Nyxoah SA (NYXH) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Nyxoah's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. I will now hand the conference over to your first speaker today, Pearson Dennis, Investor Relations Associates. Please go ahead.

Thank you. Good afternoon, everyone, and I welcome you to our second quarter 2026 earnings call. Participating from the company today will be Olivier Taelman, 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 20-F, 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 Q2 highlights. Q2 was a strong quarter for Nyxoah 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 a second consecutive quarter of more than 20% sequential U.S. revenue growth. U.S. net revenue was EUR 5.2 million, up 22% over the first quarter of 2026. We also posted another strong quarter of revenue growth in our international business, up 19% over the first quarter of 2026. On a worldwide basis, net revenue was EUR 7.7 million in the second quarter, representing 21% sequential growth over the first quarter. Second, before doing a deeper dive on the U.S. commercialization results, let me provide a high-level leading U.S. commercial indicators. Of U.S. leading commercial indicators continued to strengthen across the board. Entering quarter 2 with 40 fully trained sales reps, we can cover 200 of the top 400 high-volume hypoglossal nerve 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 approval rate remains at 100% for both commercial payers and patients submitted via the wider program. On the reimbursement front, CMS announced meaningful proposed increases for HGNS 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 Genio U.S. commercialization ramp and implement the growth initiatives focused on increasing the patient funnel. Now digging in deeper into the U.S. commercialization. The U.S. commercial launch remains the primary driver of our long-term company success. Our U.S. focused strategy remains unchanged and centered on driving strong Genio adoption in the top 400 high-volume HGNS accounts, which represent approximately 70% of the total U.S. HGNS volume. We hired and trained 50 new sales reps in the first quarter, bringing us to 40 sales territories as of April 1. And in Q2, we had access to 200 of the top 400 high-volume HGNS accounts. Specifically, we trained 55 new surgeons in Q2, bringing the total to 262 surgeons trained on the Genio system. We activated 89 new accounts in Q2, roughly doubling our active account base, bringing the total to 180 active high-volume HGNS accounts. And finally, we had 427 patients actively under prior authorization 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 HGNS accounts in a single quarter demonstrates 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 prior authorization exiting Q2, this gives us firsthand 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 no 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. Our Genio Access program, we continue to see 100% approval rates of commercial payers, Medicare Advantage and Medicare patients under the wider 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, HGNS 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 $31,526 to $35,414 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 APC5465, the Level 5 neuromodulation category. Finally, in the upcoming September CPT Editorial Panel meeting, AAO-HNSF supported by Nyxoah as an industry member will continue the discussion of a comprehensive HGNS. As a consequence, Nyxoah did not submit Genio for a dedicated Category 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 8, we had the pleasure of hosting our Investor Day, where we focus on bringing together leading ENT surgeons and sleep physicians alongside independent reimbursement experts. The surgeons shared their firsthand implant experience with Genio and both surgeons 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 HGNS reimbursement landscape, confirming the durability of long-term coverage and Genio's strong positioning under every future coding scenario. The event reinforced the 2 pillars of our U.S. 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 financials, 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 HGNS market outside the U.S., we first entered this market back in 2023 as our commercial proof of concept. Resulting today in a stable HGNS market share of up to 25% overall with a market share in our top high-volume accounts of above 50%. In the U.K., we entered 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, Nyxoah is the sole HGNS 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. For the second quarter of 2026, worldwide net revenue was EUR 7.7 million, which represents 21% sequential growth compared to the first quarter of 2026 and compares to EUR 1.3 million in net revenue in the second quarter of 2025. U.S. net revenue was EUR 5.2 million, representing 22% sequential growth over the first quarter of 2026. International net revenue was EUR 2.5 million, representing 19% sequential growth over the first quarter of 2026. For the 6 months ended June 30, 2026, worldwide net revenue was EUR 14 million compared to EUR 2.4 million for the 6 months ended June 30, 2025, an almost sixfold 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 EUR 9.5 million in the second quarter of 2026 compared to EUR 10.1 million in the second quarter of 2025 due to a decrease in product development expenses. SG&A expenses were EUR 15.6 million in the second quarter of 2026 compared to EUR 10.7 million 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 for the second quarter of 2026 was EUR 20.6 million and remained relatively flat compared to EUR 19.9 million 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 EUR 900,000 due to the repricing of employee equity incentive awards. Non-GAAP cash operating expenses were EUR 21.8 million or essentially flat compared to EUR 21.7 million in the first quarter of 2026. Non-GAAP cash operating expenses increased from EUR 19.8 million 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 via $95 million equity raise and the drawdown of the second tranche of our EIB loan in the amount of $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 totaled approximately EUR 97.8 million. 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 EUR 36 million to EUR 40 million. We continue to expect gross margin in the range of 60% to 62%. We now expect total operating expenses in the range of EUR 99 million to EUR 102 million, an increase of EUR 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 EUR 88 million to EUR 90 million. Non-GAAP cash operating expenses reflect expected total operating expenses less noncash items such as depreciation, amortization 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 3 by further expanding from 40 to 55 territories and implement growth initiatives focused on increasing the patient funnel. Second, continue to execute on our focused U.S. launch strategy, targeting the top 400 high-volume HGNS 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 Nyxoah employees for their contribution in making the second quarter once more a successful one. With that, I would now like to open the line for Q&A.

[Operator Instructions] First question coming from the line of Adam Maeder with Piper Sandler.

This is Kyle Winborne on for Adam. Congrats on the progress. I guess, first, I just wanted to ask about the quarterly cadence, if we could, with the revenue guidance. Is there any additional color you can give us on how you expect the remainder of the year to break out kind of between Q3 and Q4, obviously, understanding amidst the ramp for the launch that it should kind of continue to grow sequentially. Just -- anything you can kind of help us with there? And maybe you could kind of just talk to your confidence level of achieving the guidance.

Sure. Absolutely. I'll start with that part first, Kyle. I guess with regard to what we see in the funnel with regard to new surgeon training, VAC committee approvals as well as the number of pre-authorization patients are in that position entering Q3. We're comfortable with the guidance for the full year of EUR 36 million to EUR 40 million, which reflects based on our first half revenue, a range of EUR 22 million to EUR 26 million 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.

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 of 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.

Thank you for the question. And 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 ISSS Congress symposium. 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-day 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 CCC added to our label.

Our next question in queue coming from the line of Suraj Kalia with Oppenheimer.

Can you hear me? So Olivier, in terms of your prior authorization cadence, the numbers that you give exiting the quarter, how should we think about the cadence of these prior authorizations? I mean we can reverse engineer some of the implants, U.S. implants that are being done in the quarter. I'm more curious in terms of how much time are you all seeing for prior authorization from start to finish? And is there a specific cadence as the quarter progresses just so that we can map it out for the next few quarters?

Yes, this is a very interesting question. So first of all, with 427 submitted prior authorizations entering quarter 3, just to give some color, this is a significant increase of 77% compared to the number of prior authorizations 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 prioritization 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 prioritizations 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, Suraj.

And Olivier, our math is suggesting in Q2, you did roughly 240 implants. And I'm curious, out of the 180 active sites, what do you think this translates into your share? Are the 240 just in a certain subset of those active sites really and the remaining really have to -- even though they are active, they have to really start contributing. Any additional color would be great.