Earnings call transcript: CeriBell Inc Q2 2025 shows revenue growth, stock dips

CeriBell Inc (market cap: $550.5 million) reported its Q2 2025 earnings with a notable 38% year-over-year increase in total revenue, reaching $21.2 million. Despite the strong revenue growth, the company posted a net loss of $13.6 million, equivalent to $0.38 per share. Following the earnings call, CeriBell’s stock price experienced a slight dip of 0.85% in aftermarket trading, closing at $15.23. According to InvestingPro analysis, the stock appears overvalued at current levels, with analysts setting price targets between $26 and $36.

Key Takeaways

• CeriBell’s total revenue grew by 38% year-over-year, driven by strong product and subscription sales.
• The company reported a net loss of $13.6 million, or $0.38 per share.
• CeriBell’s stock declined by 0.85% in aftermarket trading following the earnings release.
• The company raised its full-year 2025 revenue guidance to $85-$88 million.
• Expansion plans include increasing territory coverage and developing new algorithms.

Company Performance

CeriBell demonstrated robust revenue growth in Q2 2025, with a 38% increase compared to the same period last year. This growth was primarily driven by a 38% increase in product revenue and a 41% rise in subscription revenue. The company’s gross margin also improved to 88%, up from 86% in the previous year, maintaining its impressive margin profile of 87.25% over the last twelve months. Despite these positive indicators, CeriBell reported a net loss of $13.6 million, highlighting ongoing challenges in achieving profitability. InvestingPro data reveals the company holds more cash than debt on its balance sheet, with a healthy current ratio of 17.36x, suggesting strong liquidity position.

Financial Highlights

• Revenue: $21.2 million, up 38% year-over-year
• Product Revenue: $15.9 million, up 38%
• Subscription Revenue: $5.3 million, up 41%
• Gross Margin: 88%, up from 86%
• Net Loss: $13.6 million or $0.38 per share
• Cash and Equivalents: $177.4 million

Outlook & Guidance

CeriBell raised its full-year 2025 revenue guidance to a range of $85-$88 million, indicating expected annual growth of 30-34%. The company is focusing on expanding its market presence by increasing territory coverage and investing in new product developments, such as a delirium detection algorithm. CeriBell aims to maintain gross margins in the mid-80% range through 2026.

Executive Commentary

CEO Jane Chao emphasized the company’s mission to enhance patient care through expanded access to EEG technology, stating, "We aim to expand cerebellar access to the millions of patients who are receiving delayed or suboptimal diagnosis." She also highlighted the strategic focus on making EEG a vital sign, underscoring the company’s commitment to innovation and market leadership.

Risks and Challenges

• Achieving profitability remains a challenge due to ongoing net losses.
• Market saturation and competition from established players could impact growth.
• Regulatory hurdles and patent litigation, such as the lawsuit against Natus Medical, pose potential risks.
• Economic uncertainties and potential supply chain disruptions could affect operations.

Q&A

During the earnings call, analysts inquired about CeriBell’s strategy for increasing departmental penetration and physician training. The company highlighted its focus on expanding within existing accounts and exploring opportunistic investments in new territories. Additionally, the potential market opportunity for delirium detection was discussed, emphasizing its alignment with CeriBell’s long-term objectives.

Full transcript - CeriBell Inc (CBLL) Q2 2025:

Desiree, Conference Operator: 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 the Cerebell Q2 twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer I would now like to turn the conference over to Brian Johnson.

You may begin.

Brian Johnson, Investor Relations, Cerebell: Good afternoon and thank you all for participating in today’s call. Joining me from Cerebell are Jane Chao, Co Founder and Chief Executive Officer and Scott Blumberg, Chief Financial Officer. Earlier today Cerebell issued a press release announcing financial results for the quarter ended 06/30/2025. 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 05/08/2025. This conference call contains time sensitive information and is accurate only as of the live broadcast today, 08/05/2025.

Therabell disclaims any intention or obligation, except as required by law to update or revise any financial statements, projections or forward looking statements whether because of new information, future events or otherwise. And with that, I will now turn the call over to Jane.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Thanks, Brian. Good afternoon, and thank you all for joining us on our second quarter twenty twenty five earnings call. Today, I will share key highlights from our second quarter results and review our progress towards our strategic priorities for 2025. Scott will then provide an overview of our financial performance and discuss our full year 2025 guidance. I’m pleased to report that the total revenue for the 2025 was $21,200,000 This reflects 38% growth over the same period last year.

As of 06/30/2025, we had five eighty four active accounts, which translates to an increase of 26 active accounts during the second quarter. These results demonstrate our team’s ability to efficiently launch new accounts and drive revenue growth despite typical seasonal dynamics. As a reminder, we typically see reduced utilization in Q2 and Q3, as ICU census typically decreases in the summer months. Our core commercial strategy continues to be focused on driving account acquisition and increased utilization of the seizure detection system within our existing accounts. As we further expand our market presence, we continue to invest in our commercial infrastructure.

We continue to target prospective accounts through our growing and increasingly tenured team of territory managers. We’re on track to achieve our target of expanding coverage to 55 territories by the end of this month. While we expect our overall territory count to remain relatively stable in the near term, we will continue to explore opportunistic investments for future growth through 2025 and beyond. Given the nature of our sales cycle, we anticipate that the territory manager additions over the past twelve months will begin to positively impact account acquisition growth in 2026. Meanwhile, we’re continuing to invest in our clinical account managers to support launch and utilization expansion initiatives across our growing account space.

Our second quarter performance has strengthened our conviction in the near and long term growth trajectory. Given our momentum and the strength of our performance year to date, we are raising our full year 2025 revenue guidance. We now expect to deliver 2025 revenue of

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: $85,000,000

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: to $88,000,000 which Scott will detail further in his remarks. Beyond investments in our direct sales organization, we are also advancing broader efforts to expand awareness of our novel technology. We are directly engaging with clinicians, investing in marketing initiatives, and importantly, generating further clinical and health economic evidence. While investments in these marketing and clinical initiatives are important, I truly believe the tangible real world value our platform delivers will remain our most effective marketing tool. It is immensely powerful when a clinician witnessed the impact of Cerebell solution on the patient firsthand.

We have previously shared stories where Cerebell systems prompt identification of stasis epilepticus saves lives. Today, I’d like to share a recent patient story that illustrates the value in demonstrating the absence of seizures, which is an even more common occurrence. In a recent case, an elderly woman in the Bay Area was unfortunately found unresponsive at the bus station and rushed to the emergency department of a local hospital. As her conditions remained unclear and seizure was suspected, the care team prepared to intubate her and admit her to the ICU. Just moments before proceeding, her care team applied the cerebellum system at the bedside.

Our point of care EEG system continuously showed zero seizure burden, helping the care team to rule out seizure. The care team was able to determine that the patient was in the deep sleep likely caused by a high dose of recreational drugs. With this information, the care team shifted its approach and focused on stimulation to wake the patient up. The patient regained consciousness within a few hours and was discharged without ever requiring ICU level care. Without Cerebell, the care team may not have been able to diagnose the patient so quickly.

Instead, the patient may have received unnecessary anti seizure medication, potentially resulting in intubation and a prolonged ICU stay. This real time data not only potentially changed the course of care for this patient, but also helped the broader care team avoid a cascade of unnecessary and costly interventions. As hospitals continue to emphasize expense management, we believe experience like this serves to cement the Ceribel value proposition in the minds of our users. Physicians trust Ceribel because it helps them provide better care for their patients. In addition, administrators value Ferrobel because it can enable hospitals to substantially reduce costs, especially those associated with prolonged ICU stays.

As we continue to invest in growing our commercial footprint, we are also advancing our mission to make system available for even more patients. This includes our ongoing market development efforts and the pilot of CLARITY for pediatric patients following our five ten clearance in April. We’re also making good progress with the neonate population in piloting our FDA cleared hardware and in continuing to develop seizure detection algorithm for this vulnerable population. I want to spend a couple minutes on the clinical unmet needs for this vulnerable patient population. Seizures and seizure mimics are highly prevalent in the neonatal intensive care unit or NICU.

While research publications report that about ten percent of NICU admits may have seizures, we believe that the true incidence could be even higher due to limited EEG access to identify seizures. The clinical consequences can impact the patient for their entire life. About thirteen percent of patients with seizure in the NICU developed epilepsy within two years, and up to twenty nine percent developed disabilities. A one hour delay in treatment can lead to significant declines in cognitive and language abilities. On the other hand, unnecessary exposure to anti seizure medication has neurotoxic effects, which can also impact long term cognitive function.

Appropriate management of high risk patients is imperative, and current EEG capabilities are not sufficient to serve the needs of our most fragile patients. Recent updates to clinical guidelines signal a growing shift towards proactive seizure detection in neonates. In January, the American Clinical Neurophysiology Society issued new guidelines recommending seizure screening in at risk patients in the absence of clinical suspicion of seizure. This presents a new opportunity for our unique technology. We now successfully launched the first NICU pilot using our FDA cleared hardware.

The care team used our product in about 10 patients and validated the ease of use and signal quality in the neonatal population. While we believe that the introduction of a seizure detection algorithm will maximize value to our customer, early use of the HCTAP alone is already demonstrating clinical and economic value. Moving on to delirium. We are pleased with the positive reception we received at the American Delirium Society Conference in June. We presented Cerebot’s product vision and prototypes to the key opinion leaders.

Their consistently positive feedback and overall excitement underscores the alignment between Cerebell’s development strategy and the future direction of delirium research and clinical practice. The strong alignment is particularly meaningful given the clinical unmet need in the delirium space. This is a market where there is no commercially available diagnostic device despite delirium impacting twenty to fifty percent of non mechanically ventilated patients and sixty to eighty percent of mechanically ventilated patients in ICU. Our algorithm would be significant to the market, as it would be the first and only objective measurement of this very challenging condition. It would also potentially allow physicians to continuously monitor the patient and assess how situation evolves and determine whether the patient is on the correct path for delirium management.

We are very excited about our pipeline, which we believe will significantly expand our total addressable market by extending the benefits of the CereBot system to more patients in need. We look forward to providing more updates once the regulatory clearances or other strategic milestones are achieved. Overall, our near term focus remains on becoming the standard of care for seizure management in the acute care setting. We aim to expand cerebellar access to the millions of patients who are receiving delayed or suboptimal diagnosis due to the inherent limitations of the conventional EEG. This represents a $2,000,000,000 annual revenue opportunity in The U.

S. Alone. Our longer term mission is to make EEG a vital sign. With our continued commercial success and investment in R and D, we have high confidence in our ability to achieve this mission. Finally, before turning the call to Scott, I’d like to address our recently disclosed effort to defend our intellectual property against infringement.

On July 7, we announced that we filed a complaint with the United States International Trade Commission and a separate related complaint in the U. S. District Court of Delaware against Natus Medical Incorporated and related subsidiaries. Our complaints alleged patent infringement and unfair competition by Natus. We assert that the recently launched Natus Brainwash system infringes on six of our patents relating to important features of the EEG headband and electrode design.

Together, the two complaints seek a judgment of infringement, a judgment for damages, and injunctions preventing further infringement and importation of infringing products from overseas suppliers. The ITC forum provides an expedited pathway to efficiently address NATA’s alleged infringement, and the typical ITC case can be resolved as soon as two years or less. If we’re successful at ITC, NAATUS will no longer be able to import the infringing products for sale in The U. S. For context and clarity, we have been building our extensive patent portfolio since the founding of Cerebell, and our actions are consistent with our cooperative strategy to rigorously protect our intellectual property rights.

We believe we have a strong case and remain committed to protecting our proprietary inventions for the benefits of patients, healthcare providers, shareholders, employees, and others who rely on us. The complaints are a proactive measure to safeguard our innovations against unauthorized use. We remain the clear category leader and expect to maintain our position through the merits of our patented technology and our commitment to further innovation. In conclusion, we remain focused on the proven strategies that has driven our success to date and that we believe will continue to enable Cerebell to become the standard of care. This includes investing in our commercial organization to drive adoption of the Cerebell system for seizure detection in both new and existing accounts, continuing to drive awareness of seizures in the acute care setting by maintaining a leading presence in generating clinical and economic evidence, and finally, expanding our markets through further product development and commercial launches.

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

Scott Blumberg, Chief Financial Officer, Cerebell: Thank you, Jane, and good afternoon, everyone. As Jane mentioned, total revenue for the second quarter was $21,200,000 a 38% increase from $15,300,000 in the same period of the prior year. The increase was primarily driven by continued commercial expansion, resulting in increased adoption of the Ferroville system across new and existing accounts. Product revenue for the 2025 was $15,900,000 representing an increase of 38% from $11,600,000 in the 2024. Subscription revenue for the 2025 was $5,300,000 representing an increase of 41% from $3,700,000 in the 2024.

Gross margin for the 2025 was 88% compared to 86% in the prior year period. Total operating expenses for the 2025 were $33,600,000 an increase of 56% compared to $21,600,000 in the 2024. Non cash stock based compensation expense was $3,200,000 in the 2025. The increase in operating expenses was primarily attributable to investments in our commercial organization, increased headcount to support the growth of the business and expenses related to operating as a public company. As a reminder, our investments to expand our sales force have a delayed impact on revenue contribution due to the time required to train reps, acquire customers and launch new accounts.

We expect these investments, which were made over the past year and are continuing into Q3, to increase the rate of account acquisition beginning in 2026. Sales and marketing expense decreased $600,000 in Q2 compared to Q1. The sequential decline was driven by expenses related to our annual sales meeting included in Q1 and the timing of headcount and associated compensation expense. General and administrative expense in Q2 increased by 1,400,000 relative to the prior quarter, largely as a result of expenses associated with preparation of our ITC and district court IP complaints filed in July. Stock based compensation expense increased in Q2 as a result of our move to public company equity compensation practices.

We expect stock based compensation expense to increase with full year 2025 stock based compensation expense at or slightly below our guidance of $15,000,000 Net loss was $13,600,000 for the 2025 or a loss of $0.38 per share compared to a loss of $8,900,000 or a loss of $1.61 per share in the 2024. Average weighted share count of 36,300,000.0 shares was used to determine loss per share for the 2025. Our cash, cash equivalents and marketable securities as of 06/30/2025 were $177,400,000 Looking ahead, we remain committed to our goal of 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. Turning now to our outlook for the remainder of 2025. Given our momentum in the 2025, we now expect full year 2025 revenue to range from $85,000,000 to $88,000,000 up from our prior guidance of $83,000,000 to $87,000,000 which represents annual growth of 30% to 34% over 2024.

On gross margins, we expect full year 2025 to be in the mid to high 80% range. We’ve accelerated acquisition of headbands from our supplier upon the temporary reduction in tariffs in China and estimate that we currently have sufficient inventory to service our anticipated demand for the remainder of the year. Additionally, we have initiated our previously discussed strategies to derisk our supply chain amidst the uncertainties of the current trade environment. Part of our near term mitigation plan, we have taken steps to establish our production line in Vietnam to create redundancy and benefit from potentially more favorable trade policies. We expect our manufacturing site in Vietnam to be operational by the end of Q3.

The speed of this transition illustrates our ability to quickly adapt to a changing trade environment, maintain supply chain security and continue to deliver industry leading gross margins. We believe our supply chain strategies put us on track to deliver gross margins in the mid-eighty percent range for the full year 2026, assuming no changes to currently proposed tariffs. With that, I’ll turn the call back to Jane.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Thank you, Scott, and thank you all for your time today. In conclusion, I’m very pleased with our strong second quarter performance, which has positioned us well for continued success through 2025 and beyond. We have substantial growth runway ahead of us, as we currently serve only around three percent of The U. S. Patients who could benefit from our technology and are building further upon our industry leading patent protected platform.

The future for Zara Bell is brighter than ever, and we 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 Sarabelle, and 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 and A. Operator?

Desiree, Conference Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Scott Blumberg, Chief Financial Officer, Cerebell: You.

Desiree, Conference Operator: And our first question comes from the line of Travis Steed with Bank of America. Your line is open.

Travis Steed, Analyst, Bank of America: Hi, everybody. Congrats on a good quarter and the guide raise. Maybe just to start on the question, I’d love to kind of get kind of an update on some of the momentum in the business and what you’re seeing on account ads and the awareness of Cerebell out there and utilization, kind of double digit utilization growth again, kind of sustainability around that and some of the new reps that you’ve hired and territory managers that you’ve hired, sustainability of the ramp on those ads.

Unnamed Executive, Company Representative, Cerebell: Hey, Travis, I can take that. Yeah, we’re seeing good momentum on all fronts. As a reminder, we’ve most of the commercial investments we’ve made over the past year, especially in the territory manager side, given the sales cycle, we don’t expect to drive tangible growth in the account base until next year. And of course, internally, we’re tracking along on the underlying metrics around the stages of pipeline and the number of customers we touch and how those progress through the pre PO stages and it’s going quite well. So we continue to have confidence that that’s going to bear fruits.

As far as usage goes, our CAMs continue to make an impact. As we’ve talked about over the past number of calls, we do see lower seasonal usage in Q2 and Q3 relative to Q4 and Q1. But the outcome this quarter was well in line with what we expected.

Travis Steed, Analyst, Bank of America: Okay, great. And then I just wanted to follow-up on gross margin. It looks like you’re kind of getting back to your old run rate in 2026, kind of where you were before all the tariff stuff. How much of that is the kind of the mitigation versus the rates being better? And could there even be potential upside to that over time?

Unnamed Executive, Company Representative, Cerebell: It’s both. Our strategy of diversifying our supply chain in Vietnam both is to mitigate the macroeconomic and trade risk with being reliant on a single country. But beyond that, the current narrative of tariff rates coming out of Vietnam appears to be lower than what we’re paying even during this break from China. And we’ll continue to make decisions on our production jurisdiction based on what we learn along the way. But as you mentioned, we are continuing to make improvements in underlying cost structure both in our China and Vietnam manufacturing sites.

And a portion of that is included in our guide to be in the mid-eighty percent range next year.

Travis Steed, Analyst, Bank of America: Okay, great. Thanks a lot and congrats.

Desiree, Conference Operator: Our next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Robbie Marcus, Analyst, JPMorgan: Great. And congrats on a good quarter as well. Maybe for me, can you remind us of what seasonality is like with respect to EEG? And just speak to some of the trends you saw on utilization at your hospitals, Think about any color on new or existing accounts.

Unnamed Executive, Company Representative, Cerebell: Typically, see a reduced seasonal usage in Q2 and Q3 relative to Q4 and Q1. That aligns pretty well with the macro level data that we get from various sources around what ICU census is. So we believe that that’s a direct cause. We’ve seen it over this year and we’ve seen it in the past years as well. And so we’ve appropriately prepared for it.

What we look at internally and Jane could speak more to this is some of the initiatives that our CAMS are undertaking to drive usage and those have been very effective.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, and to add to what Scott said, many of the usage initiative we’re driving is many ways independent of the seasonality. As we mentioned before, we continue to focus on very specific patient population with strong guidelines support and help hospitals to protocolize those workflows. Also in this rapid changing macro environment, we are also partnering more with administrators to help both the care team as well as administrators to see the health economic benefits using their own data. So all these initiatives we have started a few quarters back, we start to see very measurable and quantitative impacts.

Robbie Marcus, Analyst, JPMorgan: And then maybe on expenses, you had pretty good expense control in the quarter, particularly on selling expense. Maybe speak to some of the undertakings of the company, how you’re deploying the sales force and how you’re thinking about expenses for the rest of the year? Thanks.

Unnamed Executive, Company Representative, Cerebell: We don’t provide specific OpEx guidance, but our investment philosophy hasn’t changed, which is we’re deploying the capital raise in our oversubscribed IPO to drive future growth, both in the R and D engine and commercial expansion. As Jay mentioned in her prepared remarks, we are on the territory manager side approaching the end of our planned expansion of territories and plan to hold relatively consistent there. But we will continue to invest in the CAM side of the business, which will grow relatively in line with the growth of the account base. We’re also looking at other areas to invest opportunistically to drive future growth.

Robbie Marcus, Analyst, JPMorgan: Great. Thanks a lot.

Desiree, Conference Operator: Next question comes from the line of Brandon Vazquez with William Blair. Your line is open.

Brandon Vazquez, Analyst, William Blair: Hey, everyone. Thanks for taking the question and congrats on the nice quarter. I wanted to ask first on utilization as the account base keeps growing. I was curious if you could talk a little bit about segmentations of utilization growth and how they grow over time. Is this simply a matter of you kind of look at tenure of accounts?

Do they kind of linearly grow in utilization or is there something else that you see in the dataset that makes some accounts drive utilization more than others? Just trying to get an understanding of what kind of underlying trends there look like when you look at the accounts segmented by utilization.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, we look at our utilization, I would say in three dimensions in growth. The first one is departmental penetration or expansion in many of our accounts. We’re still not in all the departments and all the departments would include all the ICU emergency department as well as the floor. So in many of these accounts will be intentionally driving departmental expansion. The second dimension is physician training.

So in many of the departments we are already in, we have not been able to always train 100% of the providers on the bedside, partially driven by the natural turnover. And also, it’s driven by it’s very challenging to train the night shifts or the weekend shifts. So we have specific initiative internally to address that. The third dimension, as I mentioned earlier, is really focused on specific population and supporting the nursing and physician team to think about driving protocolization. So these are overall the three dimensions.

I would say they applies to majority of our customer because most of our customers have ICU and ED, has the different physician provider groups as well as the different patient population.

Brandon Vazquez, Analyst, William Blair: Okay, that’s great. And then Jane, maybe I think you guys are kind of still early days in this and kind of a limited launch in the pediatric side. Talk a little bit about what even if it’s just anecdotal at this point, any updates there, how things are going and how that may progress from kind of a limited launch into a little bit of a broader launch in the coming quarters or year? Thank you.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, since our FDA clearance in April, we started the, we call it the pilot or limited market release of the pediatric. We are actually making progress on multiple fronts. As I mentioned in the last call, the two areas, one is in the children’s hospital, and we have not penetrated the majority of the children’s hospital. The other is the pediatric population in the emergency department. So the initiatives we are making progress and driving are, for example, doing QI quality insurance projects with key opinion leaders to show the problems of seizure in the pediatric, in the ED context because this population just never had an EEG in the emergency department before.

So we can see how many seizures could be potentially missed and also in parallel work out what’s the right workflow for this population different departments. And meanwhile, all these exercise also help us to truly understand deeper of the patient needs here, as well as the dynamics in this specific segments. And all this would enable us to maximize our go to market plan as we launch the product formally down the road.

Desiree, Conference Operator: Next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Joshua Jennings, Analyst, TD Cowen: Hi. Good afternoon. Thanks for taking the questions. I was hoping to start on the pipeline. James, great to hear that the early buzz is being generated by the delirium indication.

And I was hoping to just review just the economic value proposition as you see it rolling out. And is it going to be driven by decreased length of stay, decreased kind of workup costs in terms of pinning down delirium, but if in the future once approved if a hospital adopts Cerebell technology and utilizes the point of care EEG to make a delirium diagnosis, I mean how much cost savings could we see and maybe compare the economic value proposition to the Cerebell EEG solution?

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, thank you, Josh. We see a lot of parallel in terms of health economics benefit between delirium and seizure since we’re not launching delirium yet. So, we probably won’t be able to provide super specific health economics benefit as we do on seizure. However, at high level, one angle is what you already mentioned, since most all these patients are under DRG most of these patients for inpatient under DRG, which means the revenue is relatively fixed. So, reducing length of stay will be a major value driver.

There are plenty of clinical evidence has shown that when patient have delirium, the ICU or the hospital length of stay is significantly higher. So we expect that when you have a more objective continuous measurement that help physician to optimize the management of delirium, we could potentially see a signal there as we did in seizure. Also similar to seizure, we received a breakthrough on delirium as well. And there could be association of and tab and breakthrough, which we commonly see. And of course, there’s always uncertainty there.

So overall, we see a lot of parallel and this is what we will be focusing on in generating more clinical evidence as well as health economics evidence when we launch new indications.

Joshua Jennings, Analyst, TD Cowen: Excellent. And then I was hoping to just better understand the pricing strategy and what the experience was in the first half of this year and any help just thinking through headband pricing and clarity pricing for second half ’twenty five and going into 2026? Any change from trend in 2024? Thanks for the help and congrats on the nice 2Q.

Unnamed Executive, Company Representative, Cerebell: Thanks, Josh. The headband pricing has been relatively consistent year over year. We’ve continued to opportunistically look at price increases where appropriate, but we also want to be judicious with those and appreciate that a lot of hospitals are on our economic stream right now. We have been able to effectively increase the rate of Clarity, the Clarity ASP over time and a lot of that’s attributable to driving more recorders through the subscriptions.

Desiree, Conference Operator: Our next question comes from the line of Bill Quvanic with Canaccord Genuity. Your line is open.

Brian Johnson, Investor Relations, Cerebell0: Hey, great. Thanks. Thanks for taking my question. Just on the just start off with cost for Scott. Just on the ongoing legal, you mentioned that your G and A was a little elevated in Q2 because you’re prepping for all of this.

How should we think about the incremental costs over the next couple of years to legal? And then just on the delivery, I think how do we think about the if you come to market with this product, how we just think about is there a certain like I guess with I guess there’s a certain pathway, guideline on how to treat those patients already in place. Is there something similar with delirium that there’s a specific pathway of how to treat them or it just changes how they’re going to treat them if they know they’re not

Scott Blumberg, Chief Financial Officer, Cerebell: to wear you? Thanks for taking my questions.

Unnamed Executive, Company Representative, Cerebell: On the cost of legal, we do expect an ongoing cost associated with the action. Of course, that’ll depend on the response and how long that lasts. But what I’ll say to guide you is the amount of increase that we saw relative to normal in Q2 should about reflect what we’re going see in the coming quarters of ’25 and ’26.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: And on the delirium treatment, it is true that it’s different from seizure management in that seizure management focused on very clear first line, second line treatment and that’s mostly medication. Delirium doesn’t have a single medication and that’s proven to be effective or recommended by the guidelines, especially in the high poll delivery on patient population. However, that being said, there’s clear treatment pathways that the societies has developed a clear guideline and that involves in looking into potential medication, especially sedatives that can cause living, therefore to eliminate eliminate certain medication from the patient, or finding other root cause, potentially infection and other underlying and balanced iron level. So those can be different root cause for delirium. It’s critical to identify those root cause and that can help delivery management.

Another factor of delirium is that these patient often stay ICU for days or even weeks. And it’s a disease state that can wax and wane and evolve over time. So often when paid, when physicians put patient in one treatment path, it’s very hard for physicians to know it could be hard for physicians to know whether or they’re on the right path. And this is where we received some of the feedback from the key opinion leaders as a BS that objective and the continuous monitoring device can help the physician not only to more accurately and potentially detective early, but to know that whether or not they’re on the right path in managing these patients.

Brian Johnson, Investor Relations, Cerebell0: Great. Thanks for taking my question.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Thank you, Bill.

Desiree, Conference Operator: Next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Your line is open.

Brian Johnson, Investor Relations, Cerebell1: Hi, Jane and Scott. Thanks for taking our questions. I guess, firstly, could you delve into the neonate indication a little bit? Could you talk a little bit more about the pilot and number of patients and number of centers that you would anticipate to run through this and as far as timing when we may see some initial data?

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, we don’t disclose specific patient population or specific sites, but the pilot is still, I would say relatively small. We’re not talking about hundreds of sites. We’re talking about probably single double digit. And the reason is that for the pilot, we’re really trying to achieve one to further validate the ease of use and signal quality of our FDA cleared hardware, which is the both the recorder as well as the head cap. And B, probably more importantly, it’s again, understand specific patient needs here in this very unique patient population.

And also the specific dynamics workflow in the NICU. So all this would inform us when we developed our when we are developing our go to market plan. As we mentioned in the last earnings call, we will be sharing FDA clearance or approval when they come or other strategic regulatory milestones. So, at the moment, we do not have those milestones to share, but we are what we can share is everything is on track related to our pipeline according to our internal milestone and some of them are even ahead of schedule.

Brian Johnson, Investor Relations, Cerebell1: Got it. That’s helpful. And then secondly, could you talk a little bit about the shift on the manufacturing to Vietnam? You did mention this could occur by the end of Q3. Is that going to be a sole shift in its entirety?

Or do you expect to have two facilities running? And then just clarify for us, would that be separate in both Clarity as well as the headbands? Thank you.

Unnamed Executive, Company Representative, Cerebell: We expect to maintain our current suppliers in China as well. The Vietnam facility is really to de risk the single country supplier as well as to be able to change our manufacturing jurisdiction in order to take advantage of the differing trade policies we seek. So I would consider it an added line. As it relates to manufacturing, we do a lot of the manufacturing related to the headbands internationally in China, Vietnam with final assembly inspection here in The U. S.

And the recorders have always been and will continue to be manufactured here in The U. S.

Brian Johnson, Investor Relations, Cerebell1: Okay, perfect. Thanks for taking our questions. Congrats on the quarter.

Desiree, Conference Operator: Next question comes from the line of Marie Thibault with BTIG. Your line is open.

Brian Johnson, Investor Relations, Cerebell2: Hi, good evening. Thanks for taking the questions and congrats on a nice quarter. I wanted to ask here, I think I heard in the prepared remarks that there would be opportunistic investments for the territory count. What are some of the drivers that would determine whether you make those investments?

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Part of our core strategy and how we operate is we always run pilots. Usually before we invest extensively in any initiative or function, we would have a rather proven pilot. So, we have multiple commercial pilot ongoing and as we see strong signals, and that’s when we will pull the trigger to take those opportunities.

Brian Johnson, Investor Relations, Cerebell2: Okay, so strong signals from within a region or specific territory. Okay, very helpful Jane. And then what are you hearing anecdotally so far? What are your sales folks seeing in the field from the competition given their recent launch?

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Yeah, we created point of care EEG category. So there has been competition pretty much since day one we launched the product. With our success growing, we see more emerging players and more activities. However, we see the competition activity not really impacting our commercial performance as you could see from our Q2 performance and that we have high confidence to raise our 2025 guidance. The reason is that we fundamentally believe that our product is significantly superior than what’s available from the competition.

It’s highly validated by hundreds of thousands of patients and our clinical evidence. The fact that we have Fed ramp, which is one of the highest cybersecurity certification that any company can get is really differentiate us as our customers pay more attention to cybersecurity now. So overall, we remain highly confident that we will be the dominant remain the dominant category leader.

Brian Johnson, Investor Relations, Cerebell2: Wonderful. Very encouraging. Thanks for taking the questions.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Thank you, Mary.

Desiree, Conference Operator: That concludes the question and answer session. I would like to turn the call back over to Jane Chow for closing remarks.

Jane Chao, Co-Founder and Chief Executive Officer, Cerebell: Well, thank you everyone for your time. We are very pleased with our strong Q2 performance. We look forward to sharing more progress down the road. Thank you.

Desiree, Conference Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining and you may

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