Pulmonx (NASDAQ:LUNG) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Pulmonx Corporation reported total worldwide revenue of $22.8 million in Q3 2026, marking a 6% year-over-year increase and signaling a return to revenue growth.
The company reduced its adjusted EBITDA loss by nearly 60% to $3.5 million, demonstrating improved operating leverage and cost management.
Pulmonx reiterated its full-year 2026 revenue guidance of $90 million to $92 million, emphasizing confidence in continued growth and strategic execution.
International revenue grew 5%, with strong performance outside China, and U.S. revenue increased by 7%; the company added 8 new U.S. treating centers in the quarter.
Management highlighted the refocused commercial strategy and enhanced salesforce productivity as key drivers of growth, with continued investments in clinical programs and market expansion initiatives.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the Pulmonx Q3 2026 earnings conference call. At this time, all participants are in a listen-only mode. To ask a question during our Q&A session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your first speaker, Webb Campbell of Investor Relations.
Please go ahead.
Webb Campbell (Investor Relations)
Good afternoon and thank you all for participating in today’s call. Joining me from Pulmonx are Glen 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 September 30, 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 provision 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, clinical 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 with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q filed with the SEC on August 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 the 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, Oct. 27, 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. And with that I will turn the call over to Glen.
Glen French (Chief Executive Officer)
Thank you, Webb. Good afternoon everyone and welcome to our third quarter 2026 earnings call. Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. I am very pleased to report that Pulmonx delivered total worldwide revenue of $22.8 million in the third quarter, marking our organization’s return to revenue growth with a 6% increase over the prior-year period. This milestone is evidence of our strategy in action. Our continued progress, built on consistent execution, leaves us increasingly confident in our ability to achieve our previously communicated revenue guidance of $90 million to $92 million for the full year 2026.
Beyond returning to growth, we continue to deliver on our commitment to significantly improve operating leverage by reducing our year-over-year adjusted EBITDA loss by nearly 60% to $3.5 million. Derrick will provide further details on this later in the call. I will focus my remarks today on our priorities for reaccelerating sales growth and advancing our market, expanding clinical initiatives. Our organization-wide emphasis on disciplined execution of the highest-impact selling activities, consistent with the near-to-far framework for market development we’ve outlined previously, continues to drive success for our commercial team and is responsible for the 7% year-over-year growth that we delivered this quarter in the U.S. To reiterate, this means setting up high-quality and efficient valve programs, engaging with and educating physicians who treat COPD and who are aligned with hospital systems offering Zephyr valves, concentrating our direct-to-patient efforts specifically on geographies with established treating centers that have the capacity to accommodate interested patients, and finally continuing to work together with our champions to educate service line administrators, ensuring that their programs are properly resourced and can provide a high-quality patient experience.
We are seeing evidence that our sharper focus on fewer initiatives is accelerating growth by prioritizing what matters most. With the right people, focus, and culture now in place in the U.S., we are confident that we have rebuilt a foundation for continued revenue growth. At the start of the year, our focus was on rebuilding our sales leadership team and filling open territories. We have been finding great talent and have presently filled substantially all open U.S. sales positions. Since the start of the year, we have seen broad-based increases in activity within our accounts that are associated with long-term growth, such as regular reviews of patients being considered, dedicated valve program coordinators, and systematic reviews of pulmonary function test results to identify potential patients.
In our digital advertising, we have been able to reduce our cost per patient engagement and are seeing increased yield of those engagements to successful treatment. All of these are markers of progress on our near-to-far strategy that we believe are contributing to our improved growth trajectory in the U.S. We have seen strong engagement in recent specialty society meetings. At the European Respiratory Society Congress in Barcelona, there was significant scientific focus on bronchoscopic lung volume reduction, including a panel symposium and 19 poster presentations, with particular interest in the patient pathway, patient experience, and multidisciplinary approaches to severe COPD management. At the American Association of Bronchoscopy and Interventional Pulmonology meeting in Denver, the five-year follow-up data from our LIBERATE pivotal trial was presented, and there were multiple sessions focused on emerging uses of endobronchial valves.
Shifting gears, we also remain centrally focused on expanding our addressable market through Aeroseal. Enrollment in our CONVERT2 IDE trial continues to progress, and we remain on track to complete enrollment in the back half of next year. We believe that Aeroseal represents a TAM expansion tool and a further revenue contributor, with the ability to expand our addressable market by roughly 20% globally. In closing, the third quarter marked an important milestone for Pulmonx as we returned to year-over-year revenue growth in both our U.S. and international businesses. While 2026 remains a year of execution and transition, we’re very pleased with our pace of progress, and we have greater conviction in our strategy to refine execution and further penetrate the substantial market opportunity for our products. The organization remains aligned and focused on our top priorities.
We’re confident in the underlying strength of this business and the opportunity in front of us, and in our ability to deliver growth and operating leverage as our year-over-year trends continue to strengthen. With that, I will turn the call over to Derrick to provide a more detailed review of our third quarter results.
Derrick Sung (Chief Operating Officer and Chief Financial Officer)
Thank you, Glen, and good afternoon everyone. I’m very pleased to report results that reflect meaningful progress in improving our financial trajectory and advancing Pulmonx towards sustained revenue growth and profitability. Total worldwide revenue in the third quarter of 2026 was $22.8 million, a 6% increase from $21.5 million in the same period last year on both a reported and constant currency basis. This marks our first return to global year-over-year growth since Glen and I rejoined the company last year.
U.S. revenue in the third quarter was $14.9 million, a 7% increase from $14.0 million during the same period of the prior year. The return to year-over-year growth for our U.S. business gives us confidence that our efforts to regain commercial momentum are starting to take hold. We added 8 new U.S. treating centers during the quarter. International revenue in the third quarter of 2026 was $7.9 million, a 5% increase from $7.5 million during the same period last year and an increase of 6% on a constant currency basis. Excluding China, our international markets remained strong and grew approximately 9% on both a reported and constant currency basis as compared to the same period last year. With the renewal of our China registration certificate now secured, we have restarted commercial activity in the region and expect to resume shipments to our distributor by early next year.
Gross margin for the third quarter of 2026 was 76% compared to 75% in the prior-year period. The year-over-year increase was driven by a lower mix of distributor sales in our international markets as well as cost efficiencies across our supply chain. Looking forward, we now expect gross margin for the full year 2026 to be approximately 77% as we expect these benefits to persist through the remainder of the year. Total operating expenses for the third quarter of 2026 were $24.9 million, an 18% decrease from $30.4 million in the same period last year. Non-cash stock-based compensation expense was $3.2 million in the third quarter of 2026. Excluding stock-based compensation expense, operating expenses in the third quarter of 2026 decreased 16% from the same period of the prior year. The decrease in operating expenses reflects the cost reduction efforts that we initiated at the start of the year, and we remain on track to meaningfully reduce our expense trajectory in 2026 while maintaining investments in our key growth initiatives.
To that end, we now expect full-year 2026 operating expenses to fall between $108 and $109 million inclusive of approximately $14 million of non-cash stock-based compensation expense. R&D expenses for the third quarter of 2026 were $4.9 million compared to $4.8 million in the third quarter of 2025. Selling, general, and administrative expenses for the third quarter of 2026 were $20.0 million compared to $25.6 million in the same period of the prior year.
I’m pleased to report that net loss for the third quarter of 2026 was $8.4 million, a reduction of 40% as compared to a net loss of $14.0 million in the same period of the prior year. Net loss per share was $0.19, down from a loss of $0.34 per share in the prior-year period. Adjusted EBITDA loss, which excludes non-cash stock-based compensation expense, for the third quarter of 2026 was $3.5 million compared to $8.2 million in the same period of the prior year.
This nearly 60% reduction in adjusted EBITDA loss further demonstrates the progress we’ve made in realizing near-term operating leverage, which We are now pairing with a return to top-line growth. Our balance sheet remains strong. Operating leverage combined with the restructuring of our credit facility earlier this year, which extends the maturity of our debt to 2031 and provides us with access to an additional $20 million in undrawn capital subject to certain revenue milestones, has left us well positioned to continue our positive trajectory. We ended September 30, 2026 with $52.7 million in cash and cash equivalents, a decrease of $3.2 million from June 30, 2026.
We now expect to burn roughly $22 million of cash for the full year 2026, which would be a 30% reduction from our cash burn in 2025. Finally, turning to our revenue outlook for 2026, we are reiterating our expectation of full-year 2026 revenue in the range of $90 million to $92 million. Having returned to year-over-year growth in both our U.S. and international businesses in the third quarter, we expect this trend to continue for the remainder of the year as our rebuilt U.S. sales team continues to ramp up productivity and as we continue to execute against our refocused commercial strategy.
In conclusion, we began 2026 with a clear plan to strengthen the trajectory of our business, and our return to year-over-year growth demonstrates that our plan is successfully unfolding. Our focus remains on ramping our sales organization, advancing our clinical programs, and delivering the financial leverage we’ve committed to. We continue to have great confidence in the strength of our business and in our team’s ability to execute. With that, I’d like to thank you all for your attention and we will now open the call for questions.
OPERATOR
As a reminder, to ask a question, you will need to press star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press star-11 again. Please stand by while we compile our Q&A roster. Our first question will be coming from the line of John Young of Canaccord. Your line is open.
John Young (Analyst)
Hi Glen and Derek, congratulations on the great results and thank you for taking the questions. Just to start on the U.S. business, Q3 beat the seasonality you usually see in the U.S., growing sequentially. Any way you could parse out where this growth came from in the U.S. in terms of DTC efforts, the ramping productivity, the reps? Anything you could quantify there would be great. Thank you.
Glen French (Chief Executive Officer)
Hey John, thank you for the question. Yeah, so it was, you know, the third quarter is always a bit of a mystery with regard to how much kind of headwind you’re going to get from the softness that comes from vacations and so forth. And I think in a healthy situation, we’ve been able to power through some of that seasonality from a quarter-to-quarter basis. So the strength relative to the second quarter was encouraging in that regard. We had opportunities to do procedures and we ended up executing those during the period.
I don’t believe that there’s any one thing that we can point to. We have more people filled in territories today than we did even in the prior quarter. So, you know, we’re moving in a positive direction. It’s difficult to parse out exactly how that strength presented itself, but it is encouraging to see that when I look at the third quarter relative to the second.
John Young (Analyst)
Okay, great. And then Glen, of those reps that you’ve hired and just looking at the entire U.S. sales force, what percentage today have been in their seats for more than six months now and how should we think about just where we are in the productivity curve today? Thanks again for taking the questions.
Glen French (Chief Executive Officer)
Yeah, well, thanks for the question, and the question just for those who were just wondering where this is coming from. About a year and a half ago, the mean and median tenure of our U.S. sales organization was about three years, and today the mean is about 1.8 years and the median is about 1.2 years because of the turnover that we realized. So, you know, that data, I’m not breaking it down in a six-month period. Things have been, I think, slightly strengthening as of late in terms of these numbers.
But yeah, we’re… The average tenure of our sales organization is a little bit on the junior side. We have a high degree of variability in the time it takes to bring somebody up to speed. We have examples of people who’ve been in their seat for a year who are absolutely crushing it. And so there’s some encouragement as it relates to some of the changes that we’ve made from a training perspective and also the success that we’ve had in several situations promoting sort of our junior reps that we call TAMs into quota-carrying territory managers.
So they sort of have a running start in that regard. So in any case, the tenure is short, but people are coming up to speed and we’re going to try to get those numbers to be moving up and to the right.
OPERATOR
And our next question will be coming from the line of Rick Wise of Stifel. Your line is open.
Annie (Analyst)
Hi, this is Annie on for Rick. Thanks for taking our questions. Maybe to start on the full-year guide, it looks like it implies you could exit 2026 growing at or close to double digits. So aside from China coming back online and easier comps, can you just talk about what other drivers are giving you confidence that underlying business growth can sort of continue to accelerate from here? And then I have a follow-up after that. Thanks.
Derrick Sung (Chief Operating Officer and Chief Financial Officer)
Yeah, hi Annie, this is Derek. Thanks for the question. So that’s right. You know, our guidance implies we are back to growth and continue to stay back to growth in Q4 of this year. Just to clarify one of your comments on China, you know, we’re currently expecting for us to resume shipments to our Chinese distributor by early next year. So it may be in the fourth quarter and maybe early next year. That variability is contemplated in our guidance. Really what’s driving our guidance, or what’s driving our growth in Q4, is similar to what Glen mentioned in Q3, which is a variety of factors.
But we are getting our rebuilt sales team up to speed. We have seats filled. We have refocused the commercial organization on some of our key priorities and those seem to be taking traction. So it’s really just a continuation of the momentum that we’ve been building in Q3 and getting this relatively new team up to speed and executing, in that we expect to continue to drive growth through the remainder of this year.
Annie (Analyst)
Okay, great. And thank you for the clarification on China. And then maybe to ask you another question, Derek, it would be sort of when you’re highlighting this cost restructuring initiatives and you’ve talked about how they’ve reduced recurring costs by 10% without even impacting any commercial and R&D investments. Just, I’m curious, as revenue growth improves, how should we think about spending from here? Like, can you keep it roughly flat year-over-year, or where will you need to reinvest and in what areas?
Derrick Sung (Chief Operating Officer and Chief Financial Officer)
Yes, that is another great question. Thanks, Annie. So we are quite comfortable right now with where our cost structure sits. As you can see in our numbers, our cash OPEX is down roughly $4 million, or 16%, on a year-over-year basis where we are now. I think we are comfortable that we have a cost structure that can continue to drive the growth that we need and provide the operating leverage that we’re currently realizing. I don’t expect that we will see meaningful increase in that cost structure moving forward.
You know, I think it maybe increases a little bit with inflation. But where we are today, we’re very comfortable with that cost structure and maintaining costs at this level. And moving forward, with our gross margins at 75-plus percent, I think we will certainly continue to see meaningful operating leverage driven through our P&L as we continue to grow our top line.
Annie (Analyst)
Great. Thanks so much.
OPERATOR
And our next question will come from the line of Frank Takanen of Lake Street Capital Markets. Your line is open, Frank.
Frank Takanen (Analyst)
Great. Thank you for taking the questions, and congrats, guys, on a good quarter. Wanted to ask maybe a little bit about how you’re thinking about next year. I know the Street is at about 8% growth versus the 2026 implied midpoint. Maybe talk through what are some of the key drivers. Obviously you made comments about China at the beginning of the year. My assumption is the salesforce productivity curve and then, if I remember correctly, potentially some OUS AeriSeal later in the year, and then maybe put all those pieces together and help us think about long-term growth.
Is this a high single-digit growth business, a low double-digit growth business, and help us kind of think about the long-term growth prospects. Thanks.
Derrick Sung (Chief Operating Officer and Chief Financial Officer)
Great. Thanks. Thanks, Frank. I appreciate your question. So first off, we’re very happy to have returned to growth in Q3. And as I talked about previously, our guidance for 2026 implies continued meaningful growth in Q4. We’re going to refrain from providing 2027 guidance and details on 2027 until our next earnings call. I will say that we are comfortable right now with where consensus currently sits, but we don’t want to get out in front of ourselves. And we are really focused right now on executing and finishing this year strong.
From a long-term perspective, we’ve said and continue to be committed to sustaining double-digit growth for our company moving forward. But again, having just returned to growth here in Q3, which, again, we’re very happy about, we think it’s premature to put a timeframe on that. So we’re not going to put a timeframe on that. But I think the trends that you’re seeing in Q3 and the trends that will continue into Q4 will continue into next year. And certainly we’re committed to growing our business in Q4 as well, or in 2027 as well.
Glen French (Chief Executive Officer)
Yeah. If I could just add to that, Frank, you asked about sort of the drivers and you asked about China being one of them, I just want to put into context here just to make sure everybody’s on the same page. Sixty-four percent of our business comes from the U.S. and 33% comes from Europe, and 3% right now comes from Asia Pacific. And when China comes back online, it’ll represent about 2% of our business. So I think we’ve been talking a lot about China on a quarter-over-quarter basis recently, and as a consequence, it may have become a focal point.
And the reason for that is that the combination of anticipating us going behind the moon for the better part of a year because of an administrative challenge that we had from a regulatory perspective and that coinciding with the onset of all the tariff discussion, we had very heavy preparatory China revenue that flowed in. And at one point, I think one quarter China represented 10% of our overall revenue. So I just want to put that in context. We expect to get back into China next year, but it’s, you know, 2% of our business.
It’s just not… It’s… And I don’t expect it’s… I mean, we’re cheering for China. We like that market. We do everything we can to grow it. But it is a distributor market. So it is not as quite as predictable; it’s certainly more lumpy than what you would see in one of our direct markets. And again, this last quarter we were 99% direct. So just to put all of that into perspective. So that’s the China thing. You asked about salesforce productivity. Yes. As people come up to speed, we would expect that we will see, you know, continued salesforce productivity, and we see that as a factor in driving our 2027 numbers. And you asked about AeriSeal, implying that we might have meaningful revenues outside the United States as a result of AeriSeal. And I just want to point out that though we do expect to be commercial with AeriSeal in 2027, we will be just…
We will be in Europe. So that’s a third of our business roughly overall on a global basis. And we will launch in what would be considered sort of a limited launch fashion, get everything up and running, tested, and then expand beyond that. So I would anticipate material revenues out of Europe with AeriSeal in 2028, not so much in 2027. You know, it’s not central to what we do. We do this very opportunistically. It’s very similar to the way that we’ve done it in the past. I think that we, and the mix between TMs and TAMs, the junior reps, is always sort of on the move. But I think overall I would imagine we’ll probably see modest increases in the number of territories we have when territories get super large either with regard to revenues and the complexity of managing them and/or situations where the geography is truly spectacular in terms of its breadth.
We have historically divided territories and I think we will continue to do that opportunistically where we believe that the addition of the cost associated with another sales resource will be more than paid for by fairly prompt realization of upside on the revenue front.
OPERATOR
And our next question will be coming from the line of Jason Bednar of Piper Sandler. Your line is open.
Jason Bednar (Analyst)
Hey, good afternoon. Thanks for taking the questions and nice work in the progress here. I actually want to start with building off of some of John’s questions earlier. Been wondering about if you have these newer reps that extend their tenure. Just how you think about the balance between onboarding new accounts, which often gets a lot of attention from all of us on the street, versus reactivating what might be some dormant accounts for you. How do you think about the strategy in striking that balance, Glenn?
What’s the highest return on time for those reps?
Glen French (Chief Executive Officer)
So we are obviously—we opportunistically open up new accounts and we guide to about 40 a year. I think we’re tracking a little bit ahead of that at this point. So that’s sort of a natural place. And those are revenues that come against a zero base as we grow our business. As we have always said with regard to penetrating this opportunity, the way that we do that is through same-store sales, and central to our current strategic focus, which we’ve described on a number of different fronts and we’ve abbreviated by referring to near to far.
The near to far strategy is about same-store sales and driving incremental revenues. With the newer reps—or I don’t know whether you were implying that they might be drawn to the shiny object that is often a new account versus growing an existing account—but I can tell you we’ve had a tremendous amount of experience with newer reps. Obviously people that we have brought in over the last year to fill rep positions and also a considerable number of folks that we’ve promoted from the junior rep position, and they’ve done a really nice job at reigniting accounts that had sort of gone a little—I wouldn’t call it dormant—but weren’t sort of in full stride maybe the way they were in the past, or hadn’t evolved to the next level.
And I think that they’ve done a spectacular job. One of the things that’s super encouraging to me right now is, if you look at—we’re divided into eight different regions—and the region right now that is number one in terms of dollar growth over prior year is 100% composed of people who started with the company as territory account managers, or junior reps. They’ve all been promoted into rep positions and they’re leading the charge right now. So I’m not worried about our newer people being able to focus.
The younger—sort of the least experienced people—tend to be coming up from the TAM position, and when we bring people in from the outside, they’re very seasoned, 10 years’ experience and so forth, and they know how to focus on building a business over time.
Jason Bednar (Analyst)
Okay, that’s helpful. Thanks, Derek. One for you and more focused on the cash side. I’m not sure if there’s going to be any oddities on the cash conversion cycle as you ramp China back up, but really just trying to get a sense of the pace at which cash burn narrows from here after 26 has been very successful. Certainly a few variables that play into it as we look ahead, but the pace of improvement we saw from 25 to 26, either percentage or absolute dollars, is that a reasonable way to think about the go forward for 27 or are there factors you’d have us consider when we model out cash?
Derrick Sung (Chief Operating Officer and Chief Financial Officer)
Yeah, that’s a great question, Jason. So I would think about it primarily from the perspective of, on a go-forward basis, as I mentioned before, we feel like our cost structure is in a pretty good place and expect our OPEX to increase by maybe a few percent moving forward but nothing significant. And so the operating leverage which drops down to our bottom line and really drives the cash leverage that you’re talking about, I think moving forward—kind of next year and beyond once we anniversary this year and the sort of one-time cost realignment that we’ve done—really comes from top-line growth.
So I think that should be your guide. And again, with gross margins being above 75%—and you mentioned China—we believe that even with China coming online, which is a modest drag on our gross margin but still highly profitable from an operating margin perspective, we expect to stay above 75% in terms of our gross margin profile. And so that gross profit that we generate as we grow our sales is going to be what drives our reduction in cash utilization moving forward, as well as our operating leverage.
And we do believe that with the capital that we have on hand and have access to, that we do have a very clear pathway to get to cash flow breakeven.
Jason Bednar (Analyst)
All right, very helpful.
OPERATOR
Thanks, Derek, and I would now like to turn the conference back to Glenn for closing remarks.
Glen French (Chief Executive Officer)
Thank you very much. First I’d like to express my greatest appreciation to all Pulmonx employees for their ongoing engagement and consistent execution of our plans. Simply put, it’s great to return to year-over-year revenue growth. We expect to continue to execute on our commercial strategy, advance our longer-term strategic priorities, and with a realigned cost structure deliver operating leverage. Thank you all for your time today and interest in Pulmonx.
OPERATOR
And this concludes today’s program. Thank you for participating. You may now disconnect.
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