Pulmonx beats Q2 EPS estimates by 16% on Zephyr valve sales

Pulmonx Corp. beat Q2 earnings estimates by 16% as the Zephyr endobronchial valve maker reported a narrower-than-expected loss of $0.24 a share.

"We continue to see strong adoption of Zephyr valves as physicians expand their emphysema treatment programs," Chief Executive Officer Glen French said in the earnings release.

Revenue reached $22.76 million for the three months ended June 30, slightly below the $22.85 million consensus estimate. The company narrowed its net loss to $0.24 per share from $0.29 a year earlier, beating the average analyst estimate of -$0.29 compiled by Bloomberg. The 16% improvement in per-share loss came as the company held operating expenses relatively flat while growing revenue by roughly 8% year over year.

The Zephyr endobronchial valve is a minimally invasive implant that blocks hyperinflated lung segments in patients with severe emphysema or chronic obstructive pulmonary disease, allowing healthier portions of the lung to function more effectively. The device received FDA pre-market approval in 2018 based on the LIBERATE study, which showed significant improvements in lung function and exercise tolerance compared to standard medical therapy. Since commercial launch, more than 100,000 Zephyr valves have been implanted worldwide across more than 500 treatment centers.

Pulmonx competes with Olympus Corp.'s Spiration Valve System, which received FDA 510(k) clearance, as well as traditional surgical lung volume reduction procedures that carry higher morbidity rates and longer recovery times. The company's competitive advantage lies in its proprietary Chartis Pulmonary Assessment System, which helps physicians identify suitable candidates for valve therapy — a critical step that determines clinical outcomes.

Pulmonx ended the quarter with approximately $60 million in cash and equivalents, giving the company a runway into 2027 without requiring near-term capital raises. The company trades at roughly 2.5 times trailing revenue, a significant discount to the broader medical device sector's average multiple of about 5 times, reflecting investor skepticism about the timeline to profitability. Shares have declined approximately 40% over the past 12 months, valuing the company at around $150 million.

The Q2 results suggest the Zephyr valve's adoption trajectory remains intact as the company works toward operating breakeven. Investors will be watching for procedure volume data and any updates on Pulmonx's international expansion, particularly in Japan and China, where COPD prevalence is high and the Zephyr valve has received regulatory clearance. The company faces the challenge of convincing more pulmonologists to adopt the technology, a process that requires both clinical education and reimbursement support from insurers. For now, the narrower loss and steady revenue growth provide a foundation for that expansion story.

This article is for informational purposes only and does not constitute investment advice.