Ceribell Aktie

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to Ceribell Q2 2026 earnings call. [Operator Instructions] I would now like to turn the call over to Brian Johnston of Gilmartin Group. You may begin.

Good afternoon, and thank you all for participating in today's call. Joining me from Ceribell are Jane Chao, Co-Founder and Chief Executive Officer, and Scott Blumberg, Chief Financial Officer. Earlier today, Ceribell issued a press release announcing financial results for the quarter ended June 30, 2026. A copy of the press release is available on the Investor Relations section of the company website. Before we begin, I'd like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being 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, performance are forward-looking statements. 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 public filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the SEC on February 24, 2026, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 10, 2026. Ceribell 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'll turn the call over to Jane.

Good afternoon and thank you for joining us for our second quarter 2026 earnings call. Q2 marked another strong quarter for Ceribell, as we delivered revenue of $28.1 million, growing 33% year-over-year. This is an acceleration from the 29% year-over-year growth we reported in Q1, which reflects a particularly strong performance in same-store growth driven by our Clinical Account Management team. We also increased our account base by 32 accounts to a total of 712 active accounts. While the increase is similar to what we delivered in recent quarters, Q2 growth relied less on VA accounts than previous quarters. Our sustained success in growing our account base is the result of the continued maturation and performance of our account acquisition team.

While revenue and commercial acceleration get publicity, I do want to take a moment to focus on our gross margin. We delivered record gross margin of 92% in Q2. This number was positively impacted by a refund on previously paid tariffs. Even when excluding this refund, we delivered a gross margin of 89%. This does not happen by accident. It is a direct result of our proactive efforts in supply chain optimization and manufacturing diversification. And gross margin is more than just a number. It generates the outsized gross profit we're reinvesting to fund our growth initiatives and R&D with the eye towards executing our mission.

With 33 consecutive quarters of sequential revenue growth, we believe we have built a repeatable growth engine by pointing that engine squarely at our defining objective, establishing Ceribell as the standard of care for seizure detection in acute care setting. At the center of our growth strategy is our commercial infrastructure, with the dual purpose to acquire new customers and drive deeper adoption within our install base. Our account acquisition team continues to mature and is contributing in line with expectations. Their efforts are being supplemented by our newly added Strategic Account Management team through top-down engagement of regional health systems. We have built a robust pipeline of prospects that gives us confidence in our ability to maintain an accelerated rate of new account additions in 2026 compared to 2025.

While we continue to expand our account base, our Clinical Account Management team is providing revenue through headband utilization expansion. Our strong performance this quarter reflects execution of our established utilization playbook, provider engagement, department expansion, and patient population protocolization. A robust and expanding body of clinical evidence validates our platform. Our aim is to make the case for Ceribell's clinical necessity by investing in high-quality evidence, demonstrating the clinical and economic value our system delivers. Adding to our established base of over 150 publications and abstracts, in Q2, a high-impact study was published in Critical Care Medicine, one of the leading journals in intensive care research.

Studies found that when our Clarity algorithm reported a peak seizure burden of 90% or greater, patients were 3.6 times more likely to experience severe disability or death at discharge. Further, each additional hour of a Clarity detected seizure activity was associated with nearly twofold increase in that risk. The premise that longer seizure duration correlates with worse outcome is not new. What is new is that a device output can quantitatively report seizure burden at the bedside in real time, and that this burden reliably correlates with patients' outcome. These findings sharpen the clinical imperative for using the Ceribell solution, particularly Clarity to reduce seizure burden for patients. As the body of evidence compounds, we're increasingly confident that Ceribell's path to becoming the standard of care is not a question of if, but when.

As we continue to deliver within our core seizure market, we remain encouraged by the traction in our emerging market opportunities. We launched our neonate and pediatric products and the commercial pilot of our Delirium algorithm. We remain encouraged by the early commercial traction of our neonate and pediatric seizure line extensions. Customer interest remains high. The clinical conviction is translating into early commercial success as we secured purchase orders from both new and existing customers in Q2. With a robust and growing pipeline, we are well positioned to translate our commercial efforts into revenue contribution as we move into 2027. We are also excited about the momentum of our first of its kind, Delirium Monitoring Solution, which received 510(k) clearance in December.

Delirium represents an estimated $1 billion U.S. market for Ceribell and a strong addition to our platform. Despite being the most common neurological complication in the ICU, before Ceribell, there had been no commercially available tool to continuously monitor delirium. We launched our commercial pilot in April and are now live in multiple sites. The early feedback has been positive with users praising improvements in clinical decision-making. For example, based on the survey, 40% of the patients were difficult to assess under CAM-ICU, the current standard of care, but could still be monitored with the Ceribell solution. Beyond the clinical signal, we are also seeing a utilization effect. Existing Ceribell customers that have joined the Delirium pilot are increasing advanced utilization.

We believe this is a reflection of both the clinical value of the Delirium detection algorithm and the incidence overlap between seizure and delirium, underscoring the synergistic value of our platform. We are also pleased to share that we just received a favorable final rule from CMS, establishing a New Technology Add-on Payment or NTAP for our Delirium Monitoring Solution. The NTAP, which becomes effective October 1, 2026, provides up to $2,171 in incremental reimbursement per qualified patient. This is a meaningful milestone. It will support adoption by adding favorable economics to the strong clinical interest we're already seeing in the field. Our launch strategy is coming into focus. And we now have the confidence that we will launch Delirium commercially this year.

With the commercial and clinical updates covered, I'd like to turn to our vision for the future. We believe we are well on our way to establishing the Ceribell system as a standard of care for seizure management. At the same time, our longer-term vision to establish EEG as a new vital sign is no longer theoretical. We have made material progress and believe we can begin translating this vision to reality in 2027. Underpinning this is a two-pronged product strategy. We invested in algorithm and hardware enhancement to reach more patient populations while improving patient care and meeting physician needs. Our first prong is centered around developing novel algorithms to further improve clinical decision-making. Delirium and LVO are excellent examples of clinical expansion to new patient populations under this strategy.

Through these advancements, Ceribell continues objective brain monitoring to a set of underserved patient populations. We also apply algorithm development to improve care for patients we already serve. We are pleased to announce today the receipt of FDA 510(k) clearances for two new algorithms, targeting our core seizure market. We believe each meaningfully adds to our platform clinical utility, strengthening the case for Ceribell as the standard of care. First, represents a significant enhancement to Clarity's ability to identify and reduce EEG artifact signals. Artifact recognition has long been the leading challenge to EEG interpretation in the acute care environment. It is not uncommon for even neurologists to mistake electrical signal from various medical equipment as seizure activity.

EEG is so sensitive that even the electrical signal from an IV drip's movement can create artifacts. Our new algorithm trained on a large artifact database created by Ceribell can differentiate between brain activity and artifact, adding a layer of AI-driven sophistication. The new algorithm significantly simplifies EEG interpretation for neurologists and improves the point-of-care experience. We anticipate rolling this out in the third quarter. The second clearance is for epileptiform abnormality detection. This algorithm targets abnormal brain activity in a gray zone between clear seizure and normal signals. This activity is clinically important, but has historically been difficult to consistently measure. To our knowledge, Ceribell is the first software to be FDA cleared for the detection of both seizure and epileptiform abnormality.

This is the capability that neurologists have specifically asked for, and we are proud to be the first one to deliver it. We expect to activate this algorithm by the end of the year. These new algorithms serve to strengthen the clinical benefits offered by our system. We believe that by widening the gap between the value offered by Ceribell system compared to conventional EEG, we create a clinical imperative to adopt our leading-edge technology. The second prong of our product strategy centers on enhancing and expanding our hardware platform. Over recent months, we have received FDA 510(k) clearances for several products that together form the foundation of our new hardware platform. This includes clearances for a recorder with video and EKG capability, compatibility to integrate with other vital sign measurements, and the ability to monitor continuously while ambulating.

We have also received clearances for two headband designs that provide optionality for full montage and multiple day continuous monitoring when needed. The features offered by our new platform serve to support our effort to make EEG a new vital sign. For example, delirium patients often require days in the ICU before resolution, and the new system can be even more seamless in supporting this new use case. And when we add LVO in the future, a bigger screen will be needed to monitor multiple disease states. Within our core market, we believe our current product is optimized for the majority of patients in acute care setting. It is quick, simple, and reliable in a care setting where these are the most important needs. However, with our hardware line extensions, clinicians no longer have to worry about the cost of the product.

They no longer have to choose between the speed of point-of-care EEG and the comprehensiveness of conventional EEG for patients who need both. Ceribell can offer both with one device. We are continuing to test our products, refine the design, and scale our manufacturing with the target launch of our new hardware platform in 2027. We will share more details as we get closer to the product launch. As I step back, I am struck by how much is converging at once. Our core business continues to perform, delivers 33% year-over-year growth and an acceleration compared to last quarter. We are the first and only point-of-care seizure platform indicated for use with patients of all ages. At the same time, the work we have been building towards for years is coming to a head.

New algorithms, new hardware clearances, a Delirium pilot tracking towards commercial launch and a new NTAP. These advancements stand to meaningfully strengthen our value proposition while reinforcing our market leadership position with significant innovation-based barriers to entry. We see 2027 as a pivotal year with Neonate gaining more scale, Delirium commercially launched, our expanded hardware platform on the market, and an increasingly mature sales force delivering even greater impact. I'm more convinced than ever that we are building the right platform at the right moment. Our goal of creating a single brain monitoring solution for the acute care setting is within reach. With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of the second quarter results and 2026 guidance.

Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the second quarter of 2026 was $28.1 million, which represents a 33% increase from $21.2 million in the second quarter of 2025 and a 6% sequential increase quarter-over-quarter. The increase was primarily driven by the success of our same-store growth strategy, in addition to increased adoption of the Ceribell system across new and existing accounts. Product revenue for the second quarter of 2026 was $21.2 million, representing an increase of 33% from $15.9 million in the second quarter of 2025. Subscription revenue for the second quarter of 2026 was $6.9 million, representing an increase of 30% from $5.3 million in the second quarter of 2025. We ended Q2 with an active account base of 712 hospitals, representing an increase of 32 accounts in the quarter.

We have been pleased to see our investments in driving same-store growth continue to deliver. While we saw signs of typical seasonality in Q2, when warmer months tend to result in reduced ICU census, our same-store growth performance exceeded expectations, including an acceleration in year-over-year growth from recent quarters. We continue to believe that we have a significant untapped growth opportunity within our install base in which our top accounts continue to use our product at roughly 3x the rate of average accounts of similar size. Gross margin for Q2 2026 was 92% compared to 88% in the prior year period. This includes the impact of $1.6 million in tariff refunds received in the quarter, of which $1.0 million was recognized in cost of goods sold and $0.6 million was capitalized to inventory. Excluding this adjustment, gross margin was 89%.

Our strong margin profile is a direct reflection of cost reduction efforts and the expansion of manufacturing capabilities in Vietnam. We feel confident in our ability to maintain gross margins in the high 80% range throughout 2026 based on current tariff policies, and believe we have built flexibility in our manufacturing capabilities to manage any future policy shifts. Total operating expenses for the second quarter of 2026 were $45.9 million, an increase of 37% compared to $33.6 million in the second quarter of 2025. Non-cash stock-based compensation expense was $6.0 million in the second quarter of 2026 and $3.2 million in the prior year period. Sales and marketing expense in the second quarter grew as a result of headcount expansion, including the newly established Strategic Account Management function and expansion of our CAM infrastructure in advance of Delirium launch.

G&A expense remains elevated in the second quarter of 2026 as a result of expenses related to our ongoing IP litigation, which total $3.9 million. Looking ahead to the third and fourth quarters of 2026, we anticipate a reduction in lawsuit-related activities and associated expense. Research and development expense in the second quarter reflects investments we've made into our platform, including our next generation hardware, algorithm development, and clinical studies. Net loss was $19.3 million for the second quarter of 2026, or a loss of $0.51 per share compared to a loss of $13.6 million or a loss of $0.38 per share in the second quarter of 2025. An average weighted share count of 38.0 million shares was used to determine loss per share.

Last quarter, we instituted the disclosure of adjusted EBITDA to represent the ongoing operating performance of our business. Adjusted EBITDA reflects our net loss before interest, taxes, depreciation, and amortization expense, and also excludes non-cash stock-based compensation expenses, as well as legal expenses associated with our ongoing IP litigation. Adjusted EBITDA loss for the second quarter of 2026 was $9.8 million as compared to a $10.0 million loss in the second quarter of 2025. This reflects our continued strategy of thoughtfully deploying gross profits from our expanding revenue base back into the business to pursue long-term growth opportunities. Our cash, cash equivalents, and marketable securities as of June 30, 2026 were $129.3 million.

We remain committed to our objective of achieving cash flow break-even with cash on hand, and the strength of our balance sheet and strong gross margin profile give us a high degree of confidence in our ability to do so. Finally, following close of the quarter, we successfully refinanced our existing credit facility, securing access to up to $60 million in committed capital with an additional $25 million uncommitted. The structure includes a non-formula revolver plus term loan that remains available to draw through year-end 2028. We expect that this structure will reduce our interest expense starting in Q4 and extend our repayment timeline by roughly 3 years into 2031. We do not have plans to draw the committed but undrawn term loan in the near term, but we believe that its availability will provide us with greater strategic flexibility.

Turning now to our outlook for 2026. We expect full year 2026 total revenue to range from $114 million to $117 million, up from our prior guidance of $112 million to $116 million. This represents annual growth of 28% to 31% over 2025. This change to guidance reflects the momentum we are seeing in our core business, with success driven both by new account additions and usage within our established account base. This range does not include material contributions from our neonate, pediatric, or Delirium product, which we expect will begin to translate into revenue more meaningfully in 2027. With that, I will turn the call back to Jane.

Thank you, Scott, and thank you all for your time today. Q2 reinforced the confidence we have in our trajectory. Our core business is growing and accelerating. Our commercial execution across new accounts, utilization, and neonate is on track, and the product and clinical evidence investments we have been making are beginning to compound in ways that will matter over the next year and beyond. We have less than 4% penetration in our core seizure market. This tells you how much runway is still ahead of us. And we are advancing into new greenfield markets with urgency and purpose. Our mission to establish EEG as a new vital sign remains our North Star. And the progress we made in Q2 gives us every reason to push harder. I would now like to turn the call over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Travis Steed with Bank of America. Your line is open.

I wanted to spend a little more time on all the FDA approvals that you guys have gotten and put together. And I don't know if there's anything else you want to add to that, but I think the real question is, like, what can all these approvals and new indications and everything do for kind of the revenue growth rate and kind of the incremental revenue dollars you can add to this business that'd be kind of helpful to context but anything else you want to say on all the approvals would be helpful just to put in context for everybody.

Yes. Thank you, Travis. So, I will put our recent FDA clearance into two groups aligned with our two-prong strategy. The first groups are the algorithm clearances that include artifact rejection as well as epileptiform abnormality. As we launch both of these algorithms later this year, we do not plan to charge more, but we see this tool will be very beneficial, especially for the neurologists. And directly or indirectly, this would further increase the stickiness and potentially increase the utilization at account. We have always seen our top accounts always have very strong neurologist support. So we could see this as a leverage to drive usage and potentially increase the deal velocity as well.

In terms of our new hardware platform, we are not launching this platform yet, and similar to the previous strategies we have deployed, we are planning on a limited market release for the new hardware platform and potentially launch the platform in 2027. This new hardware platform really has been aiming at making EEG a new vital sign in conjunction to Delirium and the future LVO we're working on. So we see this as giving us access to additional patients or even additional market segments. So we do see this can be a revenue driver in 2027 directly. As we get closer to the launch time, we will share even more details.

Our next question comes from the line of Robbie Marcus with JP Morgan.

I wanted to ask on OpEx. Companies your size typically need to make a strong beeline towards leverage. And we've seen OpEx grow faster than sales the past several quarters. So maybe just speak to the investments and the spending that you're doing now. What's driving that? And when can we start to see leverage on OpEx?

Sure thing, Robbie. First of all, the two things I'd like to point out in the Q2 OpEx that were a little bit out of the normal is stock-based compensation sequentially increasing by about $2.3 million. That's an annual equity cycle that happens in Q2. So you'll tend to see that step function in Q2 and then carry forward until the next cycle. The other, of course, is the IP litigation, which remained elevated, lower than Q1, but higher than we'd expect going forward. As it relates to our investment philosophy, we've maintained adjusted EBITDA loss roughly at around $10 million, give or take, for the past many quarters in a row. Our strategy has been to continue to grow the top line, generate outsized gross profits with our high gross margin and then reinvest that back into the business.

And that investment comes in the form of sales infrastructure in this quarter, both building the Strategic Account Management function out as well as expanding our CAM infrastructure a bit ahead of our Delirium launch, as well as R&D. And as we make those investments, we're very mindful of our objective to achieve cash flow break-even with cash on hand, haven't guided specifically as to when that will come, but we keep a very close eye on it to ensure that we control our own destiny and make sure that we're self-sufficient as far as our cash position goes.

Next question comes from the line of Brandon Vazquez with William Blair.

Jane, I think you had mentioned that, you know, like there was kind of an inflection here, or a driving factor of growth in the quarter was from new account ads. There's clearly a bunch of tailwinds going on in the business with new indications and things like that. So I was hoping you could just spend a minute on unpacking, you know, are you guys seeing kind of like an inflection in interest from end users. I think you even said that neonate and pediatrics was driving new account openings that you weren't even in before. So just kind of give us a little bit of an update on interest in driving new accounts and expectations on how durable that can be going forward.

Yes, definitely echo your statement. We do see a lot of tailwinds. On the account acquisition front, we saw the new purchase order related to neonate, both in existing accounts as well as new accounts. And I would say in Q2, it's still relatively early phase. As you know, it does take the sales cycle and we just launched the neonate recently, we do expect the impact from neonate is going to be even bigger second half of the year and especially in 2027. And as I mentioned in my previous call last quarter that we started the Strategic Account Management team. So we also continue seeing the pipeline and the momentum from this team in closing accounts at the regional hospital system level. And we remain very optimistic for the impact to come later this year and in 2027.

Another dimension of revenue drive, of course, is from the utilization or the same-store growth. As Scott mentioned, Q2 usually is our low seasonality quarter, but the same-store growth this quarter exceeded the expectation. And the majority of that is the continuous execution of the known playbook we have. In addition to that, we also see coming tailwind as we later launch Delirium as the limited market release did show that these existing Ceribell accounts, when they start to use Delirium, it meaningfully increased the utilization as well. So we are very excited about the different tailwinds we're having.

Next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

I wanted to, you know, you've laid out some additional layers of growth that will be kicking in in 2027. Right now the street's projecting a 7% similar kind of revenue growth rate prior to today as the lower end of 2026 guidance that you just revised up. I don't think you're going to provide explicit guidance for 2027, but with pediatric neonate kicking in next year, Delirium, you know, the new hardware, Ceribell headband platform, how should we be thinking about trajectory of growth. It seems like there could be an acceleration even in '27 versus '26.

Yes, Josh, you know, we're not yet going to comment on 2027 guide, but as you pointed out, there's a lot of tailwinds that are all coalescing around the same time. We feel really good about what we know. We feel good about what we learned on the new and early launch, the Delirium pilot. There are still things we need to learn. Learn how the Delirium launch plan for later this year goes, as well as the limited market release on the new product platform. But we've got about 6 or 7 months here before we're guiding for '27, and we're learning. I'm very happy to share our learnings with you when we issue our guide.

Our next question comes from the line of Bill Plovanic with Canaccord Genuity. Your line is open.

Can you talk more about the magnitude of the gross margin impact from the Vietnam manufacturing shift? I thought that was going to be more impactful later in the year. It sounds like you're starting to get some benefit now. Can you try to quantify that, please?

Sure. I view the 89%, which effectively is if there had not been any sort of refund as effectively the steady state for where we are. I mean, as we've mentioned, we expect to be in the high 80% range for the remainder of the year. That 89%, which would have been more than 80% for the remainder of the year, that's included the burden of tariffs is essentially back to where we were, even a little better, before all the tariff noise. And that's a direct reflection of both the manufacturing moves Vietnam, but also some general cost reduction initiatives that we put into place over the course of the last year and a half that should continue to generate dividends going forward.

Next question comes from the line of Jeff Cohen with Ladenburg Thalmann. Your line is open.

Jane, I know you mentioned that like 45% of the patients in the Delirium pilot were difficult to evaluate, but still could be monitored using the Ceribell system. So I'm wondering, as we're moving forward, as the pilot has matured, are you seeing the initial commercial use case converge around a particular patient population or workflow? And if you could just kind of expand on that a little bit.

Yes, thank you. This is part of the reason we do a limited market release so we can really fine tune the value proposition and workflow and patient population. So the short answer to your question is yes, we start to see emerging populations that hospitals and physicians are particularly interested in applying to Delirium. The examples include sepsis patients with altered mental status or elderly patients, especially with post-cardiac surgery or other surgical procedures. And these patients are more likely to have delirium. And it is more than 40% of these patients with a conventional standard of care would not have been able to assess delirium is one of the value proposition.

In the same pilot and survey, we also show other results, for example, physicians and nurses showed that about another 30% to 40% of the patients, they were able to reduce sedation or even intubation based on the Delirium algorithm. And about 20% of the time, they were able to improve care. So these give us even stronger confidence as well as the initial preliminary evidence to support the Delirium launch we are planning later this year as well.

Next question comes from the line of Marie Thibault with BTIG. Your line is open.

I wanted to hear a little bit more about the regional health system team. I know that's a small strategic team targeting some of the regional health systems and I heard you say it's going well so far, but I wonder if we could get any more details on some of the early pipeline metrics, things like the number of systems under engagement or in conversation, number of hospitals in these kinds of discussions and you know your best estimate for when this starts to really accelerate account ads further.

Yes, thank you, Marie. So I mentioned probably about two quarters ago, as we start forming this team, we also optimize our internal operation and tracking. So this year is the first time we start to track pipeline, not just at hospital level, but also at the system level. We're not ready and probably won't share the pipeline of system level quantitatively, but what I can share is we've seen very, very strong momentum growth on this hospital system level pipeline. In many ways they are growing even faster than the already very healthy hospital level pipeline we are seeing. As I also mentioned earlier, this team only started in January. We are just building up this team in January and take a few months to build up the team and to learn. So we are only 6 months in the process. And with the sales cycle, we expect to see early win. We're already seeing early win internally this year, but a bigger impact would come in 2027 and 2028.

Next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

I guess on Delirium, the decision to launch in late '26 versus what I think was your prior commentary of fourth quarter, early '27. Is the decision due to what you're seeing in the pilot? Is it the establishment of the NTAP? Any commentary on reasoning for what I assume is a fourth quarter launch? And then as a related question, you hinted at it earlier, but is there a need for additional sales infrastructure to launch Delirium?

Yes, thank you, Jason. The answer is both. We saw both very positive feedback coming clinically and operationally, as I mentioned earlier, from the limited market release on Delirium across the sites we have launched, as well as the final rule from CMS on NTAP effective October 2026. So the combination of that give us the confidence that we will fully officially launch Delirium in Q4 this year. In terms of sales force, the short answer is no, we do not expect we need additional specific sales team for this. As we did with the limited market release, we leveraged the local, mostly CAM, Clinical Account Manager team, and we expect we can continue to leverage our Clinical Account Manager team. And, of course, if Delirium really, we can see it gaining even more momentum, we could consider opportunistically expand this team even further, but we definitely do not see a need to establish a different sales force.

Next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Just one follow-up to the, I guess, next generation or Ceribell headband hardware that you talked about introducing in 2027. I just wanted to get a better sense. I mean, is that you adding electrodes? Is it going to be a full montage EEG? Can you just talk about moving into conventional EEG territory and the TAM expansion opportunity there? And can you leverage all of the AI algorithms Clarity that have been developed for reduced costs electrode montage on this next Ceribell headband hardware?

Yes, thank you, Josh. The new hardware platform really focus on to provide a hardware solution to become the brain monitor. So the key features I would emphasize is when you think about brain monitor, sometimes physician would want video, a bigger screen, and continuous monitor for days or even weeks. So the recorder needs to plug in and also the capability to integrate other signals so the new recorder add EKG or other vital signs into the recording. And it would be the platform that will run the seizure algorithm, the Delirium algorithm, all the algorithm we already have, and also the future algorithm. And the wearable that, one of the wearables clearance is even more comfortable and that's where a patient can wear it for days. So the vision is really to become a brain monitor.

And with that we also have a wearable that has the parasagittal coverage. So that's the full montage. It only works in conjunction with our existing headband. So it's the add-on wearable plus our headband together, plug it into the same recorder will provide the full montage. And that's because we believe that our existing system can support the majority of the patients, but occasionally doctor preference or patient needs do need full montage, so we want to provide the optionality. And you're right, with this entire new hardware, we're not just the brain monitor anymore. We also provide almost all the functionality of the conventional EEG. So we look forward to sharing more our bigger picture and value proposition of our hardware as we're getting closer to the market release later this year.

And our last question comes from the line of Bill Plovanic with Canaccord Genuity. Your line is open.

Last quarter you provided that 85% of the new reps with at least 12 months of tenure contributed to the active account base and had 100% purchase orders. What is that looking like now? Can you quantify how these new reps are maturing as it is considered a bigger part of your revenue ramp for this year.

I don't have a precise sound bite for you, but we track very carefully the progression of the team across what we know to be the productivity curve. And as we mentioned in the past, typically we don't see reps add their first account until they hit the end of year one, and then they continually get more productive throughout year two and then reach their kind of max rate of new ads at the end of year two. With the infrastructure build we did starting in late 2024, we're having more folks age into that one year bucket. Still the majority of those are not at the two year bucket. And the productivity has along with the growth what we've seen historically, and I think that's a reflection of the ads you've seen on the account base, in which we delivered a pretty similar result in terms of new ads this quarter to the prior two quarters, but with much less reliance on VA to juice the number up and really more of a reflection of the organic maturation of the sales work.

That concludes the question and answer session. I would now like to turn the call back over to Jane Chao for closing remarks.

Thank you everyone for joining the call. We are very proud of what we have accomplished this quarter and really excited about what's ahead of us and in 2027.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

[Audio Gap] I cover medical devices at Bank of America. And next up as part of our health care conference, we have CeriBell. We have Jane Chao, CEO; and Scott Blumberg, CFO. So thank you both for being here today.

Thank you for having us.

Maybe we can start with Q1 since you just reported the other day, revenue came in a little better than the Street, and it was our largest quarter of net new adds and record usage per account. So maybe you can just give some background on the commercial progress you've been making on both fronts to get to these record levels in Q1.

Sure, Stephanie. As you alluded, there's really 2 core drivers for our core seizure market. I know I'm sure we'll get into the pipeline soon. But one is accounts added and two is usage per account. On the account adds front, we added 33 accounts in Q1, which brings us up to 680 total. It was our largest number of new adds since we've become a public company. That continues to grow, and we see growth drivers there, accelerators in the maturation of the sales force as well as initiatives we have like our expansion from the VA system.

And then on the other side of the house, that's usage per account. We don't disclose that specifically, but we do disclose product revenue per account. So I know the Street is tracking very closely on that. We had a record number of usage per account in Q1. We still are in the early innings there. We're roughly, we believe, around 30% penetrated within our active account base. And we continue to march forward and driving growth through department expansion and provider education and workflow expansion.

Great. And then the revenue guidance for the year was raised by $1 million, which was a little bit more than the beat in Q1. So maybe you can just talk about your confidence in the outlook for the year and some of those core building blocks that you touched on and the visibility there.

Yes. We -- now we have about a 6-quarter track record of being a public company. And we've consistently had very accurate forecasting and beat our numbers. We have a philosophy, which hasn't changed over the last 1.5 years to provide guidance that we have very high confidence in the ability to achieve, and that's grounded in a really projectable business model. We -- on the acquisition front, of course, we track the leading indicators, but one underappreciated fact is that we tend to get purchase orders about 3 to 4 months before we turn an account live. So we've got very, very good near-term visibility in terms of the accounts that are launching in the coming quarter or 2.

On the usage per account front, we are -- we've got a very low customer attrition rate. Our relative to other capital type devices companies, for example, we're selling a whole lot of a product at a lower price point. And so we're less subject, I think, to shocks to the system. So we have very good visibility into the business, and I think that's reflected itself in our performance to date.

And then on the seasonality in Q2 and Q3, you mentioned you typically see sequential moderation, again, just given seasonality in utilization. Do you expect that to be a similar extent this year as what you've seen in the past? Or do some of the incremental opportunities you've been making progress on change that in any way?

I think we only have about a 3-or-so year track record of having sufficient usage to make an assessment. And we've seen the same trend for 3 years. So that's why we talk about it, which is that we tend to see higher usage in Q4 and Q1 relative to Q2 and Q3. And there was really, really strong reporting of ICU and ED census during COVID for obvious reasons. And so we have overlaid that with our patterns, and there's a very direct relationship between ICU and ED census and our usage. And so we strongly believe that, that's the cause.

That said, we're implementing a number of strategies to drive up into the right. Whether one drivers is more power from the other, I think that's something that we -- with the 3-year track record, don't have quite enough data to suggest, except for to appreciate that some degree of seasonality is a part of our business.

Makes sense. And then I wanted to follow up on the account side of things for a bit. You, I guess, recently talked about a new account acquisition strategy that's more focused at the hospital system level. So maybe you can just start with why you decided to build out this strategy in addition to what you were doing before and some of the ways that it's different.

Yes. So previously, we have the territory managers, they cover more individual account. And then we have a hospital system team, but they more cover big national accounts like the HCAs and the CommonSpirit. And there's a very big portion of the customers there we call the regional hospital systems. They are somewhere between owning 10 to 30 hospitals. And these often start to become fall between the cracks, right, the TMs and the system. We did this model because we saw a strong signal last year.

Our best TMs, they closed significantly higher than national average because they were able to close the smaller systems. They can close 10 hospitals at once, right? And then we noticed what they do is they not only just call individual hospital, they actually cover the system level administrators and CNOs and CMOs. They also do a better job coordinating across territory because I might only own 8 of the hospitals, you own another 2. They partner with the TM. They also partner better with the CAM. The CAMs are our sales that cover existing accounts because out of the 10 hospitals, 2 might be already CeriBell users. And -- but then historically, we don't have a dedicated team to make sure all this can get done systematically. So that's the reason behind building the team. So this team can partner with the TMs and the CAMs call on the system level stakeholders and also coordinate across different territories, different teams, make sure we have a well-designed strategic comprehensive strategy.

And I think you mentioned you hired a small team to drive this strategy. Is it all new hires? Or did you move over some of those TMs that had good success doing this in the past?

It's both.

Yes. Okay. And I guess, do you anticipate building this team out further or needing incremental investments to support this strategy?

We -- usually, we hired a meaningful a few numbers, single digit. Usually, we try for a few quarters. We are pretty confident we'll see the signal. So we might further extend, but this by nature is not going to be a big team. It's going to be a relatively small team because what I talked about is a lot of coordination and working at the system level. So it shouldn't have a big impact to the cost side.

Okay. And then just thinking about maybe impact on the model and if this changes sort of the pace of active account adds in the future or if it may affect headband orders and trends in the future?

I think on the rate of account adds, I think there's reason to believe it will. That's our thesis in doing it. The nature of these system-level sales is that they come in chunks, right? You work hard and then you get 7 or 10. It's probably going to be a few quarters before it can fully materialize into output. We're tracking it closely. But we're making the investment because we believe it can accelerate account acquisition. Maybe less clear on the utilization side. I think there's probably an argument that spreading best practices, but we view it more at least initially as an acquisition play.

Makes sense. And then the VA System represents a 170 hospital opportunity that you're in the early stages of. So anything you can share from your early experience there and the progress you're making on account adds?

We don't disclose specific the VA System because end of the day, it is one of the many hospital systems, right? So of course, one of the biggest one. However, we -- the way VA works is it more has this annual -- well-designed annual budget cycle. So what we did is we closed a meaningful portion of the VA hospitals Q3 last year. So in the last 2 quarters, we've been launching majority of these accounts. And this year, of course, we'll continue to launch the rest of the VA as well as work with the VA to see whether or not we can close even more accounts, and that will start launching later this year or next year.

Okay. Makes sense. And then maybe shifting to utilization a little bit. You've said that your top accounts use 3x more than the average account. So what are the drivers that can help move an average account up that utilization curve?

Yes. The pattern we see in the top accounts are a few. One is they use almost all the departments, all the ICUs, emergency departments, sometimes even step-down units and the floor. Our average account often are not in all the departments yet. So the departmental expansion is a very reliable path. The second feature we see in these top accounts is they have a very coherent workflow that -- because when you think about these are different departments, but the patient actually flows through ICU to the floor, sometimes to the -- sorry, ED to the ICU to the floor and go through neurology. And so we see average account, sometimes their workflow is not -- it can have room for improvement.

The third thing we see is they -- we train better these hospitals. Sometimes we have better access to it. We have better internal team. So they train all the physicians, they make sure the new physicians are trained, the overnight shifts are trained. The fourth thing we see is they have more well-formed protocol for specific patient population. For example, post-cardiac arrest patients have clear guidelines from AHA to have prompt seizure monitoring seizure -- prompt EEG monitoring seizure. Many of these top hospitals would have point-of-care EEG or CeriBell in their cardiac risk protocol. Not in all the patient population yet even in the top accounts, but those are the 4 patterns we see. And you can see how we translate this to our overall strategy, departmental expansion, protocolization and physician engagement and workflow optimization.

And when thinking about utilization at the top accounts and some of the additional indications that you've been making progress on, are there any constraints to consider from a hospital perspective for utilization going higher in those top accounts? Or is there still room in those accounts as well?

There are definitely rooms in the top accounts. So even without new indication like delirium and Neonate, we see our top accounts growing year-over-year. And top accounts are even easier for us to expand to new indications because all the stakeholders are strong CeriBell believers. So it's much easier to a strong account say, can you introduce me to the Medical Director of NICU or pediatric epileptologists. And same for delirium, a lot of our commercial pilot sites are our strong existing accounts.

And then just thinking about the account adds accelerating this year and utilization ramp for a new account versus utilization in an existing account. Maybe you can just remind us what that looks like and if there's any impact on overall utilization from new account adds?

The adoption pattern of new accounts, I think, is a little bit different than what I think from observation most investors infer. It's not like a try before you buy. They don't use 5 and 10 and then 15 and 20. They can establish really good practices on the front end. And what we see is that the practices that are established are very sticky.

So that's why we invest a lot of resources on high-quality launches. So to that end, adding a lot of accounts doesn't have a significant dilutive effect to usage, but they do come in slightly below our average. So there is some dilutive effect. But we work really hard to establish those best practices to make sure that they hit the ground running.

Okay. Maybe we can shift to some of the new indications. You're now in the commercial launch of Pediatric and Neonate products. So maybe you can just talk about early traction and feedback you're getting there and if it's consistent with the pilots.

Yes. The feedback from Neonate is very positive, which is why we announced the full commercialization this quarter. It's towards more of the optimistic scenario of our internal time line. If I compare Neonate launch to adult seizure launch we had about 6, 7 years ago, a few things that's actually more positive. One, from neurology perspective, when we launch adult, we have to explain to neurologists why partial montage. It's sufficient for ICU compared to the full montage. That's probably the #1 question from any neurologist now. Of course, we have a lot of data, neurologists finally say, yes, partial montage is good. But that was not day 1.

For Neonate, we actually have full montage recommended by American Epilepsy Society. And so that's the one question that we do not have to explain. And the reason we did full montage is because babies actually often have seizure in parasagittal domain. Number two, we see is even a different level of care of neurological outcome for this population. Of course, we all care about patients' outcome. Physicians all do and the neurological outcome. But sadly, when -- not sadly, but just like it's human nature, right? When you take care of a patient, that you are trying to save patient heart, patient lung and it's just harder to think about the brain when patients is 80-, 90-year old post cardiac arrest.

But when you have this newborn, seizure is the #1 most common neurological abnormality in NICU. They don't have usually stroke. They have a very small population. They don't have TBI usually. And then data also show 1 hour of seizure can change the IQ from 100 to 85 and neonatologists really recognize that. So because of the clinical impact, we really see a very strong desire to adopt. Now on the health economic side, many of these Level III NICU, so the highest NICU is Level IV. They are top teaching centers. The next high level is Level III. They're already very sophisticated. They often have to transfer patients out because they cannot get EEG. The DRG code for this patient is much higher than adult because they stay in ICU for much longer.

So we can keep the hospital keeping these patients in. And so that allows a very strong health economics as well as pride for the hospital to keep their family, keep the mom and the baby in the same hospital. So all these are very positive from the initial pilot. That's why we decided we are very much ready for the full launch.

You have said there's 200 NICUs in your existing installed base. Are they aware of this offering? Had you been messaging the broader launch with them while you were in the pilot phase? I know you mentioned it's still a multi-month sales process, but just curious how to think about the pace at which you can sort of start the process with your existing installed base?

Yes. The commercial pilot phase, no, we did not message to the 200 NICUs or any NICUs. We only focused on a small number because we want to make sure we do things right. Now with the full commercial launch that our CAM team is targeting these 200 NICUs. So that just started.

Okay. And then on delirium, you launched the first pilots in April and anticipate the full launch later this year or early next year. What have those conversations been like for setting up the pilots and any early learnings that you can share?

Yes. It's also very positive. The #1 question we get from investors, so what do I do if patients have delirium, you don't really have a drug. If you talk to intensivists, many of them actually don't ask that question because there's a clear guideline from Society of Critical Care Medicine that what do physicians need to do? They look at medication, sedatives or antibiotics or some pain meds can cause delirium, they look at other underlying conditions.

And so that we thought that's the case based on our market research, it was the case as we start to do the commercial pilot. And the second learning we have is doctors are very -- just most of them agree, say, "Okay, I really feel the current standard of care is subjective. I only have a binary result, I only have twice a day, and I'm not sure our new nurses were trained properly," having objective continuous trend resonate very much with them.

The third learning is actually a little bit of a surprise, but it's in a very positive way. They really see it's not delirium alone, it's delirium and seizure together because so many of these patients are having delirium and seizure together. And the symptom is the same. The treatment can be opposite. They don't have a tool, they have to guess. So a lot of the first few sites of commercial pilot focus on what are the populations we can target, how do we tailor the workflow when algorithms say it's positive or negative and also think about down the road, what are the potential clinical outcome or health economic outcome we should be measuring.

And what is the biggest benefit of having the delirium indication to you? Is it capturing incremental patients and improving utilization? Or is it on the subscription side? Yes, maybe just how you're thinking about that.

Yes. I mean the good news is it could be all above. We can decide it. We can decide do we want to charge more or do we see such a strong patient expansion? We don't want to charge more because if you charge more, you kind of slow down the adoption. And those are the questions we will be very much focusing on getting insight, getting data during the next couple of quarters. So by the time we have full launch, we really think through our pricing strategy.

And on the earnings call, you mentioned a study with Vanderbilt Medical Center to examine the overlap between seizure and delirium. Any more detail on the study that you can share or what you're hoping to learn from it?

Yes. As I mentioned in the earnings call, Vanderbilt is where delirium standard of care CAM-ICU developed and the standard of management [ A-F bundle ] is also developed at Vanderbilt. It's really probably one of the most influential medical center related to delirium. It actually, it started with -- we showed the algorithm and then we showed some literature. It triggered their interest about they wonder how many of their delirium patients are actually having seizure because they don't have the best EEG capability. So that's really the premise of it is to show how seizure and delirium together can potentially improve care.

So the first phase will just -- the protocol is public. So we'll look at all the delirium suspicion patients and put CeriBell and see how many seizure they can see and/or in other words, how many seizure they would miss with the current standard of care. And I think even that alone can drive significant adoption because you don't need to show doctor treating seizures is important. Doctors know that. You just need to show they are missing it. And down the road, of course, we can potentially expand that partnership more thinking about what study we need to do to integrate this and influence the guideline.

And then I wanted to ask about pricing from some of these new indications since there's puts and takes for both headbands and subscriptions potentially. You mentioned the neonate having the higher headband and subscription. You also got delirium NTAP in the CMS proposal, but NTAP for the core system, I think, is expiring this year. So maybe you can just help us think about the different puts and takes on pricing from a headband and subscription perspective.

Yes. I think as you alluded to, there are still decisions to be made, especially on the delirium side. But our core headband price has remained relatively consistent over the past year or so. We expect to maintain price going forward. We've seen an increase in -- even without neonate, we've seen an increase in the Clarity price, and that's been driven by hospitals acquiring more recorders. We typically charge about $500 more per month for every additional loaner recorder and the demand of hospitals and department expansion has driven that higher.

And in the near term, we have made a decision on neonate, which is that's sold as a separate subscription, and there's economies of scale to the customer to acquiring both adult and neonate such that having both is cheaper than 1 plus 1. And the headcap is also higher priced than the headband. Beyond that, as Jane mentioned, there's a wide range of choices we can make around future indications, and we haven't made those yet because we're awaiting information from our ongoing pilots and research.

Makes sense. Okay. Maybe we can switch over to the P&L. Gross margin of 87% in Q1 was about 300 basis points better than the Street, and you expect the rest of the year to be in the high 80% range versus the prior mid-80%. So what's driving that gross margin strength and improved outlook?

Yes. So we were operating around 88% over the past year and change, and we were manufacturing the headband except for final inspection assembly in China. And of course, tariffs went up materially there. Over the -- we undertook a number of mitigation strategies. What you're seeing right now is just us managing costs, reducing expenditures, volume-based discounting, manufacturing efficiency, et cetera.

And that's something we were working on in general before tariffs, but of course, accelerated and put additional focus on as tariffs came on board. And that offset the elevation of tariffs from China. And so those have kind of moved through our P&L at the same time that we kind of turned on the higher inventories of China. So this quarter, Q1, we were entirely dependent on inventory from China because our accounting is first in, first out.

Separately from that, we very quickly over the course of a quarter and change, stood up a second manufacturing line in Vietnam. We think there's value in supply chain diversity in general. But when tariffs were astronomically high for a brief period in China, we stood that up quickly so that we could move manufacturing or move part of manufacturing over there. That's fully operational, and we've received inventory from Vietnam. It hasn't yet flown through the P&L. So the way I would think about it is what you're seeing right now that move from 88% to 87% has been a reflection of the increasing tariffs in China. But going forward, in addition to continuing to capture the cost reduction initiatives as well as others we have underway, as Vietnam starts to move through the P&L, there's some opportunity for upside there.

Okay. And then on OpEx, in Q1, it was a little above what the Street was expecting. And I know you don't guide to OpEx necessarily. But with some of the new indications and opportunities that you're working on, has your, I guess, expectation for OpEx for the year changed in any way?

I don't think so. I think the OpEx in Q1 really had 2 buckets. One was investments in growth, which is sales and marketing and R&D. And sales and marketing investment was, in a large part, the natural expansion of the CAM team, which has to grow at the rate of growth of the account base pending -- barring a change of span of control and then the addition of the strategic account function. And those are investments that, of course, we believe are going to drive downstream growth.

And then on R&D, it was investments made in our pipeline as well as improving our products. So those are things we made open eyed. We evaluate our cash position regularly. We made a commitment, which we stand by to achieve breakeven with cash on hand. And there are investments that we feel will drive long-term value and growth and don't sacrifice that. The other, which was less ongoing is the expenses related to our ongoing litigation was higher in Q1 than it had been in the prior 3 or 4 quarters since we started that action. The nature of litigation is that it's nonlinear and the first half of 2026 is the most time-intensive and thus most expensive part of the lawsuit. So we -- that was elevated and will likely remain elevated in Q2, but we expect that to subside as we get through the most intensive parts of the trial.

And then I think as of Q1, you started to report adjusted EBITDA. So maybe you can just talk about your decision to do that now.

Yes. I think we've tracked closely, and I think we were, frankly, the outlier in not doing it until now. Most of our peers of our stage do have some form of adjusted EBITDA. I think our 2 exclusions from EBITDA to adjusted EBITDA is noncash stock-based comp and the litigation expense related to that specific action.

As a general matter of companies going public, the noncash stock-based comp tends to increase the first few years as you make that transition from on the books really inexpensive stock options to from a GAAP perspective, more expensive RSUs. And so I think making sure that, that's appreciated and not a reflection of differential investments we're making in the infrastructure is important to call out. And then as it relates to the litigation with Natus, again, we view that as transient in nature and thought it was important to specifically identify that.

Makes sense. I think with that, we're out of time. So thank you both for joining us.

Thank you.

Thank you, Stephanie.

Thank you for standing by. At this time, I would like to welcome everyone to the Ceribell First Quarter 2026 Earnings Call. [Operator Instructions]

Thank you. I will now turn the conference over to Brian Johnston, Investor Relations. You may begin.

Good afternoon, and thank you all for participating in today's call. Joining me from Ceribell are Jane Chao, Co-Founder and Chief Executive Officer; and Scott Blumberg, Chief Financial Officer.

Earlier today, Ceribell issued a press release announcing financial results for the quarter ended March 31, 2026. A copy of the press release is available on the Investor Relations section of the company's website.

Before we begin, I'd like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being 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. 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 public filings with the Securities and Exchange Commission, including our annual report on Form 10-K filed with the SEC on February 24, 2026. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 11, 2026. Ceribell 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 Jane.

Good afternoon, and thank you all for joining us for our first quarter 2026 earnings call. Q1 was a strong quarter. We delivered revenue of $26.5 million, growing 29% year-over-year and 7% sequentially. Growth was driven by record headband utilization and our largest quarter of net new account additions.

We also delivered 87% gross margin and expect to maintain gross margin in the high 80s range throughout 2026. Beyond continued progress in penetrating our core seizure market, we delivered 2 major milestones that mark inflection points in the evolution of our platform. First, following a successful pilot, we have initiated the full commercial launch of our neonate and pediatric products. We are privileged to now offer our seizure monitoring solution to some of the most vulnerable patients. Second, we activated the first site in our delirium pilot in April, signifying our entry into the $1 billion market where we offer the only FDA-cleared diagnostic tool. I will discuss both milestones in detail shortly.

First, let me start with our performance in our core market. Our goal is to become the standard of care for seizure management across 6,000 U.S. hospitals that offer acute care services. We are pursuing this through 2 paths, adding new accounts and deepening utilization within our existing installed base.

On account acquisition, we ended Q1 with 680 hospitals actively using Ceribell System. With 33 net additions, this marks our strongest single quarter of account growth since becoming a public company. We remain confident in our ability to increase the number of new adds in 2026 above the level seen in 2025. Our confidence is reinforced by 3 strengths in this part of the business, the continued maturation of our recently expanded sales organization, deepening penetration within the VA and other health systems and our strong account backlog.

The account acquisition team expansion we launched in Q4 2024 is delivering. Among the new hires with at least 12 months of tenure, over 85% have contributed to the active account base and 100% have generated purchase orders. Given the timing of our sales cycle and the time required to launch new accounts, this level of productivity is encouraging. As more of our new hires mature throughout 2026, we expect a further step-up in productivity with additional acceleration in 2027.

Beyond growing the territory manager team, we are also gaining momentum in 2 initiatives focused on accelerating hospital system acquisition. First, we expect continued momentum within the VA system, where we remain in the early stages of penetrating the 170 hospitals unlocked by our FedRAMP High Authorization last year. Separately, leveraging our success from the VA, we launched a pilot at select U.S. military hospitals. The opportunity is incremental in scale, but nonetheless, it is a compelling validation of our product and our position as a category leader.

Second, we have successfully hired a small team focused on top-down engagement of regional hospital systems. This complements the bottom-up activity of our TM organization and opens additional pathways to system-level adoption. Overall, we are encouraged by the growing market receptivity to our technology and are pleased with our team's momentum in adding new accounts.

Meanwhile, same-store growth trends remain strong. Q1 marked our strongest quarter ever in terms of headband usage per account. Our growing CAM team continues to drive utilization through departmental expansion, provider engagement across all shifts and support of protocol development.

We believe we have a significant opportunity to increase utilization even further. In accounts that have adopted our best practices, the results speak for themselves. Our top accounts routinely monitor approximately 3x as many patients as average comparable accounts.

We are also increasingly encouraged by what we are hearing from our users in real world. As our user base expands and real-world data accumulates, recognition of the clinical imperative of quantifiable brain monitor at the bedside continues to grow. In March, I had the opportunity to experience this firsthand at the Annual Meeting of the Society of Critical Care Medicine. There was strong excitement for our technology far beyond what we have experienced at past industry events. It is clear that we are moving closer to achieving our goal of helping to redefine the standard of care for seizure management.

Turning now to our neonate and pediatric seizure programs. We have initiated the commercial launch of both products. Neonate is a population where improvement in seizure management can change the entire course of individual's life. Our pilot was conducted at 5 sites, including both new and existing customers. All 5 of these hospitals are now moving forward from pilot to full implementation. This momentum reinforces both the clinical case for use of our technology in younger patients and the commercial opportunities ahead.

We're still early in our pediatric launch, but the feedback we are hearing from parents and physicians has already been profoundly meaningful. I'd like to share a recent case involving a pediatric patient in the emergency department. A 2-year-old boy was brought to the ER unresponsive by his mom. It was his second ER visit of the day. The bedside provider initially struggled in identifying the root cause until the neurologist requested the Ceribell System. Clarity immediately identified seizure activity, which neurologists confirmed. This avoided the need for a lumbar puncture and potential ICU admission while waiting for a conventional EEG. The team was able to initiate treatment promptly and the little boy gained full alertness later that day. He was discharged the next morning. This case reflects what Ceribell System is designed to do, quickly identifying seizure activity, guide treatment decisions in real time and help patients get the care they need faster.

Moving now to delirium. In April, we were thrilled to have activated the first site of our delirium pilot. This marks the beginning of a new chapter for Ceribell as we continue moving towards our goal of establishing EEG as a new vital sign. As a reminder, following FDA 510(k) clearance in December, Ceribell was the first and only company with an FDA-cleared delirium monitoring solution.

Delirium is the most common neurological complication in the ICU, yet the standard of care for assessment remains subjective, labor-intensive and intermittent. Our solution offers something fundamentally different, objective, consistent and continuous insight into a patient's neurological state. Our pilot is designed to build real-world experience, validating the right patient populations, optimizing clinical workflows, refining our commercial strategy and generating clinical evidence. What we are hearing from the field is encouraging. Interest in our delirium solution has been strong. And notably, that interest is amplified when delirium monitoring is paired with seizure detection. This interest is further validated by our recently launched study with Vanderbilt Medical Center to examine the overlap between seizure and delirium across ICU patient populations.

While the stand-alone value of delirium algorithm is clear, we are convinced that addressing seizure and delirium together has the potential to transform ICU care. We are also pleased to share that in April, we received a supportive CMS proposed rule for a new technology add-on payment, or NTAP, for our delirium monitoring solution. The rule proposes up to $2,171 in incremental reimbursement per patient. This is a positive indicator of the potential for a favorable final rule in August 2026. If adopted, the NTAP would become effective October 1, 2026.

We believe that a positive final rule would supplement the significant clinical interest in our technology, helping to pave the way for its adoption. Looking ahead, we remain on track for a full commercial launch of our delirium solution in Q4 2026 or Q1 2027.

Finally, turning to LVO stroke. We received breakthrough device designation for this indication in January 2026. We are continuing to push our clinical programs forward and look forward to sharing more in the coming quarters.

Stepping back, I could not be prouder of what our team have accomplished in the first quarter of the year. Q1 reinforced the confidence in our trajectory, and I'm energized by the momentum we are carrying into the rest of 2026. Execution across the business is on track with several key initiatives running ahead of schedule.

We estimate our total addressable market at approximately $3.5 billion in the U.S. alone, nearly double what it was just a year ago. We believe Ceribell is best positioned to lead this market with an integrated platform, established trust from physicians and administrators and a growing body of clinical evidence.

Our goal is a single brain monitoring platform that sets a new standard for neurological care, and we are executing against that vision. We remain committed to make EEG a new vital sign and the early progress in 2026 only strengthens our conviction in the transformational nature of what we are building.

With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of the first quarter results and 2026 guidance.

Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the first quarter of 2026 was $26.5 million, which is a 29% increase from $20.5 million in the first quarter of 2025. The increase was primarily driven by increased adoption of the Ceribell System across new and existing accounts. Product revenue for the first quarter of 2026 was $20.2 million, representing an increase of 29% from $15.6 million in the first quarter of 2025. Subscription revenue for the first quarter of 2026 was $6.3 million, representing an increase of 29% from $4.9 million in the first quarter of 2025.

We ended Q1 with an account base of 680 hospitals, representing an increase of 33 accounts in the quarter. This includes a number of accounts that are part of our ongoing expansion within the VA system. We continue to anticipate incremental addition of VA accounts over the course of the year.

We are pleased with the continued sequential momentum in headband purchasing trends in the first quarter, which we believe reflects the success of our same-store growth initiatives as well as our focus on high-quality new account launches. While we expect to continue to drive deeper within our accounts, I'll remind you that we typically see a sequential moderation in Q2 and Q3 volumes driven by a reduction in ICU census during the warmer months.

Gross margin for Q1 2026 was 87% compared to 88% in the prior year period. This was achieved despite relying on inventory acquired from China at an elevated tariff rate. We were able to nearly fully offset this expense through a variety of cost reduction initiatives undertaken in 2025.

As we move into the back half of 2026, we will begin shipping inventory sourced from our fully operational line in Vietnam, which is subject to lower tariff rates. Consequently, we feel confident in our ability to maintain gross margins in the high 80% range throughout 2026.

Total operating expenses for the first quarter of 2026 were $43.9 million, an increase of 36% compared to $32.2 million in the first quarter of 2025.

Noncash stock-based compensation expense was $3.7 million in the first quarter of 2026.

The increase in sales and marketing expense in the first quarter was attributable to investments we made in our commercial organization as previously detailed. Further, we typically hold our national sales meeting in Q1, resulting in elevated non-headcount sales and marketing expense during the quarter.

G&A expense increased in Q1 as a result of expenses related to our ongoing IP litigation, which totaled $5.6 million. This is considerably higher than what we've seen in prior quarters, which is a reflection of the nonlinear nature of litigation-related activities.

Research and development expense in Q1 increased as a result of headcount expansion to support enhancements to our product platform, including developing and improving our new product pipeline. Net loss was $19.7 million for the first quarter of 2026 or a loss of $0.52 per share compared to a loss of $12.8 million or a loss of $0.36 per share in the first quarter of 2025. An average weighted share count of 37.7 million shares was used to determine loss per share in Q1 2026.

Going forward, we will begin reporting adjusted EBITDA, which we believe is representative of the ongoing operating performance of our business. Adjusted EBITDA reflects our net loss before interest, taxes, depreciation and amortization expense and also excludes noncash stock-based compensation expense as well as legal expenses associated with our ongoing IP litigation. Adjusted EBITDA loss for the first quarter of 2026 was $11.2 million as compared to $10.9 million in the first quarter of 2025.

Our cash, cash equivalents and marketable securities as of March 31, 2026, were $141.2 million. We remain committed to our objective to achieve cash flow breakeven with cash on hand and the strength of our balance sheet and strong gross margin profile give us a high degree of confidence in our ability to do so.

Turning now to our outlook for 2026. We expect full year 2026 total revenue to range from $112 million to $116 million, up from our prior guidance of $111 million to $115 million. This represents annual growth of 26% to 30% over 2025. This change to guidance reflects the momentum we're seeing in our core business with success driven both by new account additions and usage within our established account base.

With that, I will turn the call back to Jane.

Thank you, Scott, and thank you all for your time today. We are pleased with our first quarter performance and the trajectory of our business. We continue to make tangible progress towards establishing the use of our system as the standard of care for seizure detection in acute care setting. With less than 4% penetration in our core seizure market, we have a sizable runway ahead of us.

At the same time, we are advancing our platform into new indications with urgency and purpose, building towards a comprehensive brain monitoring system. Our mission to establish EEG as a new vital sign remains our North Star.

I will now turn the call over to the operator for Q&A. Operator?

[Operator Instructions] Your first question comes from the line of Stephanie Algazi with Bank of America.

Just wanted to ask about Q1 and the guidance. Q1 came in a little better than The Street, and you raised the guide by $1 million, a little bit more than the beat. So can you just talk about the decision to raise the guide and your confidence in the outlook for the year?

Sure, Stephanie. When it comes down to 2026, there's really 2 core drivers of our business. It's account acquisition and same-store growth, and we're doing quite well on both. We just had our largest quarter of net new adds since we've been a public company and record usage per account. So that really forms the foundation of our confidence in the business and gives us the ability to raise guidance coming out of Q1.

Got it. And then just to follow up, I wanted to ask about OpEx. It was a little higher than expected. Was that mostly from higher litigation? Or was there increased commercial investments versus what you expected as well? And does Q1 change how you're thinking about the full year? Or is it more a change in timing of expenses?

We don't provide OpEx guidance. But as it relates to Q1, we saw a little bit of elevation in sales and marketing and R&D, and I'd bucket those more as investments in the business. We continually look at the facts in front of us and make investments to drive future growth, and that includes expansion of the sales team. As Jane outlined, a portion of that was related to our regional health systems function. And we continue to invest in R&D on the basis of our new product adds as well as improving our current product.

G&A is really where the IP expense came in. That was a detailed $5.6 million, higher than what we've seen in prior quarters. That's a result of the cadence of the lawsuit where we're right now in Q1 and Q2, really at the heaviest expense as we prepare for and go to trial. So we'd expect that to moderate as we get towards the back of the year.

Your next question comes from the line of Robbie Marcus with JPMorgan.

This is Lily on for Robbie. I was hoping you could talk a bit more about what you're seeing so far in pediatric and neonate. I know it's still early, but could you share a bit on the early feedback and utilization trends you're seeing so far and how meaningful of a contributor it's assumed to be in guidance for this year?

Yes. Overall, as I mentioned in the call, we see very positive momentum. We see the initial all the neonate pilot sites has committed to move to full execution. We are also seeing both in existing accounts as well as our new accounts showing strong interest in neonate expansion as well. So that could potentially drive both utilization as well as new account add.

On the pediatric ER front, that case I shared during the call is not an outlier. This is a very vulnerable patient population when they go to ER, physicians often have to deal with the situation that they don't get EEG and they cannot get EEG. So we see physicians and nurses see that opportunity for improvement. So overall, I would say the clinical validation has been very strong.

In terms of the second part of your question, how this implies to the revenue implication, it's still very consistent with what we have been guiding because even getting to a new department or adding a patient population still can take months for new accounts can still take the same amount of effort and time line. So we would see some impact in 2026. We'll see the much more meaningful impact would come in 2027 and beyond.

Perfect. And then just a follow-up on gross margin. That came in really strong, above what we were thinking and above the range that you were guiding previously to for the full year. So can you talk a bit more about what drove the strength in the quarter and in the guidance? And how much of that, if any, is driven by tariff refunds?

I'll answer the back half of the question first. None of it is driven by tariff refunds. We have not reflected that in our financial statements and will if and when we get the refund. But it's really driven by investments we made in mitigating costs last year. Those were things we did both as an ordinary course of business but also invested more as tariffs were coming down the pipe. So we were able to almost fully offset the cost of the increased tariffs from China.

We also, as I mentioned, are now manufacturing in Vietnam. We have that inventory in-house. But based on our first in, first-out accounting, that hasn't flown through our income statement yet. So as we move towards that towards the back of 2026, we've got some opportunity for upside as well.

Your next question comes from the line of Brandon Vazquez with William Blair.

First, I just wanted to stick on neonate for a second and just talk a little bit more -- try to get more details on how things are going there. Jane, you had mentioned that the first -- I think it was the first 5 accounts went from a pilot to a full launch. Talk to us a little bit about what did those accounts see that made them comfortable that you guys and the accounts could go to a full launch. What do you see in the early days once this goes into a full launch? And once you go into that broader commercial stage, is there any impact and pull-through on the seizure side as well?

Yes. For the new accounts, the pilot accounts conversion, often a couple of things we learned. One is the neonatologists or the neonate nurses. They are even more protective of their patients. So when they roll out new technology, they are very cautious and make sure the new technology does no harm it and it's actually safe. So over the past couple of months, they all validate very strong safety, especially related to skin integrity of this patient population. They also validate the ease of use and some of them also validated the accuracy of Clarity. So with all that, that translates to the very strong clinical buy-in.

On the health economic front, some of these sites are not Level 4. They can be Level 3. So they used to transfer patients out because they cannot get EEG. And of course, they lose the reimbursement with the patient, and they were able to show that they could potentially use this to reduce those transfers. So that's a very strong health economics driver in addition to the strong clinical driver, not to mention not having patients move. So it's very encouraging that we are seeing early on our hypothesis of clinical and health economic drivers doing our market research translating into the reality that what we see in the commercial pilot. And now our goal is to also further implement and roll out our playbook.

And the last thing I will mention is we also see that the pediatric epileptologists are very supportive because our montage is consistent with the ACNS guidelines, that's the full montage. And they are very encouraged to see that they can see the full picture as well and happy with the Clarity Assistant. So overall, we remain optimistic about the full launch.

Great. Maybe switching gears a little bit to the account add side. You guys had a great quarter there and a record quarter. I know you mentioned a couple of different buckets, but you guys have talked also about investing in some of these corporate focused teams, if that's the right terminology for it, that kind of push demand from the top down. Maybe talk to us a little bit about what are the 1 or 2 most incremental drivers that are supporting that level of account adds and just to understand durability of that going forward.

Yes. So this model was built upon the success we saw last year. We noticed some of our very top TMs, they were able to close a much bigger number of accounts because they really focused on the system -- regional hospital systems. So that's why we decided to expand the proven success model. So what this team does was build a few folds. One is they would more focus on the hospital system level often administrators or the CMOs, the VP in charge of patient transfer, the CFOs and because the TM level, usually, they don't get to the regional system level. And the second factor they can drive the business is they can coordinate across our TM as well as CAM organization. because even, say, a 10, 20 hospital system, some of them are our existing accounts. So we have CAM responsible for it. Some of them are split across different territories. To have someone centralized and coordinated efforts is also a significant driver.

And the third driver, I would say, this is the first time we are managing the regional system in a more sophisticated way. So internally, we are monitoring the pipeline movement. We are making sure the CAM and TM work closely together to also develop the pipelines for this hospital system close. It's too early to report the actual result because this process takes longer. Regional system can take even a little bit longer than individual accounts. But from the early indicator, we are very optimistic.

Your next question comes from the line of Josh Jennings with TD Cowen.

Congratulations on a nice start to the year. And I wanted to just ask on the utilization front. It seems like trends are continuing to get stronger. You put forward the systematic department expansion initiative last year, and you're seeing -- it seems like there's been more and more improvement. A any quantitative or qualitative color -- additional color you can provide just on this effort and how it's impacting utilization at same-store accounts?

Yes. I can add more -- probably more qualitative color to it. Overall, our strategy remains consistent. It is departmental expansion, physician and provider engagement across all shifts and also driving verticalization across different patient population.

I would say the strong quarter, partially, as Scott mentioned, Q1 is the high seasonality, but we also believe that a significant portion is because of execution. And last year, we also significantly invested in building up a very strong regional director leadership team and build up the CAM team accordingly and strengthen our execution and playbook. I think we are seeing a lot of the effort we have put in and just seeing the team executing in an excellent way. So very proud of what we have accomplished, what the team has accomplished here.

I also wanted to -- I was hoping to better understand what you -- Jane, you described as a potential synergy or not potential, but there could be and will be a synergistic interaction between the delirium and seizure indications. You got this Vanderbilt study going. Can you build out on how you expect results or even what's in the current library of evidence, how once the delirium launch is in play, how it can also drive deeper penetration for the seizure indication?

Yes. Thank you, Josh. Clinically, delirium and seizure are heavily intertwined. If I maybe can use one example patient population to illustrate that. If you pick up sepsis patient with altered mental status, which is many of them, about 20%, 30% of these patients, if you monitor them with EEG, would have non-convulsive seizures. And then 40% to 50% of these patients would have delirium. But their symptom, if you don't have EEG, it's the same patient just altered mental status. And to make things even more complicated for the 20%, 30% seizure patients, about 40% of them later would have delirium. And for the delirium patients, if you monitor them the EEG, a good portion of them would later develop seizure. So that's on from prevalence rate, some existing publication showed how intertwined they are.

Now when you go to the treatment, as many of us know, benzo is the first-line treatment for status epilepticus for the inpatient and often physicians use it empirically treat seizure. However, benzo is also the #1 deliriogenic agent. So if patients have delirium, you want to keep them away from benzo. And right now, without an objective tool, physicians again have to guess. So this is why as we show this clinical evidence and start connecting the dots for the physicians, the light bubble goes on. And for many physicians would wonder -- I wonder how many of the delirium patients I'm treating actually have non-convulsive seizures. So that's really the initial discussion that lead to the study that we are initiating with Vanderbilt.

Next question comes from the line of Bill Plovanic with Canaccord Genuity.

I want to start out with the launch of delirium as you go into the pilot here, do you think that you're going to be able to charge separately for delirium? Or do you think that this will be part of the offering that you're measuring metrics and it just enables you to build your installed base and your defensive moat against other players? Just any general thoughts as you're going into this? Is this going to be incremental revenue? Or is it just kind of help you continue to land, expand and really dominate the market?

Yes. Thanks, Bill. You're pointing out 2 potential drivers underneath your question. One is we could charge more or separately for delirium so that could be a revenue driver. And the other driver is by offering delirium solution, even in existing accounts, we could drive more patient usage. So it is true both are potential drivers of launching delirium.

At this point, we know that we have both options. We are not making the decision and are not ready to discuss how we're going to price it yet. However, that's exactly why we're doing delirium pilot and just both to study the price elasticity or sensitivity as well as the potential impact of delirium on the number of patient expansion we could achieve. So we look forward to probably discuss more about the question you asked down the road as we are ready to launch delirium fully.

Excellent. And then just I really want to come back to the guidance question. I mean it's rare that you see a company beat by $600,000, $700,000 and then raise guidance by $1 million, especially after the first quarter. And so you've given us the reasons of the sales force gaining traction. But then the commentary on the seasonality in Q2 and Q3 has me a little confused. And I think the best way to ask it is, for a cadence standpoint, consensus is $27.2 million for the second quarter. Are you comfortable with that number? Or any thoughts or comments would be greatly appreciated.

I think the comment on seasonality is nothing new. It's more of a reminder. And I believe most of the Street has appropriately modeled the seasonal impact of Q4, Q1 being higher than Q2 and Q3. So I won't comment specifically on the specific quarter of consensus other than that I think people understand the seasonality. And I would disconnect the two.

The guidance, of course, is full year guidance, and we have very high confidence in the full year. We just want to make sure that people are appropriately thinking about the transition from Q1 to Q2, which has always been, and we expect to continue to be sequentially down in terms of usage per account. But of course, that's offset by the growth initiatives we're pursuing both in terms of new adds and the impact of the cans.

Your next question comes from the line of Marie Thibault with BTIG.

I wanted to circle back here on sales force productivity. You gave us some great stats, very encouraging that of your folks that have 12 months or more of tenure, over 85% have contributed to the account base, 100% of them have generated purchase orders. Just wanted to double check since that's the first quarter that we're getting these sorts of stats. Is this all pretty new once they hit that 12 months that they start to be able to contribute in this way because of the length of the cycle? And I guess it's a long-winded way of asking how long does it take for a rep to kind of hit peak productivity in terms of tenure and maybe there's not even a ceiling. Just any details on kind of where this could go from here?

Yes. Sure, Marie. First, I want to make it clear that we don't intend to introduce new reporting metrics here. We wanted to quantify something that we've talked about qualitatively for a while because we just got to the point where reps who've been a part of that expansion that we really started towards the end of Q3 2024, the beginning of Q4 are just getting to the phase.

We generally have expected reps to generate their first new add at about 1 year. And that's been consistent. We last expanded our sales or pretty broadly back in 2021. But of course, we've added reps along the way. And the math there is essentially 2 or 3 months to train the rep, 6 or so months to acquire a purchase order, 3 or 4 months to launch. So that adds up to about a year.

And throughout the course of the past 1.5 years since we started that expansion, we've been tracking the precursors to that, which, of course, is the CRM measurement of the activities that we know are associated with purchase orders. And we've now gotten to the point where we can actually translate that into tangible for you. So we thought we'd give you a little bit behind the curtains in terms of how that's translating. And I do want to point out, it's a relatively small group since we did that expansion over the course of a year, and it's the first portion of those, but the rest are tracking as well. So that's one of the things that gives us confidence in the ability to drive more growth this year than next year because we got than last year because we got a number of folks aging into productivity throughout the year.

All right. Great detail there, Scott. Just one quick follow-up for me, a clarification on seasonality. Of course, I understand utilization per account might be impacted by ICU census. But would we expect any impact to account adds? It seems to me that you'd be able to still be selling into these departments. Just want to clarify that.

Yes. There's no specific seasonality. We see there is a little bit of quarter-to-quarter lumpiness, and that may be increased down the road with the addition of the new regional health system function because they'll get accounts in bigger chunks. So it's not -- there's no consistent trend, but you can see that move up or down as long as the kind of direction is up and to the right. We saw that last year where I think Q2 was lower than Q1 and Q3 was much higher than Q1. It's a little bit up and down, but the trend is that we'll add more.

Your next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann.

Firstly, could you talk about military hospitals and talk about the opportunity and TAM perhaps as it relates to the size and scope of the VA network?

Yes. The military hospitals in terms of number of hospitals, our understanding is more around 30 hospitals. So that's significantly lower than 170 VA hospitals. it's a very meaningful opportunity. And they have actually slightly different cybersecurity compared to VA. However, there's more overlap between the cybersecurity. So we were able to leverage the success we had from VA and have both physicians and administrators support and use leverage the cybersecurity gain through FedRAMP hike as well as the success in VA to start this pilot.

In terms of the clinical unmet needs, they face many similar challenges as VA, the under-resourced neurologist availability of neurologists being one of them and the EEG technicians as well. So for now, we focus on the military hospitals, and we are excited about the potential upside this can bring.

Got it. That's helpful. And could you talk a little bit further about your comment regarding CAT scans? Just curious on some of these pathways and triage monitoring as stroke and LVO patients are being looked at as far as CTs and MRIs.

Just to make sure I understand the question, you mean how our LVO monitoring algorithm would work in terms of being complementary to CT and MRI, other imaging tools.

That's right. And in practice, what might you envision be a protocol or standard of care.

Yes. We are, of course, still a little bit early to talk about the exact workflow. However, the way we see the value proposition of the product is we do not replace any CT or MRI as the gold standard of LVO detection. Where we see for the inpatient setting, the value proposition for our product is the continuous monitoring element so that we can potentially triage and detect LVO faster.

And because for CT and MRI, you can't just constantly send patients to CT and MRI, right? So if we can have a continuous monitor, we can say this patient have a very, very high likelihood to have large vessel occlusion, and that can potentially trigger a workflow to send the patient for CTA or MRIs as needed to confirm LVO. And so that could significantly shorten the delay of LVO detection. I hope that answers your question.

Your next question comes from the line of Jayson Bedford with Raymond James.

Maybe just a couple here. I realize this may depend on -- well, it will depend on hospital size, but utilization in VA hospitals compared to non-VA hospitals, how would you expect that to trend if it's different at all?

We don't disclose hospital system level utilization because even though we talked about VA as an opportunity mostly because of FedRAMP High that opened a large system. But externally, we just do not disclose specific system level utilization.

Okay. Okay. In terms of just the $5.6 million in litigation expense in the quarter, Scott, is this peak spend -- and just so I have it, is this relative to the $5.6 million is relative to about $1 million a quarter over the last few quarters? Do I have that correct?

We were running at about $1 million to $2 million a quarter before. And as we kind of move through the year and you've got the comparison period and adjusted EBITDA, you'll be able to track that. So Q1 was outsized. Q2 also will likely be higher. We're right in the kind of peak part of the action with depositions and upcoming trials. So I'd expect Q2 to be elevated too, and then it will start to moderate as you move later into 2026.

There are no further questions at this time. I will now turn the call back over to Jane Chao, Co-Founder and Chief Executive Officer, for any closing remarks.

Well, thank you, everyone, for joining our call. I'm very proud of what we have accomplished as a team and very excited about what's on the horizon and look forward to sharing more milestones in the coming quarters.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Hello, and welcome to the Ceribell Q4 2025 Earnings Call. [Operator Instructions]

I will now turn the call over to Brian Johnston, Investor Relations. Brian, you may begin.

Good afternoon, and thank you all for participating in today's call. Joining me from Ceribell are Jane Chao, Co-Founder and Chief Executive Officer; and Scott Bloomberg, Chief Financial Officer.

Earlier today, Ceribell issued a press release announcing financial results for the quarter and year ended December 31, 2025. A copy of the press release is available on the Investor Relations section of the company's website.

Before we begin, I'd like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being 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.

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 public filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q filed with the SEC on November 4, 2025.

This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 24, 2026. Ceribell 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'll turn the call over to Jane.

Thanks, Brian. Good afternoon, and thank you all for joining us on our fourth quarter and full year 2025 earnings call.

2025 was an outstanding year for Ceribell as we further penetrated our core seizure market while significantly expanding our total addressable market, which we believe has grown from $2 billion to over $3.5 billion. We accomplished this while delivering robust financial results, driving rapid revenue growth and maintaining a strong gross margin profile.

I'm pleased to report that the revenue for the fourth quarter of 2025 was $24.8 million, reflecting 34% growth over the same period last year. For the full year, revenue totaled $89.1 million, representing 36% growth over 2024. Gross margins were 87% and 88% for the fourth quarter and full year, respectively. We finished the year with 647 active accounts as of December 31, which translates to 32 net new accounts added during the fourth quarter and 118 throughout 2025. The strong performance reflects the disciplined execution of our dedicated team and predictable recurring nature of our business model.

Beyond driving rapid revenue growth and expanding our account base, we laid several critical cornerstones of the foundations for our vision. Our mission is clear: to make point-of-care EEG the standard of care for management of seizures in the acute care setting and to leverage our technology and footprint to establish EEG as a new vital sign.

The milestones we achieved in 2025 bring this vision much closer to reality. Becoming the standard of care requires demonstrating clear superiority over the status quo. With over 140 peer-reviewed publications and abstracts, we believe we have firmly established that the Ceribell system is equipped to address the unmet needs in the acute care setting, but evidence alone is not enough.

To achieve our ambitions, we must make our technology widely available. In 2025, we undertook several initiatives aimed at bringing the benefits of our system to all patients in need. First, we expanded our commercial infrastructure from 35 territories in the second half of 2024 to approximately 55 territories today. We are starting to see the signs that this investment is paying off with a very strong backlog of accounts interested in adopting our technology. Based on our experience, the timing of our investments will begin accelerating the rate of account acquisition in 2026 with further acceleration expected in 2027.

Second, we demonstrated our ability to accelerate utilization rate through systematic departmental expansions, protocol development and other growth initiatives. Our playbook is well defined and with roughly 30% penetration within our installed base, we have plenty of room to drive deeper within our accounts. Third, we broadened access to additional sites of care by achieving FedRAMP high authorization, which unlocked access to all 170 hospitals within the VA system.

After a comprehensive and highly successful pilot, the VA has committed to expanding within the system. The first accounts launched in the fourth quarter of 2025, and we're excited to launch even more throughout the first half of 2026. Finally, we expanded our core seizure market opportunity by approximately $400 million following the FDA clearance of our seizure detection products for neonate and pediatric patients. We expect this age range expansion to accelerate account acquisition and to drive deeper penetration into our existing installed base of over 600 hospitals.

I'd like to spend a few minutes discussing the neonate market. Seizures are the most common neurological emergency in the NICU and guidelines are clear in supporting the use of EEG. Still, legacy practice falls short in managing these newborns given limited EEG capacity and the shortage of epileptologists. In this patient population, 90% of seizures are nonconvulsive and physicians who suspect seizure based on observation alone are incorrect more than 70% of the time. With that stake is profound. Evidence shows that a total seizure burden of approximately 1 hour is associated with a 15% decline in cognition and language development score, a difference that can shift a child from normal neurological function to lifelong impairment. Studies also demonstrate that for every hour delay in treatment, seizure duration can double.

By identifying seizure earlier and initiating treatment sooner, clinicians can significantly reduce the total time the patient spends in seizure and fundamentally shift their development in a positive direction. In the recent case, a 2-week old infant presented brief abnormal movements after hours. The care team suspected seizure, but required EEG for accurate diagnosis. Our neonatal head cap was set up within 10 minutes and a few minutes later, seizure was confirmed. The infant was promptly sent for imaging, which identified cerebral venous sinus thrombosis, a stroke caused by a blood clot that can be devastating if not treated early. Empowered with this information, the care team was able to promptly and confidently treat the patient.

I'm happy to share that the infant is doing well today. Following treatment, there has been near complete resolution of the clot and no recurrence of seizures. This story illustrates how Cereal system can change the trajectory of care in a matter of minutes, particularly in these vulnerable patients. This story is only one of many. This early clinical experience in addition to management recognition that neonatal patients are eligible for some of the highest value DRG payments have driven momentum during our ongoing commercial pilot. We believe that every NICU should have access to point-of-care EEG, and our goal is to enable this as soon as possible. We look forward to bringing this product to the market in Q2 when we anticipate moving from the pilot stage to a full commercial launch.

With our expanded sales team, FedRAMP approval and FDA clearance for neonatal and pediatric patients, we have solidified the foundation of our core seizure market to set the stage for exciting 2026. We believe we are less than 4% penetrated within a $2.5 billion core seizure market and see significant growth opportunities ahead. Entering 2026, the path to achieving our vision of becoming the standard of care for seizure detection within the acute care setting has never been more clear.

Moving now to the second horizon of our vision to make EEG a new vital sign. We believe that a single platform that can differentiate between the most common and significant neurological abnormalities impacting patients in the acute care setting could fundamentally change the treatment paradigm. Just as patients who have chest pain receive an EKG, we see a future where patients with any sign of altered mental status receive Ceribell as a matter of protocol. During the past 3 months, we achieved a breakthrough milestones that position us to deliver a comprehensive neuromonitoring platform for the acute care setting.

In December 2025, we received FDA 510(k) clearance for our delirium algorithm, making the Ceribell system the first and only FDA-cleared delirium detection and continuous monitoring device. Shortly after, in January 2026, we announced the receipt of FDA breakthrough device designation for LVO stroke monitoring in the inpatient setting. We achieved both of these regulatory milestones ahead of schedule.

Let me first focus on delirium, where the need for objective monitoring is clear. Sometimes called acute bin failure, delirium affects over 30% of patients in the ICU. Every day in ICU with delirium carries a 10% higher mortality risk and the risk of developing dementia is at least 60% higher if patients experience delirium in ICU. The current standard of care for diagnosing delirium is a behavior-based nursing protocol. It is subjective, burdensome and binary. The limitation of this diagnostic tool make accurate longitudinal tracking of delirium impossible. As a result, it can be difficult to assess the effectiveness of management tasks and adjust them in real time.

We believe our continuous monitoring solution solves this major unmet need while also reducing nursing burden. Beyond the clear stand-alone need for delirium monitoring solution, we're excited by the synergistic value of this new technology with our existing platform. Seizures and delirium are highly interrelated. They can present similarly, but the treatment paths are biometrically opposed. The first-line medication for status epilepticus is one of the most delirium-inducing agents.

Complicating the picture further, 48% of seizure patients later experience delirium and 42% delirious patients have seizure or seizure-like abnormalities. We believe that an integrated platform that can monitor for delirium coherently with seizure will not only provide access to new patients, but also drive broader adoption within our existing patient population.

Looking ahead to 2026, we plan to initiate a pilot aimed at identifying patient populations, optimizing workflow, refining our commercial message and building clinical evidence. In parallel, we are pursuing a new technology add-on payment or NTAP to help support adoption. We are extremely excited to be the first entrant to what we believe is a $1 billion greenfield market where no other FDA-cleared monitoring device is commercially available. By leveraging our established installed base, and existing sales infrastructure, we expect to be able to bring this technology to market quickly and efficiently. This combined efforts will set the stage for an anticipated full commercial launch in the fourth quarter of 2026 or the first quarter of 2027.

Finally, turning to stroke. We view our receipt of FDA breakthrough device designation as a clear indicator of the life-saving potential and the technical feasibility of our LVO stroke monitoring algorithm. For LVO patients, every minute saved can mean a week of disability-free life. Yet when strokes occur in patients who are already in the hospital, the signs can often go unnoticed for several hours. Because these patients have highly varied cognitive baseline and are often sedated, intubated or recovering from surgery, the symptoms are incredibly difficult to spot.

As a result, hospitalized patients who have a stroke face 2 to 3x higher in hospital mortality compared to those who have stroke outside the hospital. Throughout 2026, our efforts will be focused on clinical data generation and advancing regulatory milestones for the LVL stroke detection. Seizure, delirium and stroke together form the core of our technology platform that we believe will be indispensable for the vast majority of neurological patients in the acute care setting. We look forward to sharing more details on the program in the quarters to come.

In conclusion, I am extremely proud of the team's accomplishments in 2025 and enthusiastic about what's ahead. 2025 sets the product and regulatory foundations for our near- and long-term future growth. We expanded patient access through FedRAMP high approval and 510(k) clearances for pediatric and neonatal seizure detection. We also expanded our capabilities to include a new and highly related disease state with regulatory clearance of our delivery algorithm. We believe these accomplishments have nearly doubled the size of our total addressable market, which we now estimate at $3.5 billion.

In 2026, we'll continue driving growth by adding new accounts and driving further adoption of our adult seizure product, which still delivers the majority of our revenue. We expect the upcoming full commercial launch of our pediatric and neonatal products to drive upside later in 2026 and throughout 2027. We aim to further drive upside in 2027 and beyond as we work to establish a comprehensive commercial plan for delirium in the coming quarters. We believe that our LVO stroke detection algorithm provides another exciting avenue for growth in the future.

Collectively, these efforts position us to a fundamental transformation of our business as we penetrate our large market opportunity with a single highly integrated brain monitoring platform capable of revolutionizing care for neurological conditions. We are further along in accomplishing our mission to make EEG a new vital sign than ever before and are increasingly confident in the transformational nature of our platform, transformational for patients, transformational for providers, and ultimately transformational for Ceribell.

With that, I will now turn the call to Scott Berenberg, our CFO, to provide a review of our fourth quarter results and 2026 guidance.

Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the fourth quarter of 2025 was $24.8 million, which is a 34% increase from $18.5 million in the fourth quarter of 2024. The increase was primarily driven by increased adoption of the Ceribell system across new and existing accounts. Product revenue for the fourth quarter of 2025 was $18.8 million, representing an increase of 33% from $14.1 million in the fourth quarter of 2024. Subscription revenue for the fourth quarter of 2025 was $6.0 million, representing an increase of 37% from $4.4 million in the fourth quarter of 2024. Overall, we were pleased with the continued growth in active accounts and headcount purchasing trends in Q4.

We ended 2025 with an active account base of 647 hospitals, an increase of 32 accounts in Q4. This was achieved despite our strategy to avoid launches in the final weeks of the year. Included in our Q4 launches were a small number of accounts associated with our previously announced expansion within the VA system. We anticipate the launch of additional VA accounts in the coming quarters. We also saw an increase in account utilization in Q4, which we believe reflects both the efforts of our clinical account management team and the typical seasonal patterns in which we see increased usage in the winter months when IT census is elevated.

For the full year 2025, total revenue was $89.1 million, representing 36% growth over 2024. Product revenue for the full year 2025 was $67.3 million, an increase of 34% over 2024 and subscription revenue was $21.7 million, an increase of 41% over 2024. Gross margin for the fourth quarter of 2025 was 87% compared to 88% in the prior year period. For the full year, gross margin was 88% compared to 87% in 2024. The decrease in Q4 reflects partial quarter impact of our transition to utilizing inventory acquired after the implementation of increased tariffs on products originating in China.

As a result of our efforts to mitigate the current tariff environment, including our fully operational manufacturing line in Vietnam and initiatives aimed at reducing manufacturing costs, we expect to deliver margins in the mid-80% range throughout 2026. This assumption does not include any impact from Friday's Supreme Court decision or future changes in policy. Total operating expenses for the fourth quarter of 2025 were $36.2 million, an increase of 24% compared to $29.1 million in the fourth quarter of 2024. Noncash stock-based compensation expense was $3.3 million in the fourth quarter of 2025.

Total operating expenses in the full year 2025 were $136.7 million compared to $96.5 million in the full year of 2024, representing an increase of 42% Full year 2025 operating expenses included $12.2 million in noncash stock-based compensation. The increase in fourth quarter and full year 2025 operating expenses was primarily attributable to investments in our commercial organization, increased headcount to support the growth of the business, legal expenses and expenses related to operating as a public company.

Net loss was $13.5 million in the fourth quarter of 2025 or a loss of $0.36 per share compared to a loss of $12.6 million or a loss of $0.40 per share in the fourth quarter of 2024. An average weighted share count of 37.2 million shares was used to determine loss per share for the fourth quarter of 2025. Net loss for the full year 2025 was $53.4 million or a loss of $1.46 per share compared to a loss of $40.5 million or a loss of $3.39 per share in 2024. Our cash, cash equivalents and marketable securities as of December 31, 2025, were $159.3 million.

Turning now to our outlook for 2026. We expect full year 2026 total revenue to be in the range of $111 million to $115 million, representing annual growth of 25% to 29% over 2025. As Jane mentioned, we currently expect to proceed with the full launch of our neonate and pediatric products in Q2 of this year. While we do anticipate the sales cycle may be shorter within hospitals that are already using the Ceribell system for adult patients, we believe in most cases, we will still be subject to a multi-month sales process, including contracting, workflow design and training. We expect to establish commercial traction across a number of hospitals by the end of the year, but given launch timing and expected sales cycles, the impact on 2022 revenue will likely be modest. Our goal is to establish the pediatric and neonate products as meaningful revenue contributors in 2027 and beyond.

Finally, our cash position remains strong with cash, cash equivalents and marketable securities of $159 million as of December 31. We plan to selectively deploy capital in incremental R&D and commercial infrastructure investments to capture our untapped market opportunity and maintain rapid long-term revenue growth. That said, we remain committed to our objective to achieve cash flow breakeven with cash on hand. With our gross margin profile, recurring revenue model and high customer retention rates, we remain confident in our ability to do so.

With that, I will turn the call back to Jane.

Thank you, Scott, and thank you all for your time today. In conclusion, we are very pleased with our 2025 performance and believe it positions us well for the continued growth in 2026 and beyond. I'd like to take a moment to thank the entire Ceribell team for the continued dedication to our mission of making EEG a new vital sign.

I'll now turn the call over to the operator for any Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Travis Steed with Bank of America.

Congrats on the quarter and all the progress in the pipeline. Maybe I'd start with the 2026 guidance. You're looking at -- if you look at just dollar growth, about $24 million in dollar growth, roughly about the same we did in 2025, but your TAM has doubled. You're adding accelerating center adds in the back half of the year, utilization is increasing. So just kind of wanted to understand some of the moving parts and assumptions on 2026.

Travis, first, I want to state that our guidance philosophy hasn't changed. As we've said all along, we really appreciate the number to deliver -- the need to deliver on the numbers that we put forth. And so we've baked in an appropriate level of conservatism into the model. As it relates to the sequential growth, I think it's important to appreciate that the guide last year was consistent with the guide this year. And since the philosophy hasn't changed, we think there's potential for upside if we operate within the principles that we expect to with the investments we've made.

As far as the pipeline goes, as we mentioned, we really expect that to start kicking in towards the end of this year and more into 2027. So some neonate is baked into Q4, but it's fairly modest. But we think as we set out for 2027, that could be a contributor next year.

Okay. And maybe can you elaborate a little more on the commercial plan for delirium and just trying to understand like how you build that up? Will you start to see some potential benefits in account adds and account penetration from that? Or is there kind of a different sales approach on the commercial plan for delirium?

Yes. We are in the middle of the discussion with some accounts already for the commercial pilot. And majority of these accounts are more existing accounts with some of the new accounts as well. So for the commercial pilot, we really are focused on the real-world validation of our clinical impact. So this discussion will be focused on with the accounts on what are the best target patient population, the workflow, how to measure the impact and also generate case studies and clinical evidence.

And therefore, this portion, as I mentioned earlier, is largely driven by existing accounts. we also see that will be reflected at least in the near term where delirium can drive financial and commercial impact as well. It will be more expanding deeper utilization in our existing accounts. And in that, we see 2 drivers. One is delirium itself, we introduced new patient population. That's not seizure. And the other driver we see is there's a big synergistic interaction between delirium and seizure, as I mentioned in the earnings call. So we could see this driver deeper into seizure population as we introduce delirium as well.

And your next question comes from the line of Robbie Marcus with JPMorgan.

This is Lilly on for Robbie. As we think about 2026, can you talk through what you see as the main levers of growth that you're pulling this year? I know you talked about accelerating account adds. So how are you thinking about balancing that with driving continued utilization? And what do you see that has the most potential for upside this year in terms of levers in the model?

I can touch on the levers mechanically and maybe, Jane, you can comment on the drivers. The 2 core drivers of our adult user market remain unchanged, which is the rate of account adds and the same-store growth. On the account adds, we expect to add more accounts in 2026 than we added in 2025, and that's a result of the strategy we've laid out last year, including expansion of the sales team, FedRAMP approval and the acceleration from the buzz around neonate and pediatric.

On the opportunity within the accounts, we're roughly 30% penetrated within our account base, and we've got a number of strategies aimed at driving that, including training more physicians, expanding to new departments and implementing protocols. We built out a robust campaign to drive those efforts, and we've got a lot of opportunity to continue to push that forward.

Yes. And to add to what Scott has said, we have a well-defined playbook in both adding accounts as well as driving utilization. Maybe I'll emphasize a couple of maybe new levers in 2026. On the account acquisition front, we are adding a new focus on driving hospital system level acquisition. So this more focused on both large system as well as small, medium-sized system. Instead of historically, the territory manager focused on closing 1 or 2 accounts, how can we accelerate the process of closing the entire system, say, 10 hospital size system. So we could see that in the near and long term as more growth leverage.

On the utilization front, we started more systematic departmental expansion in 2025, and we have seen consistent impact from that departmental expansion. It could be expanding to the emergency department to additional ICU or even sometimes to the floor. So we expect to further expand what we have established in 2025 and expect to see the impact on the departmental expansion on driving utilization as well.

Great. That's really helpful. And then as a follow-up, how should we be thinking about spend ahead of launches in all these new indications? It's a pretty big expansion in terms of TAM when you layer on pediatric, delirium, LVO stroke. So is there a lot of investment that needs to be made ahead of this in terms of the sales force and commercial infrastructure? Or do you think you can largely leverage what you've already built out?

We intend to largely leverage our commercial infrastructure. The beauty of our platform is that it's the same call point. It's the same platform. It's really just training the reps on the new indications and delivering that message to the customers. There, of course, will be some upfront investment related to a product launch in terms of marketing and market development. But in terms of the core infrastructure, we expect to have fairly modest investments there.

And your next question comes from the line of Brandon Vazquez with William Blair.

I wanted to focus first on the commentary around the neonate launch. Maybe spend a little bit more time on the commercial launch here and digging into it. I think as we've talked in the past, I think there are some accounts that you're already in that now you can kind of open that neonate or the NICU. And I think just to say a little bluntly, starting to see benefits not until like late in Q4 seems a little late in that. So maybe walk us through just why it takes a couple of quarters to start to see some of those in accounts that you're already in to make sure we're all level set on when you'll start to see those benefits more meaningfully ramp.

Yes. Thank you, Brandon. So let's maybe focus on the neon NICU expansion for existing accounts. I think that's where you're focusing on. So we have about 200 Level 3, Level 4 NICU in our existing accounts. If you think about the time line, we plan to launch in Q2. Even we are already in this hospital to expand to a new department, hospital need to acquire additional recorder as well as the clarity that's dedicated to neonatal seizure detection. So that often require go through committee and additional committee.

We expect that sales cycle to be shorter than your brand-new account acquisition, but that still take several months. And even after that account departmental expansion, there will be workflow and patient population discussion. And based on our experience, that often would take a couple of months as well. So if you start to think through the time line, that's why a Q2 launch would lead to financial or commercial impact in Q4.

Okay. And then maybe I'll tie this back to a couple of model questions for Scott. As we think about additional recorders and some of that stuff, just reset us and level set us on how we should be modeling some of that? How should we be thinking about where will this be reflected in the model like ASPs, things like that? And then maybe if I can also tag one modeling one here from the prior question. How should we think about -- I'll ask more poignantly on the OpEx line. How should we think about '26? Is it a point of leverage? Or does OpEx have to grow at a higher clip than your total sales growth?

Sure. On the commercial front for neonate, our model is that we are charging additional subscription cost for adoption of the neonate product. The cost of adopting neonate if you're already an adult customer is not double, but it's higher than just being an adult customer. And we would expect the headbands, which are similar pricing model, but slightly higher price to also be included. The way it will reflect itself in the top line would be not necessarily a change in the number of accounts with the exception of children's hospitals that adopt specifically for neonate, but increase in both product and subscription revenue through our installed base.

As it relates to OpEx, while we don't provide specific guidance, I'd be happy to give a little color kind of going through the different functions in order to help you with your modeling. On sales and marketing, we believe we largely have the commercial infrastructure in place to deliver on our 2026 guidance. We will be selectively investing in opportunities to drive growth in 2027 and beyond throughout the year. That includes the previously discussed regional system function as well as expansions within the CAM work to support the growing account base. And then as I mentioned earlier, there may be some additional investments associated with market development activities related to the launch of our new products.

But with our platform and our existing infrastructure, we don't expect to materially increase the size of the sales or to support those functions. On R&D, we see a lot of opportunity ahead of us, and so we're going to continue to invest in R&D. We expect a decrease in the growth rate in R&D spend this year, but we do expect R&D growth to be outsized compared to the rest of the department given what we have ahead of us. And then on G&A, our infrastructure on G&A is largely in place. So we expect to see material leverage there.

However, I think it is worth noting that with the cadence of our patent infringement case against Natus, the IP litigation expenses are heavily concentrated in the first half of this year. So I'd expect to see a little bit of elevation in G&A over the coming 2 quarters or so. Final note on OpEx is in line with what you see out of our peers. We expect an increase in noncash stock-based compensation expense throughout the year as we continue to transition to public company compensation practices. So hopefully, that's helpful.

I do expect overall that our OpEx is going to moderate in 2026. You started to see some of that in Q4 with the lowest year-over-year growth rate in OpEx that we've seen. We don't want -- we do want to strategically deploy our capital to drive long-term growth of the business. But as we make investment decisions, we've always got our eye towards our North Star, which is to achieve breakeven with cash on hand, and we have very high confidence that we can do that.

Our next question comes from the line of Josh Jennings with TD Cowen.

This is Brian here for Josh. On the revenue guidance, how is the VA expansion accounted for in your sales projections for the year, if at all? And can you review the specific tariff assumptions that go into the mid-80s gross margin guidance for the year?

Yes. So the VA is incorporated into our guide in terms of the expansion that's been committed to last year, but further expansion is not incorporated into the guide. And we'll be pursuing that with the government budgeting cycle that's likely to come up for discussion towards Q3 for late '26 and 2027 impact above our guide potentially. As far as the tariff assumptions go, obviously, there's been a lot of change over the last couple of days in terms of what our policies are.

Our guide does not contemplate any of those changes. So what our guide includes is the move from the prior tariff rates since 2018 in China of roughly 25% to the pre-Friday tariff rates, which were in aggregate around 55% in China, mitigated by our move in part to Vietnam with lower tariff rates as well as some reductions that we've done over the past couple of years on our product manufacturing costs. And without any benefit from potential impact of Friday's Q4 decision, we have confidence that we'll maintain margins in the mid-80% range throughout the year.

Okay. And then one follow-up, if I could. On the NTAP for delirium, are you saying you're positioned to file for the NTAP or NTAP that becomes potentially effective this October? Or is this likely to be a 2027 decision for you?

Yes. So we submitted NTAP late last year. If we receive it, it will be effective this October in 2026. And the preliminary decision would be released by CMS in April, so in a couple of months.

And your next question comes from the line of Bill Plovanic with Canaccord Genuity.

Just for clarity's sake, your operating losses have decreased quarter-over-quarter in the past 2 quarters. It seems like from the detailed guidance you provided, excluding any IP litigation expenses that, that trend would continue throughout 2026. And then we -- I think we're modeling for you to get to adjusted EBITDA positive in the fourth quarter of '26. Just any thoughts on any of those statements?

I don't want to go beyond the guide to give specific comments. I will say that the investment -- the infrastructure we have in place right now is sufficient to carry us forward through 2026, but we're always thinking 2, 3, 4 years ahead. And so as we see the impact of the investments in terms of translating into accelerated growth, we do have a desire to invest more to drive outsized growth in the outer years of the model. We always pay very close attention to what that means for our overall cash position. We don't pay as much attention to time to breakeven, but we want to ensure that we're maximizing growth while not putting our ability to breakeven at risk.

Okay. And then on delirium, is that more you just see more utilization? Or I know you're trying to get the add-on, but do you think you can actually charge more? And then what does implementation of that look like with the new algorithm? I mean, is that just a download over the cloud? Or do you have to get out in the field and upload the new algorithm? I mean how do you implement that?

Yes. Thank you, Bill. On the pricing of delirium, it's a little bit too early for us to comment, and that's part of the commercial pilot for us to learn, better adapt the market dynamic. We could certainly charge for both algorithm as well as the head been, but those are the decisions we would like to make later down the road.

In terms of how do we put the algorithm into implement the algorithm, it's rather straightforward in that we can remotely update both the firmware on the recorder as well as the portal so we can turn on delirium for our existing users and existing recorder remotely rather quickly.

And then are there any incremental expenses from an internal staffing and reviewing the data and the reports or anything of that nature?

As Scott mentioned, on commercialization front, we leverage existing sales team. On the R&D and ops front, there will be some marginal investment we need to add in because the portal and device gets more complex. but it's not significant. We will also invest in marketing and market development and clinical evidence generation. But there's no major significant OpEx increase related to implementing the algorithm.

And your next question comes from the line of Marie Thibault with BTIG.

Nice to see the new account adds tick higher again sequentially this quarter. And I heard your commentary on acceleration of account adds in '26 and '27. I suppose some of this goes hand-in-hand with the newer rep productivity that's coming online now. But I wanted to sort of understand the acceleration comment? Is that an acceleration from the low 30s where we are today or from the mid-20s where we were earlier in 2025? And is that something we should expect to continue building throughout the year given the timing of some of these newer reps that you hired maybe 12, 18 months ago?

At face value, the comment was specific to the full year. So I believe we added 118 in 2025, and so we expect to add more than 118 in 2026. There will be some lumpiness quarter-to-quarter. It's not entirely linear, especially with the new health system strategy where we expect purchase orders to come in, in boluses. So I wouldn't expect it to be totally linear.

That said, the reps do get progressive. What we've seen historically is the reps do get progressively more and more productive between year 1 when they start to contribute in year 2 when they reach kind of their peak productivity. And so with more reps aging into greater productivity throughout the year, we expect a general trend of acceleration.

All right. That's really helpful, Scott. And you touched on something I want to ask about, too, which is the process of trying to sell into the entire health care system, maybe sort of an enterprise-wide approach. Tell us a little bit more about what's behind the scenes there. Are we starting to see that in accounts already? Or is that all to come? I think I'm a little ignorant of how recently this was brought online.

Yes. So we saw a couple of senior territory managers last year and had a very significant success in selling to this small, midsized hospital system. And so the success drivers there are, a, often these senior TMs would work closely with the regional director and even sales regional VP because often these systems are across different territories or different regions. So we can form a coherent system level strategy, not just focus on 1 or 2 hospitals.

And also, they start to engage at the key stakeholders, especially administrators at system level and fine-tune the value proposition at system level instead of a single ICU or single ED. Because of the success last year, we are expanding that model this year. So we are relatively confident that we can further expand the success we saw.

And your next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann.

Two from our end. Could you talk about any update with regard to the patent case with Natus as far as where you're at and ramifications on any expenses for '26?

I can talk about the processes. We are in the discovery phase and the preliminary decision point would be November 19. And before that, there will be a whole series event and all that milestones and time line is publicly available on the ITC website.

Yes, on expenses, since we kicked this off in Q3 or so of last year, we've seen relatively linear costs. We expect, given the nature of kind of litigation that it won't be linear. And what we're seeing is that in the depths of the kind of core of the case, which is happening right now into Q2, we'd expect expenses to increase and then potentially moderate in Q3 and Q4 as we reach kind of the late stages at least of the first half here with the ITC.

Okay. Got it. And then secondly, first, can you talk about the LVO indication potentially and the call point there beyond ICU also thinking about or looking into neuro and/or cardiac as well?

Yes. So the LVO monitoring would focus on the inpatient. And many of these patients actually still in the ICU. Therefore, again, it's the same call point. That being said, our initial finding is that there is a significant portion of patients have stroke outside the ICU in, say, on the floor or even in the telemetry monitoring units. And they have even less or poor training on the bedside nursing on identifying stroke. So we expect that this would be a very synergistic add-on to both seizure as well as delirium. I don't fully understand your comments on neuro versus cardiac. Can you reframe that?

If the majority of patients in the ICU is the neurologists involved in the patient care and the equipment being used?

Yes. For LVO, neurologists would definitely be involved, except this will be more stroke neurologists than epileptologists. But usually, the current standard of care is if nursing identify any stroke, potential symptoms that would cause stroke and then the stroke team would rush to the bedside. So there's definitely at least a general neurologist often a stroke neurologist.

And our last question comes from the line of Jason Bedford with Raymond James.

This is Elaine on for Jason. For delirium, I was wondering, have you started the pilot launch or started any early discussions with hospitals? And if so, could you please share a little progress -- or sorry, a little color on the early progress and learnings?

Yes. So we started discussions with quite some accounts already in the context of the commercial pilot. And we do not expect any commercial pilot to go live until Q2 as we are also in the process to make sure all the different algorithm software are all fully integrated. In terms of adding color, the initial feedback was very positive. Majority of the intensivists have high awareness of delirium and the potential harm delirium would cause and often are quite frustrated with lack of objective and continuous biomarkers for delirium.

And another strong signal is that they recognize a certain population have a very strong prevalence for both delirium and seizure. So the earlier hypothesis validated by the physicians, our device could potentially help them to detect delirium earlier because not all the nurses are well trained and the algorithm could potentially help them to give them feedback to know whether or not they are on the right path. and also to really help them to differentiate seizure and delirium under the same population.

So one example, if sepsis patient have altered mental status, 20%, 30% of them could have seizure and then 40% could have delirium, while the symptom is very similar in this patient, it looks very confused. So we are very encouraged by the early feedback from the physicians and the nursing team as well as the administrators.

I appreciate the color. And for my follow-up, would you be able to share your expectations on tech band pricing this year? I know you've talked a little bit about the neonate pricing, but for overall headband, do you expect to pass on a price increase this year?

This is in general or related to the delirium product?

Sorry, this is just in general.

We have maintained really strong pricing discipline and consistent ASPs over the years. I think there's a lot of unknown about the macro environment, both some headwinds and some tailwinds as it relates to tariffs and people's understanding of tariffs and how companies react to that as well as some of the pressures on hospitals. We're evaluating it case by case. But in any regard, we expect to maintain very tight pricing discipline.

That concludes our question-and-answer session. I will now turn the call back over to our Co-Founder and Chief Executive Officer, Jane Chao, for closing remarks. Jane?

Well, thank you all for joining the call. Again, we are very proud of what we have accomplished of 2025 and cannot be more excited about 2026. Thank you all.

That concludes today's call. You may now disconnect.

Good morning, everyone. I'm Robbie Marcus, the Med Tech Analyst at JPMorgan. Very happy to introduce our next company, CeriBell. We'll have Jane Chao, the CEO, come up for a presentation followed by some Q&A. Jane?

Thank you, Robbie. Good morning, everyone. I'm very excited to share with you the overview of CeriBell and our 2025 accomplishment and 2026 plan. So at the highest level, CeriBell has developed a platform for neuromonitoring. It has the hardware that makes EEG or brainwave acquisition really easy and fast. So nurses can set up in a few minutes instead of waiting for specialized EEG technician that's often hours and days. It also have the AI-powered algorithm called Clarity detecting multiple different neurological disorders.

Till today, our commercial effort has been 100% focused on seizure detection in Acute Care, and that is ICU and ED largely. And that in the U.S. alone translate into about more than $2 billion market opportunity. And this past year, we are guiding $87 million to $89 million, 34% year-over-year growth at 88% gross margin. 2025, we also made significant progress in expanding our market. So the TAM grow from $2 billion to $3.5 billion, I'll walk you through, largely driven by expanding seizure to Pediatric and Neonate population as well as gaining FDA clearance on the first and only Delirium Detection.

Now I will focus on Seizure Detection in the Acute Care setting for the first half of this presentation. Seizures are very common in the ICU. 1/3 of neurological patients have seizure. And it's often post-stroke, post-traumatic brain injury, post neurosurgery. It also goes beyond neuro patient, post cardiac arrest or post sepsis with altered mental status, somewhere between 10% to 30% of these patients would have seizure.

And the seizures in ICU are very different than seizures in the epilepsy patients, which is often we think about seizures in the epilepsy context. They are quiet in the ICU, the seizure and they are more aggressive. What do I mean by quite seizure? 92% of the seizures in ICU are nonconvulsive, meaning patient doesn't -- patients do not have obvious symptoms. So you have to have an EEG to diagnose the seizure. And also, they are aggressive. Patient can seize from hours to days. And here, you can see on the left chart, when patients seize day 10, 20 hours, the mortality rate can go high as high as 33% and goes even higher if patients seize longer. The gray bar is the morbidity. That's often permanent secondary brain injury. So even when patients survive, you can see a very high portion, more than 50% of patients would acquire that.

You might wonder which modern ICU would allow your patient seize for 10 to 20 hours. Unfortunately, that's very, very common before CeriBell, and I walk you through that. So this is why our physicians also say time is brain, not just for stroke, but also for seizure management in the acute care setting. Another parallel is the good news is they are easy to manage if you knew patients have seizure. The treatment is easily available. Nurses can treat patients if they knew. And if you treat the patient early, so on the right side, within the first 30 minutes of seizure onset, 80% of the patients will respond and often the outcome would be very optimized. If you just delay that treatment by 1 or 2 hours, half of the patients stop responding to the medication. So early treatment, which is often driven by early detection, early EEG is one of the most important factor to manage seizure in ICU. And guidelines already show that requiring EEG arrive on the bed side within an hour for post cardiac arrest patient, post stroke.

Before CeriBell, almost not a single hospital in the U.S. or globally can be properly compliant to these guidelines. And the reason is that the standard of care is the conventional EEG, which has been around for more than 100 years. It was designed for epilepsy diagnosis for the outpatient setting, while patient can wait for weeks or months. It's not designed for acute care setting that every hour counts. It has intrinsic bottlenecks. First, on the hardware front, you have to have EEG technician to set up. And most hospitals often have just a cap of EEG technician, and it's Monday to Friday, 9 to 5, the technician on site. So if the patient arrived on Friday afternoon, that's pretty much a guaranteed 2 days delay. Even when you wait for hours and days technician arrive, it still take them 30 to 40 minutes to set up.

And on the interpretation side, EEG recording doesn't help anyone. You have to know the result to change patient management. And the bed side physician usually do not know how to read the EEG. You require very specialized neurologists, neurophysiologists or epileptologists. Again, hospitals have very limited access to them. So that leads to a further delay often hours. And at last, no physicians can actually continuously monitor EEG because it takes 10, 20 hours. You simply don't have that human capacity and resource to do that. It's important to monitor EEG because seizures are dynamic. It can come and go. I'll show you more example later.

So instead of being compliant to the guideline, the reality of getting EEG always takes hours and often take days and continuous reviewing and monitoring of EEG is very, very rare. And this is not what patients need and this is what we change. So CeriBell with the hardware can allow the bed side get EEG within just 5 minutes. Nurses can set up or anybody on the bed side after very short training. And Clarity, our algorithm would kick in and detect seizure almost right away and continuously monitor the EEG every 10 seconds, never get tired. So how do we do that?

This is the hardware you see that's on the left, the disposable head band and that's connected to the recorder that's roughly the phone size and the recorder will record and also display proper information and stream the data through CeriBell portal. And that's where neurologists or other physician can log in and read EEG. So this already provide majority of the functionality of the conventional EEG.

Now we have the fourth component that the conventional EEG does not have. That's our algorithm, Clarity. So let's look into how does Clarity work. Clarity monitor EEG every 10 seconds and reports the seizure detection result, both on the portal front to help neurologists to read even more efficiently as well as on the bed side to help the ICE intensivists and ED physicians to manage the patient more effectively. So on the left side, this very complicated curve you see our raw tracing of EEG data. It probably helps you appreciate why it takes a very specialized neurologist to read. It's a very complex data. Also, it's very time consuming to read. So this 1 page is only 15 seconds of EEG and EEG can last 12 hours, 24 hours or even days. That means neurologists have to go through thousands, sometimes tens of thousands of pages to read.

At the bottom of this chart, that's where Clarity helps. So you see this curve. The X-axis is actually the entire recording of the EEG. I explained what the Y-axis is. But even without knowing it, your intuition is to click the peak. And you're absolutely right, that's where seizure happens. So it guides neurologists to know when did seizure happen and when is patient seizure free. So the Y-axis is seizure burden. It's recommended by American Neurophysiology Society. It's defined as the percentage of time patients spend in seizure during the past 5 minutes. So if 100%, that means 5-minute seizure, that's clinically called Status Epilepticus, it's considered absolutely a neuro emergency. And that's the main condition physicians monitor on the bed side and manage on the bed side. If it's 0%, that means patient has been seizure-free for 5 minutes.

Now when patients pass 90% and getting close to Status Epilepticus, the bed side recorder will send alert. So this enables the bed side physician know immediately when patients start to seize continuously. And it also shows the seizure burden curve, and this allows bed side physician to see how patients respond to the medication. That's a lot of information. So let me walk you through one real patient case. You can see how the different components in action.

First thing, at the bottom left chart, it's 1 a.m. This is actually a community hospital at the heart of San Francisco, not far from here, right? 1 a.m., even in the large city, pretty well-funded hospital, you cannot get the EEG before CeriBell. In this case, the nurse noticed something abnormal, they set up EEG right away. And again, even if you could get the EEG before CeriBell, it's very unlikely you'll get the neurologist to read for you right away. It's almost for sure a few hours delay. But in this case, within 10 minutes, the device start alerting the bed side. Patients seizing Status Epilepticus or continuous seizure is a medical emergency. And the little pink needle you see here is the real bed side annotation after physician ordered the treatment within minutes.

And if you recall, patients do not always respond to the first-line medication. So in this case, patient did not respond. And in about an hour, the device went back alerting and say, hey, your patient is still seizing non-stop. And you can see the needle came back again and they escalate the treatment, and you can see the curve start dropping. This is when the bed side physician know, "Okay, I'm on the right path" And patients stop seizing, right? And again, without CeriBell, even you get a neurologist read for you right away, it's very unlikely that neurologist will stay up at 2:00 a.m. and just to watch it. And this patient would be under treatment, but still seize out the entire night.

I also mentioned continuous monitoring is critical for this population. And here's the example. Patient became seizure-free at 3:00 a.m., but at 4:30, patient returned to continuous seizure. And with CeriBell, you're able to react very quickly. I asked which modern ICU would leave a patient seize for 10, 20 hours. This patient is not an outlier at all. So this is the powerful impact we bring to the patient. And it's not just anecdotal. We have published close to 50 publications, 100% -- 100 abstracts. One largest study came out last year is the SAFER study. It's a retrospective of about 1,000 patients. And first thing we showed -- we actually did the study at Yale University of New Mexico, Mass General. There are top teaching centers and probably have the best conventional EEG capability in the country. Even with that, you see conventional EEG arrived on the bedside 19 hours later. That's in the top teaching center. You can only guess when you get outside the top teaching center. These are the hospitals with EEG technician on site doing after hours.

We also show that CeriBell patient stayed in the ICU 4.1 days shorter. When you think about it, that's a very significant reduction of length of stay and also with much better outcome. We looked at the percentage of patients have severe disability when at the discharge. Conventional cohort, 76%, CeriBell 58%, that's 18 percentage point reduction. Roughly, that means 1 out of 5 patients can go home instead of nursing centers, when you think about the impact to that patient and the family.

Now how do we translate this clinical impact to a sustainable business model? Our business model have 2 main largely reoccurring revenue stream. The first 25% is the subscription fee, and that's the monthly fee hospital pay us to have access to the recorders, our Clarity as well as the portal. The other 75% is the disposable head band and that single patient use. So with this model, this is the quarterly revenue you can see during the past few years. You see very strong and steady growth. And one thing you notice is every single quarter, is growing compared to the previous quarter. And as a matter of fact, this is true throughout our entire commercial history. We have not a single quarter that's lower than the previous quarter revenue. And part of this is driven by the nature of the reoccurring revenue, the business model I just walked you through. Part of it is driven by how sticky the device is. Often when physicians use it, this become a habit and become how they practice.

So we're very proud of what we have accomplished already commercially, and we're really just scratching the surface. We believe that we are only 3% penetrated in the Seizure Acute Care market in the U.S. And how do we get there? Very simple math. If you look at the number of hospitals we are in, that's about 600-plus out of 6,000 hospitals, about 10% penetration. Within the 600-plus hospitals we are in, we are only serving about 30% of the patients in these hospitals. We simply looked at our top 10% customers, they use 3x more than our average customers after calibrating the hospital size. So 10 times 30%, that's 3%. Moving forward, we'll continue to drive both in account acquisition as well as driving utilization of existing accounts.

On the account acquisition front, for 2026, we have multiple catalysts. So we already know the account acquisition strategy well. So we'll continue executing what we know have done successfully in the past 7, 8 years. We also significantly expanded our sales force in 2025. We see the new members start to be productive in 2026. In '25, we also gained FedRAMP High cybersecurity certification, and that gave us access to about 160 VA hospitals. We successfully completed the pilot with VA last year and won the first significant cohort of VA hospitals. So we will continue that drive that momentum and drive the expansion to VA in 2026. And VA is a great example of how top-down engagement with hospital system can expedite the account acquisition process. So we are also building out our health care system infrastructure and our playbook.

On the driving utilization in existing accounts. And the first one is departmental expansion. Majority of our customers were still not in every single ICU, ER, step-down units and the floor. So we'll continue to drive to additional departments. Even for the departments we're in, very likely, we have not trained all the physicians and providers. So we'll continue to drive that. And even for the physicians that's using CeriBell, they might not be aware of all the new guidelines in different populations like post-stroke, post cardiac arrest. So we'll partner with the hospital to integrate CeriBell into the patient-specific protocols.

We didn't just drive the penetration of the existing market. We also significantly expanded the seizure market in 2025. We gained FDA clearance both on the Neonate for Clarity, and that includes the preterm as well as the pediatric age 1 and older. And the Neonate also cover from preterm all the way to age 1. So this actually makes CeriBell cover the entire age starting from preterm. This unlocks incremental $400 million TAM. That's about 20% and TAM expansion and also access to the 280 children's hospital, which we had limited access to before. And we are very happy with the limited commercial pilot we run last year and plan the full launch in 2026.

Often, we think about Pediatric and Neonate product, you think about maybe just shrinking the size. But it's very complicated here because we are talking about EEG Seizure Detection. And the brain wave of [ pre-ne ] and pediatric population are much more complex due to the rapid growth of the population's neurological state and the intrinsic complexity of it. So we are actually the first and only the algorithm FDA cleared for [ pre-ne ] as well as young population as young as 1 year old.

So I want to talk a little bit more about Neonate. A lot of challenges we see in the adult front, lack of EEG, 24/7 access EEG, neurologists read translate to this market. However, in this market, the challenges are even bigger and what's at stake is even higher. For adult population, the physician can sometimes observe the patient and establish their neurological or movement baseline and use that baseline to judge maybe this patient at higher risk of seizure or lower risk. To establish a baseline of movement and cognitive level for Neonate, it is very challenging for obvious reasons.

So here, we show that not only 90% of seizure having the NICU are nonconvulsive, similar to adult, 70% of the time when physicians observe the patient and thinking patients have seizure and physicians are wrong, 73% of the time. Therefore, the guidelines recommendation is don't think about observing the patient, you need the EEG to monitor this patient regardless of what you think based on the observation. And guideline also listed very clear indications on the right, you can see that the -- all these patients have a pretty significant prevalence of seizure.

If you're walking into a NICU in your neighborhood, very likely, many of these patients are not being monitored on EEG because of EEG resource. Even when guideline made the recommendation, it recognized we understand you might not have enough EEG resource. But really, this is the right thing to do for the patient. So -- but when you don't monitor this patient, what's at stake is so high. These patients obviously are just starting their life. They have their entire lifetime ahead of them.

So look at the right chart, the Y-axis is the language score. 100 means average, so kind of similar to IQ. 85 is where the development delay threshold is. So the difference for the patient between 100 and 85 is drastic. It's the difference between you can go to your neighborhood school have a normal life, to go to a specialty need school or probably countess support you would need and think about the toll for the family. How much seizure caused the difference between 100 to 85? 1 hour. 1 hour, if patients spend in seizure, that would completely change the trajectory of this patient. So how much does early EEG help? Study showed that if you delay treatment by 1 hour, you would double the time patients spend in seizure. So if you reverse that, every hour, you can get EEG faster, you can get treatment faster. You are going to cut the time patients spend in seizure by half. And this is what that stake, and this is what we want to change.

I recently visited medical -- a NICU and the medical director said a couple of things. I think this really reflects how the neonatologists are thinking about this. First thing she said,"Jane, seizure is different than in the NICU compared to adult ICU. Adult ICU, you have quite a few different neurological abnormality to manage. You have stroke, you have TBI. In our population, seizure is the #1 neuro complication we manage. So it gets all the attention." And the second thing she said is, "It's not just about the hearts and the lungs anymore. I want my patients to be able to go to college if they want to. And that's what we are working on."

So in 2026, on the account acquisition front, we'll expand to this additional children's hospital. To drive utilization, we'll expand to hundreds of NICU and PICU in the existing accounts and also drive the Pediatric ER population.

We just spent the past about 20 minutes talked about Seizure Management in the Acute Care setting, and that is our first growth horizon. We look at our future in 3 growth horizons. The second growth horizon, we still focus on Acute Care. But we use EEG and AI expand beyond seizure, delirium, stroke and other indications. The goal is to make EEG a new vital sign. Just if patients have chest pain, you put the EKG on, if patients have altered mental status, you put a CeriBell on.

The third horizon would move beyond acute care, and that could go to outpatient clinics. And it also moved beyond seizure, potentially using EEG as a biomarker for many neurological psychiatric disorder, detection of dementia, management of depression, ADHD, you name it. For the rest of this talk, I'm going to focus on the second horizon, and that is make EEG a new vital sign.

Why does it matter? So one thing you would know you are in the ICU compared to the floor is you have more screens, you have more beeping because the patients is so [ complete ] in such a critical state. But we don't monitor the brain even in the best ICUs because we don't have the tool. So here's an example. Let's say, if you're a surgeon, you performed a major cardiac surgery and if the patient didn't wake up in time or patients still have altered mental status, you have to run your algorithm. Wait, patients have probably 0.5%, 1% chance having a stroke. Is this stroke? Or patient probably have 10% chance having a nonconvulsive seizure, is this seizure? Or patient is likely to have a delirium 30%, 40%, depends on their age, it can be 70% if they're elderly, is this delirium? The manifestation looks similar, patients altered, and you don't really have a tool to help you to differentiate and continuous monitor.

CeriBell is beautifully positioned to solve this problem. First of all, you have to solve access. Before CeriBell, you can't even get the EEG for seizure, so forget about other indications. And second, to use AI, as you know, you need a large quality data set. And CeriBell has probably one of the biggest EEG database for acute care setting and it's very well labeled. And last, you need to have very sophisticated in-house AI capacity, and we started our data science team 8 years ago.

So with all that, 2025 has been an absolutely milestone year for us to achieve this vision. We gained FDA clearance on Delirium Detection. This is, again, the first and only Delirium Detection ever cleared by FDA. We also submitted the NTAP new technology add-on payment application because we -- based on the existing breakthrough designation, we already have. And this unlocked at least a $1 billion opportunity in the ICU. We also received a breakthrough designation of large vessel monitoring for the inpatient setting.

So I want to talk a little bit about Delirium. Physicians often call Delirium acute brain failure. I find that term more prescriptive. Just like many organ failures, physicians manage in the ICU, kidney failure, liver failure. It's very common. It's the number -- most common neuro complication in ICU. It impacts 3-plus million patients, and 30% ICU patients have it, 80% if they're on the ventilator or much higher if they're elderly patients. And it have strong evidence associated with very poor outcome. One day in ICU with Delirium means 10% increase of mortality risk and 60% increase of developing dementia after surviving ICU.

The current standard of care is called CAM ICU. It's a nursing protocol behavior-based and it's subjective depending on the nursing training at pretty significant burden to the nurses as well. And the results are binary. So your patient is delirium or not or it's also not continuous. The best centers, you get the result twice a day. And delirium treatment or management has very clear path is laid out in the guideline. But the challenge there is delirium evolve, have wax and wing over hours and days. Then you don't have objective quantitative trend, continuous monitoring, it's very hard for doctor to know whether or not they are on the right path and how patients are responding to the therapy and the path they are putting patients on. So this is where we believe that our solution that's objective continuous can support physicians to manage this very complicated disease state.

Another thing that's important to know is seizure and delirium are not independent. They are highly intertwined. As I mentioned earlier, they have similar presentation, but the treatment paths are completely different. It's almost ironic. The first-line medication of antiseizure is benzo, and that's the #1 Delirium genic agent. So if your patient have seizure, you have to treat patients with very large dose of benzo very quickly. If your patient have delirium, you want to minimize or eliminate patients' exposure to benzo. So it's really important for you to know patients altered, but is it delirium or seizure.

And to make this more complicated, 48% of seizure patients later experience delirium and 42% of delirious patients, they have seizure or other seizure-like abnormalities.

So with that, in 2026, we will conduct and start our market development as well as commercial pilot that's very consistent with our overall commercial plan. We are planning a full launch of Delirium in Q4 2026 or early 2027. On the LVO stroke front, we'll continue the clinical product and regulatory advancement. We are also continue developing our second-gen hardware, add additional features and other features to support additional indication.

So in summary, we have been laser-focused on driving the penetration of seizure management in acute care in the U.S. We have very strong catalysts laid out in the next multiple years. In 2026, we'll continue to expand to VA and start to see the impact of our recent expanded sales team and also leverage the launch of Pediatric and Neonate accessing to children's hospital, potentially expanding to NICU as well as Pediatric ER and that start to have a $2.5 billion TAM in 2026. In 2027, as we think about launching Delirium and that further expand the TAM to $3.5 billion. As we make further progress on stroke and other algorithms and product development we have in the pipeline, we'll continue not only driving the penetration, but also expand our market.

What we do is not easy. We actually have a record year. We accomplished all that by many first and only. So in 2025 alone, we became the first and only medical device company ever received FedRAMP High certification. We're the first and only FDA-cleared Seizure Detection algorithm covering Preterm. And we are also the first and only FDA-cleared Seizure Detection algorithm covering age 1 and above, which makes us the first and only seizure detection algorithm covered the entire age. It's also the first and only Delirium Detection algorithm cleared by FDA and first and only large vessel monitoring algorithm.

So I'm incredibly proud of the CeriBell team, and we can accomplish all this is because CeriBell employees' absolute commitment to our mission and to excellence. I'm deeply grateful to our customers and our investors. Our foundation has never been stronger. So I'm thrilled to deliver more impact to the patients and translate those patients to the values for the shareholders. Thank you.

Well, great. Maybe we could kick it off. You had a couple of tidbits in there about 2026 around the Delirium launch timing. We'll get the full 2025 results and guidance on the fourth quarter call. But anything you can -- headwinds or tailwinds or high-level comments you could talk to about the momentum and new product launches in 2026?

Yes, absolutely. For 2026, the core adult seizure market, we have multiple tailwinds. I mentioned quite probably all of them already, but it's good to summarize them all. On the account acquisition front, we're going to see the impact of the sales team we expanded in '25. We are also going to continue to drive the impact from VA as well as going into children's hospital. And on utilization front, it will be new opportunity with NICU and Pediatric ER as well as some proven initiatives we proved out in '25, including departmental expansion and protocolization. Delirium probably will be more impacting '27 and beyond.

In terms of headwind, I would think this is the first year that we are not just executing in our core market. We start to balance continued execution in the core market, introducing new growth initiatives already and launching new products. I think as an organization, as we scale very rapidly to find that balance to not lose track of core execution while we are launching new products, it's going to be a challenge and opportunity.

So as we think about Delirium coming online, I imagine pediatric goes hand-in-hand with adult. There's probably not much extra work you have to do there, I imagine. As you think about delirium and the launch starting in fourth quarter, first quarter in '27, what are some of the things investors should be considering? How will you go about launching this? Do you need extra sales force? Is there overlap with seizure? Just give us some of the thoughts there.

Yes. I mean we talked about this before, and this is really we start to see the impact. Delirium and Pediatric, it's the similar patient population, right? It's a very similar call point. We're still calling the neurologists now Pediatric Neurologists and Delirium is still the same intensivist and same ER physicians. So we largely expect to leverage our existing sales force.

Yes, it might be some incremental as we launch Delirium, where -- that's why we are doing the commercial pilot. So the 2026 commercial pilot on Delirium, we're going to really focus on partially getting the feedback in the real world, how the algorithm can deliver patient impact, what's the best workflow to integrate it with the existing care as well as Seizure Detection and also to select the proper patient population so we can drive proper strong utilization since day 1.

Another thing to think about Delirium is also we are already in the ICU. So in many ways, the potential adoption barrier from administrative perspective is lower, right? Even for NICU, often we -- it's the departmental expansion, you have to get new recorder Clarity coverage. For Delirium, it's more a patient expansion. So we are very excited, but we want to do the pilot and to be able to talk about it more quantitatively moving forward.

What are some of the reasons that you shouldn't have 100% of existing accounts using Delirium also? Are there operational or financial considerations for the hospitals?

Yes. It's still early, but from my perspective, it's hard for me to think of like if you combine patient care and we also have NTAP, so the first few years can leverage NTAP health economic wise. It's hard to think about rational reasons to say we should then introduce a device that provide a diagnosis that's continuous.

In reality, of course, hospital often have competing priorities. We have seen that in Seizure Detection. But the good news is that we have been calling on ICU for years now. So we know how ICUs plan their priority, and we know how to best partner with them to overcome those potential barriers as well.

When I look at your model and your existing penetration into hospitals around the country, there's still a good amount of penetration to go on getting more hospitals on board. But to me, there's a significant amount of leverage still in driving utilization in existing accounts. So how is the sales force set up right now in terms of hunters and gatherers? And where do you see the most opportunity moving forward?

Yes. That's a great question as well. Historically, we have always prioritized both account acquisition as well as driving utilization. And the way we were able to do this is about a few years ago, we actually restructured our sales team. We have 2 independent, highly collaborative sales team, one accountable for account acquisition and one accountable for driving utilization, the CAM organization. And in many medical device, the clinical team is more supportive and our clinical team is actually really truly their sales there drive utilization. So this enable us to constantly drive initiatives independently because they don't have [indiscernible] this issue.

And another thing we trend we see is at the hospital system level, we start to see we can potentially both accelerate account acquisition if we have a more holistic hospital system plan and can also work on standardized certain protocol at the hospital system level. So there's synergy between -- strong synergy between the 2 teams as well.

As I think about down the P&L and the drive towards profitability, we'll see what tariffs may be on Wednesday. If those get repealed, that might give your gross margin a little boost. I know you've taken measures to diversify your country location of manufacturing on the headsets. But how are you thinking about both the margins and expenses moving forward? And when do you think we can get to cash flow breakeven?

Yes. We are growth first, but not growth at all cost. So we have been very diligent when we think about our investment. We are very confident that we can reach breakeven with the cash we have raised during IPO. And so we still look for different opportunities when we see a strong growth signal.

One example this year that we didn't talk much last year is we're going to grow the infrastructure of health care system team and because we start to see very strong signal if we better engage health care system. So overall, we are not providing the time line for breakeven, but with the cash -- with the margin we have, we are confident we can achieve that.

I would imagine delirium should help you get there as the incremental selling expense is probably a lot less than what you have with seizure?

That's a really great point, yes, and also Neonate and Pediatric because it's leveraging the existing sales team and the TAM expansion is significant. And some of the initial adoption barrier for new indications, you could argue, is lower compared to initially gaining access for seizure.

Well, we're about out of time. Maybe that's a great place to end it. Thank you so much. Thanks, everybody, for coming.

Thank you, Robbie. Thank you, everyone.

Good afternoon, and thank you all for participating in today's call.

Joining me from Ceribell This approach is are Jane Chao, Co-Founder and Chief Executive Officer; and Scott Blumberg, Chief Financial Officer. Earlier today, Ceribell issued a press release announcing financial results for the quarter ended September 30, 2025. A copy of the press release is available on the Investor Relations section of the company's website.

Before we begin, I'd like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being 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.

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 public filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q filed with the SEC on August 5, 2025.

This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 4, 2025. Ceribell 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'll turn the call over to Jane.

Thanks, Brian. Good afternoon, and thank you all for joining us for our third quarter 2025 earnings call. I'm very pleased to report on another strong quarter as we continue to execute on our key growth initiatives, while solidifying our position as the category leader in the point-of-care EEG. We have continued to expand patient access through new account growth and increased utilization, while advancing our robust product pipeline. We believe the strength of these initiatives is clearly reflected in our results.

Total revenue for the third quarter of 2025 was $22.6 million. This reflects 31% growth over the same period last year and marks our 30th consecutive quarter of sequential revenue growth.

Our performance is the result of the predictable recurring nature of our business model and continued excellence in commercial execution to launch new accounts and drive increased usage.

Given these trends and momentum we built exiting the quarter, we remain confident in our core commercial strategy, and we are raising our full year 2025 revenue guidance. We now expect to deliver $87 million to $89 million in revenue for the full year 2025, which represents 34% year-over-year growth at the midpoint.

Our success to date reflects not only strong commercial execution, but also the foundational work we have done to unlock what we believe to be an immediately addressable $2 billion market opportunity.

Our primary focus is on establishing point-of-care EEG as a new standard of care for seizure management in the acute care setting. We believe that, every ICU and emergency department should have access to the Ceribell system and the benefits our solution provides. The need is both urgent and profound.

There are roughly 3 million patients in the U.S. at risk for seizures in the acute care setting. Many of these patients will face long delays in diagnosis with conventional EEG, spending hours or even days. Others may never receive monitoring at all due to limited access to EEG or lack of clinical awareness.

The consequences are significant as prolonged and untreated seizures can lead to severe and permanent brain damage or even death.

Comparatively, the SAFER-EEG clinical trial has shown that the Ceribell system reduces the median time to EEG by 19 hours, while reducing patients' severe disability rate by 18%.

At the same time, patients who are treated with antiseizure medication without EEG confirming seizures based on observation alone may be exposed to unnecessary risks, including incubation and extended ICU stays.

The Ceribell system has been shown to enable a median reduction in ICU length of stay by 4.1 days. Ultimately, patients' lives and their quality of life are on the line, and we believe our platform can enable more timely and appropriate care.

Helping these patients receive the care they need starts with working to make the Ceribell system available to hospitals across the U.S. To this end, we have steadily made strong progress in expanding our account base.

As of September 30, we had 615 active accounts. This marks an increase of 31 accounts over the prior quarter, which is our largest sequential increase since becoming a public company.

In parallel, we continue to broaden our reach across additional sites of care. As part of these efforts, we received FedRAMP High Authorization in the second quarter of this year, providing access to the nearly 200 hospitals within the VA system.

We are pleased to report that following a successful recent pilot, we have been informed that the VA system intends to expand the usage of the Ceribell system even further in the coming quarters.

As we expand into new facilities nationwide, we are also working with our current customers to drive usage and increase access across departments and patient populations. Our efforts to date have been successful with utilization per account increasing nearly threefold over the past 5 years. Still, we believe we are only 30% penetrated within our active account base, leaving substantial room for continued growth.

Our top-performing accounts prove EEG solutions that we believe could what's possible. Usage within our top 10% accounts is roughly 3x higher than in average accounts of similar size, and these top accounts are still growing. These means that were still over 5,000 hospitals that do not have a point of Clarity seizure detection, illustrating the sentiment that we hear from physicians. The more EEG you perform, the more seizures you find.

We aim to facilitate the replication and expansion of best practices used by these top accounts through continued training and education, clinical evidence generation, protocol development and expansion to new departments, including the ED. Our CAM team is critical in leading this effort, which is well underway.

Finally, beyond the adult population, we continue to invest in expanding access to pediatric and neonatal populations. Earlier this year, we received 510(k) clearance for Clarity in pediatric population, make it the only seizure detection algorithm cleared for patients 1 year and older.

We're actively developing this market through our ongoing pilot of pediatric clarity within our existing accounts as well as children's hospitals with full launch anticipated next year.

Our confidence is backed by strong clinical data supporting our product. Recently, in September, we are pleased to see an abstract documenting technical validation of pediatric Clarity presented at the Neurocritical Care Society Annual Meeting. The retrospective study evaluated the performance of Clarity in detecting suspected status epilepticus across 645 pediatric patients aged 1 to 17.

The results demonstrated a sensitivity of 94.4% specificity of 93.1% and a negative predictive value of 99.8%. These findings suggest that Clarity can accurately monitor suspected status epilepticus in pediatric patients over 1 year old, providing timely and actionable guidance to bedside team.

With our AI-driven approach to product development, we expect these already excellent results to continue to improve as we build our database and continually refine our algorithms.

We also remain committed to expanding access to our system in the neonatal population, having already developed a headcap that meets the needs of this vulnerable patient group. We remain on track with the development of a neonatal application of Clarity, which we anticipate to bring to market in 2026.

In the meantime, we have launched multiple sites using the hardware without Clarity, and are conducting targeted market development efforts to better understand the nuances of the neonatal population. These investments reinforce our mission to helping to establish point-of-care EEG as a new standard of care for seizure detection in the acute care setting, serving all patients everywhere.

We also estimated the addition of pediatric and neonate products could expand our current addressable market opportunity of $2 billion by approximately $400 million. We see a tremendous growth runway as we advance our mission. We will continue to invest in evidence generation, product improvements, provider education and the replication of the best practices from top-performing centers.

Collectively, these investments combined with our established advantages give us great confidence in our ability to strengthen our reputation as the category leader and a trusted partner for rapid EEG and seizure detection and monitoring.

Before I turn it over to Scott, I want to also briefly touch on the second horizon of our vision, making EEG a new vital sign in acute care. This requires developing a multimodal system that can become a routine part of care for all patients at risk of a range of neurological abnormalities. We plan to achieve this by expanding our detection capabilities into new conditions such as delirium and stroke.

Our nearest-term area of focus for innovation is advancement of our delirium algorithm. We are pleased to be able to say we remain firmly on track with our development timeline.

As a reminder, this is a market where there is no commercially available diagnostic device despite delirium being a pervasive and challenging condition that affects over 30% patients in the ICU.

We are thrilled with our progress to date and expect to detail a more comprehensive vision for the opportunity and our associated commercial strategy in the coming quarters.

It's important to note that our excitement around potential new indications such as delirium is directly connected to our mission to help establish point-of-care EEG as the standard of care.

Broad adoption of the Ceribell system across our market for seizure detection gives us the installed base, data, trust, contractual relationships, security clearances and the sales infrastructure to rapidly develop and deploy new algorithms. We believe these new algorithms will significantly expand our total addressable market by introducing much needed solutions for new patient populations.

We anticipate that, we will also create synergistic value by allowing concurrent monitoring for patients at risk of multiple overlapping conditions. As a result, in addition to providing access to new patients, these pipeline products are expected to directly drive utilization within our installed base. We expect they will serve as a strong growth engine for years to come while largely leveraging our existing sales infrastructure.

To summarize, I'm incredibly proud of what we have achieved this quarter. Over 600 hospitals have adopted Ceribell, and our team is making meaningful progress in penetrating deeper within these accounts. And still, we remain very early in our journey to establish point-of-care EEG as standard of care in the $2 billion U.S. seizure detection market.

We are currently used by roughly 10% of the hospitals that provide acute care service in the U.S. This means that there are still over 5,000 hospitals that do not have a point-of-care EEG solution that we believe could benefit from our technology.

Within the customers that we do serve, we estimate we are only about 30% penetrated for patients who need timely seizure detection.

Taken together, this suggests that we are only about 3% penetrated into our core market in the U.S. We aim to go deeper and wider to address the unmet needs of the remaining 97%, both through ongoing commercial efforts and by making investments in extending the life-changing benefits of the Ceribell system to additional patient populations. This includes monitoring neonatal and pediatric patients, which represents an incremental market opportunity of approximately $400 million as soon as next year.

In parallel, we are working to go beyond seizure. We have made real progress in unlocking delirium and stroke. We believe that these indications represent a multibillion-dollar market expansion opportunity and serve as the foundation of our mission of making EEG a new vital sign.

With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of our third quarter results and outlook for the remainder of 2025.

Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the third quarter of 2025 was $22.6 million, a 31% increase from $17.2 million in the third quarter of 2024. The increase is primarily driven by increased adoption of the Ceribell system across new and existing accounts.

Product revenue for the third quarter of 2025 was $17 million, representing an increase of 28% from $13.3 million in the third quarter of 2024. Subscription revenue for the third quarter of 2025 was $5.6 million, representing an increase of 44% from $3.9 million in the third quarter of 2024.

In Q3, we continue to drive deeper into our accounts, increasing usage per account year-over-year. This was achieved despite abnormally high purchases relative to usage in Q3 2024, which led to excess product revenue during the comparison period. As a reminder, we typically see reduced usage in Q2 and Q3 relative to Q1 and Q4, driven by lower ICU census in the summer months.

Gross margin for the third quarter of 2025 was 88% compared to 87% in the prior year period. As we enter Q4, I'll remind you that we will begin to transition to utilizing inventory acquired after the implementation of increased tariffs on products originating in China. Despite this, we expect to maintain gross margins in the mid-80% range in Q4.

As we reported last quarter, we took proactive steps this year to establish an additional manufacturing line in Vietnam, which is now fully operational. This reduces our exposure to Chin a-based tariffs and positions us to benefit from potentially more favorable trade policies.

Looking ahead, we believe initiatives undertaken this year to strengthen our supply chain and build resilience put us on track to deliver gross margins in the mid-80% range for full year 2026, assuming no changes to the currently proposed tariffs.

Total operating expenses for the third quarter of 2025 were $34.6 million, an increase of 39% compared to $24.9 million in the third quarter of 2024. Noncash stock-based compensation expense was $3.3 million in the third quarter of 2025.

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The increase in operating expense was primarily attributable to investments in our commercial organization, increased headcount to support growth of the business, legal expenses and expenses related to operating as a public company.

Sales and weighted marketing expenses increased $1.1 million in Q3 compared to Q2. The sequential increase was driven by salary and our commission expenses associated with headcount expansion in Q3 as well as full quarter impact of headcount additions from Q2.

Net loss was $13.5 million for the third quarter of 2025 or a loss of $0.37 per share compared to a loss of $10.4 million or a loss of $1.85 per share in the third quarter of 2024. An average weighted share count of 36.8 million shares was used to determine loss per share for the third quarter of 2025.

Our cash, cash equivalents and marketable securities as of September 30, 2025, were $168.5 million. Earlier today, we filed a shelf registration statement on Form S-3 with the SEC as we recently became eligible to do so following the 1-year anniversary of our IPO.

This is strictly a matter of standard corporate housekeeping as it allows us to maintain flexibility. But to be clear, we do not have any intention to pursue a financing transaction at this time. We remain committed to achieving cash flow breakeven with cash on hand and the strength of our balance sheet gives us a high degree of confidence that we can achieve this without raising additional capital.

Turning now to our outlook for the remainder of 2025. Given our momentum in the third quarter of 2025, we now expect full year 2025 revenue to range from $87 million to $89 million, up from our prior guidance of $85 million to $88 million, which represents annual growth of 33% to 36% over 2024.

We continue to add to our base of active accounts and have an extremely healthy backlog of accounts that have issued purchase orders to adopt the Ceribell System.

While we do not provide guidance on our account base, it's worth noting that we intend to continue the practice we began in 2023 in which we defer launching new accounts in the second half of December. This approach is grounded in our historical experience that is better to avoid launching during the holidays as we've seen an uninterrupted attention to a high-quality launch is necessary to maximize usage during the first few weeks following launch, which we believe is critical to establishing healthy long-term utilization rates.

With that, I'll turn the call back to Jane.

Thank you, Scott, and thank you all for your time today.

In conclusion, I'm very pleased with our third quarter performance and our team's ability to continuously advance initiatives that will enable us to realize our broader strategic vision.

I'd like to thank our employees, our customers and the patients we serve for enabling us to continue our mission to help save lives while delivering substantial value to our stakeholders. Finally, we appreciate your support and continued interest in Ceribell. We look forward to providing you with updates on our progress in the quarters to come.

I will now turn the call over to the operator for any Q&A. Operator?

[Operator Instructions] Your first question comes from the line of Travis Steed from Bank of America.

Congrats everybody. Maybe to start with just on kind of 2026 and curious if you have any early thoughts at this stage, thinking about account adds and utilization and pricing, especially with the NTAP expiring for next year?

I can take that. Travis, we're not providing commentary on 2026. We'll, of course, provide guidance in the coming call. I think the fundamentals of the business and the sources of growth in terms of adding new accounts and driving usage will remain our consistent drivers.

As it relates to pricing, we've seen a very high degree of consistency in pricing in our Headband this year. We've seen an increase in the Clarity ASP as we've driven more recorders into existing sites and expect to maintain strong discipline as we think about pricing going forward.

Okay. That's fair. And then maybe a question on the neonatal opportunity. I appreciate all the information on the call. But when you think about launching that, maybe just provide a little more color on how the full launch looks for that in '26. And do you need to add new accounts that are neonatal accounts? Or do you kind of go deeper in your own accounts so you can go faster? Just trying to think about how that actually launches and rolls out.

Yes. So the short answer is both in terms of open new accounts through neonatal as well as existing accounts. Out of the about 850 Level 3 and Level 4 NICUs in the country, our existing installed base represents roughly 200 NICUs already. So for those 200 NICUs, that would be more a departmental expansion. So we put that more under the growth category of same-store growth driving utilization.

Outside that, there are 2 different market segments. One is the other -- the 280 children's hospital. We currently are barely presented in the children's hospital, not surprisingly because our product is very adult focused. So that represents more new account acquisition.

Even beyond children's hospital, we have initially seen strong interest from NICU through especially Level 3 community hospital often have to transfer patients out for lack of EEG. So we also anticipate that NICU can drive new account addition due to strong support from NICU.

Your next question comes from the line of Robbie Marcus from JPMorgan.

And congrats on a nice quarter. Two for me. First, I really want to ask on just the progress you're making in penetrating accounts, educating the different components of the hospital. And I know last year, you spent a lot of time and focus building the model to make sure that new accounts ramp up in a consistent and sustainable manner. And just your progress there and the traction you're getting?

Yes. I would say, the success there is a continuation of we have seen historically. As you can see, we continue not just driving account acquisition, but also utilization. Specifically, this year, we rolled out a few initiatives that we have been seeing success. One is, as Scott mentioned briefly, that we start to encourage the team successfully team bring more additional recorders to existing accounts that often is leading to additional departments using our device. So, we can see very strong correlation between growth and those initiatives.

The second initiative we rolled out, we start seeing impact in this year, and we anticipate seeing even more impact next year is partner with physicians on protocolization of patient population. We've especially seen success of that with cardiac rest or post-hemorrhagic stroke, which are clearly recommended by the guideline. As hospitals do not always update their guideline every quarter, it's often every year. So, as we can -- we anticipate next year, we'll see continued growth there.

The other initiative more is about building on continued education to physicians as well as nurses, also continue quarterly engagement to the administrator to not just theoretically show the economic value Ceribell bring, but using their own clinical data to show the economical value.

Great. Maybe one on expenses. Your selling and marketing and R&D as per the guidance came in above the revenue growth. I respect you'll comment on 2026 on the fourth quarter earnings call. But how are you thinking about revenue versus OpEx growth in the short and medium term? And how do you feel about your progress towards cash flow breakeven?

Yes. I think we came into this year with a successful IPO raising more than we intended and a big portion of that proceed was invested in expanding the commercial infrastructure. The nature of our model is that, there's a delayed impact. And so, the kind of the nature of the relationship between sales and marketing growth this year and revenue is a reflection of that, the investment comes ahead of the outcomes.

Of course, we'll continue to look for opportunities to grow. But our current thinking, at least on the account acquisition side, is that the size of expansion we saw over the last year would probably be less in the coming year. And so, I'd expect the growth to moderate there a bit. And the investments that will -- that we've made this year should start to generate impact as we get into 2026 here.

As far as cash goes, with an 88% gross margin and pretty strong control over our investment, which is tied almost entirely to growth and very little to maintenance, we have the flexibility to continually adapt our investment strategy to ensure that we always stay safe in terms of sufficient cash cushion.

Your next question comes from the line of Brandon Vazquez from William Blair.

Can you start maybe by talking a little bit about utilization growth across accounts by tenure, especially those that you've been talking about some of these initiatives to establish protocols at the accounts where patients versus ID guidelines should be getting EGs.

Are those kind of older, more tenured accounts continuously growing in utilization? Just kind of curious, the question is more around your more tenured accounts. Has utilization growth been pretty consistent? Just to know if that's a good signal for growth going forward as your new accounts ramp?

Yes. Thank you, Brandon. There are quite a few drivers under the growth we've seen from more tenured or top accounts, and we see many of these drivers would continue driving both top, or just all the rest of the accounts.

The #1 driver is what you already articulated, which is the external guidelines. The stroke -- seizure management for the stroke population guideline came out in 2022 and 2023. The cardiac guideline came out end of 2019. So -- and then there's COVID. So, there's quite a few -- many hospitals still are not fully adopted to this guideline yet.

For our top account growth, we often just see the hospitals start to, over time, rolling out one protocol over another, first cardiac rest, then ICH patient. So that's a continuous driver. And even our top accounts, I would say, not every single population group are fully on protocol yet. That's why we anticipate to see the continuous growth there.

The second driver is the departmental expansion. Even our most tenured accounts or our top usage accounts are not in every single department yet. They might be in all the ICUs and ED, but they might not be in the step-down units or in the -- on the floor with the rapid response nursing team yet. And of course, as we start to launch pediatric and neonate, there will be further departmental expansion.

The third driver, I would say, is more driven by our internal execution. We realize not every providers are trained even though they might miss the initial training during the site initiation turnover, especially during the night shifts. So, our CAM team really put a lot of effort above and beyond and go late hours to train the night shifts, and that's not 100% done yet.

So those are some examples, probably the top drivers that we've seen how our tenured accounts growing, and we see the account -- these drivers is not applicable just to tenured accounts, but all our accounts.

Okay. Great. And then as a follow-up to that, I think, Jane, you were just kind of alluding to this, but you made an interesting comment on the prepared remarks that only 30% of accounts or in your current accounts, you're only 30% adopted rather. Is going further into your current accounts driven a lot in putting these protocols? And then I think like you said, going into new wings. Like how do you do that? What is the friction point of getting into these new wings?

And then one unrelated follow-up, if I could just throw in there. Late last week, I think you guys got a new 510(k) clearance on the headcap. Any comments on the importance of that clearance?

Yes. I mean, in terms of going to departmental expansion and protocolization, a majority of it is really execution. I think, if we think about what are the potential barriers is both the resource on our end as well as often the resource on the -- or the priority on the hospital end. And sometimes rolling out a new protocol is beyond the capacity of the nursing team, or it's currently they have other priority.

For instance, they are updating their Epic system. So those are some practical barriers we run into, but we believe that over time, because of the strong guideline recommendation and this clinical value and evidence will continue to generate, we should overcome those barriers.

In terms of the 510(k) headcap, I think you are referring to the neonatal and headcap. The main clearance we have there compared to the previous neonate headcap is that the previous version, we have the label of approved for all ages. And during our pilot, we learned that our physician and nurses would like the FDA clearance to be even more specific that it is cleared for preterm as well as term neonate because they are very protective of this vulnerable population.

So, our current latest headcap is cleared for both preterm as well as term the neonatal population. So, this is actually a great manifestation, example of our strategy. As we do pilot, we actually learned things that we didn't anticipate as we rolled out the product. So, we see this recently approved or cleared headcap would be the product that will be ready for full commercialization as we receive the clearance of neonatal clarity.

Your next question comes from the line of Josh Jennings from TD Cowen.

Congratulations on another strong quarter. I think, Jane, you've called out that Ceribell point-of-care EEG is kind of penetrated about 10% of U.S. acute care hospitals. The word of mouth according to our checks from the customer base is getting louder, buzz is getting stronger, the library of clinical evidence and the cost-effective data is growing.

I was hoping to just maybe lead that intro into a question of, okay, can you add some quantitative or qualitative color just on where the new customer account pipeline or funnel sits today relative to the beginning of the year? And just in terms of giving us up thinking about the potential for account growth in 2026?

Yes, Josh, the numbers that are reflected in our active account base is launched accounts, which is when the customer is fully trained and live. Of course, we measure before that, we measure when we receive a purchase order, we measure the various stages of engagement that happen that lead to a purchase order.

Without getting quantitative on it, I can tell you that, that number -- the funnel is growing, and it's growing as a direct reflection of both of the investments we've made in our commercial org over the past year, but also, I believe, the appreciation of the need for this technology that's growing by the day.

And I just was hoping to better understand how Ceribell is positioned with IDNs or health care systems. And has the company benefited from some IDNs kind of making best practices decisions or standard of care within their network? Or is that opportunity in front of Ceribell? Maybe just help us think about how you're positioned through the number of IDNs that are in play in the United States.

Thank you, Josh. Yes, we definitely have seen that the partnership with hospital systems has been a strong growth engine from previous years, including the current one. And we see potentially even bigger opportunity ahead of us. I think, historically, especially a few years back when we were much smaller, we often do not engage IDN at the headquarter level because we were so small.

We were more engaging at the individual hospital level as we're becoming available in 600-plus hospitals in the U.S. We are building our hospital system sales team and also the entire sales team -- train our entire sales team to not only thinking about individual hospital but really thinking about hospital system level sales. So that requires, we call it bottom-up and top-down sales coordination. We more just started doing this systematically this year. So, we anticipate to continue executing and capture the opportunity here, become even better partner for our customers.

Your next question comes from the line of Bill Plovanic from Canaccord Genuity.

And you did a good job on the pronunciation. So, start out with first, just I'm looking at the guidance, and it's pretty broad. Low end is about, I think, 23% year-over-year, high end is 25% or 35% year-over-year. Multiple questions here. First, what drives the lower end versus the higher end of that? I mean it's a pretty broad guidance range considering you're coming into the end of the year. I'm going to start with that and then multiple other.

Yes. Bill, I think our philosophy on guidance remains unchanged. We appreciate the importance, especially as a company that's only been public for a year to put forth numbers that we feel very strongly we're able to achieve, and that colors the way we think about guidance. So, when there's things that we know or believe like Q4 seasonality, for example, being stronger than Q3, as we think about the bottom of the range, we think about being extremely conservative and essentially derisking all of the unknowns. So. I think it's -- I would read into the range really as risk calibration and us putting forth numbers that we have a very high degree of confidence in.

Okay. And then I just want to -- post IPO, one of the things you did was you took a lot of that and you invest in the sales force. Just any update on where you are with the TMs and the CAMs today?

And then, you saw an uptick, I think, basically 31 net new active accounts sequentially. That's the highest number we've seen in a very long time. It's definitely ticking up. Just is this a function of the new reps that were brought on? Kind of what are the drivers of that this quarter?

As far as the commercial infrastructure goes, we haven't made any fundamental changes to our strategy since last quarter. We still have roughly the same number of territories planned in the mid-50s right now on the TM side. We have and we'll continue to invest in the CAM side of the business because that side of the org grows roughly in line with the growth of the account base.

So, we're fully staffed on that side, but that will continue to grow. I think, we also are looking opportunistically at areas to invest to accelerate further growth. And James answer to a prior question, I think, is one area where we're looking very closely, which is IDN level systems.

As far as the account adds go, we're obviously very pleased with the results this quarter. I know, there's a lot of kind of emotional difference between the 29 we did last quarter, a couple of quarters ago 31. But I'd consider that largely in the kind of range of expected outcomes here, and we fully expected that the hires we make start to become productive as we get into 2826 here.

Okay. And then I think Robbie asked the question, you've been growing revenue pretty strong. We haven't seen leverage in the P&L. And I think one of the questions we get from investors is, is that something we're like -- I know you haven't given guidance yet, but is there a reason we won't start seeing it sometime in the next year?

The only reason you would expect -- I would expect us not to see, it is if we make a strategic decision because we see a profound growth opportunity to really invest in the OpEx to capture that growth. And if and when we make that decision, we'll communicate that clearly to the Street so that it's not a surprise.

Okay. And then any update just on competition? The other question we get a lot of is just competition. What are you seeing in the marketplace? Are you losing any more accounts today or winning any more versus where you were 6 or 12 months ago? And then any update on the IP litigation? What are the next steps?

Yes. On the competition front, I would say in Q1, Q2, we saw a significant increase of the competition activity, as we mentioned before. In Q3, I would say, there's nothing substantial change. We see continued growth of competition activities there. However, I would say our performance in 2025 speaks for itself. We have beat and raised our guidance every single quarter, and that shows that the competition is not meaningfully impact our performance.

And the reason we are achieving this is not only leveraging the superiority of our product, clinical evidence and cybersecurity, we are also learning a lot about competition and put strategy and plan in execution to address this.

And in terms of ITC litigation, as investors or you probably see ITC have outlined the milestones before the shutdown. And at the time, the anticipated decision is September next year and the final ruling of January 2027. With the government shutdown, we anticipate some level of delay there, then we also expect that ITC would update the time line as soon as the government reopens.

Okay. And then just last for me. I think you mentioned the shift to Vietnam with the manufacturing. We'll start to see the impact in Q4. I think you mentioned that will drive mid-80s gross margin. Is 100% of that into the quarter? Or is it kind of we'll see margins ramp down this year in Q4, and then hit that mid-80s for next year? How do we think about kind of cadence there? Your line is live.

Hi. This So Q4, we'll be relying for the first part of the quarter on pre-tariff inventory, and then on for the remainder of the quarter only on China inventory

Because it's essentially inventory that was acquired before we had Vietnam up and running.

So, Vietnam doesn't impact this quarter. As we move into next year, what you'll see is China inventory that we've acquired at a higher tariff rate mixed in with Vietnam inventory at a lower tariff rate currently and that should reflect itself in that continuation of the mid-80% gross margin into next year.

Your next question comes from the line of Jeffrey Cohen from Ladenburg Thalmann.

First, I wondered if you could dive into the VA channel a bit more and talk about some of the current accounts and some of the expanded accounts and what you may expect, how that implies into fourth quarter and next year as far as the growth specific to VA?

Yes. So, we do not -- even though we cannot and do not disclose the specific numbers on VA or specific hospital system, but I'm really excited and can talk more about what we can share about VA. So, VA has a very rigorous process in terms of piloting first and then systematically roll out at different phases.

So, where we are now is the first few pilot has been very successful. Both the physicians and administrators at the VA clearly not only saw and also experience the value our system delivers clinically as well as financially. So, we are now confirmed to roll out the first larger cohort of VA accounts in the next couple of quarters.

And so this will be one of the largest top-down rollouts we've ever done at in the Ceribell history. So that's what we are very excited about. It's not only a big win for the company, but also for the veterans who we serve, who are at the risk of seizures.

Okay. Got it. And then as a follow-up, I know you spoke previously about the headcap and neonatals, but you made a comment about the utilization of hardware without clarity that was happening in Q3. Could you just expand upon that a little bit for us, please?

Yes. We -- it's premature to probably talk about utilization at the account level for neonate at this phase yet, because the pilot we focus on is really on the population discussion, confirming signal quality, confirming ease of use. Because of the nature of that, it does not perfectly reflect what would be the actual commercial clinical usage.

However, what we can report is it has been very well received. We already have certain case studies that the physicians and nurses that they significantly help the patient, either detecting seizure early or avoid unnecessary medication for the patient, which is critical for patients' outcome. So, we are excited to potentially bring the entire product from hardware with Clarity to market in 2026.

Thank you, Geoff. Perfect. Your final question, it comes from the line of Jayson Bedford from Raymond James.

This is [ Elaine ] on for Jason. So, by our math, you grew utilization year-over-year despite the tough comp from stocking in 3Q '24. So, I was just wondering how much would utilization have grown, excluding the stocking impact? And also, did you see the usual seasonality impact this quarter as well?

The quarter year-over-year growth comparison would have looked much more similar to the year-over-year growth we saw in Q1 and Q2 had there not been the purchases, the additional purchases in Q3.

As far as seasonality goes, yes, of course, we'll know for sure after we get through Q4. But if you look kind of sequentially, Q1 was really strong and Q2 and Q3 on a sequential basis were less so. And that's been exactly consistent with what we've seen in the last 2 years. We're still obviously only a few years into this commercial journey, but this year has not surprised us in any way in terms of the quarter-to-quarter trends.

And for my follow-up, I was wondering, could you share more -- sorry, more color on the utilization trends, are certain departments driving the increased utilization? Are you seeing more in the ICU or the ED, for instance? And I know you talked a little bit about the use cases.

Yes. Overall, we actually see a relatively broad growth driver. So, from departmental expansion to protocolization and even beyond the ICU and ED to the floor to the step-down units. And particularly, we do see a bit of even stronger growth in the emergency department compared to the ICU because EDs are in general, even less penetrated. So that's overall, but we don't see a single driver that accounts for majority of the growth.

That concludes the question-and-answer session. I'd now like to turn the call back over to Jane Chao for closing remarks.

Thank you. Well, thank you, everyone, for your attention and for joining the call. Again, we are very excited and proud of what we have accomplished for Q3 and look forward to sharing our performance of next quarter and quarters to come. Thank you.

This concludes the meeting. You may now disconnect.