Pulmonx Corporation ((LUNG)) has held its Q1 earnings call. Read on for the main highlights of the call.
Pulmonx Corporation’s recent earnings call painted a picture of mixed sentiment, with strong international growth and successful product initiatives being tempered by moderated U.S. growth, increased operating expenses, and a slight decline in gross margin. While the closure of the DOJ investigation brought a positive note, financial challenges such as net loss remain a concern.
Strong Revenue Growth
Pulmonx reported impressive worldwide sales of $22.5 million in Q1 2025, marking a 20% growth over the same period last year and 21% on a constant currency basis. This robust performance underscores the company’s ability to expand its market presence and capitalize on emerging opportunities.
International Revenue Surge
Internationally, Pulmonx experienced a remarkable 39% increase in revenue, rising from $6 million last year to $8.3 million in Q1 2025. This surge, driven by strong demand in China, highlights the company’s successful penetration into global markets and its potential for continued international expansion.
Commercial and Product Initiatives
The introduction of LungTraX Detect is gaining traction, with numerous accounts in various contracting phases. Pulmonx’s efforts in peer-to-peer education and community physician engagement are proving effective, setting the stage for future growth and market penetration.
DOJ Investigation Closure
A significant relief for Pulmonx came with the DOJ’s decision not to intervene in the case filed under the False Claims Act and the Anti-Kickback Statute. This closure allows the company to refocus on delivering value to its stakeholders without the overhang of legal uncertainties.
U.S. Revenue Growth Moderation
While U.S. revenue increased by 11% from $12.9 million to $14.2 million, this growth was more moderate compared to international figures. The company acknowledges this trend and is likely strategizing to boost domestic performance.
Gross Margin Decline
Pulmonx reported a gross margin of 73% for Q1 2025, down from 75% in the previous year. This decline is attributed to a shift in geographic revenue mix, indicating a need for strategic adjustments to maintain profitability.
Increased Operating Expenses
Operating expenses rose by 8% to $30.9 million, driven by higher clinical trial costs. This increase reflects Pulmonx’s commitment to innovation and development, albeit at a higher financial cost.
Net Loss
The company reported a net loss of $14.4 million, or $0.36 per share, for Q1 2025, similar to the previous year’s loss. This ongoing challenge underscores the need for strategic financial management to achieve profitability.
Forward-Looking Guidance
Pulmonx maintains its revenue target of $96 million to $98 million for the full year 2025, projecting growth of 16% to 18% on a constant currency basis. The company expects U.S. growth to accelerate in the second half of the year, supported by initiatives like the LungTraX Detect system and expanded educational efforts. Internationally, robust growth is anticipated, particularly in China.
In conclusion, Pulmonx Corporation’s earnings call reflects a balanced outlook with strong international growth and promising product initiatives. However, challenges such as moderated U.S. growth and financial losses need addressing. The closure of the DOJ investigation provides a positive backdrop for the company to focus on its strategic goals and capitalize on growth opportunities.