Pulmonx (LUNG) Q2 2025: International Revenue Jumps 32% as U.S. Ramp Lags Guidance Reset

July 30, 2025 | By EarningsIQ Research

Pulmonx delivered robust international growth, but U.S. initiatives lagged, prompting a guidance cut and a strategic recalibration. The company’s evolving funnel, led by new patient acquisition and AI-enabled detection, is showing early promise, though conversion timelines are stretching. Investors should focus on execution pace in the U.S. and the durability of international momentum heading into the second half.

Summary

• International Outperformance: Global markets drove upside, validating Pulmonx’s OUS investment thesis.
• U.S. Commercial Initiatives Delayed: New patient funnel and AI screening traction are real, but conversion is slower than planned.
• Guidance Recalibrated: Management reset expectations, but highlighted upside if U.S. initiatives accelerate.

Performance Analysis

Pulmonx reported total revenue of $23.9 million for Q2 2025, representing a 15% year-over-year increase, with international sales providing the clear highlight. International revenue reached $9.1 million, up 32% YoY, capturing 38% of total sales for the quarter, and validating the company’s sustained investment in global education and market development. The company’s Zephyr valve, a minimally invasive emphysema treatment, continues to see robust adoption in Europe and Asia, with both direct and distributor channels contributing.

U.S. revenue grew 6% YoY to $14.7 million, but lagged internal expectations due to slower conversion of new commercial initiatives. The company cited operational pressures at interventional pulmonology centers and a shift in focus toward lung cancer screening and robotic bronchoscopy as key factors constraining bronch suite availability. Gross margin compressed to 72% from 74% a year ago, reflecting a greater mix of international and distributor sales. Operating expenses rose modestly, with targeted R&D and commercial spend offset by cost discipline. Net loss was stable at $15.2 million, with cash burn tracking to plan.

• International Surge: OUS sales outperformed, offsetting U.S. softness and supporting the global expansion thesis.
• Funnel Complexity: U.S. growth initiatives, including direct-to-patient and AI-driven screening, are extending sales cycles.
• Gross Margin Mix Shift: Higher distributor sales diluted gross margin, but management expects improvement as mix normalizes.

Management’s guidance reset reflects a recognition that U.S. funnel conversion is a multi-quarter process, not a near-term lever. The international business remains a bright spot and is expected to anchor growth in the near-term.

Executive Commentary

Strategic Positioning

1. International Engine Validates Expansion Model

Pulmonx’s international business is now a material growth driver, with OUS revenue up 32% YoY and comprising nearly 40% of total sales. The company’s investments in peer-to-peer education, regional multidisciplinary boards, and targeted physician engagement are yielding durable volume across Europe and Asia. Management expects direct international markets to remain robust, even as distributor channels, notably China, moderate in the second half.

2. U.S. Commercial Initiatives: Traction, But Longer Timelines

U.S. growth now depends on a more complex, multi-stakeholder funnel, as Pulmonx shifts from traditional referrals to direct-to-patient campaigns, referring physician engagement, and AI-powered LungTrax Detect screening. While these programs are generating record patient engagement and StratX scan volumes, conversion from identification to procedure is taking one to two additional quarters, delaying revenue impact.

3. AI and Ecosystem Build-Out

LungTrax Detect, Pulmonx’s AI-enabled CT scan analysis tool, is showing promise in early hospital deployments, flagging new patients and shortening time to treatment. The company is also embedding BLVR (bronchoscopic lung volume reduction) logic into Jaeger’s pulmonary function testing platforms, aiming to capture a greater share of the 16 million annual U.S. PFTs and expand the addressable population for Zephyr valves.

4. Clinical Pipeline and Evidence Generation

The CONVERT II trial and post-approval studies in Japan are progressing, targeting previously untreatable patient segments and opening new geographies. Pulmonx continues to present new clinical evidence at major conferences, further legitimizing Zephyr therapy and supporting broader adoption.

Key Considerations

This quarter underscores both the opportunity and complexity of Pulmonx’s growth strategy. The business is evolving from a single-channel, referral-driven model to a diversified, ecosystem-based approach, but this transition is stretching timelines and increasing operational risk.

Key Considerations:

• International Strength: OUS execution is robust, providing a buffer as U.S. initiatives ramp more slowly.
• Conversion Lag: New U.S. funnel initiatives are working, but require longer lead times and cross-functional buy-in.
• AI Screening Potential: Early results from LungTrax Detect are positive, but broad adoption is still in the early innings.
• Margin Sensitivity: Gross margin is exposed to shifts in geographic and channel mix, with distributor-heavy quarters diluting profitability.
• Operating Discipline: Cost controls are being exercised, with revised OpEx guidance supporting continued investment in growth levers.

Risks

Pulmonx faces execution risk as U.S. commercial initiatives take longer to convert and require complex stakeholder coordination. Any further delays in hospital onboarding, patient workup, or capacity expansion could extend the U.S. recovery. International revenue is also exposed to distributor volatility and macro factors such as tariffs, though management currently sees minimal near-term impact. Gross margin remains sensitive to mix, and competitive threats, while not acute, could emerge if new technologies gain traction.

Forward Outlook

For Q3, Pulmonx expects:

• U.S. revenue to be flat year-over-year, with growth weighted to Q4 as initiatives convert.
• International revenue to moderate, reflecting typical seasonality and lower China distributor orders.

For full-year 2025, management revised guidance to:

• Revenue of $90 to $92 million (7% to 10% YoY growth)
• Gross margin of approximately 74%
• Operating expenses of $128 to $130 million (including $22 million non-cash stock comp)

Management emphasized that guidance is based on current conversion pace, with potential upside if U.S. initiatives accelerate in H2. Cash burn is expected to remain at or below 2024 levels, supporting ongoing clinical and commercial investment.

• Watch for U.S. conversion rates and continued OUS momentum as key swing factors.
• Broad adoption of AI-enabled screening and PFT partnerships could unlock incremental upside.

Takeaways

Pulmonx’s Q2 results highlight a business in transition, with clear international strength offsetting near-term U.S. execution risk.

• OUS Outperformance: International revenue growth validates Pulmonx’s global playbook and offers a near-term anchor for total growth.
• U.S. Ramp Is a Multi-Quarter Story: Direct-to-patient and AI funnel initiatives are real but require patience, as conversion cycles lengthen.
• Inflection Watch: Investors should track the pace of U.S. patient conversions and ecosystem build-out, as these will dictate the timing and magnitude of a U.S. rebound.

Conclusion

Pulmonx delivered strong international growth and demonstrated traction with new commercial initiatives, but slower U.S. conversion forced a prudent guidance reset. The company’s multi-channel, ecosystem-based strategy is gaining ground, though investors must watch execution speed and margin mix carefully as Pulmonx navigates this next phase.

Industry Read-Through

Pulmonx’s results reinforce a broader medtech trend: international markets can outpace the U.S. when local education, reimbursement, and targeted engagement are prioritized. The company’s AI-enabled screening and direct-to-patient models foreshadow how chronic disease funnel management is evolving across device and diagnostics sectors. U.S. hospitals’ shift toward lung cancer screening infrastructure is creating both competition and opportunity for adjacent therapies, suggesting that companies able to integrate into these new care pathways will have a strategic edge. Margin sensitivity to geographic and channel mix remains a watchpoint for all global device players.

LUNG Healthcare Medical Devices International Expansion AI Screening Margin Mix Patient Funnel