CeriBell Sees ‘Early Innings’ Growth as Hospital Accounts and Usage Hit Records

Key Points

• Hospital usage and account growth hit records in Q1, with CeriBell adding 33 new accounts to reach 680 total and posting a record number of uses per account. Management said the core seizure market still has significant room to grow, with the company estimating it is only about 30% penetrated in its active account base.
• The company raised annual revenue guidance by $1 million and said it has strong near-term visibility from purchase orders that typically arrive 3 to 4 months before accounts go live. Executives also highlighted low churn and a consumable-heavy model that makes the business less vulnerable than capital equipment peers.
• CeriBell is expanding into new clinical areas, including neonatal seizure monitoring and delirium, both of which showed positive early feedback in pilots. Management also sees opportunity from regional hospital systems and the VA, which could help accelerate account acquisition over the next few quarters.

CeriBell NASDAQ: CBLL executives said the company’s first-quarter results reflected continued momentum in both new account additions and increased usage among existing hospital customers, while outlining early progress in new clinical areas including neonatal seizure monitoring and delirium.

Speaking at a Bank of America healthcare conference, Scott Blumberg, CeriBell’s chief financial officer, said the company added 33 accounts in the first quarter, bringing its total to 680. He said that was the largest number of new additions since the company became public.

Blumberg said CeriBell’s core seizure market is being driven by two factors: new account additions and usage per account. While the company does not disclose usage per account, he said product revenue per account is a metric investors track closely, and that the company reached a record number of uses per account in the first quarter.

“We still are in the early innings there,” Blumberg said, adding that CeriBell believes it is roughly 30% penetrated within its active account base. He cited department expansion, provider education and workflow expansion as areas supporting additional growth.

Guidance and account visibility

CeriBell recently raised its annual revenue guidance by $1 million, a move Blumberg said reflected the company’s confidence in its business model and visibility into account launches.

Blumberg said CeriBell typically receives purchase orders three to four months before an account goes live, giving the company “very, very good near-term visibility” into accounts launching over the next one or two quarters. He also pointed to low customer attrition and the company’s lower-priced consumable product model as factors that make the business less exposed to sudden disruptions compared with some capital equipment models.

On seasonality, Blumberg said CeriBell has seen a consistent pattern over the past three years, with higher usage in the fourth and first quarters compared with the second and third quarters. He said the company has observed a direct relationship between ICU and emergency department census levels and product usage.

Hospital system strategy and VA opportunity

Jane Chao, CeriBell’s chief executive officer, discussed a newer account acquisition strategy focused on regional hospital systems, which she described as systems that often own 10 to 30 hospitals. She said these systems can fall between individual territory manager coverage and the company’s national account efforts.

Chao said CeriBell saw a strong signal last year from top-performing territory managers who were able to close smaller systems by engaging administrators and clinical leaders at the system level and coordinating across territories. The company has since created a small team to focus on that opportunity.

Blumberg said the strategy is intended to accelerate account acquisition, although he cautioned that system-level sales can come in “chunks” and may take a few quarters to fully translate into results. He said the impact on utilization is less clear initially, and that management views the effort primarily as an account acquisition initiative.

Chao also addressed the Department of Veterans Affairs, which she said represents a 170-hospital opportunity. She said the company does not disclose VA-specific account numbers, but noted that CeriBell closed a “meaningful portion” of VA hospitals in the third quarter of last year and has been launching the majority of those accounts in recent quarters.

Utilization drivers and new accounts

Chao said CeriBell’s top accounts use the company’s products at about three times the average account level. She identified several factors that distinguish those higher-usage accounts, including broader department coverage across ICUs, emergency departments, step-down units and floors; more coherent workflows as patients move through the hospital; stronger physician and staff training; and formal protocols for specific patient populations such as post-cardiac arrest patients.

Blumberg said new accounts generally do not follow a slow “try before you buy” pattern. Instead, he said CeriBell invests in high-quality launches to establish strong practices early, and those practices tend to be sticky. New accounts come in slightly below average usage, creating some dilution, but Blumberg said adding accounts does not have a significant dilutive effect overall.

Neonatal and delirium initiatives

CeriBell is now in commercial launch for pediatric and neonatal products. Chao said feedback from neonatal pilots has been “very positive,” supporting the company’s decision to move to full commercialization this quarter.

Chao said the neonatal product differs from the adult seizure launch in part because it uses a full montage recommended by the American Epilepsy Society. She said neonatologists recognize the clinical importance of seizure monitoring, and she pointed to health economics for Level 3 NICUs that may otherwise need to transfer patients to obtain EEG monitoring.

Chao said CeriBell has about 200 NICUs within its existing installed base, but the company did not broadly market the offering during the pilot phase. With the full commercial launch, she said CeriBell’s customer account management team has begun targeting those NICUs.

On delirium, Chao said early pilot conversations have also been positive. She said physicians have responded to the idea of objective, continuous trends because current delirium assessments are often subjective, binary and performed only periodically. She also said clinicians are seeing delirium and seizure together as an important use case because symptoms can overlap while treatments may differ.

Chao also discussed a Vanderbilt Medical Center study examining overlap between seizure and delirium. She said Vanderbilt was central to development of the CAM-ICU standard of care and the ABCDEF bundle, and that the first phase of the study will evaluate delirium-suspected patients using CeriBell to see how many seizures are detected or missed under current standards of care.

Margins, pricing and expenses

Blumberg said CeriBell’s first-quarter gross margin was 87%, and management expects margins for the rest of the year to remain in the high-80% range. He said the company had been operating around 88% and has taken cost mitigation steps including expenditure reductions, volume-based discounts and manufacturing efficiencies.

He said tariffs on China manufacturing pressured margins, but CeriBell has also established a second manufacturing line in Vietnam. Inventory from Vietnam has been received but has not yet flowed through the company’s profit and loss statement, according to Blumberg.

On pricing, Blumberg said the core Headband price has remained relatively consistent and is expected to remain so. He said CeriBell has seen increases in Clarity subscription pricing as hospitals acquire more recorders, with the company typically charging about $500 more per month for each additional loaned recorder. The neonatal offering is sold as a separate subscription, and its Headcap is priced higher than the adult Headband.

Blumberg said first-quarter operating expenses reflected investments in sales and marketing, research and development, and higher litigation expenses. He said the company continues to expect to achieve breakeven with cash on hand. He also said CeriBell began reporting adjusted EBITDA in the first quarter, excluding non-cash stock-based compensation and expenses tied to its litigation with Natus, which he described as transient in nature.

About CeriBell NASDAQ: CBLL

CeriBell Corp NASDAQ: CBLL is a healthcare technology company specializing in the design, manufacture and sale of automated newborn hearing screening devices. The company offers a suite of medical diagnostic tools based on otoacoustic emissions (OAE) and auditory brainstem response (ABR) technologies, enabling early detection of auditory impairments in infants. CeriBell's solutions are used in hospitals, birthing centers and audiology clinics to support universal newborn hearing screening programs aimed at improving language development outcomes through prompt intervention.

The company's product portfolio includes handheld and desktop screening units, proprietary software for data management, and accessories designed to streamline testing workflows.

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