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Ceribell, Inc. (CBLL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $22.6M (+31% YoY) with 88% gross margin; FY25 revenue guidance raised to $87–$89M (midpoint +$1.5M vs prior) . Consensus revenue was $21.78M*, and GAAP EPS was -$0.37 vs consensus -$0.41*, both better than expected .
  • Active accounts reached 615 (+31 sequential, largest quarterly add since IPO), supported by VA pilots and FedRAMP High authorization; utilization continues to expand across departments and patient groups .
  • Management flagged tariff-driven margin compression in Q4 but expects mid-80% gross margin as mitigation (Vietnam line) ramps; reiterated supply chain resilience and cash sufficiency toward cash flow breakeven .
  • Guidance raised for the third consecutive quarter; catalysts include VA system rollout, pediatric Clarity expansion in 2026, and delirium algorithm development (no device competitors today) .
  • Risks: OpEx up 39% YoY, ongoing losses (-$13.5M), rising competitive activity, and IP litigation timing uncertainty post-government shutdown .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and recurring momentum: revenue $22.6M (+31% YoY), GM 88%, subscription revenue +44% YoY; largest sequential account adds (+31) since IPO .
  • Guidance raised again: FY25 revenue to $87–$89M; management emphasized durable adoption and predictable recurring model .
  • Strategic pipeline and channel progress: VA pilots successful with top-down rollout ahead; pediatric Clarity validated (sensitivity 94.4%, specificity 93.1%, NPV 99.8%) and neonatal headcap clearance refined for preterm/term neonates .

What Went Wrong

  • Continued operating losses and higher OpEx: OpEx rose to $34.6M (+39% YoY); net loss -$13.5M; sales & marketing up sequentially on headcount expansion .
  • Tariff headwinds: transition to post-tariff China inventory in Q4 likely compresses GM to mid-80% short term; Vietnam line won’t offset until next year .
  • Competitive intensity and IP uncertainty: increased competitor activity, with ITC decision timeline pushed back due to government shutdown; elevated legal costs .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$20.5 $21.2 $22.6
Diluted EPS ($USD)-$0.36 -$0.38 -$0.37
Gross Margin %88% 88% 88%
Operating Expenses ($USD Millions)$32.2 $33.6 $34.6
Net Loss ($USD Millions)$12.8 $13.6 $13.5

Segment breakdown:

MetricQ1 2025Q2 2025Q3 2025
Product Revenue ($USD Millions)$15.6 $15.9 $17.0
Subscription Revenue ($USD Millions)$4.9 $5.3 $5.6
Total Revenue ($USD Millions)$20.5 $21.2 $22.6

KPIs:

KPIQ1 2025Q2 2025Q3 2025
Active Accounts (count)558 584 615
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$182.7 $177.4 $168.5
Gross Margin %88% 88% 88%

Versus estimates:

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$20.5 $21.2 $22.6
Revenue Consensus Mean ($USD Millions)$19.30*$20.45*$21.78*
EPS Actual ($USD)-$0.36 -$0.38 -$0.37
Primary EPS Consensus Mean ($USD)-$0.457*-$0.399*-$0.414*
EBITDA Consensus Mean ($USD Millions)-$15.18*-$15.27*-$16.73*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$81–$85 $83–$87 Raised
Revenue ($USD Millions)FY 2025$83–$87 $85–$88 Raised
Revenue ($USD Millions)FY 2025$85–$88 $87–$89 Raised
Gross Margin %FY 2025Mid-80% expectation Mid to high 80% reiterated Maintained
Gross Margin %Q4 2025N/AMid-80% expected in Q4 due to tariffs New/Specific
Gross Margin %FY 2026N/AMid-80% target assuming tariffs unchanged New/Specific

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Supply chain & tariffsExpect Q4 tariff impact; mitigation plans, potential reshoring Vietnam line to be operational by end Q3; maintain mid–high 80% GM Transition to post-tariff China inventory in Q4; Vietnam reduces exposure; mid-80% GM Improving resilience; near-term GM pressure
AI/technology initiativesPediatric Clarity 510(k) clearance; large validation dataset Positive delirium KOL feedback; no diagnostic devices exist Delirium algorithm on track; expanding indications (stroke, delirium) Advancing pipeline; TAM expansion
Regulatory/legalFedRAMP High authorization enables VA and agencies ITC and district court filings vs Natus; legal costs ITC timeline delayed by shutdown; updates expected post-reopen Ongoing; timing uncertainty
Product performance/adoption558 accounts; strong Q1 seasonality lift 584 accounts; continued utilization initiatives 615 accounts; +31 sequential adds; utilization grows across ED/ICU Broad-based growth
Government/VA channelATO and FedRAMP High groundwork —VA pilots successful; larger cohort rollout planned Scaling via top-down rollout
R&D execution (peds/neonates)Plan limited pediatric release; neonatal Clarity timeline Neonatal pilots with hardware; algorithm in development Neonatal headcap cleared for preterm/term; full launch in 2026 Progressing to commercialization

Management Commentary

  • “Total revenue for the third quarter of 2025 was $22.6 million… and we are raising our full year 2025 revenue guidance to $87 million–$89 million.” — CEO Jane Chao .
  • “Gross margin for the third quarter of 2025 was 88%… We expect to maintain gross margins in the mid-80% range in Q4.” — CFO Scott Blumberg .
  • “As of September 30th, we had 615 active accounts… our largest sequential increase since becoming a public company.” — CEO Jane Chao .
  • “We have established an additional manufacturing line in Vietnam… [which] reduces our exposure to China-based tariffs.” — CFO Scott Blumberg .
  • “VA pilots have been very successful… confirmed to roll out the first larger cohort of VA accounts in the next couple of quarters.” — CEO Jane Chao .

Q&A Highlights

  • 2026 outlook: Management declined to comment on 2026 specifics, reiterated core growth drivers (new accounts, usage) and pricing discipline; Clarity ASP rising as more recorders are deployed .
  • Neonatal launch: Strategy is both new-account acquisition and deeper penetration in existing NICUs and children’s hospitals; full commercialization targeted for 2026 .
  • Utilization drivers: Protocolization (e.g., cardiac arrest, hemorrhagic stroke), departmental expansion beyond ICU/ED, and intensified provider training including night shifts .
  • OpEx vs leverage: Near-term OpEx elevated due to growth investments; leverage should begin to show in 2026 unless management chooses to invest further in outsized growth opportunities .
  • Competition/IP: Activity increased but not materially impacting performance; ITC timeline delayed post-shutdown; cybersecurity (FedRAMP) viewed as differentiator .

Estimates Context

  • Q3 revenue beat: $22.6M actual vs $21.78M consensus* (+3.7%); EPS beat: -$0.37 vs -$0.41*; EBITDA better than consensus* .
  • Across Q1–Q3, actuals consistently exceeded consensus revenue and EPS*, supporting guidance raises .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Consistent execution: Third consecutive quarterly guidance raise with broad-based adoption across accounts and departments; recurring model underpins momentum .
  • Near-term margin watch: Expect gross margin to dip to mid-80% in Q4 on tariffed inventory; Vietnam mitigation should stabilize margins through 2026 .
  • Channel catalyst: FedRAMP High opens VA and agency channels; confirmed VA cohort rollout could accelerate 2026 growth .
  • Pipeline optionality: Pediatric Clarity expanding in 2026; neonatal clearance advances; delirium algorithm targets a device-less market, expanding TAM .
  • Investment vs leverage: Elevated OpEx reflects buildout; management signals leverage emerging in 2026 unless strategic growth investments are prioritized .
  • Competitive posture: Heightened activity but limited performance impact so far; IP defense ongoing, cybersecurity credentials differentiate .
  • Trading setup: Near-term catalysts include Q4 seasonal lift, progress on VA rollout, and tariff/margin cadence; watch for any IP timeline updates and FY26 color at the next call .

Additional notes:

  • Q3 earnings press release furnished via 8-K Item 2.02; no separate Q3 press releases found beyond Exhibit 99.1 .
  • Prior two quarters: Q1 revenue $20.5M; Q2 revenue $21.2M; both 88% GM and raised FY25 guidance as adoption and utilization increased .