CG MEDTECH, DIAGNOSTICS AND DIGITAL HEALTH & SERVICES FORUM - CERIBELL INC

Financial Performance:

• Achieved 30% year-over-year revenue growth, driven by record same-store utilization growth in the low double digits (Q3).
• Delivered record 35 new accounts; total active accounts monitor roughly 3x more patients than the average account.
• Headbands sold per active account reached 50.4 (up 7% YoY); actual usage growth is double-digit, distinct from purchasing patterns which were slightly lower in Q3 due to inventory stocking.
• Maintained 96-97% gross margin on subscription revenue; currently holding ~$117-118 million in cash with debt capacity available.
• Revenue model heavily weighted toward consumables (75% of revenue from headband sales); recorders act as conduits for recurring headband revenue.

Guidance and Future Outlook:

• Q4 guidance assumes purchasing patterns normalize to historical levels without a recoupment of the Q3 deviation.
• Management expects new account additions to accelerate in 2026 due to sales team maturation (hitting year-two productivity max) and the full deployment of a new Strategic Account Management (SAM) function.
• Delirium revenue contribution to the total mix is expected to be incremental and not yet quantified for 2025/2026, with a commitment to provide quantitative modeling in 2027.
• Strategic goal remains achieving cash flow breakeven using existing cash on hand; specific timeline for breakeven is not yet disclosed but management expresses high confidence.

Business Segments and Product Lines:

• Seizure Detection: Established as the standard of care; core business continues to expand departmentally (ICU and ED) within existing accounts.
• Delirium Monitoring: Launched as a free software add-on in exchange for program commitments (training/workflow adoption) rather than direct dollar commitments; pilot data showed material, sustained usage increases (3-4 months).
• Omni Device: A new multimodal brain monitor combining point-of-care EEG, conventional EEG, and continuous monitoring with video/EKG; currently in innovation pilot with neurologists; full market launch announced for the AES conference in December.
• VA Opportunity: Secured a federal purchase order in September similar to prior year; rollout expected to begin in Q4 and peak in Q1 of the fiscal year, mimicking the 2026 ramp.
• Sepsis: Identified as a high-priority new patient population where 20-30% of altered patients may experience seizures; being leveraged to drive delirium and seizure monitoring adoption.

Market and Competitive Landscape:

• Market Penetration: Operating in 747 of ~6,000 potential US hospitals (ICU/ED); estimated market penetration is only ~4% (combining hospital access and patient awareness).
• Competition: No direct technology competitors for continuous delirium monitoring; competitors for seizure include legacy conventional EEG (designed 100 years ago) and manual nursing surveys (CAM-ICU).
• Land Grab Phase: Describes the current market as a "land grab" where the company is creating new demand for point-of-care monitoring rather than just replacing legacy tools.
• Pricing Power: Delirium software adoption is accelerated by the recent NTAP (Neurotechnology Advancement Program) status, providing an insurance-like assurance for hospitals regarding reimbursement.

Risks and Challenges:

• Implementation Friction: Delirium adoption requires significant workflow changes and training; the "free software" model relies on successful execution of these non-dollar commitments.
• Sales Cycle Complexity: Moving from individual hospital deals to multi-hospital system contracts (via SAM) could potentially slow the cadence of individual account additions.
• Margin Pressure: The new Omni device has higher COGS than the standard recorder; however, management does not expect this to significantly impact overall gross margins.
• Litigation: Mentions recent litigation as a factor in the current financial environment, though it has not significantly impacted the P&L yet.

Management Commentary and Tone:

• Confidence: Tone is highly confident and optimistic, noting the company has "beat and raised" consistently since IPO with no recent punishment in stock performance.
• Strategic Evolution: Clearly articulated a shift from a single-purpose seizure detection tool to a comprehensive critical care brain monitoring platform.
• Operational Discipline: Emphasizes a disciplined approach to spending, prioritizing cash flow break-even over aggressive burn, while continuing to invest in sales infrastructure.

Analyst Questions and Answers:

• Utilization vs. Purchasing: Analysts noted a discrepancy between 7% growth in headbands sold per account and double-digit usage growth; CFO clarified usage is the true driver and purchasing is inventory-driven.
• New Account Cadence: Analysts asked if new account additions would sustain or accelerate; Management predicts acceleration in 2026 due to sales team maturity and SAM layering.
• Strategic Account Mechanics: Clarified that SAM replicates top-performer behaviors to expand deals system-wide rather than just hospital-by-hospital, increasing deal size without necessarily slowing volume.
• Omni Pricing: Asked about Omni's impact on margins; CFO noted pricing and COGS scaling are not finalized but expects minimal impact on the company's high-margin subscription model.
• Delirium Economics: Analysts questioned the "no dollar commitment" model; Management confirmed reliance on usage metrics and program adherence, with validation pending scale.

Other Key Points:

• NTAP Status: The Neurotechnology Advancement Program (NTAP) for delirium applies only to negative charge Medicare patients (where hospitals lose money on standard care), acting as an insurance policy to facilitate adoption.
• Productivity Metrics: The company uses cloud-enabled device data for precise internal usage analytics and compensation planning.
• VA Rollout: The VA program follows a similar cadence to previous years, with the largest concentration of launches occurring in Q1 following the September order.
• Product Roadmap: Omni is designed to bridge the gap between point-of-care EEG and traditional conventional EEG, targeting neurologists specifically.