Nyxoah (NYXH) Q2 2026 earnings call transcript

Thank you. Good afternoon, everyone, and I welcome you to our second quarter 2026 earnings call. Participating from the company today will be Olivier Talman, Chief Executive Officer, and John Landry, Chief Financial Officer. During the call, we will discuss our operating activities and review our second quarter 2026 financial results released after U. S. market closing today, after which we will host a question and answer session.

The press release can be found on the investor relations section of our website. This call is being recorded and will be archived in the events section on the investor relations tab of our website. Before we begin, I'd like to remind you that any statements that relate to expectations or predictions of future events, market trends, results, or performance are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions.

These forward-looking 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. All forward-looking statements are based upon current available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these forward-looking statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our Form 20F, which was filed with the Securities and Exchange Commission on March 26, 2026.

With that, I will now turn the call over to Olivier.

Thank you, Pearson. Good day, everyone, and thank you for joining us for our second quarter 2026 earnings call. Let me start with two highlights. Q2 was a strong quarter for Nixola across multiple fronts, and I'm pleased with the progress we are making in the business.

First, the strong commercial execution of our U. S. launch delivered the second consecutive quarter of more than 20% sequential U. S. revenue growth. U. S. net revenue was 5.2 million euros, up 22% over the first quarter of 2026. We also posted another strong quarter of revenue growth in our international business at 19% over the first quarter of 2026.

On a worldwide basis, net revenue was 7.7 million euros in the second quarter, representing 21% sequential growth over the first quarter. Second, before doing a deeper dive on the US commercialization results, let me provide our high-level leading US commercial indicators. Our US leading commercial indicators continued to strengthen across the board. Entering quarter two with 40 fully trained sales apps, we can cover 200 of the top 400 high-volume Hipparossal Nervous Stimulation Accounts in the U. S. We have trained 55 new surgeons and activated 89 new accounts in this quarter, doubling our active account base to 180. We entered the third quarter with 427 patients actively under prior authorization, a 77% increase over the prior quarter. Our prior authorization of approval rate remains at 100% for both commercial payers and patients submitted via the WISER program.

On the reimbursement front, CMS announced meaningful proposed increases for AGNS overall, including GENIO specifically. CMS proposed facility reimbursement would increase OPPS facility payment by 12% and ASC, Ambulatory Surgical Centers, by 15% for 2027. These increases would further strengthen the economic value of the GENIO procedure for the facilities. From a financing perspective, we significantly strengthened our balance sheet by securing $110 million during the quarter, taking away the financial overhang. This new capital will provide us with the resources needed to further accelerate Gineo US commercialization ramp and implement the growth initiatives focused on increasing the patient funnel.

Now digging in deeper into the US commercialization. The US commercial launch remains the primary driver of our long-term company success. Our US-focused strategy remains unchanged and centered on driving strong GENIO adoption in the top 400 high-volume AGNS accounts, which represent approximately 70% of the total US AGNS volume. We hired and trained 50 new sales reps in the first quarter, bringing us to 40 sales territories as of April 1st. And in Q2, we had access to 200 of the top 400 high volume AGNAS accounts.

Specifically, we trained 55 new surgeons in Q2, bringing the total to 262 surgeons trained on the Gineo system. We activated 89 new accounts in Q2, roughly doubling our active account base, bringing the total to 180 active high-volume AGNAs accounts. And finally, we had 427 patients actively under prioritization submissions entering the third quarter of 2026. This is a 77% increase over the previous quarter.

Doubling our active account base to 180 high-volume agenetic accounts in a single quarter demonstrate that both facilities and physicians are embracing GENIO and confirms the success of our patient referral pathway by sleep physicians. With 427 patients actively under prioritization exiting Q2, this gives us first-hand confirmation of increased patient demand and is a key leading indicator for Q3 of the acceleration of our patient pipeline, giving us confidence in continued launch momentum entering Q3.

Next, reimbursement. There is now full clarity for GENIO reimbursement with the dedicated Medicare C code C8011 for GENIO. Our commercial payer coverage remains broad and stable using existing CPT codes and our market access team continues to execute strong on supporting prior authorization submissions. Through our GENIO Access Program, we continue to see 100% approval rates of commercial payers, Medicare Advantage, and Medicare patients under the WISER Program. Commercial payers are still the majority of our business, making up approximately 85% of it. The recent direction of CMS proposed rule for 2027, AGNS reimbursement, would positively impact the clinical and economic value of the GENIO procedure in OPPS and ASCs. Specifically CMS is proposing to increase hospital outpatient reimbursement for the GENIO procedure under C code C8011 from to or an increase of approximately 12 CMS is also proposing to increase ambulatory surgical centers, the ASCs, reimbursement from $27,563 to $31,722, or an increase of approximately 15%.

These proposed increases are amongst the strongest within APC 5465, the Level 5 Neuromodulation category. Finally, in the upcoming September CPT editorial panel meeting, AAO HNS, supported by NICSOA as an industry member, will continue the discussion of a comprehensive AGNS coding. As a consequence, NICSOA did not submit GENIO for a dedicated Category 1 CPT code on the September CPT editorial panel meeting agenda. Let me now focus a little bit more on our recent Investor Day. On July 8th, we had the pleasure of hosting our Investor Day, where we focused on bringing together leading ENT surgeons and sleep physicians alongside independent reimbursement experts. The surgeons shared their first-hand implant experience with Genio, and both surgeons and and sleep physicians confirmed strong airway openings on activation.

These real-time experiences are the key drivers behind GENIO's adoption in their practice. The reimbursement experts presented their view of the AGNS reimbursement landscape, confirming the durability of long-term coverage and GENIO's strong positioning under every future coding scenario. The event reinforced the two pillars of our US launch, growing physician adoption and a solid reimbursement foundation. For those who missed it, the replay is available on our investor relations website. International. Before turning to the financial, let's look at the international markets. We accelerated revenue in the second quarter, resulting in a 19% growth quarter over quarter. Overall, in the first half of 2026, we almost doubled our international revenue versus the first half of 25, driven by our focused commercial approach in target geographies.

In Germany specifically, as the largest AG&S market outside the US, we first entered this market back in 2023 as our commercial proof of concept resulting today in a stable agns market share of up to 25% overall with a market share in our top high volume accounts of above 50% in the UK we have the market at the same time as competition in late 2024 and in our initial accounts we are seeing market shares above 50% as well. In the Middle East, Nixor is the sole AG&S provider and we continue to further expand. And we recently entered the market in the Netherlands. Our strategy remains unchanged. Exercise financial discipline in these markets with a goal of driving growth and breaking even in our international business, which we've been able to do already in Germany.

With that, I will now turn the call over to John for a detailed overview of our financial results.

Thank you, Olivier. So the second quarter of 2026, worldwide net revenue was 7.7 million euros, which represents 21% sequential growth compared to the first quarter of 2026 and compares to 1.3 million euros in net revenue in the second quarter of 2025. U. S. net revenue was 5.2 million euros, representing 22% sequential growth over the first quarter of 2026.

International net revenue was 2.5 million euros, representing 19% sequential growth over the first quarter of 2026. For the six months ended June 30, 2026, worldwide net revenue was 14 million euros, compared to 2.4 million euros for the six months ended June 30th, 2025, an almost six-fold year-over-year increase, primarily driven by our U. S. commercial launch. Gross margin in the second quarter of 2026 was 60% compared to 57% in the first quarter of 2026. Research and development expenses were 9.5 million euros in the second quarter of 2026 compared to 10.1 million in the second quarter of 2025 due to a decrease in product development expenses. SG&A expenses were 15.6 million euros in the second quarter of 2026 compared to 10.7 million euros in the second quarter of 2025.

This increase was primarily driven by the continued build-out of our U. S. commercial organization. Total operating loss of the second quarter of 2026 was 20.6 million euros and remained relatively flat compared to 19.9 million euros in the second quarter of 2025. Please note that our operating expenses in the second quarter of 2026 included a one-time non-cash share-based compensation charge of approximately 900,000 euros due to the repricing of employee equity incentive awards.

Non-GAAP cash operating expenses were 21.8 million euros or essentially flat compared to 21.7 million euros in the first quarter of 2026. Non-GAAP cash operating expenses increased from 19.8 million euros in the second quarter of 2025, primarily due to the investments in our U. S. commercial organization. During the second quarter of 2026, we secured $110 million in aggregate financing, the $95 million equity raise, and the drawdown of the second tranche of our EIB loan in the amount $15 million. This additional cash removes the near-term financial overhang that had been a concern for investors and gives us capital to scale our U. S. commercial business. As of June 30, 2026, cash and cash equivalents plus financial assets total approximately 97.8 million euros.

Now I'll turn to guidance. For the full year 2026, our full year revenue guidance remains unchanged and we continue to expect worldwide net revenue in the range of 36 million euros to 40 million euros. We continue to expect gross margin in the range of 60% to 62%. We now expect total operating expenses in the range of 99 million to 102 million euros, an increase of 1 million due to the one-time share-based compensation charge recorded in the second quarter.

We continue to expect total non-GAAP cash operating expenses in the range of 88 million euros to 90 million euros.

Non-GAAP cash operating expenses reflect expected total operating expenses, less non-cash items such as depreciation, hammerization, and share-based compensation expense. We continue to target long-term gross margins above 80% and believe our disciplined approach to operating expenses supports revenue breakeven below $150 million in revenue.

With that, I'll now turn the call back over to Olivier.

Thank you, John. As we enter the second half of 2026, our priorities remain clear. First, accelerate investment in our U. S. commercial organization in quarter three by further expanding from 40 to 55 territories and implement growth initiatives focused on increasing the patient funnel.

Second, continue to execute on a focused U. S. loan strategy targeting the top 400 high volume AGNs accounts. And third, maintain a disciplined financial approach to OPEX and direct investments towards revenue growth drivers. Before closing I would like to thank all the NICSOA employees for their contribution in making the second quarter once more a successful lot With that I would now like to open the line for Q Thank you, ladies and gentlemen.

Sure, absolutely. I'll start with that part. First, Kyle, I guess with regard to what we see in the funnel with regard to, you know, new surgeon training, VAC committee approvals, as well as the number of preauthorization patients that are in that position entering Q3, we're comfortable with the guidance for the full year of 36 million to 40 million euros, which reflects, based on our first half revenue, a range of 22 to 26 million euros for the second half of 2026. We would expect that revenue in the U. S. to grow sequentially from Q2 to Q3, and then again from Q3 to Q4. And then from an international perspective, we expect it to be consistent in the back half of the year as compared to the first half of the year.

Okay, great. That's helpful. And then maybe just as my second question, on the access study, and we talked about this a bit on the investor day, just wanted to kind of check in to make sure like everything kind of went well. I think you were planning to wrap patient follow-up shortly after the investor day, which would have been a couple weeks ago. And just to kind of confirm if you're still expecting initial data, I think you were saying at or around the ISSS meeting, and if you're still on track for the PMA supplement for Q4 label expansion early next year. Thanks.

Thank you for the question. I'm happy to also share here some very positive news. So we are finalizing the 12-month data as we speak, and we are preparing for the PMA supplement submission. For ISSS, we just received the news that the podium presentation has been accepted for the CCC data, So we will release all the CCC data during the IEEE Congress on podium. I invite everyone to attend and to be present.

And then when it comes to the submission, also there we stay fully on plan. So we are finalizing our 12-month data. We are planning to get them submitted end of Q3, latest beginning Q4. Then there is the 180 days FDA review, and we accept, as we disclosed already previously, somewhere during the end of Q1, maybe beginning Q2 latest in 2027, a positive result, and also CDC added to our label.

Great. Thank you, guys. Thank you.

Hi, Suraj.

Yes, and this is a very interesting question. So first of all, with 427 submitted by authorization entering quarter three, Just to give some color, this is a significant increase of 77% compared to the number of privatizations we had entering Q2. In absolute numbers, entering Q3, 427. If we go back in time, entering Q2, we had 241. Now, that being said, the next question is how fast can a privatization result into an actual implant? And I'm sure if you do the math on sales, so we end with approximately 240 devices that were sold.

And if you then calculate Q1, we had roughly 240 pilotizations that were transferred in Q2. So is this exact science? No, it's not. But ballpark, we see that the majority, as we consistently communicated, that we transfer will also result in actual implants in the next quarter. I hope this is answering the question, Suresh.

Yes. So another very interesting question. So we were talking about having, on average, 15% market share in the sites where we are present when we exited in fact Q1 we can see that overall we are maintaining this 15% but note that we have opened 89 new sites in Q2 which are fresh with which are gaining their first experience but we can also report that the longest standing accounts of showing market shares above 15% and I'm even happy to share that our top account is passing already the 44% of market share and this is really promising if you see how fast we are opening new accounts and then also if you see all the long-standing accounts due to reordering and confidence in GEO or showing stronger growth in market share than the 15% got it hey Olivia one last question forgive me um did I hear you correctly you'll have not paired with INSPIRE for the C code submission for the September editorial meeting?

Yes, this was correct. So we are very transparent in this. We participate as an industry partner. We are supporting also the discussion, the lead of the AAO HNS, and they are talking about a comprehensive coding. So for September, we continue to support this approach and we did not submit it for the dedicated school.

Yeah. So, David, thank you for the question. And First of all, we have a focused launch strategy focused on the top 400 high volume AGNs accounts in the U. S. To your point, we showed very strong results in Q2 by doubling the number of active accounts, bringing it to 180. And to answer your question, we have to link this also with the number of territory managers or sales reps that we are having. And we have 40 entering Q2. so I communicated already a couple of times that on average or sales rep they have five of those high-volume accounts so with 40 reps it's easy mathematics you can cover up to 200 high-volume sites today exiting Q2 we already have 180 who are active knowing going forward we they also are hiring again a new cohort of 15 sales reps so that will bring our total to 55 you do the same met so you see that we can go in quarter three quarter four up to 225 to 230 in planting high-volume accounts with our current sales force so that's one thing that we are doing well the next thing also asking on productivity in our strategy the strategy is going deep and therefore I'm extremely pleased also to see that we capture overall in all of accounts and average already of 15% market share but I think more important is that we can see the account that were opened up already in Q4 or early Q1 that they are already going beyond this 15% market share and that we already have a top account where we go above 40% market share I mean all this is confirming that facilities surgeons and patients are embracing Gino and I think that is the key takeaway message we are growing extremely fast in the volume of accounts we also have more than 262 surgeons trained I mean again showing the excitement of surgeons so what to expect in the second half the quote will be more or less reaching 225 to 230 accounts in the second half of 26 and then as we continue investing in hiring more salespeople this goal so goes hand in hand with having more accounts that we will open but it's not of strategy to open 1,000 accounts or strategy stays to get as fast as we can to the 400 high volume in planting accounts that we see across the US.

Yep, sure. Absolutely, David. Yeah, so for the back half of the year from a gross margin improvement perspective, you know, we have ongoing projects that continue to drive gross margin up. These are smaller in nature. For one example, the ES, which is a component of the device, that's going to be removed in the second half of the year in the U. S. , so that's going to help drive gross margin up to those levels. We continue to increase our yields over the course of the year as we continue to produce products. So those are the near-term drivers for 2026 in the back half of the year. In terms of OpEx spread, I would anticipate in the third quarter you'll see a bit of a sequential step up from the second quarter, but more of the expenditures will be coming in the fourth quarter when we have a full quarter's worth of U. S. sales rep expansion baked into that fourth quarter.

So it's been a step up Q3 expense-wise, but more of it in Q4 to get to that full year 88 to 90 number, cash opx.

You're welcome. Thank you.

Yeah, so definitely, Joe. So first of all, I would like to start by pointing out that today the environment for repulsional knowledge stimulation reimbursement is stable and supportive, and that with Genio we have a dedicated code the C8011 that is in place also for commercial payers we see that there is clarity on the CBT code that they are using and we're also seeing that we have 100% power authorization so that is the stalling base next I do think that the discussions that you are that are ongoing in the editorial panel are extremely constructive we see that the a a a ns is really taking the lead and is also trying to find and to discuss together with AMA finding the most optimal solution for AGNL in the future and coming to a comprehensive coding is part of this strategy.

If that strategy is followed, the first comprehensive coding clarity would be effective in play January 1st, 2029. Now, going back to competition, yes, they went and they submitted in September for a dedicated code. They also did the same thing in April. Just as a reminder, in April, this was rejected, so they have resubmitted. Our strategy within GEMEO stays and remains unchanged. We support the AEO ANS, and we do want to follow and give our full support in also going to a comprehensive AGNS coding. Because there is a coding in play. There is no risk at all. And in moving forward, we will see how the future will further evolve.

So as I mentioned also in earlier calls, we have a high demand of salespeople who want to join Nickso up. And this has continued. So we are currently actively doing the interview process. So we expect that we have all 15 onboarded definitely by the end of quarter three. We will start doing their training beginning Q4 so that we can still get them active selling even during Q4 and definitely have a full selling and trained sales force of 55 people going in January 1st, 2027. Great. Thank you. Thank you.