Pulmonx Corp

Previous wording

We market and sell our products in the United States through a direct sales organization. Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across approximately 500 high-volume hospitals in the United States. We are expanding our commercial operations in the United States while continuing to foster our international growth. We employ both direct and distributor-based sales models, with 89% of our revenue generated in markets where we sell directly for the three months ended March 31, 2025.

Current wording

We market and sell our products in the United States through a direct sales organization. Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across approximately 500 high-volume hospitals in the United States. We are expanding our commercial operations in the United States while continuing to foster our international growth. We employ both direct and distributor-based sales models, with 91% of our revenue generated in markets where we sell directly for the six months ended June 30, 2025.

Previous wording

To date, we have financed our operations primarily through the sale of our products, the sale of equity securities, and debt financing arrangements. We have devoted substantially all of our resources to research and development activities related to our solution, including clinical and regulatory initiatives to obtain marketing approval, sales and marketing activities, and investing in general and administrative infrastructure. We generated revenue of $22.5 million, with a gross margin of 72.5% and a net loss of $14.4 million, for the three months ended March 31, 2025 compared to revenue of $18.9 million, with a gross margin of 74.7% and a net loss of $13.7 million, for the three months ended March 31, 2024. As of March 31, 2025, we had an accumulated deficit of $482.0 million, cash, cash equivalents and marketable securities of $88.7 million, and $37.2 million of outstanding term loans and credit agreements, net of debt discount and debt issuance costs.

Current wording

To date, we have financed our operations primarily through the sale of our products, the sale of equity securities, and debt financing arrangements. We have devoted substantially all of our resources to research and development activities related to our solution, including clinical and regulatory initiatives to obtain marketing approval, sales and marketing activities, and investing in general and administrative infrastructure. We generated revenue of $23.9 million, with a gross margin of 72.1% and a net loss of $15.2 million, for the three months ended June 30, 2025 compared to revenue of $20.8 million, with a gross margin of 73.7% and a net loss of $15.3 million, for the three months ended June 30, 2024. For the six months ended June 30, 2025, we generated revenue of $46.4 million, with a gross margin of 72.3% and a net loss of $29.6 million, compared to revenue of $39.6 million, with a gross margin of 74.1% and a net loss of $29.1 million, for the six months ended June 30, 2024. As of June 30, 2025, we had an accumulated deficit of $497.2 million, cash, cash equivalents and marketable securities of $84.2 million, and $37.1 million of outstanding term loans and credit agreements, net of debt discount and debt issuance costs.

Previous wording

We intend to continue to promote awareness of our solution through training and educating physicians, pulmonary rehabilitation centers, key opinion leaders and various medical societies on the proven clinical benefits of Zephyr Valves. In addition, we intend to continue to publish additional clinical data in various industry and scientific journals and online and to present at various industry conferences. We plan to continue building patient awareness through our direct-to-patient marketing initiatives, which include advertising, social media and online education. We also intend to continue helping physicians in their outreach to patients and other healthcare providers. These efforts require significant investment by our marketing and sales organization, and vary depending upon the physician’s practice specialization, and personal preferences and geographic location of physicians, pulmonary rehabilitation centers and patients. In order to grow our business, we will need to continue to make significant investments in training and educating hospitals, physicians and patients on the advantages of our solution for the treatment of severe emphysema.

Current wording

We intend to continue to promote awareness of our solution through training and educating physicians, pulmonary rehabilitation centers, key opinion leaders and various medical societies on the proven clinical benefits of Zephyr Valves. In addition, we intend to continue to publish additional clinical data in various industry and scientific journals and online and to present at various industry conferences. We plan to continue building patient awareness through our direct-to-patient marketing initiatives, which include advertising, social media and online education. We also intend to continue helping physicians in their outreach to patients and other healthcare providers. These efforts require significant investment by our marketing and sales organization, and vary depending upon the physician’s practice specialization, and personal preferences and geographic location of physicians, pulmonary rehabilitation centers and patients. In order to grow our business, we will need to continue to make significant investments in training and educating hospitals, physicians and patients on the advantages of our solution for the treatment of severe emphysema. We are also working to improve the efficiency of our commercial initiatives to accelerate patient identification and treatment conversion.

Previous wording

We currently derive substantially all of our revenue from the sale of our products to hospitals and distributors. We market and sell our products through a direct sales organization in the United States and through direct sales and several third-party distributors in select markets outside the United States. We currently generate most of our revenue from the sales of Zephyr Valves and delivery catheters. We also generate a smaller amount of our revenue from our Chartis System, which is comprised of sales of the balloon catheters, usage fees and sales of the Chartis console. The LungTraX Platform, which is used to identify patients eligible for treatment with Zephyr Valves, has not independently generated any revenue for us. We had one customer that accounted for 10% of our revenue for the three months ended March 31, 2025. No customer accounted for more than 10% of our revenue for the three months ended March 31, 2024.

Current wording

We currently derive substantially all of our revenue from the sale of our products to hospitals and distributors. We market and sell our products through a direct sales organization in the United States and through direct sales and several third-party distributors in select markets outside the United States. We currently generate most of our revenue from the sales of Zephyr Valves and delivery catheters. We also generate a smaller amount of our revenue from our Chartis System, which is comprised of sales of the balloon catheters, usage fees and sales of the Chartis console. The LungTraX Platform, which is used to identify patients eligible for treatment with Zephyr Valves, has not independently generated any revenue for us. No single customer accounted for more than 10% of our revenue during the six months ended June 30, 2025 and June 30, 2024.

Previous wording

Other income, net primarily consists of foreign currency exchange gains and losses.

Current wording

Other (expense) income, net primarily consists of foreign currency exchange gains and losses.

Previous wording

Revenue increased by $3.7 million, or 19.5%, to $22.5 million for the three months ended March 31, 2025, compared to $18.9 million for the three months ended March 31, 2024. The sale of products in the United States increased by $1.3 million to $14.2 million for the three months ended March 31, 2025, compared to $12.9 million for the three months ended March 31, 2024. The sale of products in international markets increased by $2.3 million to $8.3 million for the three months ended March 31, 2025, compared to $6.0 million for the three months ended March 31, 2024. The increase in revenue was primarily attributable to the continued volume growth of Zephyr Valve sales in the United States and in international markets.

Current wording

Revenue increased by $3.1 million, or 14.8%, to $23.9 million during the three months ended June 30, 2025, compared to $20.8 million during the three months ended June 30, 2024. The sale of products in the United States increased by $0.8 million to $14.7 million during the three months ended June 30, 2025, compared to $13.9 million for the three months ended June 30, 2024. The sale of products in international markets increased by $2.2 million to $9.1 million during the three months ended June 30, 2025, compared to $6.9 million for the three months ended June 30, 2024. The increase in revenue was primarily attributable to the continued growth of Zephyr Valve procedure volumes in the United States and in international markets.

Previous wording

Cost of goods sold increased by $1.4 million, or 29.7%, to $6.2 million for the three months ended March 31, 2025, compared to $4.8 million for the three months ended March 31, 2024. The increase was mainly due to an increase in the number of products sold and increased manufacturing costs as we invested to support anticipated growth. Gross margin decreased by 2.2% to 72.5% for the three months ended March 31, 2025, compared to 74.7% for the three months ended March 31, 2024. The decrease in gross margin was primarily due to geographic mix during the three months ended March 31, 2025.

Current wording

Cost of goods sold increased by $1.2 million, or 21.5%, to $6.7 million during the three months ended June 30, 2025, compared to $5.5 million during the three months ended June 30, 2024. The increase was mainly due to an increase in the number of products sold and increased manufacturing costs as we invested to support anticipated growth. Gross margin was 72.1% during the three months ended June 30, 2025, compared to 73.7% during the three months ended June 30, 2024. The decrease in gross margin was primarily due to geographic mix during the three months ended June 30, 2025.

Previous wording

Research and development expenses increased by $0.6 million, or 13.0%, to $4.8 million for the three months ended March 31, 2025, compared to $4.2 million for the three months ended March 31, 2024. The increase in research and development expense was primarily due to an increase of $0.5 million in costs associated with our clinical trials, including fees paid to clinical research organizations, and an increase of $0.2 million in services and other expenses in support of product development.

Current wording

Research and development expenses decreased by $0.3 million, or 5.5%, to $5.3 million during the three months ended June 30, 2025, compared to $5.6 million during the three months ended June 30, 2024. The decrease in research and development expense was primarily due to a non-cash impairment charge of $1.7 million related to certain previously capitalized software development costs recorded in the second quarter of 2024, offset by an increase of $0.5 million in costs associated with our clinical trials, including fees paid to clinical research organizations, an increase of $0.5 million in payroll and personnel-related expenses, and an increase of $0.4 million in services and other expenses in support of product development.

Previous wording

Selling, general and administrative expenses increased by $1.7 million, or 7.2%, to $26.1 million for the three months ended March 31, 2025, compared to $24.4 million for the three months ended March 31, 2024. The increase in selling, general and administrative expenses was primarily due to an increase of $1.9 million in advertising and marketing related expenses, an increase of $0.3 million in payroll and personnel-related expenses for our sales, marketing and administrative personnel, and an increase of $0.3 million in travel and conference related expenses. These increases were offset by a decrease of $0.8 million in legal and other professional expenses.

Current wording

Selling, general and administrative expenses increased by $1.4 million, or 5.5%, to $26.7 million during the three months ended June 30, 2025, compared to $25.3 million during the three months ended June 30, 2024. The increase in selling, general and administrative expenses was primarily due to an increase of $1.1 million in advertising and marketing related expenses, an increase of $0.3 million in legal and other professional expenses, and an increase of $0.2 million in payroll and personnel-related expenses for our sales, marketing and administrative personnel.

Previous wording

Interest expense decreased by $0.1 million to $0.8 million for the three months ended March 31, 2025 compared to $0.9 million for the three months ended March 31, 2024, primarily due to lower interest rates. Interest income decreased by $0.6 million to $0.9 million for the three months ended March 31, 2025 compared to $1.5 million for the three months ended March 31, 2024. The decrease was primarily due to a lower balance of cash, cash equivalents, and marketable securities, which resulted in reduced returns on these assets.

Current wording

Interest expense decreased by $0.1 million to $0.8 million for the three months ended June 30, 2025 compared to $0.9 million for the three months ended June 30, 2024, primarily due to lower interest rates. Interest income decreased by $0.6 million to $0.7 million for the three months ended June 30, 2025 compared to $1.3 million for the three months ended June 30, 2024. The decrease was primarily due to a lower balance of cash, cash equivalents, and marketable securities, which resulted in reduced returns on these assets.

Previous wording

Other income, net was $0.2 million for the three months ended March 31, 2025 and $0.4 million for the three months ended March 31, 2024, primarily due to foreign currency exchange gains.

Current wording

Other (expense) income, net was $0.1 million during the six months ended June 30, 2025 and $0.4 million during the six months ended June 30, 2024, primarily due to foreign currency exchange gains.

Previous wording

To date, we have financed our operations primarily through our initial public offering, private placements of equity securities, debt financing arrangements and sales of our products. As of March 31, 2025, we had cash, cash equivalents and marketable securities of $88.7 million, an accumulated deficit of $482.0 million, and $37.2 million outstanding under the CIBC Loan and Credit Agreement, net of debt discount and debt issuance costs.

Current wording

To date, we have financed our operations primarily through our initial public offering, private placements of equity securities, debt financing arrangements and sales of our products. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $84.2 million, an accumulated deficit of $497.2 million, and $37.1 million outstanding under the CIBC Loan and Credit Agreement, net of debt discount and debt issuance costs.

Previous wording

In April 2025, we amended the terms of the CIBC Loan to extend the interest-only period through maturity, with the full principal repayment due in October 2027, and to modify certain financial covenants.

Current wording

In April 2025, we further amended the terms of the CIBC Loan to extend the interest-only period through maturity, with full principal repayment due in October 2027. There was no change to the interest rate or the maturity date of the loan.

Previous wording

We paid $0.5 million fees to the lender and third parties which is reflected as a discount on the loans provided under the Amended and Restated CIBC Agreement and is being accreted over the life of the loan using the effective interest method. During each of the three months ended March 31, 2025 and March 31, 2024, we recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million.

Current wording

We paid $0.5 million fees to the lender and third parties which is reflected as a discount on the loans provided under the Amended and Restated CIBC Agreement and is being accreted over the life of the loan using the effective interest method. During the three months ended June 30, 2025 and June 30, 2024, we recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million and less than $0.1 million, respectively. During the six months ended June 30, 2025 and June 30, 2024, we recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million and less than $0.1 million, respectively.

Previous wording

Interest expense on the CIBC Loan was $0.8 million and $0.9 million during the three months ended March 31, 2025 and March 31, 2024, respectively.

Current wording

Interest expense on the CIBC Loan was $0.8 million and $0.9 million during the three months ended June 30, 2025 and June 30, 2024, respectively. Interest expense on the CIBC Loan was $1.6 million and $1.8 million during the six months ended June 30, 2025 and June 30, 2024, respectively.

Previous wording

In May 2020, Pulmonx International Sàrl, our wholly owned subsidiary, received 0.5 million Swiss Francs ($0.5 million U.S. dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program. The COVID-19 Credit Agreement currently bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter. The loan principal is being repaid in twelve equal installments, paid semi-annually, which began in March of 2022. As of March 31, 2025, Pulmonx International Sàrl has repaid $0.3 million to the lender.

Current wording

In May 2020, Pulmonx International Sàrl, our wholly owned subsidiary, received 0.5 million Swiss Francs ($0.5 million U.S. dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program. The COVID-19 Credit Agreement currently bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter. The loan principal is being repaid in twelve equal installments, paid semi-annually, which began in March of 2022. As of June 30, 2025, Pulmonx International Sàrl has repaid $0.4 million to the lender.

Previous wording

Net cash used in operating activities was $13.2 million for the three months ended March 31, 2025. Cash used in operating activities was primarily a result of the net loss of $14.4 million, a decrease in accrued liabilities of $4.9 million primarily due to payment of incentive compensation expense associated with the achievement of performance objectives, an increase in accounts receivable of $0.7 million due to the timing of payments from our customers, an increase in other assets of $0.4 million primarily due to capitalized implementation costs of a hosting arrangement, and amortization of premiums and discounts on marketable securities of $0.2 million. This is partially offset by stock-based compensation expense of $5.6 million, an increase in accounts payable of $0.5 million due to timing of payments to our vendors, a decrease in inventory of $0.4 million due to shipment of products, non-cash lease expense of $0.4 million, a decrease in prepaid expenses and other current assets of $0.3 million primarily due to the timing of payments to our vendors, and depreciation and amortization expense of $0.3 million.

Current wording

Net cash used in operating activities was $17.1 million for the six months ended June 30, 2025. Cash used in operating activities was primarily a result of the net loss of $29.6 million, a decrease in accrued liabilities of $2.4 million primarily due to payment of incentive compensation expense associated with the achievement of performance objectives, an increase in accounts receivable of $1.9 million primarily due to the timing of payments from our customers, an increase in other assets of $0.4 million primarily due to capitalized implementation costs of a hosting arrangement, amortization of premiums and discounts on marketable securities of $0.3 million, and a decrease in lease liabilities of $0.3 million due to lease payments. This is partially offset by stock-based compensation expense of $11.8 million, an increase in accounts payable of $2.6 million due to timing of payments to our vendors, a decrease in inventory of $1.1 million due to shipment of products, a decrease in prepaid expenses and other current assets of $1.1 million primarily due to the timing of payments to our vendors, non-cash lease expense of $0.6 million, and depreciation and amortization expense of $0.6 million.

Previous wording

Net cash used in operating activities was $11.8 million for the three months ended March 31, 2024. Cash used in operating activities was primarily a result of the net loss of $13.7 million, a decrease in accrued liabilities of $6.0 million due to payment of incentive compensation expense associated with the achievement of performance objectives, an increase in inventory of $1.1 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions, and a decrease in lease liabilities of $0.8 million due to lease payments. This is partially offset by stock-based compensation expense of $5.7 million, an increase in accounts payable of $1.6 million due to timing of payments to our vendors, a decrease in accounts receivable of $1.4 million due to the timing of payments from our customers, and non-cash lease expense of $0.7 million.

Current wording

Net cash used in operating activities was $17.6 million for the six months ended June 30, 2024. Cash used in operating activities was primarily a result of the net loss of $29.1 million, a decrease in accrued liabilities of $4.2 million due to payment of incentive compensation expense associated with the achievement of performance objectives, a decrease in lease liabilities of $1.5 million due to lease payments, amortization of premiums and discounts on marketable securities of $0.9 million, and an increase in inventory of $0.7 million due to continued production to build inventory to meet projected increase in sales and to protect against potential supply interruptions. This is partially offset by stock-based compensation expense of $11.6 million, a non-cash impairment charge of $1.7 million related to certain previously capitalized software development costs recorded in the second quarter of 2024, an increase in accounts payable of $1.6 million due to timing of payments to our vendors, non-cash lease expense of $1.2 million, depreciation and amortization expense of $0.8 million, a decrease in accounts receivable of $0.8 million due to the timing of payments from our customers, and a decrease in prepaid expenses and other current assets of $0.6 million.

Previous wording

Net cash provided by investing activities in the three months ended March 31, 2025 was $16.3 million, consisting of proceeds from maturities of marketable securities of $20.5 million, offset by purchases of marketable securities of $3.9 million and purchases of property and equipment of $0.3 million.

Current wording

Net cash provided by investing activities in the six months ended June 30, 2025 was $21.8 million, consisting of proceeds from maturities of marketable securities of $27.8 million, offset by purchases of marketable securities of $5.7 million and purchases of property and equipment of $0.4 million.

Previous wording

Net cash used in investing activities in the three months ended March 31, 2024 was $2.5 million, consisting of purchases of marketable securities of $13.8 million and purchases of property and equipment of $0.5 million, offset by proceeds from maturities of marketable securities of $11.8 million.

Current wording

Net cash used in investing activities in the six months ended June 30, 2024 was $3.3 million, consisting of purchases of marketable securities of $20.8 million and purchases of property and equipment of $0.9 million, offset by proceeds from maturities of marketable securities of $18.4 million.

Previous wording

Net cash provided by financing activities in the three months ended March 31, 2025 was $0.7 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.6 million and proceeds from the exercise of common stock options of $0.1 million.

Current wording

Net cash provided by financing activities in the six months ended June 30, 2025 was $0.6 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.6 million and proceeds from the exercise of common stock options of $0.1 million, offset by repayment of debt under the Credit Agreement of less than $0.1 million and payment of debt issuance cost of less than $0.1 million.

Previous wording

Net cash provided by financing activities in the three months ended March 31, 2024 was $0.9 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.8 million and proceeds from the exercise of common stock options of $0.1 million.

Current wording

Net cash provided by financing activities in the six months ended June 30, 2024 was $0.8 million, consisting of proceeds from the issuance of common stock under the employee stock purchase plan of $0.8 million and proceeds from the exercise of common stock options of $0.1 million, offset by repayment of debt under the Credit Agreement of less than $0.1 million.

Previous wording

Our net cash operating expenditures were $13.2 million in the three months ended March 31, 2025 and $11.8 million in the three months ended March 31, 2024. We intend to continue to make investments in the development of our products, including ongoing research and development programs. Our cash outflows for capital expenditures were $0.3 million and $0.5 million in the three months ended March 31, 2025 and March 31, 2024, respectively, and we expect to maintain the level of expenditures in the future to support our commercial infrastructure, sales force and other commercialization efforts. Recent and expected working and other capital requirements include amounts related to future lease payments for operating lease obligations, which totaled $31.4 million as of March 31, 2025, with $2.9 million expected to be paid within the next 12 months. Amounts related to future short-term and long-term debt payments totaled $37.2 million. In April 2025, we amended the terms of the CIBC Loan to extend the interest-only period through maturity, with full principal repayment due in October 2027. Under the amended agreement, $3.2 million of interest is expected to be paid within the next 12 months in connection with future debt payments. Lastly, we may undertake additional expenses to further expand our commercial organization and efforts, enhance our research and development efforts and pursue product expansion opportunities.

Current wording

Our net cash operating expenditures were $17.1 million in the six months ended June 30, 2025 and $17.6 million in the six months ended June 30, 2024. We intend to continue to make investments in the development of our products, including ongoing research and development programs. Our cash outflows for capital expenditures were $0.4 million and $0.9 million in the six months ended June 30, 2025 and June 30, 2024, respectively, and we expect to maintain the level of expenditures in the future to support our commercial infrastructure, sales force and other commercialization efforts. Recent and expected working and other capital requirements include amounts related to future lease payments for operating lease obligations, which totaled $31.0 million as of June 30, 2025, with $3.0 million expected to be paid within the next 12 months, and amounts related to future short-term and long-term debt which totaled $37.1 million, with $3.3 million due within the next 12 months. Lastly, we may undertake additional expenses to further expand our commercial organization and efforts, enhance our research and development efforts and pursue product expansion opportunities.

Previous wording

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $88.7 million. Based on our current planned operations, we expect that our cash, cash equivalents and marketable securities will enable us to fund our operating expenses for at least 12 months from the issuance of our condensed consolidated financial statements as of and for the three months ended March 31, 2025. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and marketable securities, sales of our products, debt financings, and access to other public or private equity offerings. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $84.2 million. Based on our current planned operations, we expect that our cash, cash equivalents and marketable securities will enable us to fund our operating expenses for at least 12 months from the issuance of our condensed consolidated financial statements as of and for the six months ended June 30, 2025. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and marketable securities, sales of our products, debt financings, and access to other public or private equity offerings. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025, and the notes to the unaudited condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report on Form 10-Q. During the three months ended March 31, 2025, except as described in Note 2 to the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025, and the notes to the unaudited condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report on Form 10-Q. During the six months ended June 30, 2025, except as described in Note 2 to the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates from those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025.