Pulmonx Corporation

Ladies and gentlemen, thank you for standing by. Welcome to Pumonic's second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you would need to press star 1-1 on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would like now to turn the call over to Webb Campbell, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining today's call. Joining me from Palmonix are Glenn French, President and Chief Executive Officer, and Derrick Sung, Chief Operating Officer and Chief Financial Officer. Earlier today, Palmonix issued a press release announcing its financial results for the quarter ended June 30th, 2026. A copy of the press release is available on the Palmonix 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 All forward-looking statements, including, without limitations, those related 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 expense, 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 Please refer to the risk factors section of our filings with the Securities and Exchange Commission, including our quarterly report on Form 10Q filed with the SEC on May 4, 2026. Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations of 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, July 29th, 2026. Palmonix 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 Thank you, Webb.

Good afternoon, everyone, and welcome to our second quarter 2026 earnings call. Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. Overall, we are very pleased with the progress we are making against our three key priorities of re-accelerating sales growth, driving near-term operating leverage, and advancing our market expanding clinical initiatives. Pulmonix delivered total worldwide revenue of $22.8 million in the second quarter of 2026, consistent with our expectations as our efforts to regain commercial traction play out as anticipated. We remain confident in our ability to achieve our previously communicated revenue guidance of 90 to 92 million dollars for the full year 2026 and remain on track to return to global sales growth later in the year. We made a commitment at the start of this year to deliver meaningful operating leverage through our cost alignment initiatives and I am pleased that the impact of our actions is now clearly evident We effectively reduced our year-over-year adjusted EBITDA loss by nearly 40% to $5.1 million in the second quarter of 2026, and Derrick will provide further details later in the call. Today, I'm pleased to report progress across our remaining two priorities, re-accelerating sales growth and advancing our market-expanding clinical initiatives. I will address each of these in turn, starting with our progress on driving US sales growth. Our organization has made great strides in building and maintaining the right people and the right culture in the US, which we consider to be a foundational element of re-accelerating revenue growth in the region. I remain encouraged by our progress in this respect. We have now filled all of our sales leadership positions and those leaders are making rapid progress and rounding out our U.S. field sales team with top talent. We've also seen marked improvement in our commercial team culture as priorities have become clear and incentives are better aligned with our corporate objectives. Sales turnover has normalized consistent with industry standards and we are thrilled with the team that we have in place. As the newer members of our team continue to ramp, we expect U.S. sales growth to build through the back half of the year. Our emphasis remains on disciplined execution of the highest impact selling activities, consistent with the near to far framework we've outlined previously. To reiterate, this means one, setting up high quality and efficient valve programs, Two, engaging with and educating physicians who treat COPD and who are aligned with hospital systems offering Zephyr valves. Three, concentrating on direct-to-patient efforts specifically on geographies with established treating centers that have the capacity to accommodate interested patients. And finally, four, continuing to work together with our champions to educate service line administrators to ensure appropriate resourcing of their programs. In my interactions with our sales managers and members of our field team, I see a re-energized unit intensely focused on impacting the lives of patients. During meetings with treating physicians and administrators, I hear about hospitals focused on driving value for patients and their systems by aligning resources and processes to scale and expand referral networks. These meetings have validated my conviction that sharper focus on fewer initiatives is helping accelerate growth by focusing on what matters most. With respect to our international business, we continue to see strength and stability across international markets, which delivered 9% year over year constant currency revenue growth, excluding China. Related to China, we are pleased to share that in mid-June, we secured the renewal of our Chinese registration certificate. With this hurdle behind us, we look forward to resuming shipments to our Chinese distributor by early next year. For the balance of this year, we will be focused on restarting commercial activity in this region. Turning to our second priority, Expanding our addressable market through AeroSeal remains a central focus. Enrollment in our Convert2 pivotal trial is progressing and we continue to expect to complete enrollment in 2027. We believe that AeroSeal represents a TAM expansion tool for our Zephyr valves and a future revenue contributor with the ability to expand our addressable market by roughly 20% globally. In closing, while 2026 is a year of execution and transition, we're very pleased with our pace of progress and we have strong conviction in our strategy to refine execution and further penetrate the substantial remaining market opportunity for our products. The organization remains aligned and focused on the priorities that matter most. We're confident in our underlying strength of this business. and the opportunity in front of us and in our ability to deliver sustainable, profitable growth as our year-over-year trends continue to strengthen. With that, I will turn the call over to Derrick to provide more detailed review of our second quarter results.