Pulmonx Reports Third Quarter 2024 Financial Results

Pulmonx Corporation (Nasdaq: LUNG) (“Pulmonx” or the "Company"), a global leader in minimally invasive treatments for lung disease, today reported financial results for the third quarter of 2024 ended September 30, 2024.

Recent Highlights

• Achieved worldwide revenue of $20.4 million in the third quarter of 2024, a 15% increase over the same period last year
• Delivered $13.8 million in U.S. revenue in the third quarter of 2024, representing 17% year-over-year growth
• Realized gross margin of 74% in the third quarter of 2024
• Added 15 new Zephyr® Valve U.S. treatment centers in the third quarter of 2024
• 6-month data from the AeriSeal® CONVERT trial demonstrated 77.6% of patients with collateral ventilation experienced conversion
• Long-term data from the LIBERATE study demonstrated positive, durable benefits to patients treated with Zephyr® Valves out to at least 5 years

“I am pleased with our team’s continued execution across several key commercial and clinical initiatives designed to increase patient access to our life changing Zephyr Valve treatment,” said Steve Williamson, President, and Chief Executive Officer. “We remain confident in the strong underlying demand for Zephyr Valves. I believe our efforts to automate patient workflow through our LungTraX platform, drive awareness among patients and referring physicians, and expand our total addressable market will enable sustained commercial growth over the long-term.”

Third Quarter 2024 Financial ResultsTotal worldwide revenue in the third quarter of 2024 was $20.4 million, a 15% increase from $17.7 million in the third quarter of 2023. U.S. revenue was $13.8 million, a 17% increase from the third quarter of 2023. International revenue was $6.6 million, a 12% increase compared to the third quarter of 2023. The growth in revenue reflects continued commercial execution and global adoption of Zephyr Valve procedures.

Gross profit in the third quarter of 2024 was $15.0 million, compared to $13.0 million for the third quarter of 2023. Gross margin for the third quarter of 2024 was 74%, compared to 74% for the same period in 2023.

Operating expenses in the third quarter of 2024 were $29.2 million, compared to $28.2 million for the third quarter of 2023, representing an increase of 3%. The increase in operating expenses was primarily attributable to increased commercial investments.

Net loss in the third quarter of 2024 was $14.1 million, or $0.36 per share, compared to a net loss of $14.9 million, or $0.39 per share, for the same period in 2023.

Adjusted EBITDA loss in the third quarter of 2024 was $8.1 million compared to $9.0 million for the same period in 2023.

Cash, cash equivalents, and marketable securities totaled $107.8 million as of September 30, 2024.

2024 Financial OutlookPulmonx continues to expect revenue for the full year 2024 to be in the range of $81 million to $84 million.

The Company now expects gross margin for the full year 2024 to be approximately 74%.

Pulmonx now expects total operating expenses for the full year 2024 to fall within the range of $122 million to $124 million, inclusive of approximately $22 million of non-cash stock-based compensation.

Webcast and Conference Call DetailsPulmonx will host a conference call today, October 30, 2024, at 1:30 p.m. PT / 4:30 p.m. ET to discuss its third quarter financial results. A live webcast of the conference call will be available on the Investor Relations section of the Company's website at https://investors.pulmonx.com/. The webcast will be archived on the website following the completion of the call.

Use of Non-GAAP Financial MeasuresTo supplement Pulmonx’s condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, Pulmonx provides certain non-GAAP financial measures in this release as supplemental financial metrics. Non-GAAP financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with GAAP results, may provide a more complete understanding of factors and trends affecting Pulmonx’s business.

Constant currency calculations show reported current period revenues as if the foreign exchange rates remain the same as those in effect in the comparable prior year period. Pulmonx uses results on a constant currency basis as one measure to evaluate its performance. Pulmonx calculates constant currency by calculating current-year results using foreign currency exchange rates from the applicable comparable period in the prior year. Pulmonx generally refers to such amounts calculated on a constant currency basis as excluding the impact of foreign exchange or being on a constant currency basis. Pulmonx believes the presentation of results on a constant currency basis in addition to reported results helps improve investors’ ability to understand its operating results and evaluate its performance in comparison to prior periods. Pulmonx generally uses constant currency to facilitate management's financial and operational decision-making, including evaluation of Pulmonx’s historical operating results.

The Company defines Adjusted EBITDA as earnings before interest income or expense, taxes, depreciation and amortization and stock-based compensation and may also exclude certain non-recurring, irregular or one-time items not reflective of our ongoing core business operations, such as impairment charges. Management believes in order to properly understand short-term and long-term financial trends, investors may wish to consider the impact of these excluded items in addition to GAAP measures. Further, management uses adjusted EBITDA for strategic and annual operating planning. We believe these non-GAAP financial measures are useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance.

Reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is set forth in the tables below.

The non-GAAP financial measures used by Pulmonx should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. Because non-GAAP financial measures exclude the effect of items that increase or decrease the company's reported results of operations, management strongly encourages investors to review, when they become available, the Company's consolidated financial statements and publicly filed reports in their entirety. The Company's definition of non-GAAP measures may differ from similarly titled measures used by others.

Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect our strategy, operations or financial performance, and actual results may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. These forward-looking statements include, but are not limited to, statements regarding our commercial strategy to grow the adoption of our Zephyr Valve treatment and expand our global treatable market, our expectations regarding the demand for Zephyr Valves, account activity and productivity, our possible or assumed future results of operations, including long-term outlook, descriptions of our revenues, total operating expenses, gross margin, profitability, guidance for full year 2024, commercial momentum, physician engagement and awareness of the benefits of the Zephyr Valve, the adoption by customers of our LungTraX Platform, and overall business strategy. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Risk Factors section of Pulmonx’s public filings with the Securities and Exchange Commission (“SEC”), including the Quarterly Report on Form 10-Q filed with the SEC on August 2, 2024, available at www.sec.gov. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. All statements other than statements of historical fact are forward-looking statements. Except to the extent required by law, we undertake no obligation to update or review any estimate, projection, or forward-looking statement. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in our business.

About Pulmonx CorporationPulmonx Corporation (Nasdaq: LUNG) is a global leader in minimally invasive treatments for chronic obstructive pulmonary disease (COPD). Pulmonx’s Zephyr® Endobronchial Valve, Chartis® Pulmonary Assessment System, LungTraX™ Platform, and StratX® Lung Analysis Reports are designed to assess and treat patients with severe emphysema/COPD who despite medical management are still profoundly symptomatic. Pulmonx received FDA pre-market approval to commercialize the Zephyr Valve following its designation as a “breakthrough device.” The Zephyr Valve is commercially available in more than 25 countries, is included in global treatment guidelines and is widely considered a standard of care treatment option for improving breathing, activity and quality of life in patients with severe emphysema. For more information on the Zephyr Valves and the company, please visit www.Pulmonx.com.

Pulmonx®, AeriSeal®, Chartis®, StratX®, and Zephyr® are registered trademarks and LungTraX™ is a trademark of Pulmonx Corporation.

Investor ContactBrian Johnston Laine MorganGilmartin [e-mail]

Pulmonx CorporationConsolidated Statements of Operations(in thousands, except share and per share data)(Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Revenue	$	20,387			$	17,668			$	60,024			$	49,397
Cost of goods sold		5,361				4,639				15,613				13,045
Gross profit		15,026				13,029				44,411				36,352
Operating expenses
Research and development		3,744				4,220				13,569				14,184
Selling, general and administrative		25,411				23,985				75,129				70,184
Total operating expenses		29,155				28,205				88,698				84,368
Loss from operations		(14,129	)			(15,176	)			(44,287	)			(48,016	)
Interest income		1,269				1,490				4,016				4,027
Interest expense		(891	)			(893	)			(2,665	)			(2,327	)
Other (expense) income, net		(201	)			(262	)			179				(316	)
Net loss before tax		(13,952	)			(14,841	)			(42,757	)			(46,632	)
Income tax expense		192				59				462				323
Net loss	$	(14,144	)		$	(14,900	)		$	(43,219	)		$	(46,955	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.36	)		$	(0.39	)		$	(1.11	)		$	(1.24	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		39,276,447				38,119,824				38,953,032				37,838,822

Pulmonx CorporationCondensed Consolidated Balance Sheets(in thousands)(Unaudited)
	September 30, 2024				December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	63,312			$	83,547
Restricted cash		258				237
Short-term marketable securities		44,467				33,555
Accounts receivable, net		11,670				12,105
Inventory		16,959				16,743
Prepaid expenses and other current assets		4,263				4,235
Total current assets		140,929				150,422
Long-term marketable securities		—				14,390
Long-term inventory		2,266				2,580
Property and equipment, net		2,983				4,028
Goodwill		2,333				2,333
Intangible assets, net		—				31
Right of use assets		18,236				3,406
Other long-term assets		654				591
Total assets	$	167,401			$	177,781
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	4,576			$	1,497
Accrued liabilities		12,779				16,234
Income taxes payable		74				93
Deferred revenue		109				104
Short-term debt		99				2,155
Current lease liabilities		663				3,074
Total current liabilities		18,300				23,157
Deferred tax liability		129				114
Long-term lease liabilities		17,910				1,106
Long-term debt		37,137				35,089
Total liabilities		73,476				59,466
Stockholders' equity
Common stock		39				39
Additional paid-in capital		545,732				526,797
Accumulated other comprehensive income		2,534				2,640
Accumulated deficit		(454,380	)			(411,161	)
Total stockholders' equity		93,925				118,315
Total liabilities and stockholders' equity	$	167,401			$	177,781

Pulmonx CorporationReconciliation of Reported Revenue % Change to Constant Currency Revenue % Change(in thousands)(Unaudited)
	Three Months Ended September 30,
		2024				2023			% Change				FX Impact %				Constant Currency % Change
United States	$	13,836			$	11,838				16.9	%			—	%			16.9	%
International		6,551				5,830				12.4	%			0.4	%			12.0	%
Total	$	20,387			$	17,668				15.4	%			0.1	%			15.3	%

	Nine Months Ended September 30,
		2024				2023			% Change				FX Impact %				Constant Currency % Change
United States	$	40,586			$	32,197				26.1	%			—	%			26.1	%
International		19,438				17,200				13.0	%			0.9	%			12.1	%
Total	$	60,024			$	49,397				21.5	%			0.3	%			21.2	%

Pulmonx CorporationReconciliation of Net Loss to Non-GAAP Adjusted EBITDA (in thousands)(Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
GAAP Net loss	$	(14,144	)		$	(14,900	)		$	(43,219	)		$	(46,955	)
Depreciation and amortization		376				415				1,199				1,261
Stock-based compensation		5,839				6,003				17,432				16,503
Impairment of capitalized software development costs		—				—				1,717				—
Interest (income)/expense, net		(378	)			(597	)			(1,351	)			(1,700	)
Provision for income taxes		192				59				462				323
Adjusted EBITDA	$	(8,115	)		$	(9,020	)		$	(23,760	)		$	(30,568	)