Ceribell (CBLL) Q4 2025 earnings review
Strong Execution Meets Emerging Operating Leverage
Ceribell delivered a stellar finish to a transformational 2025, recording a 34% YoY revenue jump to $24.8M in Q4. More importantly, the company is finally demonstrating operating leverage: Q4 revenue growth (+34%) comfortably outpaced operating expense growth (+24%) for the first time this year. While net losses persist (-$13.5M for the quarter), a wave of critical FDA clearances for delirium, neonatal use, and stroke detection significantly expands their Total Addressable Market (TAM). The FY26 guidance projects $111-115M in revenue, representing a slight deceleration in percentage terms (27% midpoint vs 36% in FY25), but highlights the sheer scale of the company's emerging multi-billion dollar opportunity.
🐂 Bull Case
FDA 510(k) clearances for delirium and neonatal patients (via the Clarity algorithm) unlock entirely new hospital wards beyond the standard adult ICU, accelerating the 'land and expand' strategy and pushing the TAM beyond $1.5 billion.
Subscription revenue jumped 37% YoY in Q4, maintaining a high-margin recurring base that effectively cushions hardware fluctuations and underpins an impressive 87% gross margin.
🐻 Bear Case
FY26 revenue guidance implies 25-29% YoY growth, a noticeable deceleration from FY25's 36% growth. As the denominator grows, maintaining hyperscale growth will require flawless execution of new product launches.
Despite operating leverage emerging, Ceribell recorded a $53.4M net loss in FY25. With a cash balance of $159.3M, they have sufficient runway, but profitability remains a distant milestone.
⚖️ Verdict: 🟢
Bullish. Ceribell is executing perfectly on its goal to make EEG a 'new vital sign.' The combination of expanding clinical indications, accelerating hospital account additions, and early signs of operating leverage offsets the natural deceleration in percentage growth.
Key Themes
Regulatory Sweep Expands TAM
Q4 was defined by massive regulatory milestones. Ceribell secured FDA 510(k) clearance for a first-of-its-kind continuous monitoring solution for delirium, and clearance for the Clarity algorithm in neonates (making it the first and only algorithm cleared for pre-term neonates through adults). Additionally, they received Breakthrough Device Designation for LVO stroke detection. This fundamentally shifts the company from a niche seizure tool to a ubiquitous neurological monitoring platform.
Account Acquisition is Accelerating
The company's commercial expansion is yielding compounding results. Active accounts ended at 647, reflecting an addition of 32 new accounts in Q4. This represents an acceleration compared to 31 adds in Q3, 26 in Q2, and 29 in Q1. The expanded territory manager workforce is actively converting the ~5,500 target acute care facilities.
Subscription Revenue Momentum
Subscription revenue continues to be a powerful growth engine, accelerating 37% YoY in Q4 to $6.0M. For the full year, subscription revenue grew 41% to $21.7M. This recurring stream provides high visibility and near-100% gross margins, acting as a crucial counterbalance to product sales volatility.
Macro Impact: Navigating the China Tariff Headwind
Gross margin ticked down slightly to 87% in Q4 from the historical 88% norm. Management has previously guided that higher China tariffs (up to 35%) would begin impacting the P&L in late 2025. While the company has been standing up a Vietnam manufacturing line to mitigate this, the slight margin compression in Q4 warrants close monitoring to ensure the supply chain pivot is progressing smoothly.
Growth Deceleration at Scale
Management's FY26 guidance of $111-$115M implies YoY growth of 25-29%. While still robust, this is a clear deceleration from the 45% growth seen in FY24 and the 36% growth delivered in FY25. The core adult seizure market will eventually face the law of large numbers, placing immense execution pressure on the rollout of the new delirium and pediatric/neonatal indications to sustain momentum.
Public Company Expenses Weigh on Profitability
Operating expenses surged 42% for the full year to $136.7M, largely driven by investments in the commercial organization and the newly added costs of operating as a public company. While Q4 showed the first signs of OpEx growth (24%) trailing revenue growth (34%), the absolute dollar burn remains high, and any delay in commercializing the new pipeline products could delay the targeted cash-flow breakeven point.
Other KPIs
Stable. Gross margin expanded from 87% in FY24 to 88% in FY25, showcasing exceptional pricing power and product mix despite the looming threat of supply chain tariffs.
Down from $194.3M at the end of FY24. The company burned roughly $35M over the course of the year to fund commercial expansion and R&D. The balance remains healthy enough to reach profitability without immediate dilution risks.
Accelerating. Grew 33% YoY from $16.2M in 24Q4, perfectly mirroring the top-line growth and proving that the company is not discounting to acquire market share.
Guidance
Decelerating. The midpoint of $113M implies a 26.8% YoY growth rate. This is lower than the 36% growth achieved in FY25. Base effects are catching up to the company, meaning future beats will rely heavily on the speed at which they can monetize the newly approved delirium and neonatal indications.
Key Questions
Vietnam Manufacturing Transition
Gross margins dipped slightly to 87% in Q4. Can you provide an update on the transition of headband manufacturing to Vietnam and confirm whether you still expect gross margins to hold in the mid-to-high 80s for FY26?
Commercializing Delirium
With the landmark 510(k) clearance for delirium monitoring now in hand, what does the commercial rollout look like? Will this require a separate sales motion, or can the existing Clinical Account Managers drive adoption within the current 647 installed accounts?
Operating Leverage Trajectory
Q4 was the first quarter where revenue growth noticeably outpaced OpEx growth. Should we view this as a permanent inflection point, or will the launch of the new pediatric and delirium indications require another step-up in commercial investment in early 2026?