Executive Summary / Key Takeaways

• Ceribell (NASDAQ:CBLL) is pioneering point-of-care electroencephalography (EEG) with its AI-powered Ceribell System, aiming to establish a new standard of care for seizure management in acute settings and expand into broader neurological diagnostics.
• The company demonstrates robust revenue growth, with Q3 2025 total revenue reaching $22.6 million, a 31% year-over-year increase, driven by new account acquisition and increased utilization within its existing base of 615 active accounts.
• Ceribell's proprietary technology, including the FDA-cleared Clarity™ AI algorithm for pediatric seizure detection and a strong patent portfolio, provides a significant competitive moat against larger, more diversified medical device companies.
• Strategic pipeline initiatives in neonatal seizure detection, delirium, and stroke represent substantial total addressable market expansion opportunities, leveraging existing infrastructure and potentially creating synergistic value for patients at risk of multiple conditions.
• Despite ongoing operating losses and macroeconomic headwinds, Ceribell maintains a strong liquidity position of $168.5 million in cash and marketable securities as of September 30, 2025, and remains confident in achieving cash flow breakeven without additional capital.

A New Standard in Neurological Monitoring

Ceribell, Inc. is at the forefront of transforming neurological diagnostics, particularly in acute care settings, through its innovative point-of-care EEG platform, the Ceribell System. Founded in 2014, the company has rapidly evolved from its initial FDA clearance for hardware in 2017 to introducing its AI-powered Clarity™ seizure detection algorithm in 2019. This journey underscores a clear strategic imperative: to make rapid, accessible EEG monitoring the new standard for patients at risk of serious neurological conditions. The company's focus on the acute care setting addresses a critical unmet need, where conventional EEG systems often lead to significant diagnostic delays and suboptimal patient outcomes.

The Ceribell System integrates proprietary, highly portable hardware with sophisticated artificial intelligence. Its disposable headband, pre-filled with conductive gel and featuring ten non-invasive electrodes, can be applied within minutes by non-specialized healthcare professionals after just about an hour of training. This ease of use and rapid deployment are tangible benefits over traditional EEG setups, which are often cumbersome and require specialized personnel, leading to delays. The system's pocket-sized, battery-operated recorder wirelessly transmits EEG signals to a cloud-based portal, enabling neurologists to access data remotely in real-time. This technological differentiation is crucial in time-sensitive acute care environments.

The core of Ceribell's technological advantage lies in its Clarity™ AI-powered seizure detection algorithm. Clarity continuously monitors EEG signals, providing real-time assessment of seizure activity. This capability is a significant differentiator, as it aids clinicians in making rapid diagnoses and management decisions. Clinical evidence from the SAFER-EEG trial demonstrates that the Ceribell System reduces the median time to EEG by 19 hours and lowers patients' severe disability rate by 18%. Furthermore, it has been shown to enable a median reduction in ICU length of stay by 4.1 days. These quantifiable benefits highlight the system's impact on patient outcomes and hospital economics, directly contributing to Ceribell's competitive moat.

Ceribell operates in a highly competitive medical device industry, primarily contending with established players like Natus Medical Incorporated (NTUS) and Nihon Kohden (NIHOY), which dominate the conventional EEG market. These competitors possess greater brand recognition, larger market shares, and more extensive resources. However, Ceribell's specialized focus on point-of-care, rapid EEG, and its AI-driven approach provides a distinct edge. The company's recent patent infringement complaints against Natus Medical Incorporated underscore its commitment to protecting its technological innovations and maintaining its leadership in the point-of-care EEG category. Ceribell's FedRAMP High Authorization, a stringent cybersecurity certification, further differentiates it, particularly in securing access to government healthcare systems like the VA, where cybersecurity is paramount.

Expanding Reach and Driving Utilization

Ceribell's commercial strategy centers on expanding its active account base and deepening penetration within existing customers. As of September 30, 2025, the company reported 615 active accounts, marking its largest sequential increase since becoming a public company with 31 new accounts added in the third quarter. This growth is a direct result of investments in its commercial organization, including territory managers focused on new account acquisition and clinical account managers (CAMs) dedicated to driving utilization within existing hospitals. Management estimates that Ceribell is currently used by roughly 10% of the approximately 6,000 acute care facilities in the U.S. that could benefit from its system, suggesting a vast untapped market.

Within its existing customer base, Ceribell believes it is only about 30% penetrated for patients who need timely seizure detection. This implies significant room for growth, as utilization per account has already increased nearly threefold over the past five years. The company's CAM team actively works to increase usage through ongoing clinician education, raising awareness of non-convulsive seizures, and supporting the integration of standardized protocols for monitoring at-risk patients. For instance, Ceribell partners with physicians on protocolization for conditions like cardiac arrest and post-hemorrhagic stroke, which are clearly recommended by guidelines. This approach helps hospitals leverage the Ceribell System to provide better patient care and achieve economic benefits, such as reduced ICU length of stay.

Financial Performance and Strategic Investments

Ceribell has demonstrated consistent revenue growth, with total revenue for the third quarter of 2025 reaching $22.6 million, a 31% increase over the same period in 2024. For the nine months ended September 30, 2025, total revenue was $64.3 million, up 37% from $46.9 million in the prior year. Product revenue, primarily from disposable headbands, grew 28% to $17.0 million in Q3 2025, while subscription revenue from Clarity and the portal increased 44% to $5.6 million. The company's gross margin remains robust, standing at 88% for Q3 2025, reflecting efficient manufacturing and the high-margin nature of its subscription offerings. Subscription revenue, which constitutes about 25% of total revenue, boasts a 97% gross margin and is not subject to tariffs, providing a stable, high-profitability component to the business.

Despite strong revenue growth, Ceribell continues to incur operating losses, with a net loss of $13.5 million in Q3 2025 and an accumulated deficit of $206.8 million as of September 30, 2025. These losses are primarily due to significant investments in research and development (R&D) and sales and marketing. R&D expenses increased 47% year-over-year in Q3 2025 to $5.0 million, driven by increased headcount and clinical study costs aimed at improving existing algorithms and expanding into new indications. Sales and marketing expenses surged 48% to $18.6 million in Q3 2025, reflecting the expansion of the sales organization. General and administrative expenses also rose 22% to $11.0 million, partly due to costs associated with operating as a public company and intellectual property enforcement activities.

Ceribell's liquidity position is strong, with $168.5 million in cash, cash equivalents, and marketable securities as of September 30, 2025. This includes approximately $188 million in net proceeds from its October 2024 IPO. Management is confident that existing cash reserves are sufficient to fund planned operating expenses and capital expenditures for at least the next 12 months and remains committed to achieving cash flow breakeven without raising additional capital. The company also has access to a $30 million undrawn term loan commitment and a $10 million revolving credit facility, providing further financial flexibility.

Future Horizons: Beyond Seizure Detection

Ceribell's strategic vision extends beyond seizure detection, aiming to make EEG a "new vital sign" in acute care. This involves developing a multimodal system capable of detecting a range of neurological abnormalities. The company's R&D pipeline is focused on expanding its AI-powered detection capabilities into new conditions, with significant progress already made.

In April 2025, Ceribell received FDA 510(k) clearance for Clarity™ in pediatric patients aged one year and older, making it the first and only such algorithm. This expands the addressable market by an estimated $400 million, targeting a vulnerable patient population where seizures are a leading cause of ED visits and often missed. The pediatric algorithm was validated using EEG data from over 700 patients, the largest dataset for an FDA-cleared seizure detection algorithm. A limited commercial release and pilot are underway to refine the go-to-market strategy before a full launch.

The company is also on track with the development of a neonatal application of Clarity, with a 510(k) submission anticipated in 2026. Early pilots using FDA-cleared hardware in NICUs have shown positive anecdotal feedback, highlighting the ease of use and signal quality in this fragile patient group. New clinical guidelines from the American Clinical Neurophysiology Society in January 2025 recommending seizure screening in at-risk neonates further underscore this market opportunity.

Beyond seizure, Ceribell is actively preparing to submit an FDA application later in 2025 for the detection and monitoring of delirium, for which it has already received Breakthrough Device Designation. Delirium is a pervasive condition in the ICU with no commercially available diagnostic device, representing a significant unmet need. The company's algorithm aims to be the first objective, continuous measurement, potentially optimizing management and improving patient outcomes. Furthermore, Ceribell has accelerated its investment in a stroke detection algorithm, collecting data from over 200 patients to refine the algorithm and inform its regulatory strategy. These new indications are expected to significantly expand Ceribell's total addressable market by billions of dollars and drive utilization within its existing installed base, largely leveraging the current sales infrastructure.

Risks and Outlook

While Ceribell's growth trajectory is compelling, investors should consider several risks. The company's reliance on contract manufacturers in China and Vietnam exposes it to geopolitical and trade policy risks, including increased tariffs. However, Ceribell has proactively established a manufacturing line in Vietnam, operational by Q3 2025, to diversify its supply chain and mitigate tariff impacts, aiming to maintain mid-80% gross margins in 2026. The ongoing U.S. federal government shutdown could also delay regulatory reviews and litigation proceedings, including the patent infringement case against Natus Medical Incorporated.

The NTAP designation for the Clarity algorithm is temporary, lasting no more than three years, and its expiration could impact customer profit margins and adoption. Furthermore, the rapidly evolving regulatory landscape for AI technologies poses a risk, as new laws or interpretations could require costly modifications to Ceribell's products or business practices. The company also faces intense competition from larger, more diversified medical device companies, which could exert pricing pressure or introduce competing technologies.

Despite these challenges, Ceribell's management has consistently raised its full-year 2025 revenue guidance, now expecting $87 million to $89 million, representing 34% year-over-year growth at the midpoint. This confidence is rooted in strong commercial execution, a healthy backlog of accounts, and the anticipated impact of prior sales force investments. The company expects to maintain gross margins in the mid-80% range for the full year 2025, even with increased tariffs, due to existing inventory and mitigation strategies. R&D investments are accelerating to pursue pipeline opportunities in parallel, though their revenue impact is expected to be longer-term.

Conclusion

Ceribell stands as a compelling investment opportunity, driven by its pioneering AI-powered EEG platform and a clear vision to redefine neurological care. The company's ability to deliver rapid, point-of-care seizure detection has already demonstrated significant clinical and economic value, translating into robust revenue growth and expanding market penetration. Its technological leadership, underpinned by a strong patent portfolio and stringent cybersecurity certifications, provides a durable competitive advantage in a critical and underserved market.

Looking ahead, Ceribell's strategic expansion into pediatric and neonatal seizure detection, coupled with ambitious pipeline initiatives in delirium and stroke, promises to unlock substantial new market opportunities. While the company faces competitive pressures and regulatory complexities, its strong financial position and management's disciplined approach to investment and risk mitigation position it for sustained long-term growth. Ceribell's journey from a specialized medical device provider to a potential leader in multimodal neurological diagnostics underscores its potential to not only save lives but also deliver significant value to its stakeholders.