LUNG

Good day, and thank you for standing by. Welcome to the Pulmonx first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. To participate, you will need to press Star 11 on your telephone. You will hear a message advising your hand is raised. To withdraw the question, press Star 11 again. Please be advised that today's conference is being recorded. It's my pleasure to hand the conference to Brian Johnston with Investor Relations. Please go ahead.

Good afternoon, and thank you all for participating in today's call. Joining me from Pulmonx are Glendon French, President and Chief Executive Officer, and Derrick Sung, Chief Operating Officer and Chief Financial Officer. Earlier today, Pulmonx issued a press release announcing its financial results for the quarter ended March 31st, 2026. A copy of the press release is available on the Pulmonx website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements.

All forward-looking statements, including without limitation, those relating to our operating trends, commercial strategies, and future financial performance, including long-term outlook and full year 2026 guidance, the timing and results of clinical trials, physician engagement, expense management, market opportunity, guidance for revenue, gross margin, operating expenses, cash usage, commercial expansion and product demand, adoption and pipeline development, are based upon our current estimates and various assumptions. These 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. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, filed with the SEC on March 10th, 2026.

During this call, we will discuss certain non-GAAP financial measures. Reconciliations to these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the press release, which is posted on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, April 29th, 2026. Pulmonx disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I will turn the call over to Glendon.

Thank you, Brian. Good afternoon, everyone, welcome to our first quarter 2026 earnings call. Here with me is Derrick Sung, our Chief Operating Officer and Chief Financial Officer. Pulmonx delivered total worldwide revenue of $20.6 million in the first quarter of 2026. Since our last update, we are increasingly encouraged by continued operational momentum, we remain confident in our ability to achieve our previously communicated revenue guidance of $90 million-$92 million for the full year 2026, with a return to global growth in the back half of this year. We are making good progress in our efforts to address internal operational and executional challenges that have led to recent underperformance, we remain highly focused on three key priorities. First, re-accelerating U.S. sales growth. Second, advancing our market-expanding clinical initiatives. Third, aligning our cost structure to drive profitability.

Let me take each of these in turn, starting with our progress on driving U.S. sales growth. A foundational element of re-accelerating U.S. revenue growth is having the right people and the right culture in place, and I'm encouraged by our progress. We have filled with top talent all our sales leadership physicians and substantially all our U.S. field sales roles. We are also seeing clear improvements in our commercial team culture. Sales turnover has stabilized over the last 6 months, a marked improvement from earlier in 2025. We expect turnover from here to be in line with industry standards. We believe this stabilization is a direct result of our efforts to increase leadership transparency and streamline selling priorities to focus on our highest impact activities. These priorities are grounded in our previously discussed near-to-far approach, specifically, one, setting up high quality and efficient valve programs.

two, engaging with COPD-oriented clinicians aligned with hospital systems offering Zephyr valves. three, working together with our champions to educate service line administrators to ensure appropriate resourcing of their programs and four, concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients. We are encouraged by early feedback from the field force and from our customers on this approach, which reflects greater focus, stronger engagement, and a more consistent execution model overall. As the newer members of our team become increasingly productive, we expect U.S. sales performance to improve over the course of the year, with growth re-acceleration in the back half of 2026.

Turning to our second priority, growing our addressable market with our AeriSeal program remains a key focus. Our CONVERT II pivotal trial is progressing well, and we are especially encouraged by our pace of enrollment since bringing on new leadership within our clinical affairs organization. Today, we are highly confident in our ability to complete enrollment of this trial in 2027, bringing us one step closer to expanding our total addressable market by approximately 20% globally. We see meaningful potential for AeriSeal to serve as both a revenue driver and a market expander for Zephyr valves over the medium to long term and look forward to providing updates on enrollment progress in the quarters ahead. On our third priority, we have made substantial progress in aligning our spending with our strategic priorities. As previously discussed, we executed a broad cost reduction initiative in the first quarter.

With these actions, our underlying expense trajectory has significantly improved, and we remain on track to deliver meaningful operating leverage and lower cash burn while maintaining investments in our key growth drivers. In closing, we have greater conviction in our strategy to refine execution to further penetrate the substantial remaining market opportunity for our products. While 2026 is a year of execution and transition, we are confident in the progress we are making. We have a better understanding of what drove prior underperformance. We have taken meaningful steps to address those issues, and we have aligned the organization around initiatives that matter most. We remain confident in the underlying strength of the business, the size of the opportunity ahead of us, and our ability to deliver sustainable, profitable growth over time.

With that, I will turn the call over to Derrick to provide a more detailed review of our first quarter results.

Thank you, Glendon. Good afternoon, everyone. Total worldwide revenue in the first quarter of 2026 was $20.6 million, a 9% decrease from $22.5 million in the same period last year, and a decrease of 12% on a constant currency basis. U.S. revenue in the first quarter was $13.3 million, a 7% decrease from $14.2 million during the same period of the prior year. We added 15 new U.S. treating centers during the quarter. International revenue in the first quarter of 2026 was $7.3 million, a 12% decrease from $8.3 million during the same period last year, and a decrease of 21% on a constant currency basis. The decline in revenue was fully attributable to the absence of sales to our distributor in China.

As a reminder, we are currently awaiting the renewal of our Chinese registration certificate, which we expect to come in the second half of 2026. Excluding China, we continued to see solid performance across all our other international markets, which grew 22% as compared to the same period last year and 9% on a constant currency basis. Gross margin for the first quarter of 2026 was 78% compared to 73% in the prior year period. The year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets. Looking forward, we continue to expect gross margin to be approximately 75% for the full year of 2026, trending higher in the first half of the year and lower toward the second half of the year based on the mix of distributor sales.

Total operating expenses for the first quarter of 2026 were $29 million, a 6% decrease from the same period last year. Non-cash stock-based compensation expense was $3.8 million in the first quarter of 2026. Operating expenses in the first quarter included approximately $1.4 million of one-time costs related to the restructuring initiative that we executed at the start of the year. Excluding stock-based compensation expense and the restructuring costs, operating expenses in the first quarter of 2026 decreased 8% from the same period of the prior year. We remain committed to decreasing spend in 2026 through our cost alignment efforts while maintaining investments in our key growth initiatives.

To that end, we continue to expect full year 2026 operating expenses to fall between $113 million and $115 million, inclusive of approximately $19 million of non-cash stock-based compensation expense. R&D expenses for the first quarter of 2026 were $4.9 million compared to $4.8 million in the first quarter of 2025. Sales, general and administrative expenses for the first quarter of 2026 were $24.1 million compared to $26.1 million in the first quarter of 2025. Net loss for the first quarter of 2026 was $13.7 million or a loss of $0.33 per share as compared to a net loss of $14.4 million or a loss of $0.36 per share for the same period of the prior year.

An average weighted share count of 41.9 million shares was used to determine loss per share for the first quarter of 2026. Adjusted EBITDA loss for the first quarter of 2026 was $8.5 million, consistent with the first quarter of 2025. Excluding one-time restructuring charges, adjusted EBITDA loss was $7 million and 18% favorable to the same period of the prior year. We ended March 31, 2026 with $61.6 million in cash equivalents, and marketable securities, a decrease of $8.2 million from December 31, 2025. In the first quarter of 2026, we took meaningful steps to strengthen our balance sheet and extend our cash runway. First, we executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10%.

Second, we closed on a $60 million credit facility with a five-year interest-only structure, extending the maturity of our existing debt out to 2031 and providing us with access to an additional $20 million in undrawn capital subject to certain revenue milestones. With these measures in place, we expect to burn roughly $23 million of cash for the full year 2026, which would be a substantial decrease from the $32 million of cash that we burned in 2025. Turning to our revenue outlook for 2026. We are reiterating our full year 2026 revenue guidance of $90 million-$92 million. Our guidance contemplates sequential quarterly improvement in our year-over-year revenue trend with a return to year-over-year growth in both our U.S. and international businesses in the back half of the year.

In the U.S., we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses. Internationally, revenue growth through the first half of 2026 will continue to be negatively impacted by the lack of sales to our distributor in China. That said, we expect continued strength throughout the year from our remaining international markets, with year-over-year sales growth in our international business resuming in the second half of the year. To conclude, we entered 2026 with a clear plan and our first quarter reflects early progress. We remain focused on the work ahead, ramping our sales organization, advancing our clinical programs, and delivering the financial leverage we've committed to. We are confident in the strength of our business and our team's ability to execute.

With that, I'd like to thank you for your attention. We will now open the call up for questions.

Thank you so much. As a reminder, to ask a question, simply press Star 11 on your telephone and wait for your name to be announced. To remove yourself, press Star 11 again. Our first question, one moment please, comes from Rick Wise with Stifel. Please proceed.

Good afternoon. Hi, Glenn. How are you doing? Let me start off, if I could. I mean, obviously, getting the sales team in place, and it sounds like it's largely in place, critical, and it seems like you're seeing some good encouraging early progress here. Maybe, talk to us about in more detail, some of the points you made about going deeper in the accounts, and some of the specific strategies you're using to see sales growth accelerate. Maybe just as part of that, help us understand what's dialed into the guidance in terms of productivity with these new people and, you know, today and what you're hoping for and what we might see. Maybe it's a question for Derrick. Thank you.

Hey, Rick. Well, first and foremost, we've been focused on narrowing the items that we're asking our U.S. sales force to do. I think one of the key things that we realized coming into this period was that last year, there were just too many balls in the air. We've narrowed that focus, and it's in the areas that we commented on in the comments that just preceded. We have, as you had mentioned, substantially filled all of our open positions. Our average tenure, as you might imagine, is not what it was one year ago, but we are bringing people up to speed quite quickly.

We are focusing our activity on setting up high quality and efficient valve programs, and we're doing that by engaging COPD physicians around these centers to be driving patients into those centers. We are looking to gain administrative service line level administrative support to ensure that we have the resources to execute on that plan. We're seeing positive impact from those efforts even in these early stages. I think that one of the bigger issues for us is just getting our sales force up and running and trained and moving forward. We are right where we expected to be at this point.

We feel good about the fact that we're full and that people are coming up the learning curve, and we certainly have some very bright spots with regard to the execution of the strategy that we've outlined.

That's great to hear. Derrick, for you, maybe just help us just think through with the first quarter in hand, the 2026 growth cadence and thinking about the reaffirmed 2026 guidance range you laid out, it applies 60 basis points of the year. This is sort of a transition. Do you feel like consensus has got it right in terms of the current sequencing? Should we be more back weighting it? I think consensus for the 2Q is like $22 million. If that's the case, what gives you the confidence that the company can have the step-up needed, you know, from 2Q to 3Q, et cetera, to get those numbers you've laid out? Thanks.

Sure, Rick, and thanks for the question. As it relates to guidance, we do expect to demonstrate a sequential quarterly year-over-year improvement in growth as the year goes on. As Glen said, you know, we feel very good about the performance in Q1. We're already demonstrating that, particularly in the U.S. Our year-over-year growth rate, while down 7% in Q1, is a meaningful improvement from our growth rate or our decline of 11% in Q4. You know, we already feel like we've bottomed in Q4 in terms of year-over-year growth rates. Both in the U.S. and internationally, we expect to see, and I think this is reflected to your question, currently in consensus.

We expect to see that sequential improvement every quarter flipping to positive year-over-year growth in the back half of the year, and even exiting the year with double-digit growth, both U.S. and international. In the U.S., what gives us confidence and the driver for that sequential improvement in year-over-year growth is, in fact, the addition of the new folks that we have brought in, and the time that it takes for the new reps to get up to speed and get up to productivity. That does take some time. Typically, six- nine months or so is what we've seen on average for new hires to get up to speed.

As the year progresses and also as our focused strategies take hold in the U.S., we do expect to see that improvement sequentially across the year. On the international side, it's really a question of comps, frankly. You know, the decline that you're seeing in our international sales in Q1 is primarily all attributable to timing of sales into China. We are currently awaiting renewal of our registration certificate in China, so there's a lack of absence of sales into China in the first this year. In the first half of this year, certainly in last year, in the first half of 2025, there were a number of large orders that were placed into China.

To put it into context, China is still a relatively small portion of our total sales, less than 5% of our total sales. The timing of those sales drove tough comps in the first half of this year. That's what's driving the optical declining growth rate and will drive that optical decline growth rate for the first half of this year. Our underlying business, as we talked about, is still strong. We grew 22% year-over-year reported in Q1. We've seen double-digit growth in our underlying direct international businesses for the past couple years. We expect that trend to continue.

In the back half of this year, that underlying strength of our OUS business, continued strength, will be more representative in our growth rates, and that's what we expect to drive the step-up in growth in our international business.

Thanks, Derrick, for the comprehensive answer. Appreciate it.

Thank you. Our next question is from the line of Jon Young with Canaccord. Please proceed.

Thanks, Glen and Derrick. Appreciate giving the progress update you provided today. I wanna go to the U.S. accounts, 15 added in Q1. I think that was higher than any numbers that was added last year, according to our model. I would love to know, is this due to the refocused sales team ramping quickly? Maybe how should we think about just the pace of account additions for the remainder of the U.S. for the year? If I could ask my second question too, related to the sales force, is just what metrics are you guys focused on in monitoring success of the revamped sales force? Thanks for taking the questions.

15 is, as you noted, a strong number relative to what we saw on a quarterly basis across last year. It's difficult to say whether that's anywhere close to the new normal. I think we're gonna stand with the 10 per quarter expectation, which we laid out. I'll let Derrick talk about that guidance if he wishes to. That feels like the right sort of number. Some of these new accounts, I think, were lining up perhaps to happen late last year, maybe fell into this quarter. I think time will tell as to whether the mean is above 10, but I would keep that. With regard to metrics, you know, at this point, we feel really good about the plan.

We are focused on moving things in a, in a fairly simplified, basic way. We're just trying to bring our people up to speed as quickly as we possibly can. We have some territories that did very, very well last year. They continue to be doing well this year, continuing to, you know, take advantage of the momentum that they established. You know, we see that in an array of different indicators. We've talked before about the importance of StratX and seeing that, you know, sort of coming through as a leading indicator for our performance, and we feel good about where we sit at this point.

Thank you. One moment for our next question. It comes from Frank Takkinen with Lake Street Capital Markets. Please proceed.

Great. Thank you for taking the questions. I know this has come up on, I think it was the previous call as well, but wondering if you can speak to kind of bigger picture growth aspirations. I know you're only a few quarters into this, and I think last time the context provided was substantially better, which obviously aligns with the cadence of revenue growth throughout 2026. But now that you've had a little bit more time with the organization, are you comfortable providing any type of we expect to be a double-digit grower commentary or something similar in nature to that as you think about a longer-term business?

Yeah. Frank,

Frank.

You wanna take that, Derrick? I mean, I'll go ahead. I'll start. You can add to it, Derrick, if you wish. We fully expect. I will speak for myself. I certainly expect us to be a double-digit grower. I think everybody on the team expects us to be a double-digit grower. I think we're trying to figure out, you know, when you look across the period, where we weren't meeting that expectation or we were moving, you know, sort of rapidly in the direction of not meeting that expectation, most particularly in the U.S., you know, we're trying to get to the bottom of that.

We think we were doing too many things, we think we lost too many sales reps, we think we can get back into a double-digit range. Where exactly in that range is still to be determined. I believe, you know, obviously outside the U.S. we've thrown up a couple 20% in a row, roughly, in terms of our growth in 2025 over 2024 and 2024 over 2023. You know, absent the matters that Derrick outlined, we're in that same sort of neighborhood in the first quarter as well in some of our key markets. All of our major European markets are double-digit growers in the first quarter. We don't report that's the case. We feel good about that.

They're executing on a plan that looks very much like the U.S. plan, which is no coincidence. We've got TAM expanders on the horizon that we're working very, very hard to push forward. We're excited about AeriSeal, and look forward to talking more about that as we move in deeper into the year. Derrick, did you wanna add something to that?

I would simply add that also it contemplated in our guidance even for 2025, as I just mentioned, is that we will exit the year growing double digits in both our international and U.S. markets. I don't wanna get ahead of ourselves and provide any more guidance than that beyond 2025. Or 2026. I'm sorry. In 2026, I meant to say, our guidance contemplates double-digit growth as we exit the year. I don't wanna provide any more guidance beyond 2026, but I just did wanna add that additional commentary. Thanks, Frank.

Perfect. Thankful. Thank you. Maybe just for my follow-up on the Chinese registration renewal, is there a reliance on that to hit the second half expectations for OUS growth? Related to that, what needs to happen for that renewal? Is this more administrative in nature? Is there some risk to this renewal maybe not occurring on time with your guided timelines?

Thanks, Frank Takkinen, for that question. I'll take that. This is Derrick Sung. We do continue to expect the renewal of our registration certificate to come in the back half of this year. It is, I believe, an administrative process that we're simply working through, so it will simply take some time. At this point, we don't have any reason to believe that we won't get that registration certificate renewed in the back half of the year. When we do get that renewal comes, I would say that our expectation is that the resumption of sales into China will be very gradual. There'll be, you know, accounts will need to be restarted, et cetera. We're not expecting, you know, a bolus of sales to come in.

It will take some time. To that end, our current guidance, you know, doesn't contemplate a significant contribution from China, even in the, in our back half. However, as I mentioned, we will be anniversarying those tough comps from our China sales in the first half of 2025. I think, you know, we'll expect to flip back to positive international growth. As, you know, Glenn and I just mentioned, you'll see our international growth rates just really be much more reflective of the strong underlying growth in our direct international businesses that we're currently experiencing.

Perfect. Thank you.

Thank you so much. One moment for our next question. It comes from Joe Downing with BTIG. Please proceed.

Glendon French and Derrick Sung. Thanks for taking the question. I guess as you kinda reprioritize existing base of treating physicians, can you just help to quantify same store productivity, say, in your top quartile of accounts versus, say, the bottom couple quartiles? In this vein, I guess how much of the 2026 U.S. revenue plan depends on lifting the bottom two quartiles versus this, you know, top 25%?

Yeah.

Yep.

I would say that we are focused on. You know, to the extent that we have some. We've got a mix of things going on here, Joe. We've got uncovered territories that are now covered, so we need to, you know, reestablish those connections and get those moving. We tend to have a bias toward the accounts that are performing best and trying to move them along and take full advantage of the near to far strategy in relation to them, make sure that they're, you know, leveraging all the best practices that we've talked about in prior calls. I would say the top quartile would be more of the area of focus as opposed to the lowest quartile.

We are, however, bringing in some number of new accounts that and our standards for bringing our accounts online have changed quite a bit. We've really raised the bar and expect those accounts to invest pretty heavily in terms of their time and efforts to get up and running and have patients that are ready to go. There's far fewer people who are recently trained who are not doing procedures. We, we actually are quite optimistic about the newer accounts that are coming online and are doing procedures right out of the block. Those would be what I would, I would consider outside the first or the first quartile or the top quartile or lower quartile, but rather just new accounts on top of that.

First and foremost, we're getting our team up and running back up and running, and just trying to support the strongest of our accounts most predominantly, and some of our newer accounts will also make some good contributions.

Thanks, Glenn. Just for my follow-up, I wanna touch on Lungfx real quick. I know it's kind of being refocused or de-emphasized a little bit, whichever way, you know, you prefer to frame it, I'm just curious, like, what % of U.S. accounts right now, I think it's the larger ones you said are still, you know, it's more effectively used in those kind of accounts. What % of the accounts are using it? Kind of what like ROI threshold would lead you to kind of selectively expand it again versus keeping it kind of at this narrow scope?

We were spending what in retrospect looked like a disproportionate amount of our time pursuing Detect, what we call Lungfx Detect. I think we brought that to a level of time and attention that it deserves. We learned a great deal during the period of time where we were heavily promoting Detect in that it really fits into a specific subset of our accounts. We did some pilots across the last year or so, and it revealed that the technology works well in certain types of accounts, and so we're tending to target Detect. I wouldn't call it a de-emphasis at all.

I think it's just a more focused approach to Detect in situations where we have determined that there could be a great return for the hospital that invests in Detect in terms of patient flow and so forth. As far as what % of accounts, I don't think we report that. You know, everything you've heard before, which is in certain accounts, it can be great. We definitely have data that suggests that. It takes longer to get set up than we, I think anticipated last year that it would.

Those that are up and running, it took a little time to get them up and running, but there seems to be all indications are that when that technology is up and running and being used, it's a pretty solid contributor to our efforts in that account.

Great. Thanks, Glenn. Appreciate it.

Thank you. This will conclude the Q&A session, and I will pass it back to Glendon French for closing remarks.

Thank you very much, operator. In summary, we have a clear plan, and our first quarter reflects early progress executing this plan. We remain focused on the work ahead, specifically ramping U.S. sales, advancing our clinical programs, and delivering the financial leverage to which we have committed. We are right where we expected to be at this point. We are confident in our business and in our team's ability to continue to execute. I want to thank you very much. I'd like to express a thank you to our employees for your focused and considerable efforts, and thank everyone on this call today for your time and your ongoing interest in Pulmonx. Have a good afternoon.

This concludes our conference. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Pulmonx Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand it over to your speaker today, Laine Morgan, Investor Relations. Please go ahead.

Good afternoon, and thank you for participating in today's call. Joining me from Pulmonx are Glen French, President and Chief Executive Officer; and Derrick Sung, Chief Operating Officer and Chief Financial Officer. Earlier today, Pulmonx issued a press release announcing its financial results for the quarter ended December 31, 2025. A copy of the press release is available on the Pulmonx website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including, without limitation, those relating to our operating trends, commercial strategies and future financial performance, including long-term outlook and full year 2026 guidance, the timing and results of clinical trials, physician engagement, expense management, market opportunity, guidance for revenue, gross margin, operating expenses, cash usage, commercial expansion, and product demand, adoption and pipeline development are based upon our current estimates and various assumptions. These 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. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q filed with the SEC on November 12, 2025. Also during this call, we will discuss certain non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the press release, which is posted on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 4, 2026. Pulmonx disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. And with that, I will turn the call over to Glenn.

Thank you, Laine. Good afternoon, everyone, and welcome to our Fourth Quarter and Full Year 2025 Earnings Call. Since returning as CEO, I have conducted a thorough review of our business, and I am both confident in the company's future and determined to accelerate its progress. During the past few months, Derrick and I have taken a deliberate bottom-up approach to assess the business, building on what's working, addressing what isn't and better aligning our spending with our strategic goals. We conducted a line-by-line review of all programs to identify and prioritize those with the highest returns on capital, with an emphasis on balancing growth with profitability. We have already taken significant steps to realign our cost structure, while preserving key commercial and clinical investments. Derrick will provide additional details on the impact of this prioritization along with our recently announced debt refinancing, which significantly strengthens our balance sheet and provides greater financial flexibility as we execute on our strategy. Our top 3 priorities are clear: first, reaccelerating U.S. sales growth; second, advancing our TAM expanding clinical initiatives; and third, aligning our spending to deliver continued financial leverage as we move predictably towards profitability. With this backdrop, I'd like to walk through our initial assessment of what drove our weaker-than-expected U.S. revenue performance last year. At a high level, we believe the underperformance was largely due to internal operational and executional challenges. First, the U.S. sales organization was stretched across too many competing initiatives, some of which were not fully tested, distracting our sales team from critical activities. This diluted operational focus and challenged efficient execution. Second, at the beginning of 2025, U.S. Territory Manager roles and responsibilities were materially altered in a way that later prove disruptive to the sales organization. And third, the 2025 U.S. sales incentive structure proved to be suboptimal in effectively directing and motivating our U.S. sales organization. Altogether, these issues resulted in significant turnover in our U.S. sales organization during 2025, disrupting customer continuity and account management. While our assessment is ongoing, these insights have meaningfully shaped the strategies we have already begun to implement. Our first area of focus has been on organizational alignment to optimize our resourcing and decision-making in critical areas. Derrick and I are leaning on talented leaders within the organization, allowing us each to have fewer direct reports so that we can dedicate substantial time and attention to the company's most important priorities. As a result, I have taken a more direct role in day-to-day operations of our U.S. sales organization and our 2 U.S. area Vice Presidents now report directly to me. We have also established new leadership of our clinical affairs organization in order to accelerate enrollment of our CONVERT II trial of AeriSeal, a critical step towards significantly expanding our addressable market. A cornerstone of our refined sales strategy is returning our attention to our customers' clinical and operational excellence and refocusing on what we know drives results. In 2025, our sales team was asked to manage an increasingly broad and prescriptive set of initiatives, including multiple new call points and services like LungTraX Detect, while well intentioned, this breadth of initiatives did not deliver the expected return on sales force time and came at the cost of focus on the foundational strategies that both built our U.S. and international markets and drove consistent growth over the years. We are now streamlining priorities of the U.S. sales team to a small set of high-impact mandates that we know drive results. Our commercial strategy follows a deliberate near to far approach where we are focused initially on those opportunities that are nearest to our critically important treating physician before shifting our attention to those opportunities, which might be farther away. This includes better supporting our treating physicians, engaging pulmonary service line directors within hospitals and prioritizing our COPD and patient education efforts in those areas closest to our well-established treating hospitals. That means 3 things: first, the strongest programs begin with the clinical performance of our Zephyr Valves and the confidence of our physician champions. These champions are essential in establishing clinical protocols, bringing colleagues along and ensuring that patients who need this therapy receive it in a timely manner. Our experience consistently shows that frontline clinical buy-in is the foundation of every high-performing center. We are now empowering our sales team to reengage with the clinical champions at their trading centers rather than diverting time to what have proven to be lower-return activities away from these physicians; second, when strong clinical leadership is matched with the right administrative support, it makes a significant difference in helping patients move through the funnel efficiently and scaling the program. With that in mind, we are prioritizing engagement with pulmonary service line administrators rather than initially trying to reach top level C-suite administrators who are typically less accessible. By focusing on administrators who are closest to the pulmonary and thoracic service lines, we ensure that our therapy is effectively protocolized into daily clinical workflows and that staffing is aligned to support them; third, we must ensure that there is a steady flow of patients to our treating centers and that each patient is supported through every step on their path to treatment. To ensure that patients are aware that valves may be an option, we are first focusing on physician education efforts within hospital systems that already offer valves before expanding outreach to the broader community. Similarly, we are concentrating our direct-to-patient efforts on geographies with established treating centers that have the capacity to accommodate interested patients rather than spreading those efforts broadly across the country. We expect this focus to meaningfully increase the return on invested time and resources. Taken together, these changes are designed to foster the right culture and consistency for a more stable, high-performing sales force with lower turnover. With the majority of our open U.S. sales positions now filled, we are encouraged by the early positive feedback from our team, which reinforces our confidence that these actions are resonating internally. That said, it will take time for our newly filled territories to ramp up in productivity, leading to our expectation that U.S. sales growth will resume in the back half of this year. Turning to our pipeline. Our AeriSeal program remains a key focus and represents our nearest term opportunity to expand our market. We continue to view AeriSeal as a way to reach a large number of severe COPD patients with collateral ventilation who are not candidates today for treatment with Zephyr Valves. Our CONVERT II pivotal trial is an important step to bringing this novel technology to market. The trial is designed to evaluate the safety and effectiveness of the AeriSeal system in limiting collateral ventilation in patients with severe emphysema. With our strengthened clinical leadership team now in place, we are pleased to see enrollment momentum accelerating. We continue to see strong potential for AeriSeal as both a revenue generator and a market expander for Zephyr Valves over the medium and long term. We expect enrollment in the trial to be completed in 2027, which would bring us one step closer to potentially growing our total addressable market by an estimated 20% globally. In conclusion, 2026 will be a year of focused execution at Pulmonx. We remain confident in the business and are excited to rebuild momentum through a clear operating plan that targets our highest impact initiatives. We have much greater visibility into what went wrong last year, and we have already begun taking decisive action to fix it. And we have the right strategy and the right people in place to execute. I returned to Pulmonx because I believe deeply in this technology and what it means for patients who have few treatment options. That conviction has only grown stronger over the past few months. We have work to do, and we are doing it. And we look forward to demonstrating that progress to you in the quarters ahead. With that, I will turn the call to Derrick to briefly review our fourth quarter and full year performance as well as our expectations for 2026.

Thank you, Glen, and good afternoon, everyone. I'd like to start off by commenting on 2 significant developments that meaningfully strengthen our financial outlook and balance sheet as we position the company for profitable growth. First, we recently executed a cost restructuring initiative that reduced our ongoing operating expenses by over 10%. With this action, we believe we have achieved an appropriate balance between expense management and continued investment in our key growth initiatives. Second, we are very pleased to have recently closed on a $60 million credit facility with a 5-year interest-only structure that meaningfully strengthens our balance sheet by extending the maturity of our existing debt out to 2031 and by providing us with access to additional undrawn capital. The initial $40 million term loan drawn at closing refinances our previously existing loan and we now have an option to draw an incremental $20 million through the end of 2027, subject to the achievement of certain revenue milestones. Taken together, these 2 developments provide us with increased balance sheet flexibility and cash runway over the next few years as we focus on rebuilding momentum in our core business and advancing our clinical priorities. We are committed to demonstrating meaningful operating leverage and reducing our cash burn starting in 2026. As a case in point, we expect to significantly decrease our annual cash burn from $32 million in 2025 to $23 million in 2026, representing a reduction of nearly 30%. Now turning to our recent performance. Total worldwide revenue in the fourth quarter of 2025 was $22.6 million, a 5% decrease from $23.8 million in the same period last year and a decrease of 7% on a constant currency basis. Worldwide revenue for the full year ending December 31, 2025, was $90.5 million, an 8% increase over the prior year and a 7% increase on a constant currency basis. U.S. revenue in the fourth quarter was $14.1 million, an 11% decrease from $15.9 million during the same period of the prior year. We added 10 new U.S. treating centers during the quarter. U.S. revenue for the full year 2025 was $57 million, a 1% increase over the prior year. International revenue in the fourth quarter of 2025 was $8.5 million, an 8% increase from $7.9 million during the same period last year and an increase of 2% on a constant currency basis. International growth was driven by continued strength in our major European markets, offset by a lack of sales to our distributor in China. Our distributor continues to work through inventory from large orders placed in the first half of 2025 as we await the renewal of our Chinese registration certificate, which we expect in the second half of 2026. International revenue for the full year 2025 was $33.5 million, an increase of 23% over the prior year and a 19% increase on a constant currency basis. Gross margin for the fourth quarter of 2025 was 77.6% compared to 74% in the prior year. The year-over-year increase was driven primarily by the lower mix of distributor sales in our international markets. Gross margin for the full year 2025 was 74%. Total operating expenses for the fourth quarter of 2025 were $27.4 million, an 11% decrease from the same period last year. Noncash stock-based compensation expense was $3.9 million in the fourth quarter of 2025. Excluding stock-based compensation expense, Total operating expenses in the fourth quarter of 2025 decreased 10% from the same period of the prior year. Total operating expenses for the full year 2025 were $128.8 million, a 1% increase over the prior year. Noncash stock-based compensation expense was $19.3 million for the full year 2025. Excluding stock-based compensation expense, total operating expenses for the full year 2025 increased 3% over the prior year. R&D expenses for the fourth quarter of 2025 were $4.6 million compared to $4 million in the fourth quarter of 2024, reflecting increased clinical trial activity. Sales, general and administrative expenses for the fourth quarter of 2025 were $22.9 million compared to $27 million in the fourth quarter of 2024 as we began to implement cost controls during the quarter. Net loss for the fourth quarter of 2025 was $10.4 million, or a loss of $0.25 per share as compared to a net loss of $13.2 million or a loss of $0.33 per share for the same period of the prior year. An average weighted share count of 41.4 million shares was used to determine loss per share for the fourth quarter of 2025. Net loss for the full year 2025 was $54 million or $1.33 per share. Adjusted EBITDA loss for the fourth quarter of 2025 was $5.5 million as compared to $7.5 million in the fourth quarter of 2024. Adjusted EBITDA loss for the full year 2025 was $30.6 million. We ended December 31, 2025, with $69.8 million in cash, cash equivalents and marketable securities a decrease of $31.7 million from December 31, 2024. Now turning to our outlook for 2026. We expect to deliver full year 2026 revenue in the range of $90 million to $92 million. Our revenue guidance contemplates a return to year-over-year growth in both our U.S. and international businesses starting in the back half of the year. In the U.S. we expect our recently filled sales positions and our refocused commercial strategy to gradually drive improving sales productivity as the year progresses. Internationally, we expect revenue growth in the first half of 2026 to be negatively impacted by minimal sales to our distributor in China. Our guidance contemplates continued strength throughout the year from our European markets and we expect year-over-year sales growth in our international business to resume in the second half of the year. We expect gross margin for the full year 2026 to be approximately 75%, trending slightly higher in the first half of the year and lower towards the second half of the year as we increase our mix of distributor sales. We are committed to demonstrating meaningful operating leverage this year. We expect full year 2026 operating expenses to fall between $113 million and $115 million, inclusive of approximately $21 million of noncash stock-based compensation expense. Excluding stock-based compensation expense, our guidance implies a 7% to 9% decrease in operating expenses from 2025, reflecting our cost realignment efforts, while maintaining investments in key growth initiatives. To conclude, we remain confident in the fundamentals of our business. We are operating with financial discipline and focus, and we are taking decisive actions to refine our strategy, regain sales momentum and position the company to deliver sustainable and profitable growth over time. With that, I'd like to thank you for your attention. We will now open up the call for questions. Operator?

[Operator Instructions] Our first question will come from the line of John Young from Canaccord.

It's nice to see the operating level you guys are starting to demonstrate here. I wanted to ask on your comments on the sales force, particularly the comment that you filled all the new physicians. Could you just tell us the percentage of the sales force overall that turned over in Q4? And when did you start hiring and complete that hiring of the new reps?

So John, nice to hear your voice. The turnover was really across the entire year, so it wasn't in the fourth quarter. The magnitude was directionally on the order of half of the sales organization across the year. When we got here some number of those territories had been filled. So we have some folks who joined in the middle to back part of the year. And we've been about the task of filling additional openings since then. And we find ourselves now with nearly all of those openings filled.

Got it. And just as a follow-up, you spoke a bit about the incentives not being aligned with the sales force last year. Can you talk about maybe some color on how you're incentivizing sales now? And what are the focused sales strategies now in the U.S. that you guys are really focused on with these new reps to get them up to speed?

Yes. So the incentives that we have in place aren't fundamentally different. I think the way that we had set things up at the beginning of last year, was a bit of a challenge for many of our folks. One of the big questions, there's essentially 2 elements. One is the design of a compensation plan, and the second is the allocation of quota to each of the territories and then how you do that is important. And we embraced a new approach to the allocation of quotas which involved a couple of things that both the amount of the quota that we allocated out and how we allocated it out across our sales organization together conspired to create a situation where there were some number of reps who felt like it was going to be difficult for them to make the kind of money they were looking to make. And by the time we realized that this new system was not being constructive we had started some movement that impacted us across the year. As it relates to this year, we have been very careful, both on the design of the sales incentive plan and with the allocation of those quotas and the amount of the quota that we're allocating at the initial point. So we basically looked at where we stubbed our toe in 2025 and simply made the changes, went back to those things that we knew had worked in the past that were well received and well understood and embraced many of those elements. So we're quite confident that we have in place a plan that is both viewed as quite reasonable as well as a design that I think people can get their heads around and get behind. So -- and it's been -- it's been tested over time. Last year was the anomaly in terms of the construct, and frankly, we paid a price for that.

Our next question will come from the line of Jason Bednar from Piper Sandler.

I want to start here on the U.S. business, if I could. I fully appreciate there isn't a silver bullet in reversing the slide that the business has been through, but you've already taken a lot of actions. You talked about, Glen, a lot of initiatives that are underway. You talked about the sales force just in the prior question as being a big one. I guess my question here is, though, is why wouldn't the growth come back sooner now that, that sales force is fully in place and addressed. You had captive accounts that lost their covering rep or saw their rep change. I would think there shouldn't be new education with physicians that's necessary. You should need to really prime the referral pump with patients into those treating accounts. So I guess, why -- again, very simply, why wouldn't that come back quicker in the U.S.?

Well, I think we've got a couple of reactions to your question. One is that as you saw across the year relative to prior year, we were in fairly steep decline. I think we had 11% growth year-over-year in the first quarter, 6% growth in the second quarter, 1% growth in the third quarter, and we just announced on the order of a negative 10% year-over-year situation. So we're springing off of somewhat spongy ground to begin with, if you look at the shape of that curve. And we have, in many cases, some folks that are just coming up to speed. We feel great about the team that we have in place. We have a construct where most of our sales folks are sort of doubled up in geographies with sort of a senior/junior rep alignment. So that's a design that allows people to come up to speed very quickly. But we want to be careful given sort of the soft ground that we're springing off of here coming off of the fourth quarter and the average tenure of the sales force being quite a bit different at this point this year as it was last year. So with that integrated in, that explains our sort of back half projection.

Okay. All right. Fair enough. Appreciate that. Derrick, I know you said you reduced the cost structure by 10%, something on the order of that number. Can you expand upon what changed? Where did you source those savings from? Is that a gross number or is the net savings lower since you've had the add back some spending on the sales force side. And then -- sorry, it's a multi-parter. But with these changes that you made, can you give us a sense of what your fixed versus variable cost structure looks like now, just so we can have an idea of how much torque you have in the P&L once that top line starts to hum later this year?

Yes. Jason, thanks for the question. So we clearly got out in front of our SKUs over the last couple of years in terms of spending in anticipation of sales growth that just didn't materialize in the time frame that we we thought it would. So we did take the difficult, but necessary steps to realign our cost structure to our current growth profile. The kind of the 10% reduction that I spoke of is kind of roughly 10% of kind of recurring costs across the board that we took out. There's some puts and takes. There's obviously some restructuring costs that we incur that we're actually incurring this year. And so when you look at the numbers, the guide that we're providing is kind of like 7% to 9% guide, incorporates some of that relative to where we were last year. The majority of the costs that we took out, and we were very careful to ensure that we kept our sights on continuing to invest in our key growth initiatives, namely on the sales side, as Glen mentioned, we're continuing to invest there. The sales force was not directly impacted by the cost restructuring. And on the R&D side, we're continuing to invest in long-term future growth drivers, namely AeriSeal this year and into future years. So most of the expense reduction came from G&A and marketing. And we believe that with those expense reductions that we've made, which are recurring, we're in a strong position now to demonstrate operating leverage, not only as you see this year, but as you see moving forward.

Our next question will come from the line of Rick Wise from Stifel.

It's Annie on for Rick. So I heard you call out AeriSeal in the CONVERT II trial as a key priority here for 2026. Obviously, there's some investment required to ramp up enrollment and move toward commercialization, eventually. So I'm hoping you can talk about kind of how you plan to balance that out with your U.S. sales organization investments and your plans to extend the cash runway.

Yes. The -- so first of all, the CONVERT trial we came in, we spent -- I looked around, make sure we had the right people in the right places. And one of the key things that we looked at was ensuring that that we had the proper alignment within our U.S. sales organization. And the other area that I looked at immediately was making sure that we had the best possible alignment within our clinical function given the role of AeriSeal in our future. And the CONVERT II trial, we were not enrolling in the CONVERT II trial as fast as I felt we should be. And -- so we made some realignments, we brought in a number of people who had been involved directly in the execution of our pivotal trial or our LIBERATE trial. One individual was here running another function and took over, once again, had formally run clinical and is now running it again. So I'm thankful that he agreed to do that. And we brought in 2 folks underneath him who were very much involved in the execution of that trial. So in some ways, from a burn perspective, as you think about the execution of that trial, first of all, it's not all that spectacular, a proportional amount of our annual burn. And number two, we're trying to get things optimized and aligned to deliver on, I think, what we had hoped we would be doing from a rate of clinical enrollment. So I also don't think that, that's going to have a meaningful impact on the overall spend of the company and certainly will not touch or pressure in any way the appropriate spending on our commercial operations.

Got it. Got it. And then just one more for me. Just thinking about longer term, appreciating that 2026 is more of a transition year for Pulmonx as your new commercial focus kind of takes hold? So I'm curious just how you're thinking about the company's longer-term growth potential? How would you sort of frame your longer-term growth aspirations now based on your time back into your respective roles.

Yes. Maybe I'll start, and if Derrick wants to add to that. I'll encourage him to do so. We came back -- when I departed, we had put up 5 quarters of 40% growth in the U.S. And as a company, we're growing 30%, and then things slipped and they slipped quite a bit. And it got a lot of people's attention and had everything to do with my coming back. I think without a question, our intention is to take our growth profile to a much better place exactly where that is. I think we'll learn a lot about that as we go through the year and we see the kind of traction that we get from the programs that we're initiating. And the types of things that we'll continue to refine and adopt as we go forward. So I don't really think we're in a position to be telling you much more than we expect us to get substantially better and we're about that task, and I'm very confident we're headed in the right direction.

Yes. And Annie, this is Derrick. I'll just add, even within -- with the full year 2026, our guidance implies, obviously, that we will sort of step up in growth through the year. And we expect that by the end of this year, we'll be moving on a global basis to double-digit growth. So again, I don't want to sort of give guidance beyond 2026, but even within this year, by the end of this year, our guidance implies that we will be growing double digits by the fourth quarter.

[Operator Instructions] Next question comes from the line of Frank Takkinen from Lake Street Capital Markets.

This is Nelson on for Frank. Comprehensive overview. I guess maybe just you've described 2025 underperformance is largely internal wrong roll structure, wrong incentives, maybe too many incentives. But anything out there maybe fundamental from a market perspective -- market penetration perspective that surprised you that maybe more challenging? Or just anything there that could be interesting.

The market is becoming increasingly active, which is, I think, a net positive. There are broader investments in the pulmonary space. Intuitive has a nice and growing business in the cancer side of our business. So these service line directors in hospitals are -- they're managing many more procedures and a lot more -- the economics, I think, have gotten them moved up the hierarchy within hospitals. So I think that's sort of a net positive. Again, in the short term, there have been moments along the way where there have been certain pressure on resources, but that's fairly easy to respond to. These procedures aren't done in operating rooms. So the procedure rooms are much more plentiful around the hospital. So we'll be able to flex in that regard and pick up the resources necessary to set up and execute these programs. So I think in general, the macro elements, whether you're talking about reimbursement, whether you're talking about places to do the procedure, people to execute the procedure. We just have to have the fundamentals in place. And as folks become increasingly invested in pulmonary, be that cancer or emphysema or COPD those are good things for us. So I think from a macro perspective, that feels like a net positive over time.

Got it. And then you had mentioned like you specifically called out LungTraX Detect being a lower return activity that pulled sales force retention away? And maybe I missed it, but is that program being shelved or deprioritized, handed off? Or how are you thinking about just that in general.

We set off at the beginning of last year with the hypothesis that, that was a technology that would be useful potentially in most of our accounts. It is a great technology. It does all that we've said it does. One of the challenges, though, is that it's really optimal for a certain subset of some of our larger systems at sites where all the elements are in place. And in any case, it's something that is not -- it doesn't fit well in every single hospital. It took us some time to figure that out. I think that my review of prior updates indicated that there was a lot of discussion about it taking more time than we had thought it might take to set up think in properly selected hospitals that sort of have an appropriate profile, there's an absolute place for LungTraX Detect. So it's not being deemphasized, I think, is being focused in certain types of situations as a real positive, potential positive. We have a number of accounts that are underway, and we're keeping a close eye on them. But the initial feedback is that it is being helpful in terms of identifying patients that otherwise wouldn't have gotten picked up.

Our next question will come from the line of Larry Biegelsen from Wells Fargo.

This is Simran on for Larry. Maybe just another follow-up question on the U.S. sales force. I mean I would be curious to maybe understand how are you thinking about the ramp in terms of months to productivity and what early indicators should we be watching for to confirm that the ramp is tracking to plan.

Simran, this is Derrick. I'll jump in and Glen can add some color here. I mean in general, it obviously differs territory to territory depending on what state the territory is when it was filled and when and how long it was open. But we normally look at kind of 6 to 9 months for a new rep or a new territory to get up the productivity curve. Now as Glen mentioned, it wasn't like everybody left all at once and everybody came in all at once. So there's a kind of -- there's a time frame here and for the new territories to ramp up to productivity. And so that is embedded in our guidance. So specifically, when we think about kind of U.S. sales growth, we kind of look at it as a gradual ramp from, say, mid- to high single-digit declines in the first quarter moving towards high single-digit growth in Q4, and I would think of it as kind of a sort of a linear-ish step-up. And I think the best metric to look at, honestly, is just sort of being able to deliver on those sales because in aggregate, it will all be obviously reflected in our U.S. sales performance.

Yes, I would absolutely -- I'm sorry, I would absolutely agree with what Derrick said. I would however -- and I was -- I hesitated when you asked the question because I thought it was a little bit of a smart a** response to say, look at the revenue number. But I do agree with Derrick, that, that is really what the -- what's going to be reflective of these folks coming up to speed. I will say that one of the most meaningful positive changes within our sales organization, since I departed was the adoption of this sort of senior rep, junior rep combination. The majority of our territories in general and certainly virtually every single one of our larger territories has this combination. And one of the real benefits of the combination is not only the ongoing ability to have one plus one equals something greater than 2. But also, it facilitates, I believe, and I can see with the number of combinations of more tenured and newer folks together. It really facilitates the training process and bringing new people up to speed when they can be working with somebody who's got a little bit more tenure, a little bit more ability to bring them up to speed. So anyway, that's a real positive about the new construct. The new as defined as since I left a couple of years ago.

Got it. That's very helpful. And maybe just on the OUS side, and apologies if I missed this, but I guess just Japan, how do we think about contribution from that geography? I know the previous management team talked about enrollment in that post-approval study really kind of occurring in the back half of 2025, I believe, or maybe early 2026. So maybe just -- is that a contributor to 2026 international sales? And just kind of what's the status in that geography?

Well, it is a contributor because these are revenue-generating patients that are going into that trial. So it's essentially -- as a post-approval study. We are continuing to enroll the patients. And they -- the enrollment is accelerating. So cases are increasing. That's -- it's about all I'm prepared to say about that...

Yes. I mean it's not a meaningful -- I would say that it is not a meaningful growth driver in 2026 as we contemplate within our guidance versus 2025. We -- as Glen said, we expect to continue through the post-market study in 2026. And true commercialization, I think, comes the following year. So it's not a huge key to our guidance in 2026.

Got it. That's helpful. And sorry, for China as well, is that also the case? I know you talked about you're awaiting the renewal certificate in the second half. So should we assume China sales are relatively kind of flattish to the prior year? Or are they depressed, I guess, just help me understand the China piece.

Yes. And thank you for asking because the China piece is a bit nuanced and does impact the year-over-year growth rates from an optics perspective, so I think it is important to clarify that. So -- just to put this in context, China sales were less than 5% of our global revenue last year. But the majority of those sales into our China distributor last year, we realized in the first half of 2025. And so our guidance -- in our guidance, we don't contemplate much of a meaningful contribution from China at all in the first half of the year. And we do expect China to resume -- our shipments to resume into China and sales to resume into China in the back half of the year. So there's this mismatch in timing with tough comps, if you will, from the first half of 2025 relative to the first half of 2026, where we're contemplating minimal sales. And then the back half of 2026, where we expect our China sales to resume. And so that results in a -- from a year-over-year growth perspective kind of double-digit declines year-over-year in the first half, and then that will flip to double-digit growth in the back half of the year. So we do get a bit of this sort of mismatch in timing that will result in some of this sort of funky optical year-over-year growth dynamics that you should be aware of.

This concludes the question-and-answer session. I will now turn it back over to Glen French for any closing remarks.

Thank you very much I just want to summarize by reinforcing that we remain confident in the business, and we're really excited to rebuild momentum through a clear operating plan that targets our highest impact initiatives. I am confident that we have the right strategy and the right people in place to execute and we look forward to demonstrating our progress to you in the quarters ahead. Thank you very much for your time and your questions, and thank you very much to all the Pulmonx employees who work every day so hard on behalf of our patients. Have a good day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.