Cytosorbents Corporation

Second-quarter revenue was $9.6 million, consistent with the prior year and up 9% sequentially. Gross margin improved to 73%, versus 71% in Q2 2025 and 69% in Q1 2026. Operating expenses were $9.7 million, down 7% year over year; excluding a $270,000 restructuring charge, operating expenses would have declined 13%. Operating loss narrowed to $2.6 million from $3.6 million, adjusted net loss improved to $2.9 million, or $0.05 per share, from $3.7 million, or $0.06 per share, and adjusted EBITDA loss improved to $1.6 million from $2.6 million. Net loss was $4.4 million, or $0.07 per share, versus net income of $1.9 million, or $0.03 per share, in the prior-year quarter, with the swing mainly driven by non-cash foreign currency gains and losses. Cash, cash equivalents and restricted cash were about $5.9 million at June 30, 2026, versus $6.3 million at the end of Q1. Cash burn was $400,000 for the quarter including about $200,000 of restructuring-related payments, implying net operating cash burn of about $200,000. Management reiterated it expects operating cash flow breakeven in the second half of 2026. For revenue drivers, distributor and strategic partner territories grew 16% year over year and 18% sequentially; direct sales outside Germany grew 9% year over year; Germany remained challenged; and the Middle East was below expectations due to disruptions related to the Iran war.

Phil Chan framed the quarter as evidence that the company is stronger than a year ago after major restructuring, manufacturing improvements, and expense cuts. He emphasized four value drivers over the next 6 to 18 months: operating cash flow breakeven, a return to sustainable growth in CytoSorb, opening the U.S. market with DrugSorb-ATR, and unlocking HemoDefend-BGA. His tone was upbeat but measured, repeatedly saying the progress is real while acknowledging investor skepticism and that more work remains.

Peter Mariani focused on the financial progress: revenue of $9.6 million, gross margin of 73%, operating expenses of $9.7 million, operating loss of $2.6 million, adjusted EBITDA loss of $1.6 million, and cash of about $5.9 million. He highlighted the $270,000 restructuring charge, a 23% headcount reduction since September 2025, and cash burn of $400,000 for the quarter, including about $200,000 of restructuring payments, which brought net operating cash burn to about $200,000. He said improved gross margins, lower expenses, and working capital management keep the company on track for operating cash flow breakeven in the second half of 2026, and noted that margin expansion could continue if volumes rise.

Analysts focused on timing: one asked whether parallel DrugSorb-ATR submissions for ticagrelor and DOAC removal would delay the process, and management said the efforts are intended to move truly in parallel, with timing mainly driven by FDA meeting and feedback schedules. Another question asked if Germany’s planned 3 to 5 sales reps would be enough to restore growth; management said new reps can ramp in roughly 3 to 6 months and should start contributing meaningfully by the middle part of next year, while the existing smaller team could still drive some sequential growth in the second half. On HemoDefend-BGA, management said they are not planning to fund a clinical study internally right now and are instead pursuing non-dilutive government support or a strategic partner, with FDA feedback now helping define the clinical pathway.