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    CTSO
    Earnings call· Jun 2026(Q2 FY26)

    Cytosorbents Q2 FY26 earnings call CTSO

    Aug 6, 2026 Source

    Executive summary

    CytoSorbents Q2 FY26 — Strong Progress Towards Cash Flow Breakeven and DrugSorb-ATR Regulatory Clarity

    CytoSorbents reported a quarter of significant operational progress, highlighted by improved gross margins and a substantial reduction in operating cash burn, positioning the company for cash flow breakeven in the second half of the year. The company also gained crucial clarity from the FDA on the regulatory pathway for DrugSorb-ATR, potentially opening the U.S. market without a new clinical trial. While core revenue remained stable, challenges in Germany and the Middle East persist, necessitating targeted sales force expansion.

    Highlights

    5

    • Operating cash burn significantly reduced to $200,000 (excluding restructuring costs), on track for breakeven in H2 FY26.

    • Gross margins improved to 73% in Q2 FY26, up from 71% in Q2 FY25, reflecting manufacturing efficiency.

    • Operating expenses decreased 7% to $9.7 million, or 13% excluding restructuring, driven by cost controls.

    • Distributor network sales increased 16% year-over-year, and direct sales outside Germany grew 9% year-over-year.

    • FDA provided clarity on DrugSorb-ATR regulatory path, not requiring a new clinical trial and allowing real-world evidence.

    Concerns

    4

    • Revenue remained stable at approximately $9.6 million, with Germany sales challenged due to restructuring and headcount restrictions.

    • Middle East business temporarily affected by geopolitical instability, remaining below expectations in H1 FY26.

    • Net loss for the quarter was $4.4 million, or $0.07 per share, compared to net income of $1.9 million, or $0.03 per share, in prior year.

    • Adjusted EBITDA loss was $1.6 million, despite a 38% improvement year-over-year.

    Guidance & targets

    4
    CategoryTargetConfidence
    Operating Cash Flow
    Achieve operating cash flow breakeven
    high materiality
    High
    Sales Representatives
    Add 3 to 5 additional sales representatives
    medium materiality
    Medium
    Adjusted EBITDA Loss
    Expect continued improvement
    medium materiality
    High
    NASDAQ Listing Requirements
    Regain compliance
    low materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Distributor Network
    Growth driven primarily by our distributor network.
    		—16%——
    Direct Sales (outside Germany)
    Growth driven by direct sales outside of Germany.
    		—9%——

    Operational metrics

    14
    Revenue
    $9.6 millionstable year-over-year, up 9% sequentially
    Q2 FY26
    Gross Margin
    73%up from 69% in Q1 FY26 and 71% in Q2 FY25
    Q2 FY26
    Operating Expenses
    $9.7 milliondecreased 7% year-over-year
    Q2 FY26

    Compared to $10.4 million for the prior year period.

    Operating Expenses (ex-restructuring)
    $9.43 milliondeclined 13% year-over-year
    Q2 FY26

    Excluding a $270,000 restructuring charge.

    Restructuring Charge
    $270,000
    Q2 FY26

    Recorded during the quarter, reflecting severance and related costs from additional reduction in force.

    Operating Loss
    $2.6 millionnarrowed from $3.6 million in Q2 FY25 (27% improvement)
    Q2 FY26
    Net Loss per Share (GAAP)
    $0.07compared to net income of $0.03 per share in Q2 FY25
    Q2 FY26

    Net loss was $4.4 million for the quarter.

    Adjusted Net Loss per Share
    $0.05compared to $0.06 per share in Q2 FY25 (22% improvement)
    Q2 FY26

    Adjusted net loss was $2.9 million.

    Adjusted EBITDA Loss
    $1.6 millioncompared to $2.6 million in Q2 FY25 (38% improvement)
    Q2 FY26
    Cash, Cash Equivalents, and Restricted Cash
    $5.9 millioncompared to $6.3 million at the end of Q1 FY26
    as of June 30, 2026
    Operating Cash Burn (ex-restructuring)
    $200,000
    Q2 FY26

    Net operating cash burn, excluding restructuring payments.

    Total Cash Burn
    $400,000
    Q2 FY26

    Including approximately $200,000 in restructuring-related payments.

    Headcount Reduction
    23%
    since September last year

    Total headcount reduced as part of cost reduction program.

    Sales Representatives Hiring Plan
    3 to 5
    through early 2027

    To restore country coverage and improve revenue growth in Germany.

    Industry KPIs

    7
    MetricValueDetails
    Procedure volume growth92%%
    FCF conversion leverage guidanceOperating cash flow breakeven
    Installed base system placements300,000treatments
    Segment franchise organic growth16%%
    Sales force commercial capacity build3 to 5reps
    Indicated addressable patient populationTens of millionspatients
    Pivotal trial clinical evidence milestones58%%

    Risks & headwinds

    4
    Share price skepticism regarding executionCurrent

    Our share price continues to reflect skepticism.

    Mitigation: Believe the company today is materially stronger than it was just 1 year ago due to operational improvements.

    Geopolitical instability affecting Middle East businessH1 FY26

    Middle East business temporarily affected, remains below expectations in the first half of the year.

    Mitigation: Physician interest remains strong and the region represents meaningful future upside.

    Germany sales challenges due to restructuringQ2 FY26

    Germany remained challenged following our restructuring due to headcount restrictions.

    Mitigation: Strengthened leadership, improved execution and intend to selectively hire 3 to 5 additional sales representatives through early 2027 to restore country coverage.

    NASDAQ listing complianceNear future

    Unquantified

    Mitigation: Intend to regain compliance with NASDAQ listing requirements as part of securing the company financially.

    What to watch in Q3 FY26

    5

    Operating Cash Flow Breakeven

    Second half of this year (FY26)
    Current$200,000 operating cash burn (ex-restructuring) in Q2 FY26
    TargetAchieve operating cash flow breakeven

    Why it matters

    Reduces financial risk, strengthens balance sheet, and increases strategic flexibility, fundamentally changing the company's financial profile.

    As a result, we remain on track toward our objective of achieving operating cash flow breakeven in the second half of this year.

    Q&A highlights

    5

    Will a parallel DOAC submission delay the ticagrelor submission?

    Management believes the submissions can proceed in parallel without one impacting the other, as they are on the FDA's review clock. Clarity for ticagrelor is high, and a meeting for DOAC will define its path.

    “I don't, I don't -- we don't think that one submission will necessarily impact the timing of the other one. We are on the FDA's review clock basically.”

    asked by Tom Kerr · answered by Efthymios Deliargyris

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Progress & Financial Discipline

    CytoSorbents has significantly reshaped its organization over the past year, focusing on cost reduction, manufacturing efficiency, and commercial operations. These efforts resulted in a substantial reduction in operating cash burn to $200,000 (excluding restructuring costs) in Q2 FY26, positioning the company to achieve operating cash flow breakeven in the second half of FY26. Gross margins improved to 73%, reflecting these disciplined execution efforts across the organization.

    02

    DrugSorb-ATR Regulatory Pathway

    Despite missing the primary endpoint in the STAR-T trial, the FDA has indicated that a new clinical trial is not required for DrugSorb-ATR. Instead, the agency will consider additional mechanistic data from a small experimental study and real-world evidence from European use. Pre-submission meetings are scheduled for later this month to discuss these requirements for both the ticagrelor indication and a parallel de novo submission for DOAC removal, aiming for clarity on the path to U.S. market entry.

    03

    HemoDefend-BGA Strategic Value

    The company highlighted HemoDefend-BGA as a fourth value driver, a proprietary gravity-driven filter technology designed to create universal plasma and platelets. Developed with over $16 million in non-dilutive government funding, the technology is now complete and undergoing device validation for human clinical studies. CytoSorbents is actively seeking non-dilutive government funding or strategic partnerships for its clinical development, emphasizing that it will not use internal financial resources for this program at the current time.

    04

    CytoSorb Business Performance

    The core CytoSorb business demonstrated growth driven by a 16% year-over-year increase in distributor network sales and a 9% rise in direct sales outside Germany. However, sales in Germany remained challenged following restructuring and headcount restrictions. To address this, the company plans to selectively hire 3-5 additional sales representatives through early 2027 to improve territory coverage and restore consistent revenue growth in the region.

    05

    STAR-T Clinical Data Insights

    The published STAR-T study results for DrugSorb-ATR showed a 58% risk reduction in severe bleeding events or blood loss greater than 1 liter, translating to a number needed to treat (NNT) of 6. While the overall composite endpoint did not achieve statistical significance, analysis limited to severe bleeding in the CABG per protocol population demonstrated a statistically significant win ratio of 1.59. The device also reduced blood product transfusions by 50% for moderate bleeding events, suggesting broad efficacy across the bleeding spectrum.

    AI-generated summary of the company’s earnings call. Not investment advice.