Nano-X Imaging Ltd. (NNOX) 2026-09-09 Earnings Call Transcript

Good day, and thank you for standing by. Welcome to the Nanox Q2 2026 Earnings Call. Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Cavanaugh, Investor Relations. Please go ahead.

Good morning and welcome to Nanox Imaging's Q2 2026 Earnings Call. Earlier today, Nanox Imaging Limited released financial results for the quarter ending June 30, 2026. The release is currently available on the investor section of the company's website. With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Guy Nathanzon, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial research and development, manufacturing, commercialization activities, regulatory process, and clinical activities, and other matters.

Thank you all for joining us today. In the 2 months since our last call, we have advanced commercialization across several areas of the business. Our management team has completed a thorough review of the business and started implementing lessons learned with progress reflected across our commercial, operational, and strategic priorities. Today, I will focus on the steps we are taking to improve execution, extend commercialization, and support the long-term value of the Nanox platform. While our business is trending in the right direction, as we discussed last quarter, our commercialization has taken longer than we expected.

Thank you, Erez. Before I begin, I would like to say that I'm very excited to be at Nanox, and I look forward to helping drive our future success as we seek to change medical imaging. Thank you. As we implement the lessons we have learned and drive commercial growth, we've also sought various ways to extend our cash runway to the point where we are at a sustainable run rate. During the quarter and subsequently, we have taken deliberate steps to implement effective measures, including reduction to our cash expenditures and cash burn.

Before we open the call for questions, I want to close by reflecting on the priorities I outlined today and the progress they have produced so far. We are focused on moving Nanox.ARC systems into active use, extending our commercial footprint through new partnerships, advancing the Nanox Imaging Network, and adding new Nanox.AI customers, all while managing our resources decisively and responsibly. We made real progress across these areas. We are also taking the necessary steps to improve our operating structure and extend our runway. There is still plenty of work ahead, but we believe we are taking the right actions to support Nanox's long-term opportunity in medical imaging.

And our first question will be coming from the line of Jeffrey Cohen of Ladenburg Thalmann & Co. Inc.

Just a few questions from Aaron. And I guess firstly for Guy, what's expected on the impairment for the balance of 2026? I know you're at 40.69 currently.

Currently we already completed the process as of today. And if required, according to the accounting rules, we will continue in the future. Currently we have no visibility for any other elements around the impairment. But we do the assessment according to the accounting rules every period, and we'll do what we need to do.

Okay. Got it. What's the latest pro forma share count?

Sorry, could you repeat the question?

The latest pro forma outstanding share count.

I believe it is 70.6 (sic) [ 70.06 ], if I remember correctly. Million.

Got it. And then could you talk about the placements out there? I'm curious about the evaluations and our placements. Could you give us a sense of how many were placed during the last quarter and maybe give us a sense of the pipeline that you expect throughout the balance of the year as far as evaluations.

I believe, Erez, would you like to take this answer? Erez, would you like to answer this question?

No, I was just wondering about placements for the balance of the year.

Can you hear me? Can you hear me?

Okay. Now we can swap, no we can't do that. for the balance of the year. Jeff, can you hear me?

Yes. I can.

Okay. So since the latest update, we have placed systems in Greece, in Romania, in Czech Republic. The systems for Peru are waiting for import license. Same goes with Argentina. In the U.S. we have one system which is converted from MSUs to CapEx. We've installed another one in an IDN. Another system for the first system in urgent care units in the U.S. We have 3 systems that are currently in the Nanox Imaging Network that we were talking about. One of them's already started. So, yeah, another one in the orthopedic clinic. In a nutshell, that's where we are. So, quite nice progress in the last quarter.

And our next question will be coming from the line of Scott Henry of AGP.

It sounds like there's a lot of progress going on behind the scenes as far as building momentum for future sales. Could you give us a sense of how we should think about the timing of when that traction should start? How should we think about Q3 relative to Q2 in terms of revenues? And if we're not going to see much there, when should we start to see that traction result in revenues?

I think that we have addressed this question during the last call, that we saw the middle of the year as a sort of reflection point. First of all, what you can see is the progress that you actually were talking about. And second, we will start to see the impact of this progress in the next few months, as previously indicated already. We view the Nanox Imaging Network as part of the scale which is moving forward. The business partners are in terms of the pipeline which is being converted right now to installations or to sales. And from our point of view, the direct sales is also showing the progress.

Okay, great. So it is on track with prior expectations. Thank you. And then the $2 million in cost savings for 2027, should we expect that to show up in kind of the gross margin line or more in the G&A line?

Which one? The one you're referring to?

The $2 million in cost savings on target for 2027. I just wanted to get a sense where in the model of those cost savings should be located because it is a manufacturing plant.

Yes, so the simple answer is that probably most of the expenses would be reflected in the operating expenses. Some of them in the COGS, but most of them in the OpEx.

Okay, great. And when we think about, I mean, it sounds like there are a lot of kind of cost rationalizations, getting costs out of the system, whether through contracting or what other reasons necessary. Where do you think you could get that operating expense? And that's on a GAAP basis. If it's been around $11 million, maybe a quarter of a million, maybe $11 million to $12 million per quarter on a GAAP basis, how much could you pull out of that as costs are shifted outside the system?

I'll try to be very cautious at this point, and if it's okay for you, I prefer not to answer this question directly. Once we have something to announce, we'll probably announce. At this point, in high level, I would say we are always doing ongoing research, examination, and evaluation of our expenses. There is no number that I can specifically announce right now. And once there would be a number, we'll definitely announce it like we just did on the Korean side.

Okay, then I'll look forward to that. Also, in the press release, there was mention of a CMS reimbursement pathway. What would be the timing of developments on that front?

The reimbursement of the Nanox Imaging Network?

As far as through CMS.

The AI or the Nanox Imaging Network?

Both, just the timing on either. How would we think about that?

So, the Nanox.AI, the G0680 is already right now. And we'll probably see the impact of it. Right now we expect that it will be affected in the very near future and we are going to address this segment of the market in order to benefit from this effort. In terms of the reimbursement, first of all, it's already done, so we have already revenue which is generated from this reimbursement. And the more systems and sites we add to the Nanox Imaging Network, which actually we've already previously indicated what's the pipeline on this, the more we'll see the revenues growing up. I think that based on the model that we currently have.

And I'm showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you.