ahead. Good afternoon, and thank you all for participating in today's call. Joining me from Pulmonx are Glendon French, President and Chief Executive Officer, and Derrick Sung, Chief Operating Officer and Chief Financial Officer. Earlier today, Pulmonx issued a press release announcing its financial results for the quarter ended March 31st, 2026. A copy of the press release is available on the Pulmonx website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends, commercial strategies, and future financial performance, including long-term outlook and full year 2026 guidance, the timing and results of clinical trials, physician engagement, expense management, market opportunity, guidance for revenue, gross margin, operating expenses, cash usage, commercial expansion and product demand, adoption and pipeline development, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, filed with the SEC on March 10th, 2026. During this call, we will discuss certain non-GAAP financial measures. Reconciliations to these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the press release, which is posted on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, April 29th, 2026. Pulmonx disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I will turn the call over to Glendon. Thank you, Brian. Good afternoon, everyone, welcome to our first quarter 2026 earnings call. Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. Pulmonx delivered total worldwide revenue of $20.6 million in the first quarter of 2026. Since our last update, we are increasingly encouraged by continued operational momentum, we remain confident in our ability to achieve our previously communicated revenue guidance of $90 million-$92 million for the full year 2026, with a return to global growth in the back half of this year. We are making good progress in our efforts to address internal operational and executional challenges that have led to recent underperformance, we remain highly focused on three key priorities. First, re-accelerating U.S. sales growth. Second, advancing our market-expanding clinical initiatives. Third, aligning our cost structure to drive profitability. Let me take each of these in turn, starting with our progress on driving U.S. sales growth. A foundational element of re-accelerating U.S. revenue growth is having the right people and the right culture in place, and I'm encouraged by our progress. We have filled with top talent all our sales leadership physicians and substantially all our U.S. field sales roles. We are also seeing clear improvements in our commercial team culture. Sales turnover has stabilized over the last 6 months, a marked improvement from earlier in 2025. We expect turnover from here to be in line with industry standards. We believe this stabilization is a direct result of our efforts to increase leadership transparency and streamline selling priorities to focus on our highest impact activities. These priorities are grounded in our previously discussed near-to-far approach, specifically, one, setting up high quality and efficient valve programs. two, engaging with COPD-oriented clinicians aligned with hospital systems offering Zephyr valves. three, working together with our champions to educate service line administrators to ensure appropriate resourcing of their programs and four, concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients. We are encouraged by early feedback from the field force and from our customers on this approach, which reflects greater focus, stronger engagement, and a more consistent execution model overall. As the newer members of our team become increasingly productive, we expect U.S. sales performance to improve over the course of the year, with growth re-acceleration in the back half of 2026. Turning to our second priority, growing our addressable market with our AeriSeal program remains a key focus. Our CONVERT II pivotal trial is progressing well, and we are especially encouraged by our pace of enrollment since bringing on new leadership within our clinical affairs organization. Today, we are highly confident in our ability to complete enrollment of this trial in 2027, bringing us one step closer to expanding our total addressable market by approximately 20% globally. We see meaningful potential for AeriSeal to serve as both a revenue driver and a market expander for Zephyr valves over the medium to long term and look forward to providing updates on enrollment progress in the quarters ahead. On our third priority, we have made substantial progress in aligning our spending with our strategic priorities. As previously discussed, we executed a broad cost reduction initiative in the first quarter. With these actions, our underlying expense trajectory has significantly improved, and we remain on track to deliver meaningful operating leverage and lower cash burn while maintaining investments in our key growth drivers. In closing, we have greater conviction in our strategy to refine execution to further penetrate the substantial remaining market opportunity for our products. While 2026 is a year of execution and transition, we are confident in the progress we are making. We have a better understanding of what drove prior underperformance. We have taken meaningful steps to address those issues, and we have aligned the organization around initiatives that matter most. We remain confident in the underlying strength of the business, the size of the opportunity ahead of us, and our ability to deliver sustainable, profitable growth over time. With that, I will turn the call over to Derrick to provide a more detailed review of our first quarter results. Thank you, Glendon. Good afternoon, everyone. Total worldwide revenue in the first quarter of 2026 was $20.6 million, a 9% decrease from $22.5 million in the same period last year, and a decrease of 12% on a constant currency basis. U.S. revenue in the first quarter was $13.3 million, a 7% decrease from $14.2 million during the same period of the prior year. We added 15 new U.S. treating centers during the quarter. International revenue in the first quarter of 2026 was $7.3 million, a 12% decrease from $8.3 million during the same period last year, and a decrease of 21% on a constant currency basis. The decline in revenue was fully attributable to the absence of sales to our distributor in China. As a reminder, we are currently awaiting the renewal of our Chinese registration certificate, which we expect to come in the second half of 2026. Excluding China, we continued to see solid performance across all our other international markets, which grew 22% as compared to the same period last year and 9% on a constant currency basis. Gross margin for the first quarter of 2026 was 78% compared to 73% in the prior year period. The year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets. Looking forward, we continue to expect gross margin to be approximately 75% for the full year of 2026, trending higher in the first half of the year and lower toward the second half of the year based on the mix of distributor sales. Total operating expenses for the first quarter of 2026 were $29 million, a 6% decrease from the same period last year. Non-cash stock-based compensation expense was $3.8 million in the first quarter of 2026. Operating expenses in the first quarter included approximately $1.4 million of one-time costs related to the restructuring initiative that we executed at the start of the year. Excluding stock-based compensation expense and the restructuring costs, operating expenses in the first quarter of 2026 decreased 8% from the same period of the prior year. We remain committed to decreasing spend in 2026 through our cost alignment efforts while maintaining investments in our key growth initiatives. To that end, we continue to expect full year 2026 operating expenses to fall between $113 million and $115 million, inclusive of approximately $19 million of non-cash stock-based compensation expense. R&D expenses for the first quarter of 2026 were $4.9 million compared to $4.8 million in the first quarter of 2025. Sales, general and administrative expenses for the first quarter of 2026 were $24.1 million compared to $26.1 million in the first quarter of 2025. Net loss for the first quarter of 2026 was $13.7 million or a loss of $0.33 per share as compared to a net loss of $14.4 million or a loss of $0.36 per share for the same period of the prior year. An average weighted share count of 41.9 million shares was used to determine loss per share for the first quarter of 2026. Adjusted EBITDA loss for the first quarter of 2026 was $8.5 million, consistent with the first quarter of 2025. Excluding one-time restructuring charges, adjusted EBITDA loss was $7 million and 18% favorable to the same period of the prior year. We ended March 31, 2026 with $61.6 million in cash equivalents, and marketable securities, a decrease of $8.2 million from December 31, 2025. In the first quarter of 2026, we took meaningful steps to strengthen our balance sheet and extend our cash runway. First, we executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10%. Second, we closed on a $60 million credit facility with a five-year interest-only structure, extending the maturity of our existing debt out to 2031 and providing us with access to an additional $20 million in undrawn capital subject to certain revenue milestones. With these measures in place, we expect to burn roughly $23 million of cash for the full year 2026, which would be a substantial decrease from the $32 million of cash that we burned in 2025. Turning to our revenue outlook for 2026. We are reiterating our full year 2026 revenue guidance of $90 million-$92 million. Our guidance contemplates sequential quarterly improvement in our year-over-year revenue trend with a return to year-over-year growth in both our U.S. and international businesses in the back half of the year. In the U.S., we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses. Internationally, revenue growth through the first half of 2026 will continue to be negatively impacted by the lack of sales to our distributor in China. That said, we expect continued strength throughout the year from our remaining international markets, with year-over-year sales growth in our international business resuming in the second half of the year. To conclude, we entered 2026 with a clear plan and our first quarter reflects early progress. We remain focused on the work ahead, ramping our sales organization, advancing our clinical programs, and delivering the financial leverage we've committed to. We are confident in the strength of our business and our team's ability to execute. With that, I'd like to thank you for your attention. We will now open the call up for questions. Thank you so much. As a reminder, to ask a question, simply press Star 11 on your telephone and wait for your name to be announced. To remove yourself, press Star 11 again. Our first question, one moment please, comes from Rick Wise with Stifel. Please proceed. Good afternoon. Hi, Glenn. How are you doing? Let me start off, if I could. I mean, obviously, getting the sales team in place, and it sounds like it's largely in place, critical, and it seems like you're seeing some good encouraging early progress here. Maybe, talk to us about in more detail, some of the points you made about going deeper in the accounts, and some of the specific strategies you're using to see sales growth accelerate. Maybe just as part of that, help us understand what's dialed into the guidance in terms of productivity with these new people and, you know, today and what you're hoping for and what we might see. Maybe it's a question for Derrick. Thank you. Hey, Rick. Well, first and foremost, we've been focused on narrowing the items that we're asking our U.S. sales force to do. I think one of the key things that we realized coming into this period was that last year, there were just too many balls in the air. We've narrowed that focus, and it's in the areas that we commented on in the comments that just preceded. We have, as you had mentioned, substantially filled all of our open positions. Our average tenure, as you might imagine, is not what it was one year ago, but we are bringing people up to speed quite quickly. We are focusing our activity on setting up high quality and efficient valve programs, and we're doing that by engaging COPD physicians around these centers to be driving patients into those centers. We are looking to gain administrative service line level administrative support to ensure that we have the resources to execute on that plan. We're seeing positive impact from those efforts even in these early stages. I think that one of the bigger issues for us is just getting our sales force up and running and trained and moving forward. We are right where we expected to be at this point. We feel good about the fact that we're full and that people are coming up the learning curve, and we certainly have some very bright spots with regard to the execution of the strategy that we've outlined. That's great to hear. Derrick, for you, maybe just help us just think through with the first quarter in hand, the 2026 growth cadence and thinking about the reaffirmed 2026 guidance range you laid out, it applies 60 basis points of the year. This is sort of a transition. Do you feel like consensus has got it right in terms of the current sequencing? Should we be more back weighting it? I think consensus for the 2Q is like $22 million. If that's the case, what gives you the confidence that the company can have the step-up needed, you know, from 2Q to 3Q, et cetera, to get those numbers you've laid out? Thanks. Sure, Rick, and thanks for the question. As it relates to guidance, we do expect to demonstrate a sequential quarterly year-over-year improvement in growth as the year goes on. As Glen said, you know, we feel very good about the performance in Q1. We're already demonstrating that, particularly in the U.S. Our year-over-year growth rate, while down 7% in Q1, is a meaningful improvement from our growth rate or our decline of 11% in Q4. You know, we already feel like we've bottomed in Q4 in terms of year-over-year growth rates. Both in the U.S. and internationally, we expect to see, and I think this is reflected to your question, currently in consensus. We expect to see that sequential improvement every quarter flipping to positive year-over-year growth in the back half of the year, and even exiting the year with double-digit growth, both U.S. and international. In the U.S., what gives us confidence and the driver for that sequential improvement in year-over-year growth is, in fact, the addition of the new folks that we have brought in, and the time that it takes for the new reps to get up to speed and get up to productivity. That does take some time. Typically, six- nine months or so is what we've seen on average for new hires to get up to speed. As the year progresses and also as our focused strategies take hold in the U.S., we do expect to see that improvement sequentially across the year. On the international side, it's really a question of comps, frankly. You know, the decline that you're seeing in our international sales in Q1 is primarily all attributable to timing of sales into China. We are currently awaiting renewal of our registration certificate in China, so there's a lack of absence of sales into China in the first this year. In the first half of this year, certainly in last year, in the first half of 2025, there were a number of large orders that were placed into China. To put it into context, China is still a relatively small portion of our total sales, less than 5% of our total sales. The timing of those sales drove tough comps in the first half of this year. That's what's driving the optical declining growth rate and will drive that optical decline growth rate for the first half of this year. Our underlying business, as we talked about, is still strong. We grew 22% year-over-year reported in Q1. We've seen double-digit growth in our underlying direct international businesses for the past couple years. We expect that trend to continue. In the back half of this year, that underlying strength of our OUS business, continued strength, will be more representative in our growth rates, and that's what we expect to drive the step-up in growth in our international business. Thanks, Derrick, for the comprehensive answer. Appreciate it. Thank you. Our next question is from the line of Jon Young with Canaccord. Please proceed. Thanks, Glen and Derrick. Appreciate giving the progress update you provided today. I wanna go to the U.S. accounts, 15 added in Q1. I think that was higher than any numbers that was added last year, according to our model. I would love to know, is this due to the refocused sales team ramping quickly? Maybe how should we think about just the pace of account additions for the remainder of the U.S. for the year? If I could ask my second question too, related to the sales force, is just what metrics are you guys focused on in monitoring success of the revamped sales force? Thanks for taking the questions. 15 is, as you noted, a strong number relative to what we saw on a quarterly basis across last year. It's difficult to say whether that's anywhere close to the new normal. I think we're gonna stand with the 10 per quarter expectation, which we laid out. I'll let Derrick talk about that guidance if he wishes to. That feels like the right sort of number. Some of these new accounts, I think, were lining up perhaps to happen late last year, maybe fell into this quarter. I think time will tell as to whether the mean is above 10, but I would keep that. With regard to metrics, you know, at this point, we feel really good about the plan. We are focused on moving things in a, in a fairly simplified, basic way. We're just trying to bring our people up to speed as quickly as we possibly can. We have some territories that did very, very well last year. They continue to be doing well this year, continuing to, you know, take advantage of the momentum that they established. You know, we see that in an array of different indicators. We've talked before about the importance of StratX and seeing that, you know, sort of coming through as a leading indicator for our performance, and we feel good about where we sit at this point. Thank you. One moment for our next question. It comes from Frank Takkinen with Lake Street Capital Markets. Please proceed. Great. Thank you for taking the questions. I know this has come up on, I think it was the previous call as well, but wondering if you can speak to kind of bigger picture growth aspirations. I know you're only a few quarters into this, and I think last time the context provided was substantially better, which obviously aligns with the cadence of revenue growth throughout 2026. But now that you've had a little bit more time with the organization, are you comfortable providing any type of we expect to be a double-digit grower commentary or something similar in nature to that as you think about a longer-term business? Yeah. Frank, Frank. You wanna take that, Derrick? I mean, I'll go ahead. I'll start. You can add to it, Derrick, if you wish. We fully expect. I will speak for myself. I certainly expect us to be a double-digit grower. I think everybody on the team expects us to be a double-digit grower. I think we're trying to figure out, you know, when you look across the period, where we weren't meeting that expectation or we were moving, you know, sort of rapidly in the direction of not meeting that expectation, most particularly in the U.S., you know, we're trying to get to the bottom of that. We think we were doing too many things, we think we lost too many sales reps, we think we can get back into a double-digit range. Where exactly in that range is still to be determined. I believe, you know, obviously outside the U.S. we've thrown up a couple 20% in a row, roughly, in terms of our growth in 2025 over 2024 and 2024 over 2023. You know, absent the matters that Derrick outlined, we're in that same sort of neighborhood in the first quarter as well in some of our key markets. All of our major European markets are double-digit growers in the first quarter. We don't report that's the case. We feel good about that. They're executing on a plan that looks very much like the U.S. plan, which is no coincidence. We've got TAM expanders on the horizon that we're working very, very hard to push forward. We're excited about AeriSeal, and look forward to talking more about that as we move in deeper into the year. Derrick, did you wanna add something to that? I would simply add that also it contemplated in our guidance even for 2025, as I just mentioned, is that we will exit the year growing double digits in both our international and U.S. markets. I don't wanna get ahead of ourselves and provide any more guidance than that beyond 2025. Or 2026. I'm sorry. In 2026, I meant to say, our guidance contemplates double-digit growth as we exit the year. I don't wanna provide any more guidance beyond 2026, but I just did wanna add that additional commentary. Thanks, Frank. Perfect. Thankful. Thank you. Maybe just for my follow-up on the Chinese registration renewal, is there a reliance on that to hit the second half expectations for OUS growth? Related to that, what needs to happen for that renewal? Is this more administrative in nature? Is there some risk to this renewal maybe not occurring on time with your guided timelines? Thanks, Frank Takkinen, for that question. I'll take that. This is Derrick Sung. We do continue to expect the renewal of our registration certificate to come in the back half of this year. It is, I believe, an administrative process that we're simply working through, so it will simply take some time. At this point, we don't have any reason to believe that we won't get that registration certificate renewed in the back half of the year. When we do get that renewal comes, I would say that our expectation is that the resumption of sales into China will be very gradual. There'll be, you know, accounts will need to be restarted, et cetera. We're not expecting, you know, a bolus of sales to come in. It will take some time. To that end, our current guidance, you know, doesn't contemplate a significant contribution from China, even in the, in our back half. However, as I mentioned, we will be anniversarying those tough comps from our China sales in the first half of 2025. I think, you know, we'll expect to flip back to positive international growth. As, you know, Glenn and I just mentioned, you'll see our international growth rates just really be much more reflective of the strong underlying growth in our direct international businesses that we're currently experiencing. Perfect. Thank you. Thank you so much. One moment for our next question. It comes from Joe Downing with BTIG. Please proceed. Glendon French and Derrick Sung. Thanks for taking the question. I guess as you kinda reprioritize existing base of treating physicians, can you just help to quantify same store productivity, say, in your top quartile of accounts versus, say, the bottom couple quartiles? In this vein, I guess how much of the 2026 U.S. revenue plan depends on lifting the bottom two quartiles versus this, you know, top 25%? Yeah. Yep. I would say that we are focused on. You know, to the extent that we have some. We've got a mix of things going on here, Joe. We've got uncovered territories that are now covered, so we need to, you know, reestablish those connections and get those moving. We tend to have a bias toward the accounts that are performing best and trying to move them along and take full advantage of the near to far strategy in relation to them, make sure that they're, you know, leveraging all the best practices that we've talked about in prior calls. I would say the top quartile would be more of the area of focus as opposed to the lowest quartile. We are, however, bringing in some number of new accounts that and our standards for bringing our accounts online have changed quite a bit. We've really raised the bar and expect those accounts to invest pretty heavily in terms of their time and efforts to get up and running and have patients that are ready to go. There's far fewer people who are recently trained who are not doing procedures. We, we actually are quite optimistic about the newer accounts that are coming online and are doing procedures right out of the block. Those would be what I would, I would consider outside the first or the first quartile or the top quartile or lower quartile, but rather just new accounts on top of that. First and foremost, we're getting our team up and running back up and running, and just trying to support the strongest of our accounts most predominantly, and some of our newer accounts will also make some good contributions. Thanks, Glenn. Just for my follow-up, I wanna touch on Lungfx real quick. I know it's kind of being refocused or de-emphasized a little bit, whichever way, you know, you prefer to frame it, I'm just curious, like, what % of U.S. accounts right now, I think it's the larger ones you said are still, you know, it's more effectively used in those kind of accounts. What % of the accounts are using it? Kind of what like ROI threshold would lead you to kind of selectively expand it again versus keeping it kind of at this narrow scope? We were spending what in retrospect looked like a disproportionate amount of our time pursuing Detect, what we call Lungfx Detect. I think we brought that to a level of time and attention that it deserves. We learned a great deal during the period of time where we were heavily promoting Detect in that it really fits into a specific subset of our accounts. We did some pilots across the last year or so, and it revealed that the technology works well in certain types of accounts, and so we're tending to target Detect. I wouldn't call it a de-emphasis at all. I think it's just a more focused approach to Detect in situations where we have determined that there could be a great return for the hospital that invests in Detect in terms of patient flow and so forth. As far as what % of accounts, I don't think we report that. You know, everything you've heard before, which is in certain accounts, it can be great. We definitely have data that suggests that. It takes longer to get set up than we, I think anticipated last year that it would. Those that are up and running, it took a little time to get them up and running, but there seems to be all indications are that when that technology is up and running and being used, it's a pretty solid contributor to our efforts in that account. Great. Thanks, Glenn. Appreciate it. Thank you. This will conclude the Q&A session, and I will pass it back to Glendon French for closing remarks. Thank you very much, operator. In summary, we have a clear plan, and our first quarter reflects early progress executing this plan. We remain focused on the work ahead, specifically ramping U.S. sales, advancing our clinical programs, and delivering the financial leverage to which we have committed. We are right where we expected to be at this point. We are confident in our business and in our team's ability to continue to execute. I want to thank you very much. I'd like to express a thank you to our employees for your focused and considerable efforts, and thank everyone on this call today for your time and your ongoing interest in Pulmonx. Have a good afternoon. This concludes our conference. Thank you for participating, and you may now disconnect.

Speaker 7: Good day, and thank you for standing by. Welcome to the Pulmonx first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. To participate, you will need to press Star 11 on your telephone. You will hear a message advising your hand is raised. To withdraw the question, press Star 11 again. Please be advised that today's conference is being recorded. It's my pleasure to hand the conference to Brian Johnston with Investor Relations. Please go ahead. Good day, and thank you for standing by. good day and thank you for standing by Welcome to the Pulmonx first quarter 2026 earnings conference call. welcome to the pulmonx first quarter 2026 earnings conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode After the presentation, there will be a question-and-answer session. after the presentation there will be a question-and-answer session To participate, you will need to press Star 11 on your telephone. to participate you will need to press star 11 on your telephone You will hear a message advising your hand is raised. you will hear a message advising your hand is raised To withdraw the question, press Star 11 again. to withdraw the question press star 11 again Please be advised that today's conference is being recorded. please be advised that today's conference is being recorded It's my pleasure to hand the conference to Brian Johnston with Investor Relations. it's my pleasure to hand the conference to brian johnston with investor relations Please go ahead. please go ahead

Speaker 1: Good afternoon, and thank you all for participating in today's call. Joining me from Pulmonx are Glendon French, President and Chief Executive Officer, and Derrick Sung, Chief Operating Officer and Chief Financial Officer. Earlier today, Pulmonx issued a press release announcing its financial results for the quarter ended March 31st, 2026. A copy of the press release is available on the Pulmonx website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Good afternoon, and thank you all for participating in today's call. good afternoon and thank you all for participating in today's call Joining me from Pulmonx are Glendon French, President and Chief Executive Officer, and Derrick Sung, Chief Operating Officer and Chief Financial Officer. joining me from pulmonx are glendon french president and chief executive officer and derrick sung chief operating officer and chief financial officer Earlier today, Pulmonx issued a press release announcing its financial results for the quarter ended March 31st, 2026. earlier today pulmonx issued a press release announcing its financial results for the quarter ended march 31st 2026 A copy of the press release is available on the Pulmonx website. a copy of the press release is available on the pulmonx website Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. before we begin i'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws which are made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995 Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. any statements contained in this call that relate to expectations or predictions of future events results or performance are forward-looking statements All forward-looking statements, including without limitation, those relating to our operating trends, commercial strategies, and future financial performance, including long-term outlook and full year 2026 guidance, the timing and results of clinical trials, physician engagement, expense management, market opportunity, guidance for revenue, gross margin, operating expenses, cash usage, commercial expansion and product demand, adoption and pipeline development, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, filed with the SEC on March 10th, 2026. All forward-looking statements, including without limitation, those relating to our operating trends, commercial strategies, and future financial performance, including long-term outlook and full year 2026 guidance, the timing and results of clinical trials, physician engagement, expense management, market opportunity, guidance for revenue, gross margin, operating expenses, cash usage, commercial expansion and product demand, adoption and pipeline development, are based upon our current estimates and various assumptions. all forward-looking statements including without limitation those relating to our operating trends commercial strategies and future financial performance including long-term outlook and full year 2026 guidance the timing and results of clinical trials physician engagement expense management market opportunity guidance for revenue gross margin operating expenses cash usage commercial expansion and product demand adoption and pipeline development are based upon our current estimates and various assumptions These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. these statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements Accordingly, you should not place undue reliance on these statements. accordingly you should not place undue reliance on these statements For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, filed with the SEC on March 10th, 2026. for a list and description of the risks and uncertainties associated with our business please refer to the risk factors section of our filings with the securities and exchange commission including our annual report on form 10-k filed with the sec on march 10th 2026 During this call, we will discuss certain non-GAAP financial measures. Reconciliations to these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the press release, which is posted on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, April 29th, 2026. Pulmonx disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I will turn the call over to Glendon. During this call, we will discuss certain non-GAAP financial measures. during this call we will discuss certain non-gaap financial measures Reconciliations to these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the press release, which is posted on our investor relations website. reconciliations to these non-gaap financial measures to the most directly comparable gaap financial measures are provided in the press release which is posted on our investor relations website These non-GAAP measures are not intended to be a substitute for our GAAP results. these non-gaap measures are not intended to be a substitute for our gaap results This conference call contains time-sensitive information and is accurate only as of the live broadcast today, April 29th, 2026. this conference call contains time-sensitive information and is accurate only as of the live broadcast today april 29th 2026 Pulmonx disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. pulmonx disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements whether because of new information future events or otherwise With that, I will turn the call over to Glendon. with that i will turn the call over to glendon

Speaker 4: Thank you, Brian. Good afternoon, everyone, welcome to our first quarter 2026 earnings call. Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. Pulmonx delivered total worldwide revenue of $20.6 million in the first quarter of 2026. Since our last update, we are increasingly encouraged by continued operational momentum, we remain confident in our ability to achieve our previously communicated revenue guidance of $90 million-$92 million for the full year 2026, with a return to global growth in the back half of this year. We are making good progress in our efforts to address internal operational and executional challenges that have led to recent underperformance, we remain highly focused on three key priorities. First, re-accelerating U.S. sales growth. Second, advancing our market-expanding clinical initiatives. Third, aligning our cost structure to drive profitability. Thank you, Brian. thank you brian Good afternoon, everyone, welcome to our first quarter 2026 earnings call. good afternoon everyone welcome to our first quarter 2026 earnings call Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. here with me is derrick sung our chief operating officer and chief financial officer Pulmonx delivered total worldwide revenue of $20.6 million in the first quarter of 2026. pulmonx delivered total worldwide revenue of $20.6 million in the first quarter of 2026 Since our last update, we are increasingly encouraged by continued operational momentum, we remain confident in our ability to achieve our previously communicated revenue guidance of $90 million-$92 million for the full year 2026, with a return to global growth in the back half of this year. since our last update we are increasingly encouraged by continued operational momentum we remain confident in our ability to achieve our previously communicated revenue guidance of $90 million-$92 million for the full year 2026 with a return to global growth in the back half of this year We are making good progress in our efforts to address internal operational and executional challenges that have led to recent underperformance, we remain highly focused on three key priorities. we are making good progress in our efforts to address internal operational and executional challenges that have led to recent underperformance we remain highly focused on three key priorities First, re-accelerating U.S. sales growth. first re-accelerating u.s sales growth Second, advancing our market-expanding clinical initiatives. second advancing our market-expanding clinical initiatives Third, aligning our cost structure to drive profitability. third aligning our cost structure to drive profitability Let me take each of these in turn, starting with our progress on driving U.S. sales growth. A foundational element of re-accelerating U.S. revenue growth is having the right people and the right culture in place, and I'm encouraged by our progress. We have filled with top talent all our sales leadership physicians and substantially all our U.S. field sales roles. We are also seeing clear improvements in our commercial team culture. Sales turnover has stabilized over the last 6 months, a marked improvement from earlier in 2025. We expect turnover from here to be in line with industry standards. We believe this stabilization is a direct result of our efforts to increase leadership transparency and streamline selling priorities to focus on our highest impact activities. These priorities are grounded in our previously discussed near-to-far approach, specifically, one, setting up high quality and efficient valve programs. Let me take each of these in turn, starting with our progress on driving U.S. sales growth. let me take each of these in turn starting with our progress on driving u.s sales growth A foundational element of re-accelerating U.S. revenue growth is having the right people and the right culture in place, and I'm encouraged by our progress. a foundational element of re-accelerating u.s revenue growth is having the right people and the right culture in place and i'm encouraged by our progress We have filled with top talent all our sales leadership physicians and substantially all our U.S. field sales roles. we have filled with top talent all our sales leadership physicians and substantially all our u.s field sales roles We are also seeing clear improvements in our commercial team culture. we are also seeing clear improvements in our commercial team culture Sales turnover has stabilized over the last 6 months, a marked improvement from earlier in 2025. sales turnover has stabilized over the last 6 months a marked improvement from earlier in 2025 We expect turnover from here to be in line with industry standards. we expect turnover from here to be in line with industry standards We believe this stabilization is a direct result of our efforts to increase leadership transparency and streamline selling priorities to focus on our highest impact activities. we believe this stabilization is a direct result of our efforts to increase leadership transparency and streamline selling priorities to focus on our highest impact activities These priorities are grounded in our previously discussed near-to-far approach, specifically, one, setting up high quality and efficient valve programs. these priorities are grounded in our previously discussed near-to-far approach specifically one setting up high quality and efficient valve programs two, engaging with COPD-oriented clinicians aligned with hospital systems offering Zephyr valves. three, working together with our champions to educate service line administrators to ensure appropriate resourcing of their programs and four, concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients. We are encouraged by early feedback from the field force and from our customers on this approach, which reflects greater focus, stronger engagement, and a more consistent execution model overall. As the newer members of our team become increasingly productive, we expect U.S. sales performance to improve over the course of the year, with growth re-acceleration in the back half of 2026. two, engaging with COPD-oriented clinicians aligned with hospital systems offering Zephyr valves. three, working together with our champions to educate service line administrators to ensure appropriate resourcing of their programs and four, concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients. two engaging with copd-oriented clinicians aligned with hospital systems offering zephyr valves three working together with our champions to educate service line administrators to ensure appropriate resourcing of their programs and four concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients We are encouraged by early feedback from the field force and from our customers on this approach, which reflects greater focus, stronger engagement, and a more consistent execution model overall. we are encouraged by early feedback from the field force and from our customers on this approach which reflects greater focus stronger engagement and a more consistent execution model overall As the newer members of our team become increasingly productive, we expect U.S. sales performance to improve over the course of the year, with growth re-acceleration in the back half of 2026. as the newer members of our team become increasingly productive we expect u.s sales performance to improve over the course of the year with growth re-acceleration in the back half of 2026 Turning to our second priority, growing our addressable market with our AeriSeal program remains a key focus. Our CONVERT II pivotal trial is progressing well, and we are especially encouraged by our pace of enrollment since bringing on new leadership within our clinical affairs organization. Today, we are highly confident in our ability to complete enrollment of this trial in 2027, bringing us one step closer to expanding our total addressable market by approximately 20% globally. We see meaningful potential for AeriSeal to serve as both a revenue driver and a market expander for Zephyr valves over the medium to long term and look forward to providing updates on enrollment progress in the quarters ahead. On our third priority, we have made substantial progress in aligning our spending with our strategic priorities. As previously discussed, we executed a broad cost reduction initiative in the first quarter. Turning to our second priority, growing our addressable market with our AeriSeal program remains a key focus. turning to our second priority growing our addressable market with our aeriseal program remains a key focus Our CONVERT II pivotal trial is progressing well, and we are especially encouraged by our pace of enrollment since bringing on new leadership within our clinical affairs organization. our convert ii pivotal trial is progressing well and we are especially encouraged by our pace of enrollment since bringing on new leadership within our clinical affairs organization Today, we are highly confident in our ability to complete enrollment of this trial in 2027, bringing us one step closer to expanding our total addressable market by approximately 20% globally. today we are highly confident in our ability to complete enrollment of this trial in 2027 bringing us one step closer to expanding our total addressable market by approximately 20% globally We see meaningful potential for AeriSeal to serve as both a revenue driver and a market expander for Zephyr valves over the medium to long term and look forward to providing updates on enrollment progress in the quarters ahead. we see meaningful potential for aeriseal to serve as both a revenue driver and a market expander for zephyr valves over the medium to long term and look forward to providing updates on enrollment progress in the quarters ahead On our third priority, we have made substantial progress in aligning our spending with our strategic priorities. on our third priority we have made substantial progress in aligning our spending with our strategic priorities As previously discussed, we executed a broad cost reduction initiative in the first quarter. as previously discussed we executed a broad cost reduction initiative in the first quarter With these actions, our underlying expense trajectory has significantly improved, and we remain on track to deliver meaningful operating leverage and lower cash burn while maintaining investments in our key growth drivers. In closing, we have greater conviction in our strategy to refine execution to further penetrate the substantial remaining market opportunity for our products. While 2026 is a year of execution and transition, we are confident in the progress we are making. We have a better understanding of what drove prior underperformance. We have taken meaningful steps to address those issues, and we have aligned the organization around initiatives that matter most. We remain confident in the underlying strength of the business, the size of the opportunity ahead of us, and our ability to deliver sustainable, profitable growth over time. With these actions, our underlying expense trajectory has significantly improved, and we remain on track to deliver meaningful operating leverage and lower cash burn while maintaining investments in our key growth drivers. with these actions our underlying expense trajectory has significantly improved and we remain on track to deliver meaningful operating leverage and lower cash burn while maintaining investments in our key growth drivers In closing, we have greater conviction in our strategy to refine execution to further penetrate the substantial remaining market opportunity for our products. in closing we have greater conviction in our strategy to refine execution to further penetrate the substantial remaining market opportunity for our products While 2026 is a year of execution and transition, we are confident in the progress we are making. while 2026 is a year of execution and transition we are confident in the progress we are making We have a better understanding of what drove prior underperformance. we have a better understanding of what drove prior underperformance We have taken meaningful steps to address those issues, and we have aligned the organization around initiatives that matter most. we have taken meaningful steps to address those issues and we have aligned the organization around initiatives that matter most We remain confident in the underlying strength of the business, the size of the opportunity ahead of us, and our ability to deliver sustainable, profitable growth over time. we remain confident in the underlying strength of the business the size of the opportunity ahead of us and our ability to deliver sustainable profitable growth over time With that, I will turn the call over to Derrick to provide a more detailed review of our first quarter results. With that, I will turn the call over to Derrick to provide a more detailed review of our first quarter results. with that i will turn the call over to derrick to provide a more detailed review of our first quarter results

Speaker 2: Thank you, Glendon. Good afternoon, everyone. Total worldwide revenue in the first quarter of 2026 was $20.6 million, a 9% decrease from $22.5 million in the same period last year, and a decrease of 12% on a constant currency basis. U.S. revenue in the first quarter was $13.3 million, a 7% decrease from $14.2 million during the same period of the prior year. We added 15 new U.S. treating centers during the quarter. International revenue in the first quarter of 2026 was $7.3 million, a 12% decrease from $8.3 million during the same period last year, and a decrease of 21% on a constant currency basis. The decline in revenue was fully attributable to the absence of sales to our distributor in China. Thank you, Glendon. thank you glendon Good afternoon, everyone. good afternoon everyone Total worldwide revenue in the first quarter of 2026 was $20.6 million, a 9% decrease from $22.5 million in the same period last year, and a decrease of 12% on a constant currency basis. total worldwide revenue in the first quarter of 2026 was $20.6 million a 9% decrease from $22.5 million in the same period last year and a decrease of 12% on a constant currency basis U.S. revenue in the first quarter was $13.3 million, a 7% decrease from $14.2 million during the same period of the prior year. u.s revenue in the first quarter was $13.3 million a 7% decrease from $14.2 million during the same period of the prior year We added 15 new U.S. treating centers during the quarter. we added 15 new u.s treating centers during the quarter International revenue in the first quarter of 2026 was $7.3 million, a 12% decrease from $8.3 million during the same period last year, and a decrease of 21% on a constant currency basis. international revenue in the first quarter of 2026 was $7.3 million a 12% decrease from $8.3 million during the same period last year and a decrease of 21% on a constant currency basis The decline in revenue was fully attributable to the absence of sales to our distributor in China. the decline in revenue was fully attributable to the absence of sales to our distributor in china As a reminder, we are currently awaiting the renewal of our Chinese registration certificate, which we expect to come in the second half of 2026. Excluding China, we continued to see solid performance across all our other international markets, which grew 22% as compared to the same period last year and 9% on a constant currency basis. Gross margin for the first quarter of 2026 was 78% compared to 73% in the prior year period. The year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets. Looking forward, we continue to expect gross margin to be approximately 75% for the full year of 2026, trending higher in the first half of the year and lower toward the second half of the year based on the mix of distributor sales. As a reminder, we are currently awaiting the renewal of our Chinese registration certificate, which we expect to come in the second half of 2026. as a reminder we are currently awaiting the renewal of our chinese registration certificate which we expect to come in the second half of 2026 Excluding China, we continued to see solid performance across all our other international markets, which grew 22% as compared to the same period last year and 9% on a constant currency basis. excluding china we continued to see solid performance across all our other international markets which grew 22% as compared to the same period last year and 9% on a constant currency basis Gross margin for the first quarter of 2026 was 78% compared to 73% in the prior year period. gross margin for the first quarter of 2026 was 78% compared to 73% in the prior year period The year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets. the year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets Looking forward, we continue to expect gross margin to be approximately 75% for the full year of 2026, trending higher in the first half of the year and lower toward the second half of the year based on the mix of distributor sales. looking forward we continue to expect gross margin to be approximately 75% for the full year of 2026 trending higher in the first half of the year and lower toward the second half of the year based on the mix of distributor sales Total operating expenses for the first quarter of 2026 were $29 million, a 6% decrease from the same period last year. Non-cash stock-based compensation expense was $3.8 million in the first quarter of 2026. Operating expenses in the first quarter included approximately $1.4 million of one-time costs related to the restructuring initiative that we executed at the start of the year. Excluding stock-based compensation expense and the restructuring costs, operating expenses in the first quarter of 2026 decreased 8% from the same period of the prior year. We remain committed to decreasing spend in 2026 through our cost alignment efforts while maintaining investments in our key growth initiatives. Total operating expenses for the first quarter of 2026 were $29 million, a 6% decrease from the same period last year. total operating expenses for the first quarter of 2026 were $29 million a 6% decrease from the same period last year Non-cash stock-based compensation expense was $3.8 million in the first quarter of 2026. non-cash stock-based compensation expense was $3.8 million in the first quarter of 2026 Operating expenses in the first quarter included approximately $1.4 million of one-time costs related to the restructuring initiative that we executed at the start of the year. operating expenses in the first quarter included approximately $1.4 million of one-time costs related to the restructuring initiative that we executed at the start of the year Excluding stock-based compensation expense and the restructuring costs, operating expenses in the first quarter of 2026 decreased 8% from the same period of the prior year. excluding stock-based compensation expense and the restructuring costs operating expenses in the first quarter of 2026 decreased 8% from the same period of the prior year We remain committed to decreasing spend in 2026 through our cost alignment efforts while maintaining investments in our key growth initiatives. we remain committed to decreasing spend in 2026 through our cost alignment efforts while maintaining investments in our key growth initiatives To that end, we continue to expect full year 2026 operating expenses to fall between $113 million and $115 million, inclusive of approximately $19 million of non-cash stock-based compensation expense. R&D expenses for the first quarter of 2026 were $4.9 million compared to $4.8 million in the first quarter of 2025. Sales, general and administrative expenses for the first quarter of 2026 were $24.1 million compared to $26.1 million in the first quarter of 2025. Net loss for the first quarter of 2026 was $13.7 million or a loss of $0.33 per share as compared to a net loss of $14.4 million or a loss of $0.36 per share for the same period of the prior year. To that end, we continue to expect full year 2026 operating expenses to fall between $113 million and $115 million, inclusive of approximately $19 million of non-cash stock-based compensation expense. to that end we continue to expect full year 2026 operating expenses to fall between $113 million and $115 million inclusive of approximately $19 million of non-cash stock-based compensation expense R&D expenses for the first quarter of 2026 were $4.9 million compared to $4.8 million in the first quarter of 2025. r&d expenses for the first quarter of 2026 were $4.9 million compared to $4.8 million in the first quarter of 2025 Sales, general and administrative expenses for the first quarter of 2026 were $24.1 million compared to $26.1 million in the first quarter of 2025. sales general and administrative expenses for the first quarter of 2026 were $24.1 million compared to $26.1 million in the first quarter of 2025 Net loss for the first quarter of 2026 was $13.7 million or a loss of $0.33 per share as compared to a net loss of $14.4 million or a loss of $0.36 per share for the same period of the prior year. net loss for the first quarter of 2026 was $13.7 million or a loss of $0.33 per share as compared to a net loss of $14.4 million or a loss of $0.36 per share for the same period of the prior year An average weighted share count of 41.9 million shares was used to determine loss per share for the first quarter of 2026. Adjusted EBITDA loss for the first quarter of 2026 was $8.5 million, consistent with the first quarter of 2025. Excluding one-time restructuring charges, adjusted EBITDA loss was $7 million and 18% favorable to the same period of the prior year. We ended March 31, 2026 with $61.6 million in cash equivalents, and marketable securities, a decrease of $8.2 million from December 31, 2025. In the first quarter of 2026, we took meaningful steps to strengthen our balance sheet and extend our cash runway. First, we executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10%. An average weighted share count of 41.9 million shares was used to determine loss per share for the first quarter of 2026. an average weighted share count of 41.9 million shares was used to determine loss per share for the first quarter of 2026 Adjusted EBITDA loss for the first quarter of 2026 was $8.5 million, consistent with the first quarter of 2025. adjusted ebitda loss for the first quarter of 2026 was $8.5 million consistent with the first quarter of 2025 Excluding one-time restructuring charges, adjusted EBITDA loss was $7 million and 18% favorable to the same period of the prior year. excluding one-time restructuring charges adjusted ebitda loss was $7 million and 18% favorable to the same period of the prior year We ended March 31, 2026 with $61.6 million in cash equivalents, and marketable securities, a decrease of $8.2 million from December 31, 2025. we ended march 31 2026 with $61.6 million in cash equivalents and marketable securities a decrease of $8.2 million from december 31 2025 In the first quarter of 2026, we took meaningful steps to strengthen our balance sheet and extend our cash runway. in the first quarter of 2026 we took meaningful steps to strengthen our balance sheet and extend our cash runway First, we executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10%. first we executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10% Second, we closed on a $60 million credit facility with a five-year interest-only structure, extending the maturity of our existing debt out to 2031 and providing us with access to an additional $20 million in undrawn capital subject to certain revenue milestones. With these measures in place, we expect to burn roughly $23 million of cash for the full year 2026, which would be a substantial decrease from the $32 million of cash that we burned in 2025. Turning to our revenue outlook for 2026. We are reiterating our full year 2026 revenue guidance of $90 million-$92 million. Our guidance contemplates sequential quarterly improvement in our year-over-year revenue trend with a return to year-over-year growth in both our U.S. and international businesses in the back half of the year. Second, we closed on a $60 million credit facility with a five-year interest-only structure, extending the maturity of our existing debt out to 2031 and providing us with access to an additional $20 million in undrawn capital subject to certain revenue milestones. second we closed on a $60 million credit facility with a five-year interest-only structure extending the maturity of our existing debt out to 2031 and providing us with access to an additional $20 million in undrawn capital subject to certain revenue milestones With these measures in place, we expect to burn roughly $23 million of cash for the full year 2026, which would be a substantial decrease from the $32 million of cash that we burned in 2025. with these measures in place we expect to burn roughly $23 million of cash for the full year 2026 which would be a substantial decrease from the $32 million of cash that we burned in 2025 Turning to our revenue outlook for 2026. turning to our revenue outlook for 2026 We are reiterating our full year 2026 revenue guidance of $90 million-$92 million. we are reiterating our full year 2026 revenue guidance of $90 million-$92 million Our guidance contemplates sequential quarterly improvement in our year-over-year revenue trend with a return to year-over-year growth in both our U.S. and international businesses in the back half of the year. our guidance contemplates sequential quarterly improvement in our year-over-year revenue trend with a return to year-over-year growth in both our u.s and international businesses in the back half of the year In the U.S., we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses. Internationally, revenue growth through the first half of 2026 will continue to be negatively impacted by the lack of sales to our distributor in China. That said, we expect continued strength throughout the year from our remaining international markets, with year-over-year sales growth in our international business resuming in the second half of the year. To conclude, we entered 2026 with a clear plan and our first quarter reflects early progress. We remain focused on the work ahead, ramping our sales organization, advancing our clinical programs, and delivering the financial leverage we've committed to. We are confident in the strength of our business and our team's ability to execute. In the U.S., we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses. in the u.s we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses Internationally, revenue growth through the first half of 2026 will continue to be negatively impacted by the lack of sales to our distributor in China. internationally revenue growth through the first half of 2026 will continue to be negatively impacted by the lack of sales to our distributor in china That said, we expect continued strength throughout the year from our remaining international markets, with year-over-year sales growth in our international business resuming in the second half of the year. that said we expect continued strength throughout the year from our remaining international markets with year-over-year sales growth in our international business resuming in the second half of the year To conclude, we entered 2026 with a clear plan and our first quarter reflects early progress. to conclude we entered 2026 with a clear plan and our first quarter reflects early progress We remain focused on the work ahead, ramping our sales organization, advancing our clinical programs, and delivering the financial leverage we've committed to. we remain focused on the work ahead ramping our sales organization advancing our clinical programs and delivering the financial leverage we've committed to We are confident in the strength of our business and our team's ability to execute. we are confident in the strength of our business and our team's ability to execute With that, I'd like to thank you for your attention. We will now open the call up for questions. With that, I'd like to thank you for your attention. with that i'd like to thank you for your attention We will now open the call up for questions. we will now open the call up for questions

Speaker 7: Thank you so much. As a reminder, to ask a question, simply press Star 11 on your telephone and wait for your name to be announced. To remove yourself, press Star 11 again. Our first question, one moment please, comes from Rick Wise with Stifel. Please proceed. Thank you so much. thank you so much As a reminder, to ask a question, simply press Star 11 on your telephone and wait for your name to be announced. as a reminder to ask a question simply press star 11 on your telephone and wait for your name to be announced To remove yourself, press Star 11 again. to remove yourself press star 11 again Our first question, one moment please, comes from Rick Wise with Stifel. our first question one moment please comes from rick wise with stifel Please proceed. please proceed

Speaker 8: Good afternoon. Hi, Glenn. How are you doing? Let me start off, if I could. I mean, obviously, getting the sales team in place, and it sounds like it's largely in place, critical, and it seems like you're seeing some good encouraging early progress here. Maybe, talk to us about in more detail, some of the points you made about going deeper in the accounts, and some of the specific strategies you're using to see sales growth accelerate. Maybe just as part of that, help us understand what's dialed into the guidance in terms of productivity with these new people and, you know, today and what you're hoping for and what we might see. Maybe it's a question for Derrick. Thank you. Good afternoon. good afternoon Hi, Glenn. hi glenn How are you doing? how are you doing Let me start off, if I could. let me start off if i could I mean, obviously, getting the sales team in place, and it sounds like it's largely in place, critical, and it seems like you're seeing some good encouraging early progress here. i mean obviously getting the sales team in place and it sounds like it's largely in place critical and it seems like you're seeing some good encouraging early progress here Maybe, talk to us about in more detail, some of the points you made about going deeper in the accounts, and some of the specific strategies you're using to see sales growth accelerate. maybe talk to us about in more detail some of the points you made about going deeper in the accounts and some of the specific strategies you're using to see sales growth accelerate Maybe just as part of that, help us understand what's dialed into the guidance in terms of productivity with these new people and, you know, today and what you're hoping for and what we might see. Maybe it's a question for Derrick. maybe just as part of that help us understand what's dialed into the guidance in terms of productivity with these new people and you know today and what you're hoping for and what we might see. maybe it's a question for derrick Thank you. thank you

Speaker 4: Hey, Rick. Well, first and foremost, we've been focused on narrowing the items that we're asking our U.S. sales force to do. I think one of the key things that we realized coming into this period was that last year, there were just too many balls in the air. We've narrowed that focus, and it's in the areas that we commented on in the comments that just preceded. We have, as you had mentioned, substantially filled all of our open positions. Our average tenure, as you might imagine, is not what it was one year ago, but we are bringing people up to speed quite quickly. Hey, Rick. hey rick Well, first and foremost, we've been focused on narrowing the items that we're asking our U.S. sales force to do. well first and foremost we've been focused on narrowing the items that we're asking our u.s sales force to do I think one of the key things that we realized coming into this period was that last year, there were just too many balls in the air. i think one of the key things that we realized coming into this period was that last year there were just too many balls in the air We've narrowed that focus, and it's in the areas that we commented on in the comments that just preceded. we've narrowed that focus and it's in the areas that we commented on in the comments that just preceded We have, as you had mentioned, substantially filled all of our open positions. we have as you had mentioned substantially filled all of our open positions Our average tenure, as you might imagine, is not what it was one year ago, but we are bringing people up to speed quite quickly. our average tenure as you might imagine is not what it was one year ago but we are bringing people up to speed quite quickly We are focusing our activity on setting up high quality and efficient valve programs, and we're doing that by engaging COPD physicians around these centers to be driving patients into those centers. We are looking to gain administrative service line level administrative support to ensure that we have the resources to execute on that plan. We're seeing positive impact from those efforts even in these early stages. I think that one of the bigger issues for us is just getting our sales force up and running and trained and moving forward. We are right where we expected to be at this point. We are focusing our activity on setting up high quality and efficient valve programs, and we're doing that by engaging COPD physicians around these centers to be driving patients into those centers. we are focusing our activity on setting up high quality and efficient valve programs and we're doing that by engaging copd physicians around these centers to be driving patients into those centers We are looking to gain administrative service line level administrative support to ensure that we have the resources to execute on that plan. we are looking to gain administrative service line level administrative support to ensure that we have the resources to execute on that plan We're seeing positive impact from those efforts even in these early stages. we're seeing positive impact from those efforts even in these early stages I think that one of the bigger issues for us is just getting our sales force up and running and trained and moving forward. i think that one of the bigger issues for us is just getting our sales force up and running and trained and moving forward We are right where we expected to be at this point. we are right where we expected to be at this point We feel good about the fact that we're full and that people are coming up the learning curve, and we certainly have some very bright spots with regard to the execution of the strategy that we've outlined. We feel good about the fact that we're full and that people are coming up the learning curve, and we certainly have some very bright spots with regard to the execution of the strategy that we've outlined. we feel good about the fact that we're full and that people are coming up the learning curve and we certainly have some very bright spots with regard to the execution of the strategy that we've outlined

Speaker 8: That's great to hear. Derrick, for you, maybe just help us just think through with the first quarter in hand, the 2026 growth cadence and thinking about the reaffirmed 2026 guidance range you laid out, it applies 60 basis points of the year. This is sort of a transition. Do you feel like consensus has got it right in terms of the current sequencing? Should we be more back weighting it? I think consensus for the 2Q is like $22 million. If that's the case, what gives you the confidence that the company can have the step-up needed, you know, from 2Q to 3Q, et cetera, to get those numbers you've laid out? Thanks. That's great to hear. that's great to hear Derrick, for you, maybe just help us just think through with the first quarter in hand, the 2026 growth cadence and thinking about the reaffirmed 2026 guidance range you laid out, it applies 60 basis points of the year. derrick for you maybe just help us just think through with the first quarter in hand the 2026 growth cadence and thinking about the reaffirmed 2026 guidance range you laid out it applies 60 basis points of the year This is sort of a transition. this is sort of a transition Do you feel like consensus has got it right in terms of the current sequencing? do you feel like consensus has got it right in terms of the current sequencing Should we be more back weighting it? should we be more back weighting it I think consensus for the 2Q is like $22 million. i think consensus for the 2q is like $22 million If that's the case, what gives you the confidence that the company can have the step-up needed, you know, from 2Q to 3Q, et cetera, to get those numbers you've laid out? if that's the case what gives you the confidence that the company can have the step-up needed you know from 2q to 3q et cetera to get those numbers you've laid out Thanks. thanks

Speaker 2: Sure, Rick, and thanks for the question. As it relates to guidance, we do expect to demonstrate a sequential quarterly year-over-year improvement in growth as the year goes on. As Glen said, you know, we feel very good about the performance in Q1. We're already demonstrating that, particularly in the U.S. Our year-over-year growth rate, while down 7% in Q1, is a meaningful improvement from our growth rate or our decline of 11% in Q4. You know, we already feel like we've bottomed in Q4 in terms of year-over-year growth rates. Both in the U.S. and internationally, we expect to see, and I think this is reflected to your question, currently in consensus. Sure, Rick, and thanks for the question. sure rick and thanks for the question As it relates to guidance, we do expect to demonstrate a sequential quarterly year-over-year improvement in growth as the year goes on. as it relates to guidance we do expect to demonstrate a sequential quarterly year-over-year improvement in growth as the year goes on As Glen said, you know, we feel very good about the performance in Q1. as glen said you know we feel very good about the performance in q1 We're already demonstrating that, particularly in the U.S. we're already demonstrating that particularly in the u.s Our year-over-year growth rate, while down 7% in Q1, is a meaningful improvement from our growth rate or our decline of 11% in Q4. our year-over-year growth rate while down 7% in q1 is a meaningful improvement from our growth rate or our decline of 11% in q4 You know, we already feel like we've bottomed in Q4 in terms of year-over-year growth rates. you know we already feel like we've bottomed in q4 in terms of year-over-year growth rates Both in the U.S. and internationally, we expect to see, and I think this is reflected to your question, currently in consensus. both in the u.s and internationally we expect to see and i think this is reflected to your question currently in consensus We expect to see that sequential improvement every quarter flipping to positive year-over-year growth in the back half of the year, and even exiting the year with double-digit growth, both U.S. and international. In the U.S., what gives us confidence and the driver for that sequential improvement in year-over-year growth is, in fact, the addition of the new folks that we have brought in, and the time that it takes for the new reps to get up to speed and get up to productivity. That does take some time. Typically, six- nine months or so is what we've seen on average for new hires to get up to speed. We expect to see that sequential improvement every quarter flipping to positive year-over-year growth in the back half of the year, and even exiting the year with double-digit growth, both U.S. and international. we expect to see that sequential improvement every quarter flipping to positive year-over-year growth in the back half of the year and even exiting the year with double-digit growth both u.s and international In the U.S., what gives us confidence and the driver for that sequential improvement in year-over-year growth is, in fact, the addition of the new folks that we have brought in, and the time that it takes for the new reps to get up to speed and get up to productivity. in the u.s what gives us confidence and the driver for that sequential improvement in year-over-year growth is in fact the addition of the new folks that we have brought in and the time that it takes for the new reps to get up to speed and get up to productivity That does take some time. that does take some time Typically, six- nine months or so is what we've seen on average for new hires to get up to speed. typically six- nine months or so is what we've seen on average for new hires to get up to speed As the year progresses and also as our focused strategies take hold in the U.S., we do expect to see that improvement sequentially across the year. On the international side, it's really a question of comps, frankly. You know, the decline that you're seeing in our international sales in Q1 is primarily all attributable to timing of sales into China. We are currently awaiting renewal of our registration certificate in China, so there's a lack of absence of sales into China in the first this year. In the first half of this year, certainly in last year, in the first half of 2025, there were a number of large orders that were placed into China. As the year progresses and also as our focused strategies take hold in the U.S., we do expect to see that improvement sequentially across the year. as the year progresses and also as our focused strategies take hold in the u.s we do expect to see that improvement sequentially across the year On the international side, it's really a question of comps, frankly. on the international side it's really a question of comps frankly You know, the decline that you're seeing in our international sales in Q1 is primarily all attributable to timing of sales into China. you know the decline that you're seeing in our international sales in q1 is primarily all attributable to timing of sales into china We are currently awaiting renewal of our registration certificate in China, so there's a lack of absence of sales into China in the first this year. we are currently awaiting renewal of our registration certificate in china so there's a lack of absence of sales into china in the first this year In the first half of this year, certainly in last year, in the first half of 2025, there were a number of large orders that were placed into China. in the first half of this year certainly in last year in the first half of 2025 there were a number of large orders that were placed into china To put it into context, China is still a relatively small portion of our total sales, less than 5% of our total sales. The timing of those sales drove tough comps in the first half of this year. That's what's driving the optical declining growth rate and will drive that optical decline growth rate for the first half of this year. Our underlying business, as we talked about, is still strong. We grew 22% year-over-year reported in Q1. We've seen double-digit growth in our underlying direct international businesses for the past couple years. We expect that trend to continue. To put it into context, China is still a relatively small portion of our total sales, less than 5% of our total sales. to put it into context china is still a relatively small portion of our total sales less than 5% of our total sales The timing of those sales drove tough comps in the first half of this year. the timing of those sales drove tough comps in the first half of this year That's what's driving the optical declining growth rate and will drive that optical decline growth rate for the first half of this year. that's what's driving the optical declining growth rate and will drive that optical decline growth rate for the first half of this year Our underlying business, as we talked about, is still strong. our underlying business as we talked about is still strong We grew 22% year-over-year reported in Q1. we grew 22% year-over-year reported in q1 We've seen double-digit growth in our underlying direct international businesses for the past couple years. we've seen double-digit growth in our underlying direct international businesses for the past couple years We expect that trend to continue. we expect that trend to continue In the back half of this year, that underlying strength of our OUS business, continued strength, will be more representative in our growth rates, and that's what we expect to drive the step-up in growth in our international business. In the back half of this year, that underlying strength of our OUS business, continued strength, will be more representative in our growth rates, and that's what we expect to drive the step-up in growth in our international business. in the back half of this year that underlying strength of our ous business continued strength will be more representative in our growth rates and that's what we expect to drive the step-up in growth in our international business

Speaker 8: Thanks, Derrick, for the comprehensive answer. Appreciate it. Thanks, Derrick, for the comprehensive answer. thanks derrick for the comprehensive answer Appreciate it. appreciate it

Speaker 7: Thank you. Our next question is from the line of Jon Young with Canaccord. Please proceed. Thank you. thank you Our next question is from the line of Jon Young with Canaccord. our next question is from the line of jon young with canaccord Please proceed. please proceed

Speaker 5: Thanks, Glen and Derrick. Appreciate giving the progress update you provided today. I wanna go to the U.S. accounts, 15 added in Q1. I think that was higher than any numbers that was added last year, according to our model. I would love to know, is this due to the refocused sales team ramping quickly? Maybe how should we think about just the pace of account additions for the remainder of the U.S. for the year? If I could ask my second question too, related to the sales force, is just what metrics are you guys focused on in monitoring success of the revamped sales force? Thanks for taking the questions. Thanks, Glen and Derrick. thanks glen and derrick Appreciate giving the progress update you provided today. appreciate giving the progress update you provided today I wanna go to the U.S. accounts, 15 added in Q1. i wanna go to the u.s accounts 15 added in q1 I think that was higher than any numbers that was added last year, according to our model. i think that was higher than any numbers that was added last year according to our model I would love to know, is this due to the refocused sales team ramping quickly? i would love to know is this due to the refocused sales team ramping quickly Maybe how should we think about just the pace of account additions for the remainder of the U.S. for the year? maybe how should we think about just the pace of account additions for the remainder of the u.s for the year If I could ask my second question too, related to the sales force, is just what metrics are you guys focused on in monitoring success of the revamped sales force? if i could ask my second question too related to the sales force is just what metrics are you guys focused on in monitoring success of the revamped sales force Thanks for taking the questions. thanks for taking the questions

Speaker 4: 15 is, as you noted, a strong number relative to what we saw on a quarterly basis across last year. It's difficult to say whether that's anywhere close to the new normal. I think we're gonna stand with the 10 per quarter expectation, which we laid out. I'll let Derrick talk about that guidance if he wishes to. That feels like the right sort of number. Some of these new accounts, I think, were lining up perhaps to happen late last year, maybe fell into this quarter. I think time will tell as to whether the mean is above 10, but I would keep that. With regard to metrics, you know, at this point, we feel really good about the plan. 15 is, as you noted, a strong number relative to what we saw on a quarterly basis across last year. 15 is as you noted a strong number relative to what we saw on a quarterly basis across last year It's difficult to say whether that's anywhere close to the new normal. it's difficult to say whether that's anywhere close to the new normal I think we're gonna stand with the 10 per quarter expectation, which we laid out. i think we're gonna stand with the 10 per quarter expectation which we laid out I'll let Derrick talk about that guidance if he wishes to. i'll let derrick talk about that guidance if he wishes to That feels like the right sort of number. that feels like the right sort of number Some of these new accounts, I think, were lining up perhaps to happen late last year, maybe fell into this quarter. some of these new accounts i think were lining up perhaps to happen late last year maybe fell into this quarter I think time will tell as to whether the mean is above 10, but I would keep that. i think time will tell as to whether the mean is above 10 but i would keep that With regard to metrics, you know, at this point, we feel really good about the plan. with regard to metrics you know at this point we feel really good about the plan We are focused on moving things in a, in a fairly simplified, basic way. We're just trying to bring our people up to speed as quickly as we possibly can. We have some territories that did very, very well last year. They continue to be doing well this year, continuing to, you know, take advantage of the momentum that they established. You know, we see that in an array of different indicators. We've talked before about the importance of StratX and seeing that, you know, sort of coming through as a leading indicator for our performance, and we feel good about where we sit at this point. We are focused on moving things in a, in a fairly simplified, basic way. we are focused on moving things in a in a fairly simplified basic way We're just trying to bring our people up to speed as quickly as we possibly can. we're just trying to bring our people up to speed as quickly as we possibly can We have some territories that did very, very well last year. we have some territories that did very very well last year They continue to be doing well this year, continuing to, you know, take advantage of the momentum that they established. they continue to be doing well this year continuing to you know take advantage of the momentum that they established You know, we see that in an array of different indicators. you know we see that in an array of different indicators We've talked before about the importance of StratX and seeing that, you know, sort of coming through as a leading indicator for our performance, and we feel good about where we sit at this point. we've talked before about the importance of stratx and seeing that you know sort of coming through as a leading indicator for our performance and we feel good about where we sit at this point

Speaker 7: Thank you. One moment for our next question. It comes from Frank Takkinen with Lake Street Capital Markets. Please proceed. Thank you. thank you One moment for our next question. one moment for our next question It comes from Frank Takkinen with Lake Street Capital Markets. it comes from frank takkinen with lake street capital markets Please proceed. please proceed

Speaker 3: Great. Thank you for taking the questions. I know this has come up on, I think it was the previous call as well, but wondering if you can speak to kind of bigger picture growth aspirations. I know you're only a few quarters into this, and I think last time the context provided was substantially better, which obviously aligns with the cadence of revenue growth throughout 2026. But now that you've had a little bit more time with the organization, are you comfortable providing any type of we expect to be a double-digit grower commentary or something similar in nature to that as you think about a longer-term business? Great. great Thank you for taking the questions. thank you for taking the questions I know this has come up on, I think it was the previous call as well, but wondering if you can speak to kind of bigger picture growth aspirations. i know this has come up on i think it was the previous call as well but wondering if you can speak to kind of bigger picture growth aspirations I know you're only a few quarters into this, and I think last time the context provided was substantially better, which obviously aligns with the cadence of revenue growth throughout 2026. i know you're only a few quarters into this and i think last time the context provided was substantially better which obviously aligns with the cadence of revenue growth throughout 2026 But now that you've had a little bit more time with the organization, are you comfortable providing any type of we expect to be a double-digit grower commentary or something similar in nature to that as you think about a longer-term business? but now that you've had a little bit more time with the organization are you comfortable providing any type of we expect to be a double-digit grower commentary or something similar in nature to that as you think about a longer-term business

Speaker 4: Yeah. Frank, Yeah. yeah Frank, frank

Speaker 2: Frank. Frank. frank

Speaker 4: You wanna take that, Derrick? I mean, I'll go ahead. I'll start. You can add to it, Derrick, if you wish. We fully expect. I will speak for myself. I certainly expect us to be a double-digit grower. I think everybody on the team expects us to be a double-digit grower. I think we're trying to figure out, you know, when you look across the period, where we weren't meeting that expectation or we were moving, you know, sort of rapidly in the direction of not meeting that expectation, most particularly in the U.S., you know, we're trying to get to the bottom of that. You wanna take that, Derrick? you wanna take that derrick I mean, I'll go ahead. i mean i'll go ahead I'll start. i'll start You can add to it, Derrick, if you wish. you can add to it derrick if you wish We fully expect. we fully expect I will speak for myself. i will speak for myself I certainly expect us to be a double-digit grower. i certainly expect us to be a double-digit grower I think everybody on the team expects us to be a double-digit grower. i think everybody on the team expects us to be a double-digit grower I think we're trying to figure out, you know, when you look across the period, where we weren't meeting that expectation or we were moving, you know, sort of rapidly in the direction of not meeting that expectation, most particularly in the U.S., you know, we're trying to get to the bottom of that. i think we're trying to figure out you know when you look across the period where we weren't meeting that expectation or we were moving you know sort of rapidly in the direction of not meeting that expectation most particularly in the u.s you know we're trying to get to the bottom of that We think we were doing too many things, we think we lost too many sales reps, we think we can get back into a double-digit range. Where exactly in that range is still to be determined. I believe, you know, obviously outside the U.S. we've thrown up a couple 20% in a row, roughly, in terms of our growth in 2025 over 2024 and 2024 over 2023. You know, absent the matters that Derrick outlined, we're in that same sort of neighborhood in the first quarter as well in some of our key markets. All of our major European markets are double-digit growers in the first quarter. We don't report that's the case. We feel good about that. We think we were doing too many things, we think we lost too many sales reps, we think we can get back into a double-digit range. we think we were doing too many things we think we lost too many sales reps we think we can get back into a double-digit range Where exactly in that range is still to be determined. where exactly in that range is still to be determined I believe, you know, obviously outside the U.S. we've thrown up a couple 20% in a row, roughly, in terms of our growth in 2025 over 2024 and 2024 over 2023. i believe you know obviously outside the u.s we've thrown up a couple 20% in a row roughly in terms of our growth in 2025 over 2024 and 2024 over 2023 You know, absent the matters that Derrick outlined, we're in that same sort of neighborhood in the first quarter as well in some of our key markets. you know absent the matters that derrick outlined we're in that same sort of neighborhood in the first quarter as well in some of our key markets All of our major European markets are double-digit growers in the first quarter. all of our major european markets are double-digit growers in the first quarter We don't report that's the case. we don't report that's the case We feel good about that. we feel good about that They're executing on a plan that looks very much like the U.S. plan, which is no coincidence. We've got TAM expanders on the horizon that we're working very, very hard to push forward. We're excited about AeriSeal, and look forward to talking more about that as we move in deeper into the year. Derrick, did you wanna add something to that? They're executing on a plan that looks very much like the U.S. plan, which is no coincidence. they're executing on a plan that looks very much like the u.s plan which is no coincidence We've got TAM expanders on the horizon that we're working very, very hard to push forward. we've got tam expanders on the horizon that we're working very very hard to push forward We're excited about AeriSeal, and look forward to talking more about that as we move in deeper into the year. we're excited about aeriseal and look forward to talking more about that as we move in deeper into the year Derrick, did you wanna add something to that? derrick did you wanna add something to that

Speaker 2: I would simply add that also it contemplated in our guidance even for 2025, as I just mentioned, is that we will exit the year growing double digits in both our international and U.S. markets. I don't wanna get ahead of ourselves and provide any more guidance than that beyond 2025. Or 2026. I'm sorry. In 2026, I meant to say, our guidance contemplates double-digit growth as we exit the year. I don't wanna provide any more guidance beyond 2026, but I just did wanna add that additional commentary. Thanks, Frank. I would simply add that also it contemplated in our guidance even for 2025, as I just mentioned, is that we will exit the year growing double digits in both our international and U.S. markets. i would simply add that also it contemplated in our guidance even for 2025 as i just mentioned is that we will exit the year growing double digits in both our international and u.s markets I don't wanna get ahead of ourselves and provide any more guidance than that beyond 2025. i don't wanna get ahead of ourselves and provide any more guidance than that beyond 2025 Or 2026. or 2026 I'm sorry. i'm sorry In 2026, I meant to say, our guidance contemplates double-digit growth as we exit the year. in 2026 i meant to say our guidance contemplates double-digit growth as we exit the year I don't wanna provide any more guidance beyond 2026, but I just did wanna add that additional commentary. i don't wanna provide any more guidance beyond 2026 but i just did wanna add that additional commentary Thanks, Frank. thanks frank

Speaker 3: Perfect. Thankful. Thank you. Maybe just for my follow-up on the Chinese registration renewal, is there a reliance on that to hit the second half expectations for OUS growth? Related to that, what needs to happen for that renewal? Is this more administrative in nature? Is there some risk to this renewal maybe not occurring on time with your guided timelines? Perfect. perfect Thankful. thankful Thank you. thank you Maybe just for my follow-up on the Chinese registration renewal, is there a reliance on that to hit the second half expectations for OUS growth? maybe just for my follow-up on the chinese registration renewal is there a reliance on that to hit the second half expectations for ous growth Related to that, what needs to happen for that renewal? related to that what needs to happen for that renewal Is this more administrative in nature? is this more administrative in nature Is there some risk to this renewal maybe not occurring on time with your guided timelines? is there some risk to this renewal maybe not occurring on time with your guided timelines

Speaker 2: Thanks, Frank Takkinen, for that question. I'll take that. This is Derrick Sung. We do continue to expect the renewal of our registration certificate to come in the back half of this year. It is, I believe, an administrative process that we're simply working through, so it will simply take some time. At this point, we don't have any reason to believe that we won't get that registration certificate renewed in the back half of the year. When we do get that renewal comes, I would say that our expectation is that the resumption of sales into China will be very gradual. There'll be, you know, accounts will need to be restarted, et cetera. We're not expecting, you know, a bolus of sales to come in. Thanks, Frank Takkinen, for that question. thanks frank takkinen for that question I'll take that. i'll take that This is Derrick Sung. this is derrick sung We do continue to expect the renewal of our registration certificate to come in the back half of this year. we do continue to expect the renewal of our registration certificate to come in the back half of this year It is, I believe, an administrative process that we're simply working through, so it will simply take some time. it is i believe an administrative process that we're simply working through so it will simply take some time At this point, we don't have any reason to believe that we won't get that registration certificate renewed in the back half of the year. at this point we don't have any reason to believe that we won't get that registration certificate renewed in the back half of the year When we do get that renewal comes, I would say that our expectation is that the resumption of sales into China will be very gradual. when we do get that renewal comes i would say that our expectation is that the resumption of sales into china will be very gradual There'll be, you know, accounts will need to be restarted, et cetera. there'll be you know accounts will need to be restarted et cetera We're not expecting, you know, a bolus of sales to come in. we're not expecting you know a bolus of sales to come in It will take some time. To that end, our current guidance, you know, doesn't contemplate a significant contribution from China, even in the, in our back half. However, as I mentioned, we will be anniversarying those tough comps from our China sales in the first half of 2025. I think, you know, we'll expect to flip back to positive international growth. As, you know, Glenn and I just mentioned, you'll see our international growth rates just really be much more reflective of the strong underlying growth in our direct international businesses that we're currently experiencing. It will take some time. it will take some time To that end, our current guidance, you know, doesn't contemplate a significant contribution from China, even in the, in our back half. to that end our current guidance you know doesn't contemplate a significant contribution from china even in the in our back half However, as I mentioned, we will be anniversarying those tough comps from our China sales in the first half of 2025. however as i mentioned we will be anniversarying those tough comps from our china sales in the first half of 2025 I think, you know, we'll expect to flip back to positive international growth. i think you know we'll expect to flip back to positive international growth As, you know, Glenn and I just mentioned, you'll see our international growth rates just really be much more reflective of the strong underlying growth in our direct international businesses that we're currently experiencing. as you know glenn and i just mentioned you'll see our international growth rates just really be much more reflective of the strong underlying growth in our direct international businesses that we're currently experiencing

Speaker 3: Perfect. Thank you. Perfect. perfect Thank you. thank you

Speaker 7: Thank you so much. One moment for our next question. It comes from Joe Downing with BTIG. Please proceed. Thank you so much. thank you so much One moment for our next question. one moment for our next question It comes from Joe Downing with BTIG. it comes from joe downing with btig Please proceed. please proceed

Speaker 6: Glendon French and Derrick Sung. Thanks for taking the question. I guess as you kinda reprioritize existing base of treating physicians, can you just help to quantify same store productivity, say, in your top quartile of accounts versus, say, the bottom couple quartiles? In this vein, I guess how much of the 2026 U.S. revenue plan depends on lifting the bottom two quartiles versus this, you know, top 25%? Glendon French and Derrick Sung. glendon french and derrick sung Thanks for taking the question. thanks for taking the question I guess as you kinda reprioritize existing base of treating physicians, can you just help to quantify same store productivity, say, in your top quartile of accounts versus, say, the bottom couple quartiles? i guess as you kinda reprioritize existing base of treating physicians can you just help to quantify same store productivity say in your top quartile of accounts versus say the bottom couple quartiles In this vein, I guess how much of the 2026 U.S. revenue plan depends on lifting the bottom two quartiles versus this, you know, top 25%? in this vein i guess how much of the 2026 u.s revenue plan depends on lifting the bottom two quartiles versus this you know top 25%

Speaker 4: Yeah. Yeah. yeah

Speaker 2: Yep. Yep. yep

Speaker 4: I would say that we are focused on. You know, to the extent that we have some. We've got a mix of things going on here, Joe. We've got uncovered territories that are now covered, so we need to, you know, reestablish those connections and get those moving. We tend to have a bias toward the accounts that are performing best and trying to move them along and take full advantage of the near to far strategy in relation to them, make sure that they're, you know, leveraging all the best practices that we've talked about in prior calls. I would say the top quartile would be more of the area of focus as opposed to the lowest quartile. I would say that we are focused on. i would say that we are focused on You know, to the extent that we have some. you know to the extent that we have some We've got a mix of things going on here, Joe. we've got a mix of things going on here joe We've got uncovered territories that are now covered, so we need to, you know, reestablish those connections and get those moving. we've got uncovered territories that are now covered so we need to you know reestablish those connections and get those moving We tend to have a bias toward the accounts that are performing best and trying to move them along and take full advantage of the near to far strategy in relation to them, make sure that they're, you know, leveraging all the best practices that we've talked about in prior calls. we tend to have a bias toward the accounts that are performing best and trying to move them along and take full advantage of the near to far strategy in relation to them make sure that they're you know leveraging all the best practices that we've talked about in prior calls I would say the top quartile would be more of the area of focus as opposed to the lowest quartile. i would say the top quartile would be more of the area of focus as opposed to the lowest quartile We are, however, bringing in some number of new accounts that and our standards for bringing our accounts online have changed quite a bit. We've really raised the bar and expect those accounts to invest pretty heavily in terms of their time and efforts to get up and running and have patients that are ready to go. There's far fewer people who are recently trained who are not doing procedures. We, we actually are quite optimistic about the newer accounts that are coming online and are doing procedures right out of the block. Those would be what I would, I would consider outside the first or the first quartile or the top quartile or lower quartile, but rather just new accounts on top of that. We are, however, bringing in some number of new accounts that and our standards for bringing our accounts online have changed quite a bit. we are however bringing in some number of new accounts that and our standards for bringing our accounts online have changed quite a bit We've really raised the bar and expect those accounts to invest pretty heavily in terms of their time and efforts to get up and running and have patients that are ready to go. we've really raised the bar and expect those accounts to invest pretty heavily in terms of their time and efforts to get up and running and have patients that are ready to go There's far fewer people who are recently trained who are not doing procedures. there's far fewer people who are recently trained who are not doing procedures We, we actually are quite optimistic about the newer accounts that are coming online and are doing procedures right out of the block. we we actually are quite optimistic about the newer accounts that are coming online and are doing procedures right out of the block Those would be what I would, I would consider outside the first or the first quartile or the top quartile or lower quartile, but rather just new accounts on top of that. those would be what i would i would consider outside the first or the first quartile or the top quartile or lower quartile but rather just new accounts on top of that First and foremost, we're getting our team up and running back up and running, and just trying to support the strongest of our accounts most predominantly, and some of our newer accounts will also make some good contributions. First and foremost, we're getting our team up and running back up and running, and just trying to support the strongest of our accounts most predominantly, and some of our newer accounts will also make some good contributions. first and foremost we're getting our team up and running back up and running and just trying to support the strongest of our accounts most predominantly and some of our newer accounts will also make some good contributions

Speaker 6: Thanks, Glenn. Just for my follow-up, I wanna touch on Lungfx real quick. I know it's kind of being refocused or de-emphasized a little bit, whichever way, you know, you prefer to frame it, I'm just curious, like, what % of U.S. accounts right now, I think it's the larger ones you said are still, you know, it's more effectively used in those kind of accounts. What % of the accounts are using it? Kind of what like ROI threshold would lead you to kind of selectively expand it again versus keeping it kind of at this narrow scope? Thanks, Glenn. thanks glenn Just for my follow-up, I wanna touch on Lungfx real quick. just for my follow-up i wanna touch on lungfx real quick I know it's kind of being refocused or de-emphasized a little bit, whichever way, you know, you prefer to frame it, I'm just curious, like, what % of U.S. accounts right now, I think it's the larger ones you said are still, you know, it's more effectively used in those kind of accounts. i know it's kind of being refocused or de-emphasized a little bit whichever way you know you prefer to frame it i'm just curious like what % of u.s accounts right now i think it's the larger ones you said are still you know it's more effectively used in those kind of accounts What % of the accounts are using it? what % of the accounts are using it Kind of what like ROI threshold would lead you to kind of selectively expand it again versus keeping it kind of at this narrow scope? kind of what like roi threshold would lead you to kind of selectively expand it again versus keeping it kind of at this narrow scope

Speaker 4: We were spending what in retrospect looked like a disproportionate amount of our time pursuing Detect, what we call Lungfx Detect. I think we brought that to a level of time and attention that it deserves. We learned a great deal during the period of time where we were heavily promoting Detect in that it really fits into a specific subset of our accounts. We did some pilots across the last year or so, and it revealed that the technology works well in certain types of accounts, and so we're tending to target Detect. I wouldn't call it a de-emphasis at all. We were spending what in retrospect looked like a disproportionate amount of our time pursuing Detect, what we call Lungfx Detect. we were spending what in retrospect looked like a disproportionate amount of our time pursuing detect what we call lungfx detect I think we brought that to a level of time and attention that it deserves. i think we brought that to a level of time and attention that it deserves We learned a great deal during the period of time where we were heavily promoting Detect in that it really fits into a specific subset of our accounts. we learned a great deal during the period of time where we were heavily promoting detect in that it really fits into a specific subset of our accounts We did some pilots across the last year or so, and it revealed that the technology works well in certain types of accounts, and so we're tending to target Detect. we did some pilots across the last year or so and it revealed that the technology works well in certain types of accounts and so we're tending to target detect I wouldn't call it a de-emphasis at all. i wouldn't call it a de-emphasis at all I think it's just a more focused approach to Detect in situations where we have determined that there could be a great return for the hospital that invests in Detect in terms of patient flow and so forth. As far as what % of accounts, I don't think we report that. You know, everything you've heard before, which is in certain accounts, it can be great. We definitely have data that suggests that. It takes longer to get set up than we, I think anticipated last year that it would. I think it's just a more focused approach to Detect in situations where we have determined that there could be a great return for the hospital that invests in Detect in terms of patient flow and so forth. i think it's just a more focused approach to detect in situations where we have determined that there could be a great return for the hospital that invests in detect in terms of patient flow and so forth As far as what % of accounts, I don't think we report that. as far as what % of accounts i don't think we report that You know, everything you've heard before, which is in certain accounts, it can be great. you know everything you've heard before which is in certain accounts it can be great We definitely have data that suggests that. we definitely have data that suggests that It takes longer to get set up than we, I think anticipated last year that it would. it takes longer to get set up than we i think anticipated last year that it would Those that are up and running, it took a little time to get them up and running, but there seems to be all indications are that when that technology is up and running and being used, it's a pretty solid contributor to our efforts in that account. Those that are up and running, it took a little time to get them up and running, but there seems to be all indications are that when that technology is up and running and being used, it's a pretty solid contributor to our efforts in that account. those that are up and running it took a little time to get them up and running but there seems to be all indications are that when that technology is up and running and being used it's a pretty solid contributor to our efforts in that account

Speaker 6: Great. Thanks, Glenn. Appreciate it. Great. great Thanks, Glenn. thanks glenn Appreciate it. appreciate it

Speaker 7: Thank you. This will conclude the Q&A session, and I will pass it back to Glendon French for closing remarks. Thank you. thank you This will conclude the Q&A session, and I will pass it back to Glendon French for closing remarks. this will conclude the q&a session and i will pass it back to glendon french for closing remarks

Speaker 4: Thank you very much, operator. In summary, we have a clear plan, and our first quarter reflects early progress executing this plan. We remain focused on the work ahead, specifically ramping U.S. sales, advancing our clinical programs, and delivering the financial leverage to which we have committed. We are right where we expected to be at this point. We are confident in our business and in our team's ability to continue to execute. I want to thank you very much. I'd like to express a thank you to our employees for your focused and considerable efforts, and thank everyone on this call today for your time and your ongoing interest in Pulmonx. Have a good afternoon. Thank you very much, operator. thank you very much operator In summary, we have a clear plan, and our first quarter reflects early progress executing this plan. in summary we have a clear plan and our first quarter reflects early progress executing this plan We remain focused on the work ahead, specifically ramping U.S. sales, advancing our clinical programs, and delivering the financial leverage to which we have committed. we remain focused on the work ahead specifically ramping u.s sales advancing our clinical programs and delivering the financial leverage to which we have committed We are right where we expected to be at this point. we are right where we expected to be at this point We are confident in our business and in our team's ability to continue to execute. we are confident in our business and in our team's ability to continue to execute I want to thank you very much. i want to thank you very much I'd like to express a thank you to our employees for your focused and considerable efforts, and thank everyone on this call today for your time and your ongoing interest in Pulmonx. i'd like to express a thank you to our employees for your focused and considerable efforts and thank everyone on this call today for your time and your ongoing interest in pulmonx Have a good afternoon. have a good afternoon

Speaker 7: This concludes our conference. Thank you for participating, and you may now disconnect. This concludes our conference. this concludes our conference Thank you for participating, and you may now disconnect. thank you for participating and you may now disconnect