CBLL — Q2 2026 Financial Report Analysis

Sales up a third, but the loss widened as spending ran ahead

Ceribell sells a portable EEG system (EEG is a recording of the brain's electrical activity) that lets intensive-care and emergency teams check for seizures within minutes instead of waiting hours for a conventional EEG technician. In the second quarter of 2026 (April–June), revenue rose 33% to $28.1 million, and management raised its full-year forecast for the second quarter in a row. But operating expenses grew faster than sales (+37%), so the net loss widened to $19.3 million from $13.6 million a year earlier. The company has $129.3 million of cash and investments, so this is not a near-term funding problem. It is a question of when growth starts to cover costs.

At a glance

• Revenue +33% to $28.1 million. Both parts of the business grew at about the same pace: disposable headbands (+33%) and hospital subscriptions (+30%). Growth came from new hospitals and heavier use in existing ones.
• 92% gross margin, but about 89% excluding a one-off. A $1.0 million refund of tariffs paid in earlier quarters cut this quarter's product costs. Without it, gross margin was about 88.8%, still up from 88.1% a year ago.
• $32.2 million of operating cash used in the first half, up from $18.9 million in the same half of 2025. At that pace the $129.3 million cash pile lasts roughly two years before counting the new credit line.

What the business sells, and how it grew

Ceribell earns money two ways. Product revenue comes from single-use headbands ("Wearables") that a hospital uses once per patient, so it tracks how many patients get monitored. Subscription revenue is a monthly fee hospitals pay to use the recorder, the Clarity seizure-detection software and the web portal, so it tracks how many hospitals are signed up and how many recorders they have.

The 10-Q attributes product growth to "the addition of new customers and an increase in utilization of Wearables," driven by "continued customer education." The earnings release adds that use within existing accounts grew even though ICU patient numbers usually dip in summer. Active accounts rose by 32 in the quarter, from 680 at the end of March to 712 at the end of June. The company counts about 6,000 US hospitals with an ICU or emergency department as potential customers, so it is in roughly 12% of them.

Operating margin is the share of revenue left after running the business, before interest and tax. At -71%, Ceribell spends about $1.71 for every $1 of revenue it brings in, and that ratio did not improve from a year ago.

Where the money went

Gross profit grew $7.3 million. Operating expenses grew $12.3 million. The 10-Q breaks that down:

• Sales and marketing: +$7.0 million (+40%) to $24.4 million, "primarily due to an increase in personnel and related expenses directly associated with an increase in headcount." This is the sales force that signs up new hospitals and trains existing ones. It still costs 87 cents for every dollar of revenue.
• General and administrative: +$3.4 million (+30%) to $14.8 million. $2.0 million of that was higher professional fees "driven by legal costs associated with intellectual property enforcement activities," mainly the patent suit Ceribell filed against Natus Medical in July 2025. The rest was $1.4 million of added headcount.
• Research and development: +$1.9 million (+39%) to $6.7 million, of which $1.5 million was headcount. In the quarter the company won FDA 510(k) clearances (the standard US approval route for devices similar to ones already on the market) for an epileptiform-abnormality detection algorithm, an artifact-reduction algorithm, and new recorder and headband designs for its next hardware generation.

Below the operating line, interest and other income fell to $1.2 million from $1.8 million, because the company has less cash earning interest than it did a year ago.

Takeaway: Ceribell's product works commercially: sales are growing about 30% a year with gross margins near 89% even before the tariff refund. But it has not yet shown operating leverage. Expenses grew faster than revenue this quarter, so the loss got bigger, not smaller. The narrowing of adjusted EBITDA only appears after excluding $9.9 million of stock pay and patent-lawsuit costs.

What the headline numbers hide

• The 92% gross margin includes a one-off. After a February 2026 Supreme Court ruling struck down tariffs imposed under the International Emergency Economic Powers Act, Ceribell recognized $1.6 million of refunds for duties it had paid. $1.0 million reduced this quarter's cost of goods sold; the other $0.6 million sits in inventory and will flow through as that inventory is sold. Excluding the $1.0 million, gross margin was about 88.8%: still higher than a year ago (88.1%) and than Q1 2026 (87%), helped by what the release calls "manufacturing cost reduction initiatives" and a new manufacturing line in Vietnam.
• "Adjusted" EBITDA flatters the trend. The GAAP net loss widened by $5.6 million. Adjusted EBITDA improved by $0.2 million. EBITDA means earnings before interest, taxes, depreciation and amortization. The difference comes almost entirely from two exclusions: stock-based compensation (employee pay in shares, $6.0 million vs $3.2 million) and Natus litigation costs ($3.9 million vs $1.4 million). Stock pay is a real cost to shareholders because it increases the share count. Legal costs are real cash, even if they should end when the case does.
• Cash burn grew faster than the loss. Operating activities used $32.2 million in the first half of 2026, compared with a $39.0 million net loss. Stock compensation ($9.7 million) is the main non-cash item, and paying down accrued liabilities used $2.1 million. A year earlier the half-year burn was $18.9 million. Cash and investments fell from $159.3 million at December 31 to $129.3 million at June 30, a $30.0 million drop in six months.
• Receivables and inventory are clean. Accounts receivable rose 6% since year-end (to $16.0 million) while revenue grew 33%, and inventory fell to $6.7 million from $7.3 million. There is no sign that sales are being pulled forward or that stock is piling up.
• The debt refinancing doesn't add net cash yet. On August 5, 2026 Ceribell signed a MidCap credit facility: a $30 million term loan and a $30 million revolving line of credit, plus $25 million more at the lender's discretion. At closing it drew $20 million on the revolver and used it to repay the old $20 million term loan. Net debt didn't change. The benefit is unused borrowing capacity and pushing back the old loan's April 2028 repayment start.
• Earnings per share wasn't helped by buybacks. The share count rose about 5% (38.0 million weighted shares vs 36.3 million), mostly from employee stock awards, so the per-share loss grew a little faster than the dollar loss.

Outlook

Management raised 2026 revenue guidance to $114–117 million (about 28–31% growth), up from $112–116 million in May. The low end rose $2 million and the high end $1 million. With $54.6 million booked in the first half, the new range implies $59.4–62.4 million in the second half, or roughly $29.7–31.2 million a quarter. That is a modest step up from Q2's $28.1 million and seems achievable given the account additions so far. Ceribell gives no profit or cash-flow guidance.

Two things are new for the second half. The delirium monitor, FDA-cleared in December 2025, gets a Medicare New Technology Add-On Payment from October 1, 2026. That is an extra payment to hospitals that use it on Medicare inpatients, which removes a cost objection. The CEO said the delirium pilot is in "early progress," so it is not yet a measurable revenue line. Second, new hardware cleared this quarter is meant to form the "next-generation hardware platform."

Our read: revenue growth near 30% looks durable for the rest of 2026. Profitability is further off. To close a roughly $20 million quarterly operating loss, gross profit has to grow much faster than expenses for several years. Today they are moving the other way, partly because of the patent case. Cash covers about two years of burn at the first-half pace, plus about $40 million of undrawn committed credit. Next quarter, watch three things: whether operating expense growth falls back below revenue growth, whether gross margin holds near 89% without tariff refunds, and how many accounts are added.

This is our first analysis of Ceribell, so there is no earlier outlook to check against. Figures are from the Q2 2026 Form 10-Q and the August 10, 2026 earnings release.