Cerebel (CBLL) Q3 2025: Active Accounts Jump by 31, Unlocking Deeper Hospital Penetration
Cerebel’s Q3 saw its largest-ever sequential account gain, signaling accelerating adoption of its point-of-care EEG platform across U.S. hospitals. Management raised full-year guidance as utilization deepened and new market segments—pediatric and neonatal—readied for launch, expanding the company’s addressable opportunity. Investors should monitor execution on hospital penetration and margin management as Cerebel pivots toward broader neurological indications and operational scale.
Summary
- Hospital Adoption Surges: Largest sequential rise in active accounts, reinforcing Cerebel’s category leadership in acute care EEG.
- Utilization Deepens: Usage per account and protocol-driven expansion signal robust organic growth potential.
- Pediatric and Neonatal Expansion: Pipeline progress and regulatory wins set up a step-change in addressable market for 2026.
Performance Analysis
Cerebel delivered a 31% year-over-year revenue increase in Q3, driven by expanding adoption and deepening utilization of its point-of-care EEG system in hospitals. The company’s business model blends product sales and recurring subscription revenue, with subscriptions outpacing product growth at 44% year-over-year, reflecting a growing installed base and higher usage intensity. Notably, gross margin held at 88%, with management signaling a shift to mid-80% in upcoming quarters as tariffs on China-sourced inventory take effect and Vietnam manufacturing ramps up.
Operating expenses increased 39% year-over-year, reflecting deliberate investments in commercial infrastructure and market development. Net loss widened to $13.5 million, with management reiterating confidence in achieving cash flow breakeven on existing cash balances. The balance sheet remains robust, with $168.5 million in cash and equivalents, and no near-term capital raise planned.
- Account Expansion Sets Pace: 31 new active accounts added sequentially, the highest since IPO, bringing the total to 615 and validating recent salesforce investments.
- Recurring Revenue Mix Strengthens: Subscription revenue growth outpaces product sales, underscoring the stickiness and scalability of the model.
- Margin Headwinds Managed: Tariff-driven cost pressure is being offset by Vietnam manufacturing, with gross margins expected to stabilize in the mid-80% range.
Seasonality impacted Q3 usage, but underlying growth in both new and tenured accounts points to durable demand and effective protocol-driven adoption strategies.
Executive Commentary
"We have continued to expand patient access through new account growth and increase the utilization while advancing our robust product pipeline. We believe the strength of these initiatives is clearly reflected in our results."
Jane Chow, Co-founder and Chief Executive Officer
"As we enter Q4, I'll remind you that we will begin to transition to utilizing inventory acquired after the implementation of increased tariffs on products originating in China. Despite this, we expect to maintain gross margins in the mid-80% range in Q4."
Scott Blomberg, Chief Financial Officer
Strategic Positioning
1. Category Leadership in Point-of-Care EEG
Cerebel has established itself as the clear leader in point-of-care EEG for seizure detection in acute care settings, now serving roughly 10% of U.S. acute care hospitals. Management estimates just 3% penetration of its core addressable market, highlighting a vast runway for growth. Clinical validation and rapid time-to-diagnosis have become key differentiators, with the system shown to reduce EEG time by 19 hours and ICU stay by over four days.
2. Commercial Execution and Deepening Utilization
Account expansion is being matched by deeper utilization within existing hospitals, as protocolization and departmental expansion unlock incremental usage. The top 10% of accounts use the platform at triple the rate of average peers, demonstrating the potential for broader adoption as best practices are replicated. Management’s focus on education, training, and physician engagement is driving both new account wins and organic growth within the base.
3. Pediatric and Neonatal Pipeline Catalysts
Regulatory milestones and pilot launches in pediatric and neonatal populations position Cerebel for a $400 million expansion of its addressable market in 2026. FDA clearance for the pediatric seizure detection algorithm and a newly cleared neonatal head cap are enabling pilots and departmental expansion. The company is leveraging learnings from pilots to refine products and ensure adoption readiness ahead of full commercial launch.
4. Platform Expansion Beyond Seizure
Management is laying groundwork for EEG to become a “new vital sign” in acute care, with pipeline algorithms for delirium and stroke representing multi-billion dollar TAM expansion. Early progress in delirium detection, where no commercial diagnostic devices exist, signals a strategic pivot toward broader neurological monitoring and concurrent condition management within the installed base.
5. Supply Chain Resilience and Margin Management
Proactive supply chain diversification, including a new manufacturing line in Vietnam, is reducing tariff exposure and supporting margin stability. This operational flexibility is critical as the company scales and faces ongoing trade policy uncertainty.
Key Considerations
Cerebel’s Q3 results demonstrate accelerating penetration and operational discipline, but the next phase will test the company’s ability to scale efficiently and broaden its platform’s clinical relevance.
Key Considerations:
- Hospital Penetration Still Early: With just 10% of U.S. acute care hospitals reached and 3% overall market penetration, the growth runway is substantial but requires sustained sales and clinical engagement.
- Utilization Leverage: Only 30% penetration within active accounts suggests significant same-store growth potential as protocols and new departments adopt the platform.
- Pipeline Execution Risk: Success in pediatric and neonatal launches will depend on both regulatory milestones and effective hospital integration, especially outside the existing adult-focused base.
- Margin Sustainability: Tariff exposure and manufacturing transitions introduce gross margin variability, though management’s Vietnam strategy provides a partial offset.
- Cash Burn and Operating Leverage: Operating expense growth has outpaced revenue, but management expects moderation and improved leverage as commercial investments yield results in 2026.
Risks
Execution risk remains elevated as Cerebel scales its commercial footprint and pursues new indications, with potential for slower-than-expected adoption, regulatory delays, or competitive encroachment. Margin pressure from tariffs and supply chain shifts could impact profitability if not carefully managed. Litigation and competitive activity, including ongoing IP disputes, represent potential overhangs. Management’s guidance philosophy remains conservative, but investors should monitor for signs of operational strain or delayed pipeline conversion.
Forward Outlook
For Q4 2025, Cerebel guided to:
- Continued sequential growth in active accounts, with a pause in late December launches to ensure high-quality onboarding
- Gross margins moderating to the mid-80% range as tariffed inventory is utilized
For full-year 2025, management raised guidance:
- Revenue of $87 to $89 million, representing 33% to 36% growth over 2024
Management highlighted several factors that will shape results:
- Strong backlog of accounts with purchase orders, supporting visibility into Q4 and early 2026
- Continued investment in commercial and clinical infrastructure to support pediatric, neonatal, and delirium pipeline launches
Takeaways
Cerebel’s largest-ever sequential account gain and deepening utilization signal robust market traction, but sustained operating leverage and pipeline execution will be critical as the company targets broader neurological monitoring and new patient populations.
- Commercial Expansion Validated: Largest sequential increase in accounts and rising usage per site confirm the commercial model is scaling, with protocol-driven adoption and departmental expansion fueling organic growth.
- Margin and Cash Discipline in Focus: Proactive supply chain moves and robust cash balance provide resilience, but operating expense growth must be matched by revenue leverage as investments mature in 2026.
- Pipeline Launches as Next Catalyst: Successful pediatric and neonatal launches, along with progress in delirium detection, will be pivotal for sustaining growth and expanding Cerebel’s platform relevance.
Conclusion
Cerebel’s Q3 results underscore accelerating adoption and deepening account penetration, with full-year guidance raised and the pipeline poised to expand the addressable market. Investors should watch for operating leverage and successful execution on new clinical indications as key drivers of long-term value.
Industry Read-Through
Cerebel’s rapid account expansion and strong protocol-driven utilization highlight the growing importance of point-of-care diagnostic platforms in acute care, with clinical evidence and workflow integration proving decisive for adoption. The company’s proactive supply chain moves underscore the need for resilience amid global trade volatility, a lesson applicable across medtech. As hospitals increasingly demand rapid, actionable data at the bedside, competitors in diagnostics and monitoring will need to demonstrate not only clinical utility but also seamless integration and economic value to drive penetration and utilization. Cerebel’s early-mover advantage in new neurological indications may catalyze broader industry investment in AI-driven acute care diagnostics.