Ceribell (CBLL) Q3 2026 earnings review
Ceribell adds a record 35 hospitals, but its losses widen
Ceribell, a maker of portable brain monitors for hospitals, grew sales quickly while its operating losses deepened. Revenue rose 30% from a year ago as the company added a record 35 hospitals and kept gross margin at 90% with its new Vietnam factory. Chief executive Jane Chao lifted the bottom of the full-year sales plan, which by our math points to 29% growth in the fourth quarter.
| Revenue | $29.3M +30% from a year ago |
|---|---|
| Active hospital accounts | 747 +35 net new in Q3 (record) |
| Loss excluding one-offs (Adjusted EBITDA) | -$12.1M -$9.2M a year ago |
| Full-year revenue outlook | Raised $0.5M middle of the range: 30% growth |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because steady hospital adoption and widening losses moved in parallel again. Launching the delirium monitor on time and proving that gross margin stays at 90% without one-time tariff refunds strengthen the product case for 2027. The bad news: operating expenses rose 36% and pushed the loss excluding one-offs to $12 million, breaking two quarters of stability.
The question now is whether 2026's heavy hiring and research spending will produce faster sales growth in 2027 or remain a permanent drag on cash. Either the newborn and delirium tools add enough high-margin revenue to narrow the losses, or expenses keep outrunning ~30% sales growth. Management's first 2027 outlook next quarter will give the answer.
🐂 Bull Case
Hospital Additions Hit a Record as Usage Grew
Ceribell sells portable brain-monitoring headsets and disposable headbands to hospital intensive care units and emergency rooms. "Our third quarter results reflect new highs in account additions and utilization within our existing account base, demonstrating the strength of our core seizure business as a durable growth engine," chief executive Jane Chao said.
Hospitals normally see quieter intensive care units in the summer, yet the medical device maker added a record 35 net new hospitals to reach 747 active accounts, up from 32 additions last quarter. Existing hospitals also used more headbands, so total revenue per average active hospital rose 6.7% from a year ago to about $40,200 by our math.
Because the company has already added 100 hospitals in the first nine months of 2026, it needs only 19 additions in the fourth quarter to beat last year's total of 118. What to watch: fourth-quarter hospital additions and revenue per account. Another quarter above 30 additions would set a higher base for 2027 subscriptions.
Delirium Monitoring Launched, But Revenue Waits for 2027
Chao wants to expand the headset beyond adult seizure detection as part of a "mission to establish EEG as a new vital sign" (EEG, or electroencephalography, measures brain electrical activity). Some sceptics worry that hospitals will take a long time to pay for these extra software features.
The Sunnyvale group finished its commercial pilot and announced the full launch of its delirium monitoring tool, which tracks acute brain confusion in intensive care patients, alongside regulatory clearance for two new brain-wave analysis tools. However, the raised 2026 outlook still "does not include material contributions from the Company’s neonate, pediatric, or delirium products" because hospital committees take months to approve new spending.
What to watch: the initial 2027 revenue outlook next quarter. It will show how much actual sales the company expects from newborn, child and delirium monitoring after Medicare's extra payment for delirium took effect in October.
Vietnam Factory Kept Gross Margin at 90%
US tariffs on Chinese medical supplies threatened Ceribell's profit margins last year because the company made its disposable headbands in China. To protect its margins, management shifted production and worked to lower unit costs.
Gross margin reached 89.8% in the third quarter, up 1.5 percentage points from a year ago, as the cost of making products and delivering subscriptions fell from 11.7% of revenue to 10.2%. The company credited "manufacturing cost reduction initiatives and the impact of the Company’s introduction of a fully operational manufacturing line in Vietnam", proving that margins stay near 90% even after last quarter's one-time tariff refund faded.
What to watch: fourth-quarter gross margin in the full-year report. Holding near 89% or 90% once the last $0.6 million of tariff refunds in inventory sells through will confirm the Vietnam cost savings.
🐻 Bear Case
Spending Outran Sales Again, Pushing Losses Deeper
Ceribell began reporting Adjusted EBITDA (operating loss excluding stock pay, legal disputes and debt fees) this year to show underlying progress while it invests for 2027. While that loss held near $10 million in the first two quarters, it widened in the third quarter because operating expenses rose 36% from a year ago to $46.9 million, outpacing 30% revenue growth.
- Sales and marketing: 85.3% of revenue, up 3.1 percentage points from a year ago
- Research and development: 25.2% of revenue, up 3.2 percentage points
- General and administrative: 49.3% of revenue, up 0.4 percentage points
- Loss excluding one-offs (Adjusted EBITDA): $12.1 million, 32% wider than a year ago
The company spent heavily on "infrastructure in advance of the delirium launch" and next-generation hardware, widening its total net loss by 59% to $21.4 million without giving a target date for breaking even. What to watch: operating expense growth against revenue growth in the fourth quarter; if costs keep rising faster than sales, cash burn will stay high into 2027.
Stock Pay Doubled as Legal Bills Dropped
Since July 2025, Ceribell has fought a patent lawsuit against rival Natus Medical and removed those legal bills from its preferred profit metric. Legal costs for the Natus case dropped to $1.1 million this quarter from $3.9 million in the second quarter and $5.6 million in the first.
That drop did not help the bottom line because stock-based compensation more than doubled from a year ago to $7.1 million, or 24.2% of revenue, while refinancing its loan added a $1.5 million debt extinguishment charge. Because employee stock grants keep climbing, the diluted share count rose 4.6% from a year ago to 38.5 million.
What to watch: stock-based compensation and Natus legal fees in the quarterly filing. A court ruling or settlement in the Natus case would also trigger $2.9 million in deferred legal fees.
Risks this quarter didn't answer
Three standing questions about customer mix, competition and legal schedules got no new data in the earnings release.
- Government hospital reliance: the release did not state how many of the 35 new accounts came from Veterans Affairs hospitals; the conference call may clarify.
- Rival brain monitors: the release gave no update on competing devices or the delayed trade commission timetable in the Natus patent case.
- New product orders: management did not disclose order counts or pricing for the newborn and delirium launches.
💲 Other KPIs
Both revenue streams grew near 30% from a year ago. Product sales from disposable headbands rose 30.6% to $22.2 million, while subscription fees for its Clarity brain-monitoring software rose 27.6% to $7.1 million. That software pace slowed slightly from 30.0% growth in the second quarter and 29.1% in the first.
Cash and short-term investments fell by $11.8 million from last quarter and by $41.8 million since December 2025 as operating losses continued. In August, the medical technology group signed a new credit facility that provides up to $60 million in committed loan capacity, keeping long-term debt on the balance sheet at $20.0 million.
Uncollected customer bills rose 45.4% from a year ago and 11.2% from last quarter, outpacing the 4.4% quarterly rise in revenue. Rising receivables tie up working capital and indicate that hospital billing took longer to collect late in the quarter.
🔮 Guidance
Raised. Ceribell lifted the bottom of its full-year sales plan by $1 million, moving the middle of the range up by $0.5 million to $116 million, or 30.2% growth. By our math, that leaves $32.1 million for the fourth quarter, or 29.4% growth from a year ago. It is the third raise this year, and the smallest: +$1.0M, +$1.5M, and now +$0.5M.
❓ Key Questions
How is the new delirium tool priced for hospitals?
Ceribell launched its delirium monitoring software commercially in November, and Medicare's extra payment began in October. Management has not said whether hospitals pay a higher subscription fee or just buy more disposable headbands.
When will revenue growth start outpacing operating expense growth?
Operating costs grew 36% from a year ago in Q3 against 30% sales growth, widening the quarterly loss excluding one-offs to $12.1 million. Investors still have no target date or revenue level for cash-flow breakeven.
Why did accounts receivable jump 11% from last quarter?
Customer receivables grew more than twice as fast as sequential revenue in the third quarter. The quarterly filing or call needs to clarify whether late-quarter orders or slower hospital payments caused the build.
Why did stock-based compensation jump to $7.1 million?
Employee stock grants more than doubled from a year ago and rose 18% from the second quarter, reaching 24% of revenue. Shareholders need to know if third-quarter hiring or one-off executive grants drove the increase.