Ceribell, Inc. (CBLL) Q2 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. My name is Dejirae and I will be your conference operator today. At this time, I would like to welcome everyone to Ceribell's Q2 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the call over to Brian Johnston of Gilmartin Group. You may begin.

Good afternoon, and thank you all for participating in today's call. Joining me from Ceribell are Jane Chao, Co-Founder and Chief Executive Officer, and Scott Blumberg, Chief Financial Officer. Earlier today, Ceribell issued a press release announcing financial results for the quarter ended June 2026. 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 annual report on Form 10-K filed with the SEC on 02/24/2026 and our quarterly report on Form 10-Q for the quarter ended 06/30/2026. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, 08/10/2026. Ceribell disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements because of new information, future events, or otherwise. And with that, I will turn the call over to Jane.

Good afternoon, and thank you for joining us for our second quarter 2026 earnings call. Q2 marked another strong quarter for Ceribell as we delivered revenue of $28.1 million, growing 33% year over year. This is an acceleration from the 29% year over year growth we reported in Q1, which reflects a particularly strong performance in same-store growth driven by our clinical account management team. We also increased our account base by 32 accounts to a total of 712 active accounts. While the increase is similar to what we delivered in recent quarters, Q2 growth relied less on VA accounts than previous quarters. Our sustained success in growing our account base is a result of the continued maturation and performance of our account acquisition team. While revenue and commercial acceleration get top billing, I do want to take a moment to focus on our gross margin. We delivered a record gross margin of 92% in Q2. This number was positively impacted by a refund on previously paid tariffs. Even when excluding this refund, we delivered gross margin of 89%. This does not happen by accident. It is a direct result of our proactive efforts in supply chain optimization and manufacturing diversification. Gross margin is more than just a number. It generates the outsized gross profit we are reinvesting to fund our growth initiatives and R&D with an eye toward executing our mission. With 33 consecutive quarters of sequential revenue growth, we believe we have built a repeatable growth engine. By pointing that engine squarely at our defining objectives—establishing Ceribell as the standard of care for seizure detection in acute care settings—we are focused on the right priorities. At the center of our growth strategy is our commercial infrastructure, built with the dual purpose of acquiring new customers and driving deeper adoption within our installed base. Our account acquisition team continues to mature and is contributing in line with expectations. These efforts are being supplemented by our newly added strategic account management team. Through top-down engagement of regional health systems, we have built a robust pipeline of prospects that gives us confidence in our ability to maintain an accelerated rate of new account additions in 2026 compared to 2025. While we continue to expand our account base, our clinical account management team is driving revenue through head-to-toe utilization expansion. Our strong performance this quarter reflects execution of our established utilization playbook: provider engagement, department expansion, and patient population prioritization. A robust and expanding body of clinical evidence validates our platform. Our aim is to make the case for Ceribell's clinical necessity by investing in high-quality evidence, demonstrating the clinical and economic value our system delivers. Adding to our established base of over 150 publications and abstracts, in Q2 a high-impact study was published in Critical Care Medicine, one of the leading journals. The study showed that patients with 90% or greater seizure burden were 3.6x more likely to experience severe disability or death at discharge. Further, each additional hour of Clarity-detected seizure activity was associated with nearly a 2-fold increase in that risk. The premise that longer seizure duration correlates with worse outcome is not new. What is new is that a device output can quantitatively report seizure burden at the bedside in real time and that this burden reliably correlates with patient outcomes. These findings sharpen the clinical imperative for using the Ceribell solution, particularly Clarity, to reduce seizure burden for patients. As the body of evidence compounds, we are increasingly confident that Ceribell's path to becoming the standard of care is not a question of if but when. As we continue to deliver within our core seizure market, we remain encouraged by traction in our emerging market opportunities. In Q2, we launched our neonate and pediatric products and the commercial pilot of our delirium algorithm. We remain encouraged by the early commercial traction of our neonate and pediatric seizure line extensions. Customer interest remains high and clinical conviction is translating into early commercial success, as we secured purchase orders from both new and existing customers in Q2. With a robust and growing pipeline, we are well positioned to translate our commercial efforts into meaningful revenue contribution as we move into 2027. We are also excited about the momentum of our first-of-its-kind delirium monitoring solution, which received 510(k) clearance in December. Delirium represents an estimated $1 billion U.S. opportunity for Ceribell and is a strong addition to our platform. Despite being the most common neurological complication in the ICU, before Ceribell there has been no commercially available tool to continuously monitor delirium. We launched our commercial pilot in April and are now live in multiple sites. The early feedback has been positive, with users citing improvements in clinical decision-making. For example, based on the survey, 40% of patients who were difficult to assess under CAM-ICU—the current standard of care—could still be monitored with the Ceribell solution. Beyond the clinical signal, we are also seeing a utilization effect. Existing Ceribell customers that have joined the delirium pilot are increasing band utilization. We believe this reflects both the clinical value of the delirium detection algorithm and the incidence overlap between seizure and delirium, underscoring the synergistic value of our platform. We are also pleased to share that we just received a favorable final rule from CMS establishing a New Technology Add-on Payment, or NTAP, for our delirium monitoring solution. The NTAP, which becomes effective October 1, 2026, provides up to $2.17 thousand in incremental reimbursement per qualified patient. This is a meaningful milestone and will support adoption by adding favorable economics to the strong clinical interest we are already seeing in the field. Our launch strategy is coming into focus, and we now have the confidence that we will launch delirium commercially this year. With the commercial and clinical updates covered, I would like to turn to our vision for the future. We believe we are well on our way to establishing the Ceribell System as the standard of care for seizure. At the same time, our longer-term vision to establish EEG as a new vital sign is no longer theoretical. We have made material progress and believe we can begin translating this vision to reality in 2027. Underpinning this is a two-pronged product strategy. We have invested in algorithm and hardware enhancements to reach more patient populations while improving patient care and meeting physician needs. Our first prong is centered around developing novel algorithms to further improve clinical decision-making. Delirium and LVO are excellent examples of clinical expansion to new patient populations under this strategy. Through these advancements, we are delivering continuous, objective brain monitoring to assess underserved patient populations. We also apply algorithm development to improve care for patients we already serve. We are pleased to announce today the receipt of FDA 510(k) clearances for two new algorithms targeting our core seizure market. We believe each meaningfully adds to our platform's clinical utility, strengthening the case for Ceribell as the standard of care. The first represents a significant enhancement to Clarity's ability to identify and reduce EEG artifact signals. Artifact recognition has long been the leading challenge to EEG interpretation in the acute care environment. It is not uncommon for even neurologists to mistake electrical signals from various medical equipment as seizure activity. EEG is so sensitive that even the electrical signal from an IV drip's movement can create artifacts. Our new algorithm, trained on a large artifact database created by Ceribell, can differentiate between brain activity and artifact, adding a layer of AI-driven sophistication. The new algorithm significantly simplifies EEG interpretation for neurologists and improves the point-of-care experience. We anticipate rolling this out in the third quarter. The second clearance is for epileptiform abnormality detection. This algorithm targets abnormal brain activity in a gray zone between clear seizure and normal signals. This activity is clinically important but has historically been difficult to consistently measure. To our knowledge, Ceribell is the first software to be FDA cleared for the detection of both seizure and epileptiform abnormality. This is a capability that neurologists have specifically asked for, and we are proud to be the first to deliver it. We expect to activate this algorithm by the end of the year. These new algorithms serve to strengthen the clinical benefit offered by our system. We believe that by widening the gap between the value offered by the Ceribell system compared to conventional EEG, we create a clinical imperative to adopt our leading-edge technology. The second prong of our product strategy centers on enhancing and expanding our hardware platform. Over recent months, we have received FDA 510(k) clearances for several products that together form the foundation of our new hardware platform. This includes clearances for a recorder with video and ECG capability, compatibility to integrate with other vital sign measurements, and the ability to monitor continuously while plugged in. We have also received clearances for two headband designs that provide optionality for frontal touch and multiple-day continuous monitoring when needed. The features offered by our new platform support our effort to make EEG a new vital sign. For example, delirium patients often require days in ICU before resolution, and the new system can be even more seamless in supporting this use case. And when we add LVO in the future, a bigger screen will be needed to monitor multiple disease states. Within our core seizure market, we believe our current product is optimized for the majority of patients in the acute care setting. It is quick, simple, and reliable in a care setting where these are the most important needs. However, with our hardware line extensions, clinicians no longer have to choose between the speed of point-of-care EEG and the comprehensiveness of conventional EEG for patients who need both; we can offer both with one device. We are continuing to test our products, refine the design, and scale our manufacturing with a target launch of our new hardware platform in 2027. We will share more details as we get closer to the product launch. As I step back, I am struck by how much is converging at once. Our core business continues to perform—we delivered 33% year over year growth and an acceleration compared to last quarter. We are the first and only point-of-care EEG platform indicated for use with patients of all ages. At the same time, the work we have been building toward for years is coming to a head: new algorithms, new hardware, new clearances, a delirium pilot tracking toward commercial launch, and a new NTAP. These advancements stand to meaningfully strengthen our value proposition while reinforcing our market leadership position with significant innovation-based barriers to entry. We see 2027 as a pivotal year: with neonate gaining more scale, delirium commercially launched, our expanded hardware platform on the market, and an increasingly mature sales force delivering even greater impact. I am more convinced than ever that we are building the right platform at the right moment. Our goal of creating a single brain monitoring solution for the acute care setting is within reach. With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of the second quarter results and 2026 guidance.

Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the second quarter of 2026 was $28.1 million, which represents a 33% increase from $21.2 million in the second quarter of 2025 and a 6% sequential increase quarter over quarter. The increase was primarily driven by the success of our same-store growth strategy in addition to increased adoption of the Ceribell system across new and existing accounts. Product revenue for the second quarter of 2026 was $21.2 million, representing an increase of 33% from $15.9 million in the second quarter of 2025. Subscription revenue for the second quarter of 2026 was $6.9 million, representing an increase of 30% from $5.3 million in the second quarter of 2025. We ended Q2 with an active account base of 712 hospitals, representing an increase of 32 accounts in the quarter. We have been pleased to see our investments in driving same-store growth continue to deliver. While we saw signs of typical seasonality in Q2, when warmer months tend to result in reduced ICU census, our same-store growth performance exceeded expectations, including an acceleration in year-over-year growth from recent quarters. We continue to believe that we have a significant untapped growth opportunity within our installed base in which our top accounts continue to use our product at roughly 3x the rate of average accounts of similar size. Gross margin for Q2 2026 was 92%, compared to 88% in the prior-year period. This includes the impact of $1.6 million in tariff refunds received in the quarter, of which $1.0 million was recognized in cost of goods sold and $600 thousand was capitalized to inventory. Excluding this adjustment, gross margin was 89%. Our strong margin profile is a direct reflection of cost reduction efforts and the expansion of manufacturing capabilities in Vietnam. We feel confident in our ability to maintain gross margins in the high-80s range throughout 2026 based on current tariff policies and believe we have built flexibility in our manufacturing capability to manage any future policy shifts. Total operating expenses for the second quarter of 2026 were $45.9 million, an increase of 37% compared to $33.6 million in the second quarter of 2025. Non-cash stock-based compensation expense was $6.0 million in the second quarter of 2026, and $3.2 million in the prior-year period. Sales and marketing expense in the second quarter grew as a result of headcount expansion, including the newly established strategic account management function and expansion of our CAM infrastructure in advance of the delirium launch. G&A expense remains elevated in the second quarter of 2026 as a result of expenses related to our ongoing ITC litigation, which totaled $3.9 million. Looking ahead to the third and fourth quarters of 2026, we anticipate a reduction in lawsuit-related activities and associated expense. Research and development expense in the second quarter reflects investments we have made into our platform including our next-generation hardware, algorithm development, and clinical studies. Net loss was $19.3 million for the second quarter of 2026, or a loss of $0.51 per share, compared to a loss of $13.6 million, or a loss of $0.38 per share, in the second quarter of 2025. An average weighted share count of 38 million was used to determine loss per share in Q2 2026. Last quarter, we instituted the disclosure of adjusted EBITDA to represent the ongoing operating performance of our business. Adjusted EBITDA reflects our net loss before interest, taxes, depreciation and amortization expense and also excludes non-cash stock-based compensation expense as well as legal expenses associated with our ongoing ITC litigation. Adjusted EBITDA loss for the second quarter of 2026 was $9.8 million as compared to a $10.0 million loss in the second quarter of 2025. This reflects our continued strategy of thoughtfully deploying gross profits from our expanding revenue base back into the business to pursue long-term growth opportunities. Our cash, cash equivalents, and marketable securities as of 06/30/2026 were $129.0 million. We remain committed to our objective of achieving cash flow breakeven with cash on hand, and the strength of our balance sheet and strong gross margin profile give us a high degree of confidence in our ability to do so. Finally, following close of the quarter, we successfully refinanced our existing credit facility, securing access to up to $60 million in committed capital with an additional $25 million uncommitted. The structure includes a non-formula revolver plus a term loan that remains available to draw through year-end 2028. We expect that this structure will reduce our interest expense starting in Q4 and extend our repayment timeline by roughly three years into 2031. We do not have plans to draw the committed but undrawn term loan in the near term, but we believe that its availability provides us with greater strategic flexibility. Turning now to our outlook for 2026: we expect full year 2026 total revenue to range from $114 million to $117 million, up from our prior guidance of $112 million to $116 million. This represents annual growth of 28% to 31% over 2025. This change to guidance reflects the momentum we are seeing in our core business, with success driven both by new account additions and usage within our established account base. This range does not include material contributions from our neonate, pediatric, or delirium products, which we expect will begin to translate into revenue more meaningfully in 2027. With that, I will turn the call back to Jane.

Thank you, Scott. And thank you all for your time today. Q2 reinforced the confidence we have in our trajectory. Our core business is growing and accelerating. Our commercial execution across new accounts, utilization, and neonate is on track. The product and clinical evidence investments we have been making are beginning to compound in ways that will matter over the next year and beyond. We have less than 4% penetration in our core seizure market—this tells you how much runway is still ahead of us—and we are advancing into new greenfield markets with urgency and purpose. Our mission to establish EEG as a new vital sign remains our North Star, and the progress we made in Q2 gives us every reason to push harder. Now I will turn the call over to the operator for Q&A. Operator?

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star 1 on your telephone keypad to join the queue. If you would like to withdraw your question, press star 1 again. If you are called upon to ask your question and are listening via speakerphone, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit yourself to one question and requeue for any follow-up questions. Thank you. Our first question comes from the line of Travis Steed with Bank of America. Your line is open.

Hey, congrats on the progress. I wanted to spend a little more time on all the FDA approvals you guys have gotten and put together. I do not know if there is anything else you want to add to that, but I think the real question is: what can all these approvals and new indications do for the revenue growth rate and the incremental revenue dollars you can add to this business? That would be helpful to put into context for everybody. I have a follow-up as well. Thank you.

So, I will put our recent FDA clearances into two groups aligned with our two-pronged strategy. The first group are the algorithm clearances that include artifact rejection as well as epileptiform abnormality. As we launch both of these algorithms later this year, we do not plan to charge more, but we see these tools being very beneficial, especially for neurologists. Directly or indirectly, this would further increase stickiness and potentially increase utilization at the account. We have always seen our top accounts have very strong neurology support, so we could see leverage to drive usage and potentially increase deal velocity as well. In terms of our new hardware platform, we are not launching this platform yet and, similar to previous strategies we have deployed, we are planning on a limited market release for the new hardware platform and a potential broader launch in 2027. This new hardware platform has been aimed at making EEG a new vital sign in conjunction with delirium and the future LVO work we are developing. We see this as giving us access to additional patients or even additional market segments, so we do see this as a potential revenue driver in 2027. As we get closer to the launch time, we will share more details.

Our next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Great. Congrats on the quarter, and thanks for taking the question. Scott, I wanted to ask on OpEx. Companies your size typically need to make a strong beeline towards leverage, and we have seen OpEx grow faster than sales the past several quarters. Maybe just speak to the investments and the spending you are doing now—what is driving that—and when can we start to see leverage on OpEx? Thanks a lot.

Sure thing, Robbie. First of all, two things I'd like to point out in the Q2 OpEx that were a little bit out of the normal: stock-based compensation sequentially increased by about $2.3 million. We have an annual equity cycle that happens in Q2, so you tend to see that step function in Q2 and then it carries forward until the next cycle. The other, of course, is the IP litigation, which remained elevated—lower than Q1 but higher than we would expect going forward. As it relates to our investment philosophy, we have maintained an adjusted EBITDA loss roughly around $10 million, give or take, for many quarters in a row. Our strategy has been to continue to grow the top line, generate outsized gross profit with our high gross margin, and then reinvest that back into the business. That investment comes in the form of sales infrastructure: in this quarter, both building the strategic account management function as well as expanding our CAM infrastructure a bit ahead of our delirium launch, and, of course, R&D. As we make those investments, we are very mindful of our objective to achieve cash-flow breakeven with cash on hand. We have not guided to a specific timing for that, but we keep a very close eye on it to ensure that we control our own destiny and remain self-sufficient from a cash perspective.

Next question comes from the line of Brandon Vazquez with William Blair. Your line is open.

Thanks for taking the question, and congrats on a nice quarter. You mentioned that an inflection in growth this quarter was driven by new account adds. There are clearly several tailwinds going on in the business with new indications and things like that. Could you unpack whether you're seeing an inflection in interest from end users? I think you even said that neonate and pediatrics were driving new account openings in places you were not even in before. So just give us an update on interest in driving new accounts and expectations on how durable that could be going forward. Thank you.

Thank you, Brandon. We do see a lot of tailwinds on the account acquisition front. We saw purchase orders related to neonate from both existing and new accounts. In Q2 it is still relatively early phase—these sales cycles take time and we just launched neonate recently—but we expect the impact from neonate to be even bigger in the second half of the year and especially in 2027. As I mentioned last quarter, we started the strategic account management team, and we continue to see pipeline momentum from this team in closing accounts at the regional hospital system level. We remain very optimistic about the impact to come later this year and into 2027. Another dimension of revenue drivers is utilization, or same-store growth. As Scott mentioned, Q2 is usually a seasonally lower quarter, but same-store growth this quarter exceeded expectations, driven by continuous execution of our known playbook. In addition, we saw a tailwind from the delirium limited market release: existing Ceribell accounts that start to use delirium meaningfully increased utilization. So we are very excited about the different tailwinds we are seeing.

Next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Hi, good afternoon. Thanks, Jane and Scott, and congratulations on another strong quarter. You laid out additional layers of growth that will be kicking in 2027. Right now, the Street's projecting a revenue growth rate similar to the lower end of today's revised 2026 guidance. I know you are not going to provide explicit guidance for 2027, but with pediatric/neonate kicking in next year, delirium, the new hardware, Ceribell headband platform—how should we be thinking about the trajectory of growth? It seems like there could be acceleration in 2027 versus 2026.

Yeah, Joshua, we are not ready to comment on 2027 guidance yet. But as you pointed out, there are a lot of tailwinds coalescing at the same time. We feel really good about what we know and what we have learned from the neonate early launch and the delirium pilot. There are still things we need to learn, including the delirium launch plan later this year and the limited market release of the new product platform. We have about six or seven months before we issue guidance for 2027, and we are learning. I am happy to share our learnings with you when we issue our guide.

Next question comes from the line of Bill Plovanic with Canaccord Genuity. Your line is open.

Hi, it's Zachary on for Bill. Thank you for taking the question and congrats on the quarter. Can you talk more about the magnitude of the gross margin impact from the Vietnam manufacturing shift? I thought that was going to be more impactful later in the year. It sounds like you are starting to get some benefit now. Can you try to quantify that, please? Thank you.

Sure. I view the 89% gross margin—effective if there had not been any sort of refund—as effectively the steady state for where we are. As we have mentioned, we expect to be in the high-80s percentage range for the remainder of the year. That 89%, which would have included the burden of tariffs, is essentially back to where we were or even a little better before all the tariff noise, and that is a direct reflection of both the manufacturing move to Vietnam and some general cost reduction initiatives we put into place over the last year and a half. Those initiatives should continue to generate benefits going forward.

Next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Your line is open.

Hi, this is Destiny on for Jeffrey. Thank you for taking our question. Jane, you mentioned that about 40% of the patients in the delirium pilot were difficult to evaluate with CAM-ICU but could still be monitored using the Ceribell system. As the pilot has matured, are you seeing the initial commercial use case converge around a particular patient population or workflow? Could you expand on that a bit? Thank you.

Yes. Part of the reason we do a limited market release is to fine-tune the value proposition, workflow, and target patient population. The short answer is yes—we are starting to see emerging populations that hospitals and physicians are particularly interested in for delirium monitoring. Examples include sepsis patients with altered mental status and elderly patients, especially post-cardiac surgery or after other procedures—these patients are more likely to have delirium. More than 40% of these patients would have been difficult to assess under the conventional standard of care yet could be monitored with Ceribell. In the same pilot and survey, we also showed other results: physicians and nurses indicated that about 30% to 40% of the time they were able to reduce sedation or even avoid intubation based on the algorithm, and about 20% of the time they were able to improve care. These findings give us stronger confidence and preliminary evidence to support a planned delirium launch later this year.

Next question comes from the line of Marie Thibault with BTIG. Your line is open.

Hi. I wanted to hear a little bit more about the regional health system team. I know that is a small strategic team targeting regional health systems and you said it is going well so far. Could you provide any more detail on early pipeline metrics—such as the number of systems under engagement or number of hospitals in discussions—or your best estimate for when this starts to really accelerate account adds further downstream? Thanks for taking the question.

Thank you, Marie. About two quarters ago, as we started forming this team, we also optimized our internal operations and tracking. This year is the first time we started to track pipeline not just at the hospital level but also at the system level. We are not ready to share quantitative system-level pipeline metrics yet, but I can say we have seen very strong momentum growth in the hospital-system-level pipeline. In many ways, it is growing even faster than the already healthy hospital-level pipeline. This team only started in January, so we are about six months into the process. It takes a few months to build the team and learn, and we have already seen an early internal win this year. However, the bigger impact is expected in 2027 and 2028 as these engagements mature.

Next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

Good afternoon, and congrats on the progress here. On delirium, the decision to launch in late 2026 versus prior commentary of fourth quarter or early 2027—what drove that decision? Is it due to pilot results, the NTAP establishment, or both? And is there a need for additional sales infrastructure to launch delirium? Thanks.

Thank you, Jayson. The answer is both. We saw very positive clinical and operational feedback from the limited market release sites and we received the final rule from CMS on NTAP effective October 2026. The combination of positive pilot feedback and the NTAP gives us the confidence to officially launch delirium in Q4 this year. Regarding the salesforce, we do not expect to need an additional dedicated sales team. As we did with the limited market release, we leveraged our local clinical account manager team and expect to continue to do so. If delirium gains significantly more momentum, we could opportunistically expand the team, but we do not see a need for a separate salesforce at this time.

Next question comes from the line of Joshua Jennings with TD Cowen. Your line is open.

Hi, thanks. I had one follow-up on the next-generation Ceribell headband hardware you talked about introducing in 2027. Is this adding essentially a full-montage EEG capability? Can you talk about moving into conventional EEG territory and the TAM expansion opportunity there? And can you leverage the AI algorithms developed for reduced-electrode montage on this next headband hardware? Thanks for taking the question.

Thank you, Joshua. The new hardware platform is focused on providing a hardware solution to become the brain monitor. Key features to emphasize: when you think about a brain monitor, sometimes it includes video, a bigger screen, and continuous monitoring for days or even weeks, so the recorder needs to be able to be plugged in. The new recorder can add ECG and other vital signs into the recording and will serve as the platform to run the seizure algorithm, the delirium algorithm, and all existing and future algorithms. One of the wearable variants that obtained FDA clearance is even more comfortable, and patients can wear it for days. The vision is to become a brain monitor. We also have a wearable with parasagittal cap coverage—this provides full montage capability. It works in conjunction with our existing headband as an add-on variant that plugs into the same recorder to provide the full montage. We believe our existing system supports the majority of acute care patients, but occasionally physicians or patient needs call for full montage, so we want to provide that optionality. You are correct that with the new hardware we are not just a point-of-care EEG but moving toward a brain monitor with functionality similar to conventional EEG when needed. We look forward to sharing a bigger picture and value proposition as we get closer to market release next year.

And our last question comes from the line of Bill Plovanic with Canaccord Genuity. Your line is open.

Hi, it's Zachary again for Bill. Thank you for taking the follow-up. Last quarter you provided that 85% of the new reps with at least 12 months of tenure contributed to the active account base and had a 100% purchase order rate. What is that looking like now? Can you quantify how these newer reps are maturing, since they are considered a bigger part of your revenue ramp for this year? Thank you.

Zach, I don't have a precise soundbite for you, but we track the progression of the team across the known productivity curve. As we've mentioned in the past, reps typically do not add their first account until the end of year one, then they become more productive throughout year two and reach their max rate of new adds toward the end of year two. With the infrastructure build we did starting in late 2024, we have more folks aging into that one-year bucket. Still, the majority are not in the two-year bucket yet. Productivity is aligned with what we've historically seen, and I think that is reflected in the account adds you have seen this quarter—similar to prior quarters but with much less reliance on VA accounts and more of a reflection of organic maturation of the sales force.

That concludes the question-and-answer session. I would now like to turn the call back over to Jane Chao for closing remarks.

Thank you, everyone, for joining the call. We are very proud of what we have accomplished this quarter and are really excited about what is ahead of us in 2027. Thank you all.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.