Ceribell, Inc. (CBLL)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $21.20M, up 38% year over year and up sequentially, with gross margin at 88%; net loss was $(13.64)M and EPS was $(0.38) .
• Product revenue rose 38% to $15.92M and subscription revenue grew 41% to $5.28M, reflecting continued adoption across new and existing accounts; active accounts ended at 584 (+26 in the quarter) .
• Management raised FY2025 revenue guidance to $85–$88M (from $83–$87M in Q1 and $81–$85M initially) and reiterated gross margin outlook in the mid–high 80% range; Vietnam manufacturing is expected operational by end of Q3 to mitigate tariff risk .
• Results modestly beat Wall Street consensus: revenue +$0.75M vs. S&P Global estimate*, EPS $0.02 better, and EBITDA ~$0.64M better; beat driven by commercial traction and resilient utilization despite summer seasonality .

What Went Well and What Went Wrong

What Went Well

• “We are well-positioned to drive continued growth…while establishing EEG as a new vital sign,” CEO Jane Chao highlighted strong commercial execution and adoption momentum .
• Active accounts reached 584, with 26 net adds in Q2, supported by investments in territory managers (target ~55 territories) and Clinical Account Managers to drive utilization expansion .
• Gross margin remained robust at 88% despite trade uncertainty; management accelerated headband procurement during temporary tariff relief and advanced a Vietnam line to secure supply and margins .

What Went Wrong

• Operating expenses increased 56% YoY to $33.63M, driven by commercial investments, public-company costs, and legal spend tied to IP actions; net loss widened to $(13.64)M .
• Q2 and Q3 are seasonally softer for ICU census and utilization; management flagged expected seasonality offsets via CAM initiatives but acknowledged lower summer usage vs. Q4/Q1 .
• Legal action against Natus will carry ongoing G&A costs; management expects elevated legal expenses to persist through 2025–2026 following Q2 prep costs .

Financial Results

Segment breakdown:

KPIs and balance:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We are pleased with our second quarter results…accelerate adoption…well-positioned to drive continued growth…reinforce our category leadership while establishing EEG as a new vital sign” .
• CFO: “We now expect full year 2025 revenue of $85,000,000 to $88,000,000…gross margins mid to high 80%…manufacturing site in Vietnam…operational by the end of Q3” .
• CEO clinical impact: bedside CLARITY ruled out seizures in an ED patient, avoiding intubation and ICU stay; “objective, continuous monitoring” reduces unnecessary interventions and costs .
• IP defense: “We remain the clear category leader…committed to protecting our proprietary inventions” following complaints filed at USITC and Delaware federal court against Natus .

Q&A Highlights

• Utilization and seasonality: Management reiterated lower seasonal usage in Q2/Q3 due to ICU census, but highlighted CAM-driven departmental penetration, provider training, and protocolization to sustain growth .
• Gross margin trajectory: Both tariff mitigation (inventory pull-forward, Vietnam) and underlying cost improvements support mid–80% GM longer-term; Vietnam may have lower effective tariffs than China .
• Expense dynamics: Q2 G&A uptick tied to IP actions; ongoing legal costs expected through 2025–2026; sales & marketing sequentially decreased vs. Q1 due to timing (annual sales meeting) .
• Pediatric/Neonate progress: Limited pediatric launch underway across ED/children’s hospitals; NICU pilot validating hardware ease-of-use and signal quality; broader launch expected post pilot learnings .
• Pricing: Headband pricing relatively consistent; CLARITY ASP increasing via subscriptions; no tariff-based price increases contemplated in guidance .

Estimates Context

Q2 2025 actuals vs S&P Global Wall Street consensus:

Forward consensus snapshot (context for revisions):

Values retrieved from S&P Global.*

Implication: Modest beats on revenue/EPS/EBITDA likely support upward bias to FY revenue outlook, already reflected in management’s guide raise; seasonality and tariff headlines may temper near-term margin estimate revisions.

Key Takeaways for Investors

• Core execution intact: Strong 38% YoY revenue growth and stable 88% gross margin underscore resilient demand and effective utilization expansion, despite seasonal headwinds .
• Guidance credibility: Two consecutive FY25 revenue guide raises (to $85–$88M) reflect confidence in pipeline and commercial traction; margin framework reaffirmed .
• Risk mitigation: Vietnam manufacturing ramp by end of Q3 de-risks tariff exposure and supports margin durability; inventory strategy bridged near-term uncertainty .
• IP defense and category leadership: Legal actions against Natus and FedRAMP High authorization support moat and enterprise credibility; competition not impacting performance per field checks .
• Pipeline catalysts: Pediatric limited launch, NICU pilot progress, and planned delirium submission position medium-term TAM expansion; near-term revenue impact limited, but strategic optionality rising .
• Estimate dynamics: Q2 beat suggests incremental upward bias to sell-side revenue forecasts; margin estimates should consider mitigation actions and seasonal patterns .
• Trading lens: Positive narrative anchored on guide raise and supply chain mitigation; watch tariff policy developments, legal cost run-rate, and seasonal utilization commentary in Q3 prints .