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Presentation

CeriBell, Inc. misses on earnings expectations. Reported EPS is $-0.52 EPS, expectations were $-0.39.

Operator: Thank you for standing by. At this time, I would like to welcome everyone to the Ceribell First Quarter 2026 Earnings Call. [Operator Instructions] Thank you. I will now turn the conference over to Brian Johnston, Investor Relations. You may begin.

Brian Johnston: Good afternoon, and thank you all for participating in today’s call. Joining me from Ceribell are Jane Chao, Co-Founder and Chief Executive Officer; and Scott Blumberg, Chief Financial Officer. Earlier today, Ceribell issued a press release announcing financial results for the quarter ended March 31, 2026. A copy of the press release is available on the Investor Relations section of the company’s website. 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 undue 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 and Exchange Commission, including our annual report on Form 10-K filed with the SEC on February 24, 2026. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 11, 2026. Ceribell disclaims 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 will turn the call over to Jane.

Xingjuan Chao: Good afternoon, and thank you all for joining us for our first quarter 2026 earnings call. Q1 was a strong quarter. We delivered revenue of $26.5 million, growing 29% year-over-year and 7% sequentially. Growth was driven by record headband utilization and our largest quarter of net new account additions. We also delivered 87% gross margin and expect to maintain gross margin in the high 80s range throughout 2026. Beyond continued progress in penetrating our core seizure market, we delivered 2 major milestones that mark inflection points in the evolution of our platform. First, following a successful pilot, we have initiated the full commercial launch of our neonate and pediatric products. We are privileged to now offer our seizure monitoring solution to some of the most vulnerable patients.

Second, we activated the first site in our delirium pilot in April, signifying our entry into the $1 billion market where we offer the only FDA-cleared diagnostic tool. I will discuss both milestones in detail shortly. First, let me start with our performance in our core market. Our goal is to become the standard of care for seizure management across 6,000 U.S. hospitals that offer acute care services. We are pursuing this through 2 paths, adding new accounts and deepening utilization within our existing installed base. On account acquisition, we ended Q1 with 680 hospitals actively using Ceribell System. With 33 net additions, this marks our strongest single quarter of account growth since becoming a public company. We remain confident in our ability to increase the number of new adds in 2026 above the level seen in 2025.

Our confidence is reinforced by 3 strengths in this part of the business, the continued maturation of our recently expanded sales organization, deepening penetration within the VA and other health systems and our strong account backlog. The account acquisition team expansion we launched in Q4 2024 is delivering. Among the new hires with at least 12 months of tenure, over 85% have contributed to the active account base and 100% have generated purchase orders. Given the timing of our sales cycle and the time required to launch new accounts, this level of productivity is encouraging. As more of our new hires mature throughout 2026, we expect a further step-up in productivity with additional acceleration in 2027. Beyond growing the territory manager team, we are also gaining momentum in 2 initiatives focused on accelerating hospital system acquisition.

First, we expect continued momentum within the VA system, where we remain in the early stages of penetrating the 170 hospitals unlocked by our FedRAMP High Authorization last year. Separately, leveraging our success from the VA, we launched a pilot at select U.S. military hospitals. The opportunity is incremental in scale, but nonetheless, it is a compelling validation of our product and our position as a category leader. Second, we have successfully hired a small team focused on top-down engagement of regional hospital systems. This complements the bottom-up activity of our TM organization and opens additional pathways to system-level adoption. Overall, we are encouraged by the growing market receptivity to our technology and are pleased with our team’s momentum in adding new accounts.

Meanwhile, same-store growth trends remain strong. Q1 marked our strongest quarter ever in terms of headband usage per account. Our growing CAM team continues to drive utilization through departmental expansion, provider engagement across all shifts and support of protocol development. We believe we have a significant opportunity to increase utilization even further. In accounts that have adopted our best practices, the results speak for themselves. Our top accounts routinely monitor approximately 3x as many patients as average comparable accounts. We are also increasingly encouraged by what we are hearing from our users in real world. As our user base expands and real-world data accumulates, recognition of the clinical imperative of quantifiable brain monitor at the bedside continues to grow.

In March, I had the opportunity to experience this firsthand at the Annual Meeting of the Society of Critical Care Medicine. There was strong excitement for our technology far beyond what we have experienced at past industry events. It is clear that we are moving closer to achieving our goal of helping to redefine the standard of care for seizure management. Turning now to our neonate and pediatric seizure programs. We have initiated the commercial launch of both products. Neonate is a population where improvement in seizure management can change the entire course of individual’s life. Our pilot was conducted at 5 sites, including both new and existing customers. All 5 of these hospitals are now moving forward from pilot to full implementation.

This momentum reinforces both the clinical case for use of our technology in younger patients and the commercial opportunities ahead. We’re still early in our pediatric launch, but the feedback we are hearing from parents and physicians has already been profoundly meaningful. I’d like to share a recent case involving a pediatric patient in the emergency department. A 2-year-old boy was brought to the ER unresponsive by his mom. It was his second ER visit of the day. The bedside provider initially struggled in identifying the root cause until the neurologist requested the Ceribell System. Clarity immediately identified seizure activity, which neurologists confirmed. This avoided the need for a lumbar puncture and potential ICU admission while waiting for a conventional EEG.

The team was able to initiate treatment promptly and the little boy gained full alertness later that day. He was discharged the next morning. This case reflects what Ceribell System is designed to do, quickly identifying seizure activity, guide treatment decisions in real time and help patients get the care they need faster. Moving now to delirium. In April, we were thrilled to have activated the first site of our delirium pilot. This marks the beginning of a new chapter for Ceribell as we continue moving towards our goal of establishing EEG as a new vital sign. As a reminder, following FDA 510(k) clearance in December, Ceribell was the first and only company with an FDA-cleared delirium monitoring solution. Delirium is the most common neurological complication in the ICU, yet the standard of care for assessment remains subjective, labor-intensive and intermittent.

Our solution offers something fundamentally different, objective, consistent and continuous insight into a patient’s neurological state. Our pilot is designed to build real-world experience, validating the right patient populations, optimizing clinical workflows, refining our commercial strategy and generating clinical evidence. What we are hearing from the field is encouraging. Interest in our delirium solution has been strong. And notably, that interest is amplified when delirium monitoring is paired with seizure detection. This interest is further validated by our recently launched study with Vanderbilt Medical Center to examine the overlap between seizure and delirium across ICU patient populations. While the stand-alone value of delirium algorithm is clear, we are convinced that addressing seizure and delirium together has the potential to transform ICU care.

We are also pleased to share that in April, we received a supportive CMS proposed rule for a new technology add-on payment, or NTAP, for our delirium monitoring solution. The rule proposes up to $2,171 in incremental reimbursement per patient. This is a positive indicator of the potential for a favorable final rule in August 2026. If adopted, the NTAP would become effective October 1, 2026. We believe that a positive final rule would supplement the significant clinical interest in our technology, helping to pave the way for its adoption. Looking ahead, we remain on track for a full commercial launch of our delirium solution in Q4 2026 or Q1 2027. Finally, turning to LVO stroke. We received breakthrough device designation for this indication in January 2026.

We are continuing to push our clinical programs forward and look forward to sharing more in the coming quarters. Stepping back, I could not be prouder of what our team have accomplished in the first quarter of the year. Q1 reinforced the confidence in our trajectory, and I’m energized by the momentum we are carrying into the rest of 2026. Execution across the business is on track with several key initiatives running ahead of schedule. We estimate our total addressable market at approximately $3.5 billion in the U.S. alone, nearly double what it was just a year ago. We believe Ceribell is best positioned to lead this market with an integrated platform, established trust from physicians and administrators and a growing body of clinical evidence.

Our goal is a single brain monitoring platform that sets a new standard for neurological care, and we are executing against that vision. We remain committed to make EEG a new vital sign and the early progress in 2026 only strengthens our conviction in the transformational nature of what we are building. With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of the first quarter results and 2026 guidance.

Scott Blumberg: Thank you, Jane, and good afternoon, everyone. As Jane highlighted, total revenue for the first quarter of 2026 was $26.5 million, which is a 29% increase from $20.5 million in the first quarter of 2025. The increase was primarily driven by increased adoption of the Ceribell System across new and existing accounts. Product revenue for the first quarter of 2026 was $20.2 million, representing an increase of 29% from $15.6 million in the first quarter of 2025. Subscription revenue for the first quarter of 2026 was $6.3 million, representing an increase of 29% from $4.9 million in the first quarter of 2025. We ended Q1 with an account base of 680 hospitals, representing an increase of 33 accounts in the quarter.

This includes a number of accounts that are part of our ongoing expansion within the VA system. We continue to anticipate incremental addition of VA accounts over the course of the year. We are pleased with the continued sequential momentum in headband purchasing trends in the first quarter, which we believe reflects the success of our same-store growth initiatives as well as our focus on high-quality new account launches. While we expect to continue to drive deeper within our accounts, I’ll remind you that we typically see a sequential moderation in Q2 and Q3 volumes driven by a reduction in ICU census during the warmer months. Gross margin for Q1 2026 was 87% compared to 88% in the prior year period. This was achieved despite relying on inventory acquired from China at an elevated tariff rate.

We were able to nearly fully offset this expense through a variety of cost reduction initiatives undertaken in 2025. As we move into the back half of 2026, we will begin shipping inventory sourced from our fully operational line in Vietnam, which is subject to lower tariff rates. Consequently, we feel confident in our ability to maintain gross margins in the high 80% range throughout 2026. Total operating expenses for the first quarter of 2026 were $43.9 million, an increase of 36% compared to $32.2 million in the first quarter of 2025. Noncash stock-based compensation expense was $3.7 million in the first quarter of 2026. The increase in sales and marketing expense in the first quarter was attributable to investments we made in our commercial organization as previously detailed.

Further, we typically hold our national sales meeting in Q1, resulting in elevated non-headcount sales and marketing expense during the quarter. G&A expense increased in Q1 as a result of expenses related to our ongoing IP litigation, which totaled $5.6 million. This is considerably higher than what we’ve seen in prior quarters, which is a reflection of the nonlinear nature of litigation-related activities. Research and development expense in Q1 increased as a result of headcount expansion to support enhancements to our product platform, including developing and improving our new product pipeline. Net loss was $19.7 million for the first quarter of 2026 or a loss of $0.52 per share compared to a loss of $12.8 million or a loss of $0.36 per share in the first quarter of 2025.

An average weighted share count of 37.7 million shares was used to determine loss per share in Q1 2026. Going forward, we will begin reporting adjusted EBITDA, which we believe is representative of the ongoing operating performance of our business. Adjusted EBITDA reflects our net loss before interest, taxes, depreciation and amortization expense and also excludes noncash stock-based compensation expense as well as legal expenses associated with our ongoing IP litigation. Adjusted EBITDA loss for the first quarter of 2026 was $11.2 million as compared to $10.9 million in the first quarter of 2025. Our cash, cash equivalents and marketable securities as of March 31, 2026, were $141.2 million. We remain committed to our objective to achieve 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.

Turning now to our outlook for 2026. We expect full year 2026 total revenue to range from $112 million to $116 million, up from our prior guidance of $111 million to $115 million. This represents annual growth of 26% to 30% over 2025. This change to guidance reflects the momentum we’re seeing in our core business with success driven both by new account additions and usage within our established account base. With that, I will turn the call back to Jane.

Xingjuan Chao: Thank you, Scott, and thank you all for your time today. We are pleased with our first quarter performance and the trajectory of our business. We continue to make tangible progress towards establishing the use of our system as the standard of care for seizure detection in acute care setting. With less than 4% penetration in our core seizure market, we have a sizable runway ahead of us. At the same time, we are advancing our platform into new indications with urgency and purpose, building towards a comprehensive brain monitoring system. Our mission to establish EEG as a new vital sign remains our North Star. I will now turn the call over to the operator for Q&A. Operator?

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Operator: [Operator Instructions] Your first question comes from the line of Stephanie Algazi with Bank of America.

Unknown Analyst: Just wanted to ask about Q1 and the guidance. Q1 came in a little better than The Street, and you raised the guide by $1 million, a little bit more than the beat. So can you just talk about the decision to raise the guide and your confidence in the outlook for the year?

Scott Blumberg: Sure, Stephanie. When it comes down to 2026, there’s really 2 core drivers of our business. It’s account acquisition and same-store growth, and we’re doing quite well on both. We just had our largest quarter of net new adds since we’ve been a public company and record usage per account. So that really forms the foundation of our confidence in the business and gives us the ability to raise guidance coming out of Q1.

Unknown Analyst: Got it. And then just to follow up, I wanted to ask about OpEx. It was a little higher than expected. Was that mostly from higher litigation? Or was there increased commercial investments versus what you expected as well? And does Q1 change how you’re thinking about the full year? Or is it more a change in timing of expenses?

Scott Blumberg: We don’t provide OpEx guidance. But as it relates to Q1, we saw a little bit of elevation in sales and marketing and R&D, and I’d bucket those more as investments in the business. We continually look at the facts in front of us and make investments to drive future growth, and that includes expansion of the sales team. As Jane outlined, a portion of that was related to our regional health systems function. And we continue to invest in R&D on the basis of our new product adds as well as improving our current product. G&A is really where the IP expense came in. That was a detailed $5.6 million, higher than what we’ve seen in prior quarters. That’s a result of the cadence of the lawsuit where we’re right now in Q1 and Q2, really at the heaviest expense as we prepare for and go to trial. So we’d expect that to moderate as we get towards the back of the year.

Operator: Your next question comes from the line of Robbie Marcus with JPMorgan.

Lilia-Celine Lozada: This is Lily on for Robbie. I was hoping you could talk a bit more about what you’re seeing so far in pediatric and neonate. I know it’s still early, but could you share a bit on the early feedback and utilization trends you’re seeing so far and how meaningful of a contributor it’s assumed to be in guidance for this year?

Xingjuan Chao: Yes. Overall, as I mentioned in the call, we see very positive momentum. We see the initial all the neonate pilot sites has committed to move to full execution. We are also seeing both in existing accounts as well as our new accounts showing strong interest in neonate expansion as well. So that could potentially drive both utilization as well as new account add. On the pediatric ER front, that case I shared during the call is not an outlier. This is a very vulnerable patient population when they go to ER, physicians often have to deal with the situation that they don’t get EEG and they cannot get EEG. So we see physicians and nurses see that opportunity for improvement. So overall, I would say the clinical validation has been very strong.

In terms of the second part of your question, how this implies to the revenue implication, it’s still very consistent with what we have been guiding because even getting to a new department or adding a patient population still can take months for new accounts can still take the same amount of effort and time line. So we would see some impact in 2026. We’ll see the much more meaningful impact would come in 2027 and beyond.

Lilia-Celine Lozada: Perfect. And then just a follow-up on gross margin. That came in really strong, above what we were thinking and above the range that you were guiding previously to for the full year. So can you talk a bit more about what drove the strength in the quarter and in the guidance? And how much of that, if any, is driven by tariff refunds?

Scott Blumberg: I’ll answer the back half of the question first. None of it is driven by tariff refunds. We have not reflected that in our financial statements and will if and when we get the refund. But it’s really driven by investments we made in mitigating costs last year. Those were things we did both as an ordinary course of business but also invested more as tariffs were coming down the pipe. So we were able to almost fully offset the cost of the increased tariffs from China. We also, as I mentioned, are now manufacturing in Vietnam. We have that inventory in-house. But based on our first in, first-out accounting, that hasn’t flown through our income statement yet. So as we move towards that towards the back of 2026, we’ve got some opportunity for upside as well.

Operator: Your next question comes from the line of Brandon Vazquez with William Blair.

Brandon Vazquez: First, I just wanted to stick on neonate for a second and just talk a little bit more — try to get more details on how things are going there. Jane, you had mentioned that the first — I think it was the first 5 accounts went from a pilot to a full launch. Talk to us a little bit about what did those accounts see that made them comfortable that you guys and the accounts could go to a full launch. What do you see in the early days once this goes into a full launch? And once you go into that broader commercial stage, is there any impact and pull-through on the seizure side as well?

Xingjuan Chao: Yes. For the new accounts, the pilot accounts conversion, often a couple of things we learned. One is the neonatologists or the neonate nurses. They are even more protective of their patients. So when they roll out new technology, they are very cautious and make sure the new technology does no harm it and it’s actually safe. So over the past couple of months, they all validate very strong safety, especially related to skin integrity of this patient population. They also validate the ease of use and some of them also validated the accuracy of Clarity. So with all that, that translates to the very strong clinical buy-in. On the health economic front, some of these sites are not Level 4. They can be Level 3. So they used to transfer patients out because they cannot get EEG.

And of course, they lose the reimbursement with the patient, and they were able to show that they could potentially use this to reduce those transfers. So that’s a very strong health economics driver in addition to the strong clinical driver, not to mention not having patients move. So it’s very encouraging that we are seeing early on our hypothesis of clinical and health economic drivers doing our market research translating into the reality that what we see in the commercial pilot. And now our goal is to also further implement and roll out our playbook. And the last thing I will mention is we also see that the pediatric epileptologists are very supportive because our montage is consistent with the ACNS guidelines, that’s the full montage.

And they are very encouraged to see that they can see the full picture as well and happy with the Clarity Assistant. So overall, we remain optimistic about the full launch.

Brandon Vazquez: Great. Maybe switching gears a little bit to the account add side. You guys had a great quarter there and a record quarter. I know you mentioned a couple of different buckets, but you guys have talked also about investing in some of these corporate focused teams, if that’s the right terminology for it, that kind of push demand from the top down. Maybe talk to us a little bit about what are the 1 or 2 most incremental drivers that are supporting that level of account adds and just to understand durability of that going forward.

Xingjuan Chao: Yes. So this model was built upon the success we saw last year. We noticed some of our very top TMs, they were able to close a much bigger number of accounts because they really focused on the system — regional hospital systems. So that’s why we decided to expand the proven success model. So what this team does was build a few folds. One is they would more focus on the hospital system level often administrators or the CMOs, the VP in charge of patient transfer, the CFOs and because the TM level, usually, they don’t get to the regional system level. And the second factor they can drive the business is they can coordinate across our TM as well as CAM organization. because even, say, a 10, 20 hospital system, some of them are our existing accounts.

So we have CAM responsible for it. Some of them are split across different territories. To have someone centralized and coordinated efforts is also a significant driver. And the third driver, I would say, this is the first time we are managing the regional system in a more sophisticated way. So internally, we are monitoring the pipeline movement. We are making sure the CAM and TM work closely together to also develop the pipelines for this hospital system close. It’s too early to report the actual result because this process takes longer. Regional system can take even a little bit longer than individual accounts. But from the early indicator, we are very optimistic.

Operator: Your next question comes from the line of Josh Jennings with TD Cowen.

Joshua Jennings: Congratulations on a nice start to the year. And I wanted to just ask on the utilization front. It seems like trends are continuing to get stronger. You put forward the systematic department expansion initiative last year, and you’re seeing — it seems like there’s been more and more improvement. A any quantitative or qualitative color — additional color you can provide just on this effort and how it’s impacting utilization at same-store accounts?

Xingjuan Chao: Yes. I can add more — probably more qualitative color to it. Overall, our strategy remains consistent. It is departmental expansion, physician and provider engagement across all shifts and also driving verticalization across different patient population. I would say the strong quarter, partially, as Scott mentioned, Q1 is the high seasonality, but we also believe that a significant portion is because of execution. And last year, we also significantly invested in building up a very strong regional director leadership team and build up the CAM team accordingly and strengthen our execution and playbook. I think we are seeing a lot of the effort we have put in and just seeing the team executing in an excellent way. So very proud of what we have accomplished, what the team has accomplished here.

Joshua Jennings: I also wanted to — I was hoping to better understand what you — Jane, you described as a potential synergy or not potential, but there could be and will be a synergistic interaction between the delirium and seizure indications. You got this Vanderbilt study going. Can you build out on how you expect results or even what’s in the current library of evidence, how once the delirium launch is in play, how it can also drive deeper penetration for the seizure indication?

Xingjuan Chao: Yes. Thank you, Josh. Clinically, delirium and seizure are heavily intertwined. If I maybe can use one example patient population to illustrate that. If you pick up sepsis patient with altered mental status, which is many of them, about 20%, 30% of these patients, if you monitor them with EEG, would have non-convulsive seizures. And then 40% to 50% of these patients would have delirium. But their symptom, if you don’t have EEG, it’s the same patient just altered mental status. And to make things even more complicated for the 20%, 30% seizure patients, about 40% of them later would have delirium. And for the delirium patients, if you monitor them the EEG, a good portion of them would later develop seizure. So that’s on from prevalence rate, some existing publication showed how intertwined they are.

Now when you go to the treatment, as many of us know, benzo is the first-line treatment for status epilepticus for the inpatient and often physicians use it empirically treat seizure. However, benzo is also the #1 deliriogenic agent. So if patients have delirium, you want to keep them away from benzo. And right now, without an objective tool, physicians again have to guess. So this is why as we show this clinical evidence and start connecting the dots for the physicians, the light bubble goes on. And for many physicians would wonder — I wonder how many of the delirium patients I’m treating actually have non-convulsive seizures. So that’s really the initial discussion that lead to the study that we are initiating with Vanderbilt.

Operator: Next question comes from the line of Bill Plovanic with Canaccord Genuity.

William Plovanic: I want to start out with the launch of delirium as you go into the pilot here, do you think that you’re going to be able to charge separately for delirium? Or do you think that this will be part of the offering that you’re measuring metrics and it just enables you to build your installed base and your defensive moat against other players? Just any general thoughts as you’re going into this? Is this going to be incremental revenue? Or is it just kind of help you continue to land, expand and really dominate the market?

Xingjuan Chao: Yes. Thanks, Bill. You’re pointing out 2 potential drivers underneath your question. One is we could charge more or separately for delirium so that could be a revenue driver. And the other driver is by offering delirium solution, even in existing accounts, we could drive more patient usage. So it is true both are potential drivers of launching delirium. At this point, we know that we have both options. We are not making the decision and are not ready to discuss how we’re going to price it yet. However, that’s exactly why we’re doing delirium pilot and just both to study the price elasticity or sensitivity as well as the potential impact of delirium on the number of patient expansion we could achieve. So we look forward to probably discuss more about the question you asked down the road as we are ready to launch delirium fully.

William Plovanic: Excellent. And then just I really want to come back to the guidance question. I mean it’s rare that you see a company beat by $600,000, $700,000 and then raise guidance by $1 million, especially after the first quarter. And so you’ve given us the reasons of the sales force gaining traction. But then the commentary on the seasonality in Q2 and Q3 has me a little confused. And I think the best way to ask it is, for a cadence standpoint, consensus is $27.2 million for the second quarter. Are you comfortable with that number? Or any thoughts or comments would be greatly appreciated.

Scott Blumberg: I think the comment on seasonality is nothing new. It’s more of a reminder. And I believe most of the Street has appropriately modeled the seasonal impact of Q4, Q1 being higher than Q2 and Q3. So I won’t comment specifically on the specific quarter of consensus other than that I think people understand the seasonality. And I would disconnect the two. The guidance, of course, is full year guidance, and we have very high confidence in the full year. We just want to make sure that people are appropriately thinking about the transition from Q1 to Q2, which has always been, and we expect to continue to be sequentially down in terms of usage per account. But of course, that’s offset by the growth initiatives we’re pursuing both in terms of new adds and the impact of the cans.

Operator: Your next question comes from the line of Marie Thibault with BTIG.

Marie Thibault: I wanted to circle back here on sales force productivity. You gave us some great stats, very encouraging that of your folks that have 12 months or more of tenure, over 85% have contributed to the account base, 100% of them have generated purchase orders. Just wanted to double check since that’s the first quarter that we’re getting these sorts of stats. Is this all pretty new once they hit that 12 months that they start to be able to contribute in this way because of the length of the cycle? And I guess it’s a long-winded way of asking how long does it take for a rep to kind of hit peak productivity in terms of tenure and maybe there’s not even a ceiling. Just any details on kind of where this could go from here?

Scott Blumberg: Yes. Sure, Marie. First, I want to make it clear that we don’t intend to introduce new reporting metrics here. We wanted to quantify something that we’ve talked about qualitatively for a while because we just got to the point where reps who’ve been a part of that expansion that we really started towards the end of Q3 2024, the beginning of Q4 are just getting to the phase. We generally have expected reps to generate their first new add at about 1 year. And that’s been consistent. We last expanded our sales or pretty broadly back in 2021. But of course, we’ve added reps along the way. And the math there is essentially 2 or 3 months to train the rep, 6 or so months to acquire a purchase order, 3 or 4 months to launch.

So that adds up to about a year. And throughout the course of the past 1.5 years since we started that expansion, we’ve been tracking the precursors to that, which, of course, is the CRM measurement of the activities that we know are associated with purchase orders. And we’ve now gotten to the point where we can actually translate that into tangible for you. So we thought we’d give you a little bit behind the curtains in terms of how that’s translating. And I do want to point out, it’s a relatively small group since we did that expansion over the course of a year, and it’s the first portion of those, but the rest are tracking as well. So that’s one of the things that gives us confidence in the ability to drive more growth this year than next year because we got than last year because we got a number of folks aging into productivity throughout the year.

Marie Thibault: All right. Great detail there, Scott. Just one quick follow-up for me, a clarification on seasonality. Of course, I understand utilization per account might be impacted by ICU census. But would we expect any impact to account adds? It seems to me that you’d be able to still be selling into these departments. Just want to clarify that.

Scott Blumberg: Yes. There’s no specific seasonality. We see there is a little bit of quarter-to-quarter lumpiness, and that may be increased down the road with the addition of the new regional health system function because they’ll get accounts in bigger chunks. So it’s not — there’s no consistent trend, but you can see that move up or down as long as the kind of direction is up and to the right. We saw that last year where I think Q2 was lower than Q1 and Q3 was much higher than Q1. It’s a little bit up and down, but the trend is that we’ll add more.

Operator: Your next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann.

Jeffrey Cohen: Firstly, could you talk about military hospitals and talk about the opportunity and TAM perhaps as it relates to the size and scope of the VA network?

Xingjuan Chao: Yes. The military hospitals in terms of number of hospitals, our understanding is more around 30 hospitals. So that’s significantly lower than 170 VA hospitals. it’s a very meaningful opportunity. And they have actually slightly different cybersecurity compared to VA. However, there’s more overlap between the cybersecurity. So we were able to leverage the success we had from VA and have both physicians and administrators support and use leverage the cybersecurity gain through FedRAMP hike as well as the success in VA to start this pilot. In terms of the clinical unmet needs, they face many similar challenges as VA, the under-resourced neurologist availability of neurologists being one of them and the EEG technicians as well. So for now, we focus on the military hospitals, and we are excited about the potential upside this can bring.

Jeffrey Cohen: Got it. That’s helpful. And could you talk a little bit further about your comment regarding CAT scans? Just curious on some of these pathways and triage monitoring as stroke and LVO patients are being looked at as far as CTs and MRIs.

Xingjuan Chao: Just to make sure I understand the question, you mean how our LVO monitoring algorithm would work in terms of being complementary to CT and MRI, other imaging tools.

Jeffrey Cohen: That’s right. And in practice, what might you envision be a protocol or standard of care.

Xingjuan Chao: Yes. We are, of course, still a little bit early to talk about the exact workflow. However, the way we see the value proposition of the product is we do not replace any CT or MRI as the gold standard of LVO detection. Where we see for the inpatient setting, the value proposition for our product is the continuous monitoring element so that we can potentially triage and detect LVO faster. And because for CT and MRI, you can’t just constantly send patients to CT and MRI, right? So if we can have a continuous monitor, we can say this patient have a very, very high likelihood to have large vessel occlusion, and that can potentially trigger a workflow to send the patient for CTA or MRIs as needed to confirm LVO. And so that could significantly shorten the delay of LVO detection. I hope that answers your question.

Operator: Your next question comes from the line of Jayson Bedford with Raymond James.

Jayson Bedford: Maybe just a couple here. I realize this may depend on — well, it will depend on hospital size, but utilization in VA hospitals compared to non-VA hospitals, how would you expect that to trend if it’s different at all?

Xingjuan Chao: We don’t disclose hospital system level utilization because even though we talked about VA as an opportunity mostly because of FedRAMP High that opened a large system. But externally, we just do not disclose specific system level utilization.

Jayson Bedford: Okay. Okay. In terms of just the $5.6 million in litigation expense in the quarter, Scott, is this peak spend — and just so I have it, is this relative to the $5.6 million is relative to about $1 million a quarter over the last few quarters? Do I have that correct?

Scott Blumberg: We were running at about $1 million to $2 million a quarter before. And as we kind of move through the year and you’ve got the comparison period and adjusted EBITDA, you’ll be able to track that. So Q1 was outsized. Q2 also will likely be higher. We’re right in the kind of peak part of the action with depositions and upcoming trials. So I’d expect Q2 to be elevated too, and then it will start to moderate as you move later into 2026.

Operator: There are no further questions at this time. I will now turn the call back over to Jane Chao, Co-Founder and Chief Executive Officer, for any closing remarks.

Xingjuan Chao: Well, thank you, everyone, for joining our call. I’m very proud of what we have accomplished as a team and very excited about what’s on the horizon and look forward to sharing more milestones in the coming quarters.

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

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