CeriBell (CBLL) Q4 2025 Earnings Call Transcript

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DATE

Tuesday, February 24, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer & Co-Founder — Xingjuan Chao
• Chief Financial Officer — Scott Blumberg
• VP, Investor Relations — Brian Johnston

TAKEAWAYS

• Revenue -- $24.8 million for the quarter, up 34% year over year, and $89.1 million for the full year, up 36%.
• Gross Margin -- 87% for the quarter and 88% for the year; margin expected in the mid-80% range for 2026 due to tariff and cost environment.
• Active Accounts -- 647 at year-end, with 32 net new accounts added in the quarter and 118 added for the year.
• Product vs. Subscription Revenue -- Quarterly products revenue of $18.8 million (33% growth); subscription revenue of $6.0 million (37% growth); for the year: products $67.3 million (34% growth), subscription $21.7 million (41% growth).
• Operating Expenses -- $36.2 million for the quarter (24% increase); $136.7 million for the year (42% increase), with $3.3 million and $12.2 million of non-cash stock-based compensation, respectively.
• Net Loss -- $13.5 million for the quarter ($0.36 per share, based on 37.2 million shares); $53.4 million for the year ($1.46 per share); per-share annual loss decreased due to higher weighted shares.
• Cash Position -- $159.3 million in cash, cash equivalents, and marketable securities at year-end.
• 2026 Revenue Guidance -- Expected full year revenue of $111 million to $115 million, which represents projected annual growth of 25%-29%.
• Market Expansion -- Total addressable market (“TAM”) estimate increased to $3.5 billion due to FDA clearance for neonate/pediatrics and 510(k) delirium algorithm clearance.
• Penetration Rate -- Approximately 4% penetration in the $2.5 billion core seizure opportunity; roughly 30% penetration within existing installed base for utilization.
• Commercial Infrastructure -- Expanded from 35 to about 55 commercial territories during the year; further investment expected to accelerate account acquisition.
• Regulatory Achievements -- FedRAMP High authorization (enabling access to all 170 VA hospitals); FDA 510(k) clearance for neonatal/pediatric seizure and delirium algorithm; FDA Breakthrough Device designation for LVO stroke monitoring.
• Pilot Launches -- Commercial pilots for neonate and delirium anticipated to move to full launch in Q2; early VA system expansion underway.
• Account Acquisition Strategy -- New focus on system-level adoption at hospital networks and health systems to accelerate additions.
• Gross Margin Guidance Assumptions -- Current forecast excludes potential effects from recent Supreme Court decisions and upcoming tariff policy changes, instead modeling around current tariff rates and Vietnam-based manufacturing mitigation.

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RISKS

• Scott Blumberg said, "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."
• Operating expenses in Q4 2025 and full year rose 24% and 42%, respectively, primarily due to commercial investment, headcount, and legal expenses.
• CFO stated, "We expect, given the nature of litigation, that it will not be linear. And what we are seeing is that in the depths of the core of the case, which is happening right now into Q2, we would expect expenses to increase and then potentially moderate in Q3 and Q4 as we reach the late stages, at least of the first path here with the ITC."
• The guide for 2026 incorporates only committed VA expansion, with further expansion contingent on government budget cycles and not included in projections.

SUMMARY

CeriBell (NASDAQ:CBLL) reported a 34% rise in quarterly revenue and 36% for the year, underpinned by continued new account growth and expanded product indications. The company’s year-end cash and investments position stands at $159.3 million, while full-year net loss totaled $53.4 million due to increased commercial spend and elevated legal costs. FedRAMP High authorization enabled access to 170 VA hospitals, and regulatory clearances for neonatal, pediatric, and delirium solutions nearly doubled the company’s stated TAM to $3.5 billion. Management projects 2026 revenue of $111 million to $115 million and expects both enhanced utilization and faster new account acquisition as recent investments mature.

• FDA Breakthrough Device designation was granted for LVO stroke monitoring, signaling further expansion beyond core seizure and delirium detection capabilities.
• The company confirmed its commercial pilot for delirium is scheduled to transition to a full launch, pending NTAP (New Technology Add-on Payment) approval, which could become effective in October 2026.
• Gross margins are forecasted to remain in the mid-80% range, supported by increased manufacturing in Vietnam as a tariff mitigation strategy.
• Management stated that the commercial sales infrastructure can largely support upcoming launches with only modest additional investment required.
• Systematic departmental expansion and a well-defined playbook are expected to drive deeper utilization within the existing hospital base.
• Legal expenses are expected to be front-loaded in 2026 due to the ongoing ITC patent litigation with Natus, with a potential moderation in the second half of the year.
• Pediatric and neonate product launches are expected to be meaningful revenue drivers in 2027 and beyond, as the 2026 sales cycles may take several months per hospital.

INDUSTRY GLOSSARY

• FedRAMP High: The highest-level Federal Risk and Authorization Management Program security compliance, allowing sales into sensitive government healthcare systems, such as the VA.
• 510(k) clearance: Standard FDA premarket pathway for medical devices demonstrating substantial equivalence to legally marketed devices.
• NTAP: New Technology Add-on Payment—a CMS reimbursement pathway for breakthrough devices providing additional hospital payment during initial commercialization.
• LVO stroke: Large Vessel Occlusion stroke; a type of ischemic stroke where a major brain artery is blocked, requiring rapid detection and intervention.
• CAM: Clinical Account Management—CeriBell’s team responsible for account onboarding, clinical integration, and utilization expansion.

Full Conference Call Transcript

Brian Johnston: Earlier today, CeriBell, Inc. 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 would 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, Inc. 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 Xingjuan.

Xingjuan Chao: 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, Inc. 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 am 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 the predictable, recurring nature of our business model. Beyond driving rapid revenue growth and expanding our account base, we made several critical cornerstones of the foundations for application. 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, Inc. 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 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 2025, and we are excited to launch even more throughout 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 would like to spend a few minutes discussing the neonate market. Seizures are the most common neurological emergency in the U.S., 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 are supposed to suspect a seizure based on observation alone are incorrect more than 70% of the time. What is at stake is profound. Evidence shows that a total seizure burden of approximately one 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 a recent case, a two-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 am 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 features. This story illustrates how the CeriBell, Inc. 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, has 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 an 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, Inc. as a matter of protocol. During the past three months, we achieved 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, Inc. 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 brain 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 limitations 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 a delirium monitoring solution, we are 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 diametrically 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% of delirious patients have seizure or seizure-like abnormalities. We believe that an integrated platform that can monitor for delirium coherently with seizure not only provides access to new patients, but also drives 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 effort will set the stage for anticipated full commercial launch in 2026 or 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 baselines 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 two to three times higher in-hospital mortality compared to those who have a stroke outside the hospital. Throughout 2026, our efforts will be focused on clinical data generation and advancing regulatory milestones for the LVO stroke detection.

Seizure, delirium, and stroke together form the core of a 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 is 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 delirium 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 will 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 neonate 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 for 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 transformative nature of our platform: transformational for patients, transformational for providers, and ultimately, transformational for CeriBell, Inc. With that, I would now turn the call to Scott Blumberg, our CFO, to provide a review of our fourth quarter results and 2026 guidance.

Scott Blumberg: Thank you, Xingjuan, and good afternoon, everyone. As Xingjuan 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 is primarily driven by increased adoption of the CeriBell, Inc. system across new and existing accounts. Products 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 are pleased with the continued growth in active accounts and headband purchasing trends in Q4.

We ended 2025 with an active account base of 647, 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 ICU census is elevated.

For the full year 2025, total revenue was $89.1 million, representing 36% growth over 2024. Products 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 cost, 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. Non-cash stock-based compensation 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 2024, representing an increase of 42%.

Full year 2025 operating expenses included $12.2 million in non-cash 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 Xingjuan 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, Inc. 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 2026 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 Xingjuan.

Xingjuan Chao: 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 continued growth in 2026 and beyond. I would like to take a moment to thank the entire CeriBell, Inc. team for the continued dedication to our mission of making EEG a new vital sign. I will now turn the call over to the operator for Q&A. Operator?

Operator: We will now begin the question-and-answer session. If you would like to ask a question at this time, simply press. And our first question comes from the line of Travis Steed with Bank of America. Travis, please go ahead.

Travis Steed: Hey, congrats on the quarter and all the progress in the pipeline. Maybe to start with the 2026 guidance. If you look at just dollar growth, about $24 million growth, roughly about the same we did in 2025. But your TAM has doubled. You are adding accelerating center adds in the back half of the year. Utilization is increasing. So I wanted to understand some of the moving parts and assumptions on 2026.

Scott Blumberg: Hey, Travis. First, I want to state that our guidance philosophy has not changed. As we have said all along, we really appreciate the need to deliver on the numbers that we put forth, and so we have baked in an appropriate level of conservatism into the model. As it relates to the sequential growth, I think it is important to appreciate that the guide last year was consistent with the guide this year. And since philosophy has not changed, we think there is potential for upside if we operate within the principles that we expect to with the investments we have 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 in, but it is fairly modest. But we think as we set out for 2027, that could be a contributor next year.

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

Xingjuan Chao: Yes. We are in the middle of the discussion with some accounts already for the commercial pilot, and the majority of these accounts are our existing accounts, with some new accounts as well. So for the commercial pilot, we really are focused on the real-world validation of our clinical impact. So these discussions will be focused with accounts on what are the best target patient populations, the workflow, how to measure the impact, and also generate case studies and clinical evidence. 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 two drivers. One is delirium itself, where we introduce a new patient population that is not seizure. And the other driver we see is there is a big synergistic interaction between delirium and seizure, as I mentioned in the earnings call. So we could see this drive deeper into the seizure population as we introduce delirium as well.

Scott Blumberg: Thank you.

Operator: Sure. And your next question comes from the line of Robert Marcus with J.P. Morgan. Robert, please go ahead.

Lily (for Robert Marcus): Hi, this is Lily on for Robert. Thanks so much for taking the question. As we think about 2026, can you talk through what you see as the main levers of growth that you are 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?

Scott Blumberg: In terms of levers in the model, I can touch on the levers mechanically. Maybe Xingjuan can comment on the drivers. The two core drivers of our adult seizure market remain unchanged: 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 is a result of the strategy we laid out last year, including expansion of the sales team, FedRAMP approval, and the acceleration from the buzz around CeriBell, Inc. Within our base, we are roughly 30% penetrated, and we have got a number of strategies aimed at driving that, including training more physicians, expanding to new departments, and implementing protocols.

We have built out a robust campaign to drive those efforts. We have got a lot of opportunity to continue to push that forward.

Xingjuan Chao: 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 will emphasize and cap off new levers in 2026. On the account acquisition front, we are adding a new focus on driving hospital system-level acquisition. So this is more focused on both large systems as well as small and medium-sized systems. Instead of, historically, the territory manager focusing on closing one or two accounts, how can we accelerate the process of closing the entire system, say, a 10-hospital-sized system. So we could see that in the near and long term add more gross 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 ICUs, or even sometimes to the floor. So we expect to further expand what we have established in 2025 and expect to see the impact of departmental expansion on driving utilization as well. Great. That is really helpful. And then as a follow-up, how should we be thinking about spend ahead of launches in all these new indications? It is a pretty big expansion in terms of TAM when you layer on pediatric, delirium, and LVO stroke.

And 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 have already built out?

Lily (for Robert Marcus): Thanks so much.

Scott Blumberg: We intend to largely leverage our commercial infrastructure. The beauty of our platform is that it is the same call point. It is the same platform. It is really just training the reps on the new indications, and it is delivering the message to customers. There will, of course, 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.

Lily (for Robert Marcus): Perfect. Thank you.

Operator: And your next question comes from the line of Brandon Vazquez with William Blair. Brandon, please go ahead.

Brandon Vazquez: Hey, everyone. Thanks for taking the question. I wanted to focus first on the commentary around the neonate launch. Maybe spend a little bit more time on the launch here and dig into it. I think as we have talked in the past, there are some accounts that you are already in that now you can kind of open the neonate or the NICU. And I think, to say a little bluntly, starting to see benefits not until late in Q4 seems a little late.

So maybe walk us through why it takes a couple of quarters to start to see those in accounts that you are already in, to make sure we are all level set on when you will start to see those benefits more meaningfully ramp.

Xingjuan Chao: Yes. Thank you, Brandon. So let us maybe focus on the neonate NICU expansion for existing accounts. I think that is where you are focusing. We have about 200 level three, level four NICUs in our existing accounts. If you think about the timeline, we plan to launch in Q2. Even though we are already in these hospitals, to expand to a new department, the hospital needs to acquire additional recorders as well as the clarity that is dedicated to neonatal seizure detection. So that often requires going through the vetting committee and additional committees. We expect that sales cycle to be shorter than your brand-new account acquisition, but that still takes several months.

And even after that, in the context of the departmental expansion, there will be workflow and patient population discussions. Based on our experience, that often would take a couple of months as well. If you start to think through the timeline, that is why a Q2 launch would lead to financial or commercial impact in Q4.

Brandon Vazquez: Okay. And then maybe I will 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 this will 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 will ask more poignantly, on the OpEx line? How should we think about 2026? Is it a point of leverage, or does OpEx have to grow at a higher clip than your total sales growth?

Thanks, guys.

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

As it relates to OpEx, while we do not provide specific guidance, I would 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 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 do not expect to materially increase the size of the sales or support functions. On R&D, we see a lot of opportunity ahead of us, so we are 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 departments 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 ITC litigation expenses are heavily concentrated in the first half of this year, so I would expect to see a little bit of elevation in G&A over the coming two quarters or so. Final note on OpEx is in line with what you see out of our peers. We expect an increase in non-cash stock-based compensation expense throughout the year as we continue to transition to public company compensation practices. So hopefully that is helpful. I do expect overall that our OpEx growth 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 have seen. We do want to strategically deploy our capital to drive long-term growth of the business. But as we make investment decisions, we have always got our ROI towards our North Star, which is to achieve breakeven with cash on hand, and we have very high confidence that we can do that.

Operator: Okay. Our next question comes from the line of Josh Jennings with D.D. Cohen. Josh, please go ahead.

Brian (for Josh Jennings): Hi. This is Brian here for Josh. Thank you for taking my questions. 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?

Scott Blumberg: Yes. So the VA is incorporated in our guide in terms of the expansion that has been committed to last year, but further expansion is not incorporated into the guide. And we will be pursuing that with the government budgeting cycle. That is likely to come up for discussion potentially in Q3 for late 2026 and 2027 impact above our guide. As far as the tariff assumptions go, obviously there has 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.

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 have done over the past couple of years on our product manufacturing cost. Without any benefit from potential impact of Friday's Supreme Court decision, we have confidence that we will maintain margins in the mid-80% range throughout the year.

Brian (for Josh Jennings): Okay. And then one follow-up, if I could. On the NTAP for delirium, are you saying you are positioned to file for the NTAP, or an NTAP that becomes potentially effective this October, or is this likely to be a 2027 decision for you?

Xingjuan Chao: Yes. 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.

Brian (for Josh Jennings): Okay. Terrific. Thank you.

Xingjuan Chao: Thank you.

Operator: And your next question comes from the line of William John Plovanic with Canaccord Genuity. William, please go ahead.

William John Plovanic: Great. Thanks. Good evening, and thanks for taking my questions. Just for clarity's sake, your operating losses have decreased quarter over quarter the past two quarters. It seems like from the detailed guidance you provided, excluding any IP litigation expenses, that trend would continue throughout 2026. And then we, you know, I think we are modeling for you to get to adjusted EBITDA positive in 2026. Just any thoughts on any of those statements?

Scott Blumberg: I do not want to go beyond the guide and give specific comments. I will say that the investment and the infrastructure we have in place right now is sufficient to carry us forward through 2026, but we are always thinking two, three, four 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 do not pay as much attention to time to breakeven, but we want to ensure that we are maximizing growth while not putting our ability to break even at risk.

William John Plovanic: Okay. And then on delirium, I am just—is that more you just see more utilization? Or I know you are 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? Is that just a download over the cloud, or do you have to get out in the field and upload the new algorithm? How do you implement that? Thanks for taking my questions.

Xingjuan Chao: Yes. Thank you, William. On the pricing of delirium, it is a little bit too early for us to comment, and that is part of the commercial pilot for us to learn better about the market dynamics. We could certainly charge for both the algorithm as well as the headband, but those are the decisions we would like to make later down the road. In terms of how we implement the algorithm, it is 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 recorders remotely rather quickly.

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

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

William John Plovanic: Okay. Thanks for taking my questions.

Operator: And your next question comes from the line of Marie Yoko Thibault with BTIG. Marie, please go ahead.

Marie Yoko Thibault: Hi, good evening. Thanks for taking the questions. Nice to see the new account adds tick higher again sequentially this quarter. And I heard your commentary on acceleration of account adds in 2026–2027. I suppose some of this goes hand in hand with the newer rep productivity that is coming online now, but I wanted to 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?

Scott Blumberg: At face value, the comment was specific to the full year. So I believe we added 118 in 2025, and we expect to add more than 118 in 2026. There will be some lumpiness quarter to quarter, not entirely linear, especially with the new health system strategy where we expect first orders to come in boluses. So I would not expect it to be totally linear. That said, the reps do get progressively more productive. What we have seen historically is the reps do get progressively more and more productive between year one, when they start to contribute, and year two, 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.

Marie Yoko Thibault: Alright. That is really helpful, Scott. And you touched on something I want to ask too, which is the process of trying to sell into the entire healthcare system, maybe sort of an enterprise-wide approach. Tell us a little bit more about what is behind the scenes there. Are we starting to see that in accounts already, or is that all to come? I am a little ignorant of how recently this was brought online.

Xingjuan Chao: Yes. So we saw a couple of senior territory managers last year and had very significant success in selling to small and mid-sized hospital systems. The success drivers there are: often these senior TMs work closely with the regional director and even the regional sales VP because systems are across different territories or different regions. So we can form a coherent system-level strategy, not just focus on one or two hospitals. Also, they engage with key stakeholders, especially administrators at the system level, and fine-tune the value proposition at the system level instead of a single ICU or a 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.

Marie Yoko Thibault: Alright. Very helpful. Thank you.

Xingjuan Chao: Thank you.

Operator: And your next question comes from the line of Jeffrey Scott Cohen with Ladenburg Thalmann. Jeffrey, please go ahead.

Operator: Jeffrey, your line is open.

Jeffrey Scott Cohen: Hi, sorry about that. Hi, Xingjuan and Scott. Thanks for taking our questions. Two from our end. Could you talk about any update with regard to the patent case with Natus as far as where you are at and ramifications on any expenses for 2026?

Xingjuan Chao: I can talk about the process. We are in the discovery phase, and the preliminary decision point would be November 19. Before that, there will be a whole series of events, and all the milestones and timeline are published and available on the ITC website. You know?

Scott Blumberg: On expenses, since we kicked this off in Q3 or so of last year, we have seen relatively linear costs. We expect, given the nature of litigation, that it will not be linear. And what we are seeing is that in the depths of the core of the case, which is happening right now into Q2, we would expect expenses to increase and then potentially moderate in Q3 and Q4 as we reach the late stages, at least of the first path here with the ITC.

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

Xingjuan Chao: Yes. The LVO monitoring would focus on the inpatient setting, and many of these patients actually stay in the ICU. Therefore, again, it is the same call point. That being said, our initial finding is that there is a significant portion of patients who have stroke outside the ICU, on the floor or even in the telemetry monitoring units, and they have even less or poorer training for 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 do not fully understand your comments on neuro versus cardiac. Can you reframe that?

Jeffrey Scott Cohen: If the majority of patients are in the ICU, is the neurologist involved in the patient care and the equipment being used?

Xingjuan Chao: Yes. For LVO, neurologists would definitely be involved, except this would be more stroke neurologists than epileptologists. But usually, the current standard of care is if nursing identifies any potential symptom that would suggest stroke, then the stroke team would rush to the bedside. So there is definitely at least a general neurologist, often a stroke neurologist.

Jeffrey Scott Cohen: Perfect. Okay. Got it. Thanks for taking my questions.

Operator: And your next question comes from the line of Jason Bedford with Raymond James. Jason, please go ahead.

Elaine (for Jason Bedford): Hi. This is Elaine on for Jason. Thanks for taking the question. 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 color on the early progress and learnings?

Xingjuan Chao: Yes. So we started discussions with 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 fully integrated. In terms of adding color, the initial feedback was very positive. The majority of intensivists have high awareness of delirium and the potential harm delirium would cause and often are quite frustrated with the lack of objective and continuous biomarkers for delirium. Another strong signal is that they recognize certain populations have a very strong prevalence for both delirium and seizure.

So the earlier hypothesis validated by the physicians is 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 some 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. One example is sepsis patients who have altered mental status—20%–30% of them could have seizure, and then 40% of them could have delirium—while the symptom is very similar: the patient looks very confused. So we are very encouraged by the early feedback from the physicians and the nursing team as well as the administrators.

Elaine (for Jason Bedford): Thanks. I appreciate the color. And for my follow-up, would you be able to share your expectations on headband pricing this year? I know you have talked a little bit about the neonate headband pricing, but for overall headbands, 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.

Scott Blumberg: We have maintained really strong pricing discipline and consistent ASPs over the years. I think there is a lot unknown about the macro environment, both some headwinds and 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 are evaluating it case by case, but in any regard, we expect to maintain very tight pricing discipline.

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

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

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

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