Beyond Air (XAIR 3.45%), a medical device company focused on nitric oxide therapies, released its Q1 fiscal 2026 results on August 18, 2025. The key highlight was a 157% rise in GAAP revenue compared to the prior-year quarter, reaching $1.8 million. However, this result missed analyst estimates, which were set at $2.48 million. Earnings per share were $(1.53), short of expectations for a narrower $(0.96) GAAP loss, but improved from the prior year’s GAAP $(5.32) per share result. The quarter featured notable international sales for the first time, expanding global hospital placements and progress on regulatory submission for next-generation products. Despite these gains and sizable reductions in operating expenses, the quarter saw a larger net loss (GAAP) than forecasted, and cash reserves tightened, raising near-term liquidity questions.
| Metric | Q1 FY26 (ended Jun 30, 2025) | Q1 FY26 Estimate | Q1 FY25 (ended Jun 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(1.53) | $(0.96) | $(5.32) | 71.2 % |
| Revenue (GAAP) | $1.76 million | $2.48 million | $0.68 million | 157.8 % |
| Gross Profit (GAAP) | $0.16 million | $(0.33) million | $0.49 million | |
| Research and Development Expense | $3.1 million | $6.01 million | (48.6 %) | |
| Cash, Cash Equivalents & Marketable Securities (end of period) | $6.46 million | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
Business overview and key success factors
Beyond Air (XAIR 3.45%) is a medical technology company developing and commercializing systems that generate and deliver nitric oxide gas for use in hospitals. Its central platform is the LungFit product family, which generates nitric oxide from ambient air for respiratory treatments, eliminating the traditional need for high-pressure gas cylinders. The company’s products target conditions like persistent pulmonary hypertension in newborns and severe lung infections, and its pipeline extends to oncology and neurological disorders.
Recently, the company’s main focus has included regulatory approvals for its core device, increasing commercial adoption in both U.S. and international markets, and responsibly expanding into new therapeutic areas. Achieving robust regulatory clearances, accelerating clinical trial progress, and establishing distribution agreements for hospital placements are all key success factors. Financial stability and maintaining the company’s Nasdaq listing are also crucial as Beyond Air seeks to scale revenue while managing cash burn.
Quarter in review: International growth, product momentum, and expense reductions
The period marked significant GAAP revenue growth, driven by higher sales of the LungFit PH platform. U.S. adoption continued to anchor results, with the company expanding to 45 hospital clients and executed a national group purchasing agreement with Premier, Inc, granting access to about 3,000 hospitals. These agreements help streamline the sales process and can accelerate adoption by hospitals through pre-negotiated terms and broader access.
For the first time, Beyond Air recognized international sales of its LungFit PH device and consumable Smart Filters, following recent regulatory approvals in regions across Europe, the Middle East, and Asia. Distribution deals were signed in countries such as India, Italy, and Ukraine in the months leading up to June 2025, extending reach to over 30 countries and potential access to more than 2 billion people. Shipments to international distributors were targeted mostly for demonstration purposes, with expectations for direct hospital consumption and higher revenues in the second half of fiscal 2026 as local regulatory and tender processes advance.
Operating expenses, including research and development and selling, general, and administrative costs, fell sharply from the prior-year period. Notably, research and development expenses dropped by nearly half, while SG&A expenses decreased by 34.7% compared to Q1 fiscal 2025, primarily reflecting lower salaries, stock-based compensation, and reduced marketing outlays. Cost reductions and increased revenue translated to the first positive gross profit, reversing a gross loss in the year-ago period. Despite these savings, net loss remained sizable, reflecting ongoing investment to support international expansion and pipeline development.
The company made regulatory progress by submitting a premarket approval (PMA) supplement for its next-generation LungFit PH device to the U.S. Food and Drug Administration in June 2025. This newer model is designed for transportation, with a more compact form, improved interface, and lower maintenance, potentially opening emergency and critical care use cases. The company also advanced its pipeline of novel therapies, completing the first phase of a study using ultra-high concentration nitric oxide in solid tumor cancers, and reporting preclinical progress in neurological drug development through its NeuroNOS program. In this area, it secured orphan drug designation from the FDA for its lead compound in autism spectrum disorder, which can offer benefits like tax credits and market exclusivity.
Financial stability, Nasdaq compliance, and market dynamics
Cash burn remains a key concern. Net cash used for operations reached $4.7 million, resulting in an end-of-period cash and securities position of $6.5 million. Debt repayments are not required until October 2026, providing some short-term relief, but the company’s runway is highly dependent on meeting sales targets and maintaining spending discipline, with cash and equivalents of $6.5 million.
The company underwent a 1-for-20 reverse stock split in July 2025 to comply with Nasdaq’s minimum bid requirements. Management continues to describe its competitive advantage as stemming from LungFit’s cylinder-free nitric oxide supply, which offers logistical and cost benefits over cylinder-based solutions from established rivals such as Mallinckrodt, Linde Group, and Air Liquide. The company also began offering a “razor/razor blade” business model, where hospitals purchase devices and buy replacement consumable filters regularly. This approach aims to build recurring revenue and encourage broader adoption.
The company does not currently pay a dividend.
Looking at markets and competition, the company's main rivals in nitric oxide therapy remain focused on cylinder-based systems. Management noted no major shifts in hospital contract terms or market strategy from competitors’ recent launches, with its non-cylinder system providing a logistical edge, especially for international hospitals in regions with barriers to cylinder supply.
Outlook and what to watch
Management reiterated its full-year revenue guidance for fiscal 2026 in the range of $12 million to $16 million. Management expects the trajectory of sales to support sustained double-digit sequential revenue growth. Further efficiency in operating expenses is anticipated, with costs slated to rise only to support expanded revenue. However, after a quarter where revenues and earnings fell significantly short of expectations, pressure is on to deliver a much stronger back half to meet the high end of the outlook range.
No additional forward-looking profit or cash flow metrics were provided for the year. Management did not announce or declare a dividend for the quarter.
Looking ahead, investors and industry observers should monitor progress on key regulatory approvals, particularly the FDA review of the second-generation LungFit PH system as well as label expansions in cardiac surgery and emergency transport. Conversion of international distribution agreements into material hospital placements and revenue is crucial for sustaining growth. Sustained focus on operating cost control and improvements in cash burn will also be central in managing the company’s risk profile through the remainder of fiscal 2026.
XAIR does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
