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

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to Cerebral Q2 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's 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 the star 1. 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 Sarah Bell are Jane Chow, co-founder and chief executive officer, and Scott Bloomberg, chief financial officer. Earlier today, Sarah Bell issued a press release announcing financial results for the quarter ended June 30, 2026. A copy of the press release is available on the investor relations section of the company's Before we begin, I'd 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 under 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 exchange commission including our annual report on form 10k filed with the sec on february 24th 2026 and quarterly report on form 10q for the quarter ended june 30th 2026. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 10th, 2026. Fairble disclines any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements whether because of new information, future events, or otherwise.

And with that, I'll turn the call over to Jane.

Good afternoon and thank you for joining us for our second quarter 2026 earnings Q2 marked another strong quarter for Theraville, 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 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 growth margin. We delivered record growth margin of 92% in Q2. This number was positively impacted by a refund on previously paid tariffs. Even when excluding this refund, we delivered growth 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. And growth margin is more than just a number. It generates the outsized growth profit we are reinvesting to fund our growth initiatives and R&D with an eye towards 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 objective, establishing Cerebell as the standard of care for seizure detection in the acute care setting. At the center of our growth strategy is our commercial infrastructure, built with a dual purpose to acquire new customers and drive deeper adoption within our install base. Our account acquisition team continues to mature and is contributing in line with expectation. The efforts are being supplemented by our newly added strategic account management team to 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 a headband utilization expansion. Our strong performance this quarter reflects execution of our established utilization playbook, provider engagement, department expansion, and patient population protocolization. A robust and expanding body of clinical evidence validates our platform. Our aim is to make the case for Cerebel'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 in intensive care research. The study found that when our clarity algorithm reported a peak seizure burden of 90% or greater, patients were 3.6 times more likely to experience severe disability or death at discharge. Further, each additional hour of clarity detected seizure activity was associated with nearly two-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 best site in real time and that this burden reliably correlates with patient's outcome. These findings sharpen the clinical imperative for using the cerebellum solution, particularly clarity to reduce seizure burden for patients. As the body of evidence compounds, we're increasingly confident that cerebellum 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 the 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. The 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 revenue contribution as we move into 2027. We are also excited about the momentum of our first service client, Delirium Monitoring Solution, which received 510T clearance in December. Delirium represents an estimated $1 billion U.S. market for Cerabel and a strong addition to our platform. Despite being the most common neurological complication in the ICU, before Cerabel, there had 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 praising improvements in clinical decision-making. For example, based on the survey, 40% of the patients were difficult to assess under CAM ICU, the current standard of care, that could still be monitored with the cerebral solution. Beyond the clinical signal, we are also seeing a utilization effect. Existing cerebral customers that have joined the delirium pilot are increasing advanced utilization. We believe this is a reflection of 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 $2,171 in incremental reimbursement per qualified patient. This is a meaningful milestone. It will support adoption by adding favorable economics to the strong clinical interest we're 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'd like to turn to our vision for the future. We believe we are well on our way to establishing the cerebral system as a standard of care for seizure management. 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 invest in algorithm and hardware enhancement 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 a set of 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 clearances for two new algorithms targeting our core seizure market. We believe each meaningfully add to our platform clinical utility, strengthening the case for Cerebel 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's not uncommon for even neurologists to mistake electrical signal 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 Cerebel, can differentiate between brain activity and artifact, adding a layer of AI-driven sophistication. The new algorithm significantly simplifies EEG interpretation from 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 between clear seizure and normal signals. This activity is clinically important, but has historically been difficult to consistently measure. To our knowledge, Cerebel 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 one 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 Cerebral 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 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 clock day. We have also received clearances for true headband designs that provide optionality for formal touch and multiple day continuous monitoring when needed. The features offered by our new platform serve to support our effort to make EEG a new vital sign. For example, delirium patients often require days in the ICU before resolution. And the new system can be even more seamless in supporting this new use case. And when we add LVO in the future, a bigger screen will be needed to monitor multiple disease days. Within our corsage market, we believe our current product is optimized for the majority of patients in 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 imaging for patients who need both. Cerebell can offer both with one device. We're continuing to test our products, refine the design and scale our manufacturing with the 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'm struck by how much is converging at once. Our core business continues to perform, delivers 33% year-over-year growth and an acceleration compared to last quarter. We are the first and only point-of-care seizure platform indicated for use with patients of all ages. At the same time, the work we have been building towards for years is coming to a head. new algorithms, new hardware appearances, a Delirium pilot tracking towards a commercial launch, and a new ANTAP. These advancements stand to meaningfully strengthen our value proposition while reinforcing our market leadership position with significant innovation-based various launch. 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 Salesforce delivering even greater impact. I'm 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 dollars which represents a 33 increase from 21.2 million dollars in the second quarter of 2025 and a six percent sequential increase quarter over quarter the increase was primarily driven by the success of our same for growth strategy in addition to increased adoption of the cerebellum system across new and existing accounts product revenue for the second quarter of 2026 was 21.2 million dollars representing an increase of 33 percent from 15.9 million dollars 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've been pleased to see our investments in driving same-star 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-star 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 install base in which our top accounts continue to use our product at roughly three times the rate of average accounts of similar size. Gross margin for Q2 2026 was 92 percent compared to 88 percent in the prior year period. This includes the impact of 1.6 million dollars and tariff-free funds received in the quarter, of which $1 million was recognized in cost of goods sold and $0.6 million 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 80% range throughout 2026 based on current terror policies, and believe we have built flexibility in our manufacturing capabilities 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-CAS stock-based compensation expense was $6.0 million in the 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, an expansion of our CAM infrastructure in advance of delirium launch. DNA expense remains elevated in the second quarter of 2026 as a result of expenses related to our ongoing IEASN, 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 loss of 51 cents per share, compared to a loss of $13.6 million or loss of 38 cents per share in the second quarter of 2025. An average weighted share count of 38.0 million shares 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 expenses, as well as legal expenses associated with our ongoing IP litigations. Adjusted USL 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 June 30th, 2026 were $129.3 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 refinance 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-formular revolver plus 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 will provide us with greater strategic flexibility. Turning now to our outlook for 2026, we expect full-year 2026 total revenue to range from $114 to $117 million, up from our prior guidance of $112 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'll turn the call back to Jane.

Thank you, Scott, and thank you all for your time today. Q2 reinforces 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. And 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, which 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. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone in your device, 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 to one question and Rick Q for any follow-up question. Thank you. Our first question comes from the line of Travis Teed 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 that you guys have gotten and put together. I don't know if there's anything else you want to add to that, but I think the real question is what can all these approvals and new indications and everything do for the revenue growth rate and kind of the incremental revenue dollars you can add to this business. That would be kind of helpful to context, but anything else you want to say on all the approvals would be helpful just to put in context for everybody. Then I have a follow-up.

Thank you, Travis.

So I will put our recent FDA clearance into two groups aligned with our two-pronged strategy. The first groups 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 this tool will be very beneficial, especially for the neurologists. And directly or indirectly, this would further increase the stickiness and potentially increase the utilization at the count. We have always seen our top accounts always have very strong neurologist support, so we could see this as a leverage to drive usage and potentially increase the deal velocity as well. In terms of our new hardware platform, we are not launching this platform yet, and similar to the previous strategies we have deployed, And we are planning on a limited market release for the new hardware platform and potentially launch the platform in 2027. This new hardware platform really has been aiming at making EEG a new vital sign injunction to delirium and the future LVO we are working on. So we see this as giving us access to additional patients or even additional market segments. so we do see this can be a revenue driver in 2027 directly as we get closer to the launch time we will share even more details our next question comes from the line of robbie marcus with jp morgan your line is open great uh congrats on the quarter and thanks for the question um Scott, I wanted to ask on OpEx.

Companies your size typically need to make a strong beeline towards leverage. And we've seen OpEx grow faster than sales the past several quarters. So maybe just speak to the investments and the spending that you're doing now. What's driving that? And when can you start to see leverage on OpEx? Thanks a lot.

Sure thing, Robbie.

First of all, the two things I'd like to point out in the Q2 OPEX that were a little bit out of the normal is stock-based compensation sequentially increasing by about $2.3 million. We have an annual equity cycle that happens in Q2, so you'll tend to see that step function in Q2 and then carry forward until the next cycle. The other, of course, is the IP litigation, which remained elevated lower than Q1, but higher than we'd expect going forward. As it relates to our investment philosophy, we've maintained adjusted EBITDA loss roughly at around $10 million, give or take, for the past many quarters in a row. Our strategy has been to continue to grow the top line, generate outsized gross profits with our high gross margin and then reinvest that back into the business. And that investment comes in the form of sales infrastructure. in this quarter, both building the strategic account management function out as well as expanding our CAM infrastructure a bit ahead of our Delirium launch as well as R&D. And as we make those investments, we're very mindful of our objective due to cash flow break even with cash on hand, having guided specifically as to when we come, but we keep a very close eye on it to ensure that we control our own destiny and make sure that we're self-sufficient as far as our cash position goes.

Next question comes from the line of Brandon Vasquez with William Deere. Your line is open.

Hey, everyone. Thanks for taking the question, and congrats on a nice quarter. Jane, I think you had mentioned that, you know, like there was kind of an inflection here or a driving factor of growth in the quarter was from new account ads. There's clearly a bunch of tailwinds going on in the business with new indications and things like that. So I was hoping you could just spend a minute on unpacking, you know, are you guys seeing kind of like an inflection in interest from end users? I think you even said that Neonate and Pediatrics was driving new account openings that you weren't even in before. So just kind of give us a little bit of an update on interest in driving new accounts and expectations on how durable that can be going forward. Thank you.

Thank you, Brandon. Yeah, definitely echo your statement. We do see a lot of tailwinds. On the account acquisition front, we saw the new purchase order related to Neonate, both in existing accounts as well as new accounts. And I would say in Q2, it's still relatively early phase. As you know, it does still take the sales cycle, and we just launched Neonate recently. We do expect the impact from Neonate is going to be even bigger second half of the year, and especially in 2027. And as I mentioned in my previous call last quarter that we started the strategic account management team, so we also continue seeing the pipeline and the momentum from this team in closing accounts at the regional hospital system level. And we remain very optimistic for the impact to come later this year and in 2027. Another dimension of revenue drive, of course, is from the utilization or the same-store growth. As Scott mentioned, Q2 usually is our low seasonality quarter, but the same-store growth this quarter exceeded the expectation. And the majority of that is the continuous execution of the known playbook we have. In addition to that, we also see coming tailwind as we later launch delirium as the limited market release did show that these existing cerebellum counts, when they start to use delirium, it meaningfully increased the utilization as well. So we are very excited about the different tailwinds we're having.

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

Good afternoon. Thanks, Jen and Scott. Congratulations on another strong quarter. I wanted to, I mean, you've laid out some additional layers of growth that will be kicking in in 2027. Right now, the street's projecting a similar kind of revenue growth rate prior to today as the lower end of 2026 guidance that you just revised up. You know, I don't think you're going to provide explicit guidance for 2027, But with pediatric neonate kicking in next year, delirium, you know, the new hardware, Cerebel headband platform, you know, how should we be thinking about kind of the trajectory of growth? It seems like there could be an acceleration even in 27 versus 26.

Yeah, Josh, you know, we're not yet going to comment on the 2027 guide. But as you pointed out, there's a lot of tailwinds that are all coalescing around the same time. We feel really good about what we know. We feel good about what we learned on the Neonate early launch, the DeLorean pilot. There are still things we need to learn. We need to learn how the DeLorean launch, the plan for later this year goes, as well as the limited market release on the new product platform. But we've got about six or seven months here before we're guiding for 27. We're learning. I'm very happy to share our learnings with you when we need to show our guide.

Our next question. comes from the line of Bill Puvanik 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. This March impact from the Vietnam manufacturing shift, I thought that was going to be more impactful later in the year. It sounds like you're starting to get some benefit now. Can you try to quantify that, please?

Sure. I view the 89%, which effectively is if there had not been any sort of refund as effectively the SETI state for where we are. I mean, as we've mentioned, we plan to be in the – expect to be in the high 80% range for the remainder of the year. That 89%, which would have included the burden of tariffs, is essentially back to where we were, even a little better before all the tariff noise, and that's a direct reflection of both the manufacturing moves Vietnam, but also some general cost reduction initiatives that we put into place over the course of the last year and a half that should continue to generate dividends going forward.

Next question comes from the line of Jeff Cohen with Leidenberg-Talman. Your line is open.

Hi, this is Destiny on for Jeff. Thank you for taking our question. And Jane, I know you mentioned that like 45% of the patients in the delirium pilot were difficult to evaluate, but still could be monitored using TheraVel, the cervical system. So I'm wondering, as the pilot has matured, are you seeing the initial commercial use case converge around a particular patient population or workflow?

And if you could just kind of expand on that a little bit. yeah thank you this is a part of the reason we do a limited market release so we can really fine tune the value proposition and workflow and patient population so the short answer to your question is yes we start to seeing emerging populations that hospitals and physicians are particularly interesting related to delirium the examples include sepsis patient with altered mental status or elderly patient especially with post-cardiac surgery or other surgical procedures and this patient can are more likely to have delirium and it is more than 40 percent of these patients with a conventional standard of care would not have been able to assess delirium is one of the value proposition in the same pilot and survey we also show other results for example physicians and nurses showed that about, you know, another 30-40% of the patients, they were able to reduce, you know, sedation or even intubation based on the delirium algorithm. And about 20% of the time, they were able to improve care. So, these give us even stronger confidence, as well as the initial preliminary evidence to support the delirium launch that we are planning later this year as well.

Next question comes from the line of Marie Thiebaud with U.S. Bancorp BTIG. Your line is open.

Hi. I wanted to hear a little bit more about the regional health system team. I know that's a small strategic team targeting some of the regional health systems, and I heard you say it's going well so far, But I wonder if we could get any more details on some of the early pipeline metrics, things like, you know, the number of systems under engagement or in conversation, number of hospitals in these kinds of discussions, and, you know, your best estimate for when this starts to really accelerate account ads further. Thanks for taking the question.

Yeah, thank you, Marie.

So, I mentioned probably about two quarters ago, as we start forming this team, we also optimize our internal operation and tracking. So, this year is the first time we start to track pipeline, not just at hospital level, but also at the system level. We're not ready and probably won't share the pipeline of system level quantitatively, But what I can share is we've seen very, very strong momentum growth on this hospital system level pipeline. In many ways, they're growing even faster than the already very healthy hospital level pipeline we're seeing. As I also mentioned earlier, this team only started in January. We're just building up this team in January and take a few months to build up the team and to learn. So we are only six months in the process. And with the sales cycle, we expect to see early win. We're already seeing early win internally this year. But a bigger impact would come in 2027 and 2028.

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

Good afternoon and congrats on the progress here. I guess on Delirium, the decision to launch in late 26 versus what I think was your prior commentary of fourth quarter, early 27, is the decision due to what you're seeing in the pilot? Is it the establishment of the NTAP? Any commentary on reasoning for what I assume is a fourth quarter launch? And then, as a related question, you hinted at it earlier, but is there a need for additional sales infrastructure to launch Delirium? Thanks.

Yeah, thank you, Jason. The answer is both. We saw both very positive feedback clinically and operationally, as I mentioned earlier, from the limited market release on Delirium across the sites we have launched, as well as the final rule from CMS on NTAP effective October 2026. So the combination of that gives us the confidence that Wellcome fully officially launched Delirium in Q2 this year. In terms of self-force, the short answer is no, we do not expect we need an additional specific sales team for this. As we did with the limited market release, we leveraged the local, mostly CAN, clinical account manager team, and we expect we can continue to leverage our clinical account manager team. And, of course, if Delirium really we can see it gaining even more momentum, we could consider, you know, opportunistically expand this team even further. But we definitely do not see a need to establish a different Salesforce.

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

Just one follow-up to the, I guess, next generation or cerebral headband hardware that you talked about introducing in 2027. I just wanted to get a better sense, I mean, is that adding electrodes, is it going to to be a full montage EEG. Can you just talk about moving into conventional EEG territory and the TAM expansion opportunity there?

And can you leverage all of the AI algorithms clarity that have been developed for reduced electrode montage on this next cerebral headband hardware? thanks for taking the question yeah thank you Josh the new hardware platform really focused on to provide a hardware solution to become the brain monitor so the key features I would emphasize is when you think about brain monitor a sometimes addition with about video a bigger screen and continuous monitor for days or even weeks so the recorder need to plug in and also the capability to integrate other signals so the new recorder can add EKG or other vital sign into the recording and it would be the platform that will run you know the seizure algorithm the delirium algorithm all the algorithm we already have and also the future algorithm and the variable that one of the variables get FDA clearance is is even more comfortable and that's where a patient can wear it for days so the vision is really to become a brain monitor and with that we also have a variable that has the parasagital cap coverage so that's the full montage it only works in conjunction with our existing headband so it's the the add-on variable plus our headband together plug it into the same recorder or provide the full montage. And that's because we believe that our existing system can support the majority of the patients, but occasionally doctor preference or patient needs do need full montage, so we want to provide the optionality. And you're right, with this entire new hardware, we're not just the brain monitor anymore. We also provide almost all the functionality of the conventional EEG. So we look forward to sharing more our bigger picture and value proposition of our hardware as we're getting closer to the market release later this year.

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

Hi, it's Zachary again for Bill. Thank you for taking the follow-up question. Last quarter, you provided that 85% of the new wraps with at least 12 months of tenure contributed to the active account base and had 100% purchase orders. What is that looking like now? Can you quantify how these newer reps are maturing as it is 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 very carefully the progression of the team across what we know to be the productivity curve. And as we mentioned in the past, typically we don't see reps add their first account until they hit the end of year one, and then they continually get more productive throughout year two and then reach their kind of max rate of new ads at the end of year two. With the infrastructure build we did starting in late 2024, we're having more folks age into that one-year bucket. Still, the majority of those are not at the two-year bucket, and the productivity has aligned with what we've seen historically, and I think that's a reflection of the ads you've seen on the account base, in which we delivered a pretty similar result in terms of new ads this quarter to the prior two quarters, but with much less reliance on VA to juice the number up and really more of a reflection of the organic maturation of the sales work.

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

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

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