CeriBell, Inc. (CBLL) Earnings

Management highlights

### Core Commercial Performance - 33 consecutive quarters of sequential revenue growth, with Q2 2026 year-over-year growth accelerating to 33% from 29% in Q1 2026, driven by strong same-store growth - Added 32 new accounts to reach a total of 712 active accounts, with growth relying less on VA (Veterans Affairs) accounts than in previous quarters, reflecting maturation of the account acquisition team - Penetration in the core seizure detection market remains under 4%, leaving significant long-term runway for growth ### Clinical Evidence Milestone - A new high-impact study published in *Critical Care Medicine* confirmed that Cerebell's Clarity algorithm can reliably quantify real-time seizure burden at the bedside, and higher seizure burden detected by the system correlates with a significantly increased risk of severe patient disability or death. These findings strengthen the clinical imperative for Cerebell's solution. ### New Product & Platform Expansion - Launched Neonate and pediatric seizure products in Q2 2026, with early commercial traction secured via purchase orders from new and existing customers; material revenue contribution is expected in 2027 - Completed commercial pilot launch of the delirium monitoring algorithm (510(k) cleared in December 2025), with positive early feedback: 40% of patients difficult to assess with the current standard of care (CAM-ICU) can be monitored with Cerebell's solution, and existing customers using the pilot have increased overall platform utilization. The company secured a new CMS technology add-on payment (NTAP) of up to $2,171 per qualified patient, effective October 1, 2026, supporting full commercial launch in 2026 - Received FDA 510(k) clearance for two new core seizure algorithms: 1) an AI-powered artifact rejection algorithm that differentiates brain activity from equipment interference, rolling out in Q3 2026; 2) the first FDA-cleared epileptiform abnormality detection algorithm, which identifies clinically important abnormal brain activity between normal and clear seizure signals, to be activated by the end of 2026 - Received FDA 510(k) clearances for all components of a next-generation hardware platform, including an expanded recorder with video/ECG capability and integration with other vital signs, plus new headband designs for multi-day continuous monitoring. Full platform launch is targeted for 2027, enabling support for expanded use cases and optionality for clinicians needing both point-of-care and comprehensive conventional EEG functionality from a single device ### Operational & Financial Highlights - Expanded manufacturing to Vietnam, driving cost reductions and margin improvements. Refinanced the existing credit facility to secure up to $60 million in committed capital (plus $25 million uncommitted), extend the repayment timeline to 2031, and reduce future interest expense, providing increased strategic flexibility

Guidance

- Full-year 2026 total revenue guidance is raised to a range of $114 million to $117 million, up from the prior guidance range of $112 million to $116 million. This represents 28% to 31% year-over-year revenue growth over 2025 - The updated guidance does not include material revenue contributions from the new Neonate/pediatric products or the delirium monitoring solution, which are expected to begin contributing meaningfully to revenue in 2027 - Management expects gross margins to remain in the high 80% range throughout 2026 - The company remains committed to achieving cash flow breakeven with existing cash on hand - Management declined to provide explicit 2027 guidance, noting multiple material tailwinds from new product launches that are expected to coalesce next year, and will share guidance once additional launch learnings are collected

Segment performance

Cerebell reports two core revenue segments for Q2 2026: - Product Revenue: $21.2 million, representing a 33% year-over-year increase from $15.9 million in Q2 2025. Product revenue accounts for 75.4% of total Q2 2026 revenue. - Subscription Revenue: $6.9 million, representing a 30% year-over-year increase from $5.3 million in Q2 2025. Subscription revenue accounts for 24.6% of total Q2 2026 revenue. Total company revenue for Q2 2026 was $28.1 million, a 33% year-over-year increase and 6% sequential quarter-over-quarter increase. Gross margin for the quarter was 92% including a $1.6 million tariff refund, and 89% excluding the refund, up from 88% gross margin in Q2 2025.

Risks & headwinds

- Forward-looking statements related to new product adoption, growth trajectories, and cash flow breakeven are subject to material risks and uncertainties that could cause actual results to differ materially from anticipated outcomes, as detailed in the company's SEC filings - Ongoing IP litigation has resulted in elevated G&A expenses ($3.9 million in Q2 2026), though management expects litigation-related expenses to decrease in the second half of 2026 - Seasonal headwinds (such as lower ICU census in warmer months) can impact quarterly same-store growth performance, though Q2 2026 performance exceeded expectations despite this typical seasonality - New product launches and market expansion carry inherent uncertainty around adoption rates, sales cycle timelines, and revenue contribution timelines

Analyst Q&A

• Q: How will the recent wave of FDA approvals impact future revenue growth? /

  A: The new algorithm clearances for artifact rejection and epileptiform abnormality detection will not carry additional pricing, but will increase neurologist stickiness, drive higher utilization, and potentially improve deal velocity. The new hardware platform, launching in 2027, will directly drive revenue by expanding access to additional patients and new market segments. Additional details will be shared closer to launch.

• Q: Operating expenses have grown faster than revenue recently; what is driving this spending, and when will operating leverage emerge? /

  A: Two one-off factors drove higher Q2 OpEx: an annual equity compensation cycle that created a step function increase in non-cash stock-based compensation, and elevated costs from ongoing IP litigation (which will decrease in H2 2026). The core strategy is to reinvest high gross profits from growing revenue into sales infrastructure (strategic account management and pre-Delirium expansion) and R&D, while keeping adjusted EBITDA loss stable around $10 million per quarter. Management remains focused on achieving cash flow breakeven with existing cash on hand.

• Q: Is there an inflection in end-user interest driving new account growth, and how durable is this momentum? /

  A: Multiple tailwinds are supporting sustained growth. Neonate/pediatric products are already generating purchase orders from both new and existing accounts, with larger impact expected in H2 2026 and 2027. The new strategic account management team targeting regional health systems is building a pipeline that is growing even faster than the existing individual hospital pipeline. Delirium adoption will also drive higher utilization among existing accounts, adding an additional layer of growth. Even with typical Q2 seasonality, same-store growth exceeded expectations, demonstrating the strength of the company's execution playbook.

• Q: What drove the decision to launch delirium commercially in late 2026 instead of early 2027, and will additional sales infrastructure be needed? /

  A: The accelerated launch timeline is driven by two factors: very positive clinical and operational feedback from the ongoing pilot, and the CMS NTAP reimbursement that becomes effective October 1, 2026. No additional dedicated sales team is needed; the company will leverage its existing clinical account manager team to support the launch, and will only expand opportunistically if momentum exceeds expectations.