Pulmonx (LUNG) investor relations material

Operational performance and growth initiatives

• International markets, especially Europe and China, have shown strong double-digit growth, with new leadership and community engagement driving momentum.

• U.S. revenue growth has slowed due to hospital capacity constraints and workflow variability, but multiple operational programs and tools have been implemented to address these issues.

• Direct-to-patient advertising and partnerships, such as with Jaeger for pulmonary function tests, are expanding patient identification and funneling more candidates into treatment.

• The LungTraX™ platform and virtual navigator services are increasing patient throughput, with some accounts doubling procedure volumes.

• AeriSeal® clinical trial is expected to complete enrollment by end of 2026, potentially expanding the treatable patient base by 20%.

Financial outlook and margin management

• Gross margin was impacted by lower-margin China distributor sales in the first half, but is expected to average 74% for the year as U.S. sales increase in the second half.

• OpEx guidance was tightened, with efficiencies found in non-revenue generating hiring and vendor management, while growth initiatives and clinical trials remain funded.

• Cash management remains strong, with cash burn aligned to sales growth and a runway of at least a couple of years.

Market dynamics and competitive landscape

• International growth is expected to remain strong, with China and Japan highlighted as significant future contributors; Japan's commercial launch is expected in 2027 after study completion.

• U.S. growth is expected to accelerate as operational initiatives take effect, with long-term growth targets of 20% annually over three to five years.

• Competitive threats from new device entrants are seen as early-stage and not immediately impactful; pharmaceutical therapies are not targeting the same patient segment.