Ceribell (CBLL) delivered a modest beat in the third quarter. It reported a loss of $0.48 per share against a consensus of -$0.50, a 4.0% surprise, on revenue of $29.34 million, 0.7% above the $29.14 million estimate. Revenue grew 29.9% year over year, while earnings fell 29.7% as the loss deepened. The central tension is this: the operating story has rarely looked better, with record account additions, record utilization, a 90% gross margin and a fully launched delirium product. Yet top-line growth cooled and spending kept outpacing revenue. The stock entered the report up sharply on the strength of that story.
The quality of the beat deserves scrutiny. On a GAAP basis, the net loss widened to $21.4 million, or $0.55 per share, from $13.5 million, or $0.37 per share, a year earlier. Operating expenses rose 36% to $46.9 million, faster than revenue's roughly 30% gain. Sales and marketing climbed to $25.0 million and R&D jumped nearly 49% to $7.4 million. Stock-based compensation more than doubled to $7.1 million. Adjusted EBITDA loss widened to $12.1 million from $9.2 million a year ago and from $9.8 million in the second quarter. The gross line was genuinely strong. Gross margin reached 90% versus 88% last year, helped by manufacturing cost reductions and the new Vietnam line. Management held its outlook at the high 80s, up from the mid-80s it guided at the start of the year. The gap between that gross-margin strength and the widening operating loss is where bears have legitimate ammunition.
The deceleration is real but measured. Year-over-year growth slowed to about 30% from 33% in the second quarter, and sequential growth eased to 4% from 6%. Subscription revenue grew 28%, down from 30%, and the call noted that customer purchases lagged usage during the quarter. Beneath that, demand indicators strengthened. Ceribell added a record 35 net new accounts to reach 747, compared with 32 to 33 in each of the prior three quarters. Same-store utilization grew double digits, the highest since the IPO. Department expansion so far this year already exceeds all of 2025. The company also secured a new VA expansion commitment similar in size to last year's, though management noted VA accounts carry below-average utilization.
The guidance picture is better described as incremental than emphatic. Ceribell framed it as a raise to $115 million to $117 million, or roughly 29% to 31% growth. Technically, only the low end moved, up from $114 million, and the top end was unchanged, which effectively narrows the range. It is still the third consecutive upward revision this year, from an initial $111 million to $115 million. Notably, the guide excludes material contributions from neonate, pediatric or delirium products.
That exclusion matters because the forward catalysts are concentrated in 2027, which management called "pivotal" and an "inflection point." Delirium monitoring is now fully launched, and an NTAP of up to $2,171 per patient took effect October 1. However, delirium carries no incremental subscription fee, so monetization depends entirely on higher utilization. Management reported a material, durable uplift from the pilot but declined to quantify it, deferring detail to 2027 guidance. Broad conversion is expected to be gradual and to require training and recorder capacity. The Omni hardware platform enters limited release this quarter ahead of a 2027 full launch, and two new EEG algorithms received FDA clearance. On costs, litigation spending fell to $1.1 million from $5.6 million in the first quarter, and the refinancing should cut interest expense to under $1 million a year. Cash declined to $117.5 million from $129.3 million last quarter and $159.3 million at year-end. The new credit facility of up to $60 million in committed capital provides cushion, and a possible $2.9 million litigation-related payment remains a watch item.
The market had already moved ahead of the report. Shares closed at $26.96 before the release, up 34.7% from the $20.01 open following the August report and about 29.6% above the 200-day moving average. The stock sat just 4.4% below the 52-week high of $28.19 set October 29, near the top of an inter-earnings range that began at $18.65. Investor sentiment improved meaningfully, rising from -0.45 to -0.25, though it remains net negative. Earnings Whispers trend signals for price, sequential growth, momentum and AVWAP are largely positive. Together, these indicate a stock that has rallied despite lingering skepticism, which leaves less room for an incremental quarter to surprise.
The bottom line is that Ceribell's core seizure business is executing well, with record account adds, record utilization and best-in-class gross margins. Delirium and Omni give the story credible 2027 upside. However, slowing revenue growth, a low-end-only guidance raise, an unquantified delirium monetization path and losses that continue to widen faster than sales make this a steady quarter rather than a decisive one. With shares near their highs, the burden now shifts to 2027 guidance to show that utilization gains translate into operating leverage.