Q4 2024 CeriBell Inc Earnings Call
Operator: Good afternoon, and thank you all for participating in today's call.
Good afternoon, and thank you all for participating in today's call joining me from Sarah Bell, Our Jane Hsiao co founder and Chief Executive Officer, and Scott <unk>, Chief Financial Officer earlier today, <unk> issued a press release announcing financial results for the quarter and year ended December 31, 2020 for a copy of the press release is available on the Investor Relations section of the Companys web.
Operator: Joining me from CeriBell are Jane Chao, co-founder and chief executive officer, and Scott Holmberg, chief financial officer.
Operator: Earlier today, CeriBell issued a press release announcing financial results for the quarter and year ended December 31st, 2024. A copy of the press release is available on the investor relations section of the company's website.
Operator: Before we begin, I'd like to remind you that management will make statements 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.
Before we begin I would like to remind you that management will make statements. 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 995.
Fitments 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.
Operator: 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 quarterly report on Form 10-Q, filed with the SEC on November 12, 2024.
Certainties associated with our business. Please refer to the risk factors section of our <unk>.
Public filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q filed with the SEC on November 12, 2020 for this conference call contains time sensitive information and is accurate only as of the live broadcast today February 25, 2025, cerebral disclaims any intention or obligation except as required by law to update or revise any.
Operator: This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 25, 2025.
Operator: 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.
Financial projections or forward looking statements, whether because of new information future events or otherwise.
Jane Chao: And with that, I'll turn the call over to James. Thanks, Brian. Good afternoon and thank you all for joining us today on our fourth quarter and full year 2024 earnings call.
I'll turn the call over to Jane.
Jane: Thanks, Brian.
Jane: Good afternoon, and thank you all for joining us today on our fourth quarter and full year 2024 earnings call.
Jane Chao: Today, I share key highlights of our first quarter results and our outlook and strategic priorities for 2025.
Jane: Today I'll share key highlights.
Jane: Our fourth quarter results.
Jane: And our outlook and strategic priorities for 2025.
Scott Holmberg: Scott will then provide a more detailed analysis of our financial performance and discuss our full year 2025 guidance.
Jane: Scott will then provide a more detailed analysis of our financial performance and discuss our full year 2025 guidance.
Jane Chao: 2024 was a transformational year for CeriBell. I am incredibly proud of our team's many accomplishments. We made significant strides in driving commercial growth and laying the foundation for our R&D pipeline. while beginning our journey as a public company.
Sandra Bell: 2024 was a transformational year for Sandra Bell.
Sandra Bell: Im incredibly proud of our team's many accomplishments.
Sandra Bell: We made significant strides in driving commercial growth.
Sandra Bell: And laying the foundation for our R&D pipeline.
Sandra Bell: While beginning of our journey as a public company.
Jane Chao: Most importantly, we made a life-changing impact on tens of thousands of patients, their caregivers, and their families. To that end, I'm pleased to report that our technology has been now used on over 200,000 patients since we first launched. For Perspectives, this likely translates to thousands of saved lives. Tens of thousands of patients who avoided unnecessary medication and intubation and potentially hundreds of thousands of unnecessary ICU days avoided.
Sandra Bell: Most importantly, we make our life changing impact on tens of thousands of patients.
Sandra Bell: Caregivers and their families.
Sandra Bell: To that end I'm pleased to report that our technology has been now used on over 200000 patients.
Sandra Bell: We first launched.
Sandra Bell: <unk>.
Sandra Bell: For perspective, this likely translates to.
Sandra Bell: <unk> saved lives.
Sandra Bell: Tens of thousands of patients who avoided unnecessary medication and incubation.
Sandra Bell: And potentially hundreds of thousands of unnecessary ICU days avoided.
Jane Chao: Before reviewing our performance and expectations for 2025 in greater detail, I would like to take a moment to share a recent patient story that I feel perfectly illustrates the real-world impact of our mission. In this case, the 64-year-old woman arrived in emergency department of a local hospital. who was unable to follow commands and had difficulty speaking. Procure team suspected a stroke and immediately ordered a CT, which came back negative. The stroke-mimic patient was awake but continued to suffer from a variety of symptoms, including a fascia, facial droop, and mouth twitching that suggested ongoing neurological abnormalities.
Speaker Change: Before reviewing our performance and expectations for 2025 in greater detail I would like to take a moment to share a recent patient story that ICL perfectly illustrates the outward impact Mitch.
In this case, the 64 year old woman arrived in emergency Department of a local hospital.
Speaker Change: Unable to follow comments and as difficulty speaking.
Speaker Change: So Cherokee suspect status jokes and immediately ordered.
Speaker Change: Which came back negative.
Speaker Change: Stroke patients once a week, but continued to suffer from a variety of symptoms.
Speaker Change: Asia.
Speaker Change: And most recently that suggested ongoing neurological abnormalities.
Jane Chao: Her care team then applied a CeriBell system to evaluate for seizure activity, which quickly showed a 100% seizure burden, indicating non-compulsive status epilepticus. Empowered by this information, the care team was able to promptly and confidently administer anti-seizure medication, which resolved the seizure in under an hour. The patient was then transferred to the ICU, where CeriBell was used for continuous EEG monitoring, during which time the patient remained seizure-free. Within 24 hours, the patient was stabilized and discharged from the hospital. Without CeriBell, this outcome likely would not have been possible. The patient may have remained in seizure much longer, potentially resulting in a poor clinical outcome and much longer length of stay in ICU.
Speaker Change: Our account team that applied Sandra Bell system to evaluate for seizure activity, which quickly filled.
Speaker Change: 100% seizure burden, indicating nonconvulsive status epilepticus.
Speaker Change: Empowered to find this information the Cara team was able to promptly and confidentially.
Speaker Change: Mr Anti seizure medication.
Speaker Change: Zelle because the seizure.
Speaker Change: Sure.
Speaker Change: The patient was then transferred to the ICU, whereas Sandra Bell was used for continuous EEG monitoring during which time the patient remained C. Jeffrey.
Speaker Change: In 24 hours.
Speaker Change: The patient was stabilized and discharged from the hospital.
Speaker Change: We don't sell rebel this outcome Nike would know that being possible.
Speaker Change: The patient may have remaining seizure much longer potentially resulting in a poor clinical outcome and much longer length of stay in ICU.
Jane Chao: Further, this case validates findings from a recent study supporting the use of CeriBell EEG for identification of seizures in patients with stroke symptoms. In this study, a third of stroke-mimic patients were found having seizure or high eclectiform abnormality, and CeriBell was found to be a critical tool in detecting non-convulsive seizures in stroke evaluation. This experience is just one of many thousands like it.
Speaker Change: Further this case validate findings from a recent study supporting the use of shared about EEG for identification of seizures in patients with <unk> in this study the third of stroke mimic patients.
Speaker Change: <unk>, having seizure or I could ask just one abnormality and Sarah Bell was found to be a critical tool in detecting nonconvulsive seizures and sugar evaluations.
Speaker Change: This experience is just one of many thousands like it the impact we have on patient care everyday is a core driver of the passion, we have for <unk> mission to optimize the standard of care.
Jane Chao: The impact we have on patient care every day is a core driver of the passion we have for our mission to optimize the standard of care.
Jane Chao: With that, let me shift to our fourth quarter and full year results. I'm pleased to report that the revenue for the fourth quarter of 2024 was $18.5 million. reflecting 41% growth over the same period last year. For the full year, the revenue totaled $65.4 million. representing 45% growth over 2023. In both the fourth quarter and full year 2024, we maintained a strong margin profile. with a growth margin of 88% and 87% respectively.
With that let me shift to our first quarter and full year results.
Speaker Change: I am pleased to report that our revenue for the fourth quarter of 2024 was $18 $5 million.
Speaker Change: Reflecting 41% growth over the same period last year.
For the full year revenue totaled 65.4 million.
Speaker Change: Resenting, 45% growth over 2020.
Speaker Change: In both the fourth quarter and full year 2024, we maintained a strong margin profile.
Speaker Change: With a gross margin of 88% and 87% respectively.
Jane Chao: Our strong first quarter and four-year performance was driven by our team's continued success in acquiring and efficiently launching new accounts, while also driving utilization across our established account base. Turning to our commercial performance, our active account sat at 529 accounts as of December 31st. an increase of 25 during the first quarter. For perspective, we estimated that there are 6,000 acute care facilities in the U.S. that could benefit from our offering. We intend to continue targeting the approximately 5,500 remaining prospective accounts through the efforts of our growing and increasingly tenured team of territory managers, while driving penetration within existing accounts through our team of clinical account managers.
Speaker Change: Our strong fourth quarter and full year performance was driven by our team's continued success in Macquarie and efficiently launching new accounts.
Speaker Change: Also driving utilization across our established account base.
Speaker Change: Turning to our commercial performance Alright active account set at 529 accounts as of December 31.
Speaker Change: The increase up 25 during the first quarter for.
Speaker Change: For perspective, we estimate that there are 6000 acute care facilities in the U S that could benefit from our offering.
Speaker Change: To continue targeting the approximately 5500 remaining prospective accounts through the efforts of our growing and increasingly tenured team of territory managers, while driving penetration.
Speaker Change: <unk> existing accounts through our team of clinical account managers.
Jane Chao: Meanwhile, we continue to leverage both sales functions to facilitate high-quality account launch process. Based on our experience, we believe that this approach to launches enable durable, long-term utilization.
Speaker Change: While we continue to leverage both sales function to facilitate high quality account launch processes.
Speaker Change: Based on our experience we believe that this approach to launches enable durable long term utilization.
Jane Chao: We saw this strategy in action during a recent account launch, where our territory and clinical account managers worked closely on the ground to educate clinicians on the use case and the benefits of the CeriBell For more information, visit www.cdc.gov. Moments after our team left, the CeriBell system alerted 80% seizure burden detected for the very first patient who was monitored during the launch period. The neurologist was immediately consulted and the patient was quickly treated. Polarity then continuously monitored the patient to assess the treatment effectiveness. This was a breakthrough for the entire care team and the hospital's administrators.
Speaker Change: We saw this strategy in action during a recent account launch where our territory and clinical account managers worked closely on the ground to educate clinicians on the use case and the benefits of this Arab health system.
Speaker Change: <unk>.
Speaker Change: Archie left this Airbus system alerted the 80% seizure burden detectors or the very first patient was monitored during the launch period.
Speaker Change: The neurologist was immediately consulted and the patient was quickly treated.
Speaker Change: Clarity then continuously monitor patients to assess the treatment effectiveness.
Speaker Change: This was a breakthrough for the entire care team and hospital administrators.
Jane Chao: A-ha moments like this reinforce the value of the CeriBell system and highlight the major care gap that existed before the adoption of our technology. often resulting in durable, sustained clinical usage patterns.
Speaker Change: Ha moments like this reinforced the value of this arabel system and highlight the major care gap that existed before the adoption of our technology.
Speaker Change: Often resulting in durable sustained clinical usage patterns.
Jane Chao: At a high level, our commercial strategy for 2025 is to maintain our key areas of focus and build upon our success in 2024.
Speaker Change: At a high level of our commercial strategy for 2025 is to maintain our key areas of focus.
Speaker Change: And build upon our success in 2024.
Jane Chao: We will also continue to invest in and expand our commercial organization, led by Sean Manning, who we are promoting to Chief Revenue Officer. We are currently on track to our goal of expanding our account acquisition team to 55 territory managers by mid-2025. We expect this expansion will begin impacting our rate of account acquisition growth in 2026. Meanwhile, we intend to continue building on our efforts to expand awareness around the clear clinical and economic benefits of rapid EEG monitoring for seizure detection in acute care settings. We will work to expand awareness around the unique features and capabilities of CeriBell platform solution to further cement our position as the category leader.
Speaker Change: We will also continue to invest and expand our commercial organization led by showing Manny we are promoting to chief revenue officer.
Speaker Change: We are currently on track to our goal of expanding our account acquisition team to a 55 territory managers by mid 2025, we expect this expansion will begin impacting all of our <unk> acquisition growth in 2026.
Speaker Change: Meanwhile, we intend to continue building on our efforts to expand awareness around the clear clinical and economic benefits of rapid EEG monitoring for seizure detection in the acute care setting.
Speaker Change: We will work to expand awareness around the unique features and capabilities all sorry about platform solution to further cement our position as the category leader.
Jane Chao: As we look forward, we also intend to continue investing in optimizing algorithm performance and user experience of existing products while expanding the indication beyond feature.
Speaker Change: As we look forward. We also intend to continue investing in optimizing algorithm performance and user experience of existing products, while expanding indications beyond seizure.
Jane Chao: We envision our pipeline across three horizons. Currently, we are focused on becoming the standard of care for seizure management in acute care settings. In the near term, we expect to have clarity indications expanded to include pediatric patients, following our submission of a 510K application with FDA in late 2024. We are also working this year to finalize the development and testing of our Neonate Clarity Algorithm ahead of the submission of a separate 510k application in 2026. On the second horizon, our medium-term goal is to make EEG a new vital sign. Though EEG has historically been limited to the identification of seizures in clinical practice, EEG has been scientifically demonstrated to aid in the detections of a wide variety of other neurological conditions.
Speaker Change: We envision our pipeline the cross three horizons.
Speaker Change: Currently we are focused on becoming the standard of care with senior management in the acute care setting.
Speaker Change: In the near term, we expect to have clarity indication expanded to include pediatric patients.
Speaker Change: Following our submission above 500, 10-K application with FDA in late 2024.
Speaker Change: We're also working this year to finalize the development and testing of our Aneel need clarity algorithm.
Speaker Change: After submission of a separate five 10-K application in 2026.
On the second horizon of our medium term goal is to make <unk>, a new vital assai.
Speaker Change: The AEG has historically been limited to the identification of seizures in clinical practice.
Speaker Change: GE has been scientifically demonstrated to aid in the detection of a wide variety of other neurological conditions.
Jane Chao: We intend to leverage our scalable proprietary platform and AI capabilities to develop algorithms to address unmet needs across many of these critical conditions, which are common in the acute care setting. Importantly, we believe we will be able to target these novel patient populations within our existing call points largely by leveraging our existing sales force. We expect that the first such indication will be for detection and monitoring of delirium, for which we have already received breakthrough device designation from the FDA. We are now actively preparing to submit the application to FDA later this year. This is a market where there is no commercially available diagnostic device despite delirium impacting 20 to 50 percent of non-mechanically ventilated patients and 60 to 80 percent mechanically ventilated patients in the ICU.
Speaker Change: <unk> to leverage our scalable proprietary platform and AI capabilities to develop algorithms to address unmet needs across many of these critical conditions, which are common in the acute care setting.
Speaker Change: Importantly, we believe we will be able to target. These novel patient populations within our existing call points largely by leveraging our existing sales force.
Speaker Change: We expect that the first indication will be for detection and monitoring update area.
Speaker Change: Four we have already received breakthrough device designation from the FDA.
Speaker Change: We are now actively preparing to submit the application to FDA later this year.
Speaker Change: This is a market where there is no commercially available diagnostic device, despite januvia impacting 20% to 50% of known.
Nicola: Nicola ventilated patients.
Nicola: And 60% to 80% mechanically ventilated patients in the ICU.
Jane Chao: The occurrence of delirium during a patient's ICU stay can lead to severe long-term morbidity and is correlated with significantly worse outcomes. Following anticipated FDA approval, we believe our novel algorithm will present a paradigm shift in how delirium is managed and ultimately improve patient care.
Nicola: The occurrence update around doing patients ICU stay can lead to severe long term morbidity and is correlated to be significantly worse outcome.
Nicola: Following anticipated FDA approval, we believe our novel algorithm will present, a paradigm shift in how delivery is managed and ultimately improve patient care.
Jane Chao: Meanwhile, we have recently accelerated our investment in the development of a stroke detection algorithm. We have collected data on over 200 patients and companies. This data will help us to further refine our algorithm and inform our regulatory strategy.
Nicola: Meanwhile, we have recently accelerated our investment in the development of a stroke detection algorithm, we have collected data on over 200 patients and company.
Nicola: This data will help us to further refine our algorithm and inform our regulatory strategy.
Jane Chao: As part of our longer-range third horizon, we aim to develop solutions for use beyond the acute care setting. Scientific publications have shown that EEG may be a biomarker for multiple neurological and psychiatric conditions, such as depression, OCD, ADHD, and dementia. Our platform technology, which makes EEG simple enough to acquire outside the acute care setting, along with our expertise in machine learning, uniquely positions us to pursue potential products that target this very large patient population. We are very excited about our extensive pipeline and will continue strategically invest across these exciting initiatives to drive future growth. Meanwhile, we remain laser-focused on the substantial growth opportunity we have within our current $2 billion market in the U.S.
Nicola: As part of our longer range third horizon, we aim to develop solutions for use beyond the acute care setting. Thank.
Nicola: Scientific publications have shown that <unk> may be a biomarker for a multiple neurological and psychiatric conditions, such as depression, OCD ADHD and dementia.
Nicola: Our platform technology, which makes the same point out to acquire outside the acute care setting along with our expertise in machine learning.
Nicola: <unk> positions us to pursue potential carve outs that target this very large patient populations.
Nicola: We are very excited about our extensive pipeline and will continue to strategically invest across these exciting initiatives to drive future growth. Meanwhile, we remain laser focused on the substantial growth opportunity we have within our current $2 billion market.
Jane Chao: for the detection and the management of seizure in acute care settings.
Nicola: The U S for the detection and management of seizure in acute care setting.
Jane Chao: Overall, we are very excited by our progress to date and view 2025 as a catalyst heavy year for CeriBell. To summarize, in the coming quarters we plan to invest in our commercial organization to drive adoption of the CeriBell system for seizure detection in both new and existing accounts. continue to drive awareness of seizures in the acute care setting by maintaining a leading presence in generating clinical and economic evidence. And finally, make further strides in expanding our market through our investments in R&D.
Nicola: Overall, we are very excited by our progress to date and view 2025, as a catalyst heavy year for Teradata.
Nicola: To summarize in the coming quarters, we plan to.
Nicola: Invest in our commercial organization to drive adoption of the <unk> system for seizure detection in both new and existing accounts.
Nicola: Continue to drive awareness of seizures in the acute care setting by maintaining our leading presence in generating clinical and economic evidence.
Nicola: And finally further strides in expanding our market through our investment in R&D.
Scott Holmberg: With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of our fourth quarter results and 2025 guidance. Thank you, Jane, and good afternoon, everyone. As Jane mentioned, total revenue for the fourth quarter was $18.5 million, a 41% increase from $13.1 million in the same period of the prior year. The increase was primarily driven by continued commercial expansion, resulting in increased adoption of the CeriBell system across new and existing accounts. Product revenue for the fourth quarter of 2024 was $14.1 million, representing an increase of 41% from $10.0 million in the fourth quarter of 2026.
Nicola: With that I will now turn the call over to Scott Blumberg, our CFO to provide a review of our fourth quarter results and 2025 guidance.
Scott Blumberg: Thank you Jamie and good afternoon, everyone.
Speaker Change: Zane mentioned total revenue for the fourth quarter was $18 5 million or 41% increase from $13 1 million in the same period of the prior year.
Speaker Change: The increase was primarily driven by continued commercial expansion, resulting in increased adoption with turbo system across new and existing hotels.
Speaker Change: Product revenue for the fourth quarter of 2024 was $14 1 million representing.
Speaker Change: Representing an increase of 41% from $10.1 million in the fourth quarter of 2023.
Scott Holmberg: The subscription revenue for the fourth quarter of 2024 was $4.4 million, representing an increase of 40% from $3.1 million in the fourth quarter of 2023. Overall, we were pleased with continued growth in active accounts and headband purchasing trends in Q4. New account launches were slightly ahead of expectations, despite our strategy to avoid launches in the final weeks of the year, and we saw a normalization of headband purchasing patterns relative to usage following an unusually strong Q3. For the full year 2024, total revenue was $65.4 million, representing a 45% growth over 2023. Product revenue for the full year of 2024 was $50.1 million, an increase of 45% over 2023.
Speaker Change: Subscription revenue for the fourth quarter of 2024 was $4 4 million.
Speaker Change: Representing an increase of 40% from $3 1 million in the fourth quarter of 2023.
Speaker Change: Overall, we were pleased with continued growth in active accounts and have been purchasing trends in Q4.
Speaker Change: <unk> losses were slightly ahead of expectations. Despite our strategy to avoid losses in the final weeks of the year and we saw a normalization of had been purchasing patterns relative to use this following an unusually strong Q3.
Speaker Change: For the full year 2024, total revenue was $65 4 million.
Speaker Change: Representing a 45% growth over 2023.
Speaker Change: Product revenue for the full year 2024 was $50 1 million and.
Speaker Change: An increase of 45% over 2023.
Scott Holmberg: And subscription revenue was $15.4 million, an increase of 44% over 2023. Gross margin for the fourth quarter of 2024 was 88% compared to 85% in the prior year period, reflecting continuation of our strategy of using automation to improve manufacturing efficiency and volume-based leverage of manufacturing overhead. For the full year, gross margin was 87% compared to 84% in 2020. Total operating expenses for the fourth quarter of 2024 were $29.1 million, an increase of 49% compared to $19.5 million in the fourth quarter of 2022. Non-cash, stock-based compensation expense was $2.2 million in the fourth quarter of 2024.
Speaker Change: <unk> revenue was $15 $4 million, an increase of 44% over 2023.
Speaker Change: Gross margin for the fourth quarter of 2024 was 88% compared to 85% in the prior year period, reflecting the continuation of our strategy of using automation to improve manufacturing efficiencies and volume base leveraging manufacturing overhead.
Speaker Change: For the full year gross margin was 87% compared to 84% in 2023.
Speaker Change: Total operating expenses for the fourth quarter of 2024, or $29 1 million, an increase of 49% compared to $19 $5 million in the fourth quarter of 2023.
Non cash stock based compensation expense was $2 $2 million in the fourth quarter of 2024.
Scott Holmberg: Total operating expenses in the full year 2024 were $96.5 million, compared to $68.2 million in the full year 2023, representing an increase of 41%.
Speaker Change: Total operating expenses in the full year 2024 were $96 5 million compared to $68 $2 million in the full year 2023, representing an increase of 41%.
Scott Holmberg: Full year 2024 operating expenses included $5.4 million of non-cash stock-based common The increase in operating expenses in the fourth quarter and full year of 2024 was primarily attributable to investments in the company's commercial organization, increased headcounts to support the growth of the business, and legal, accounting, and professional service fees related to transitioning to and operating as a public company. Net loss was $12.6 million for the fourth quarter of 2024, or a loss of $0.40 per share, compared to a loss of $8.3 million, or a loss of $1.53 per share in the fourth quarter of 2024.
Speaker Change: Full year 2024 operating expenses included $5 4 million of noncash stock based compensation.
Speaker Change: The increase in operating expenses in the fourth quarter and full year 2024 was primarily attributable to investments in the company's commercial organization increased headcount to support the growth of the business and legal accounting and professional service fees related to operating as a public company.
Speaker Change: Net loss was $12 $6 million for the fourth quarter of 2024 or a loss of <unk> 40 per share compared to a loss of $8 3 million or a loss of $1 53 per share in the fourth quarter of 2023.
Scott Holmberg: An average weighted share count of 31.2 million shares was used to determine loss per share in the fourth quarter of 2024 and includes shares issued in connection with our October ICO. Net loss for the full year of 2024 was $40.5 million, or a loss of $3.39 per share, compared to a loss of $29.5 million, or a loss of $5.56 per share in 2024.
Speaker Change: And average weighted share count of $31 2 million shares was used as a from a loss per share in the fourth quarter of 2024 and include shares issued in connection with our October IPO.
Speaker Change: Net loss for the full year 2024 was $40 5 million or a loss of $3 39 per share compared to a loss of $29 5 million or a loss of $5.56 per share in 2023.
Scott Holmberg: Our cash and cash equivalents as of December 31, 2021 was $194.4 million, which included net proceeds of approximately $188 million from our October ICO.
Speaker Change: Our cash and cash equivalents as of December 31, 2021 was $194 4 million, which included net proceeds of approximately $188 million.
Speaker Change: From October IPO.
Scott Holmberg: Turning out our Outlook for 2025. We expect full year 2025 total revenue to be in the range of 81 to 85 million dollars, representing annual growth of 24 to 30 percent over 2024. As we look ahead, we expect to drive operating efficiencies where possible, and for gross margins to normalize to and remain in the mid to high 80% range.
Speaker Change: Turning now to our outlook for 2025.
Speaker Change: We expect full year 2025, total revenue to be in the range of $81 million to $85 million.
Speaker Change: Presenting annual growth of 24% to 30% over 2024.
Speaker Change: As we look ahead, we expect to drive operating efficiencies, where possible and for gross margins to normalize to and remain in the mid to high performers.
Scott Holmberg: This accounts for the current 35% tariff on materials sourced from China, which was up from 25% in 2024. We do not malign Mexico or Canada for any material portion of our supply chain and 100% of our commercialization is in the U.S.
Speaker Change: This accounts for the current 35% tariff on material sourced from China, which was up from 25% in 2024.
Sure.
Speaker Change: We did not have a line that's for Canada for any material portion of our supply chain and a 100% of our commercialization in the U S.
Scott Holmberg: Regarding operating expenses, we expect to utilize proceeds from our significantly upsized IPO to strategically invest in initiatives designed to enable durable, long-range growth. More specifically, we expect to accelerate hiring plans for key RE talent and make greater investments across our pipeline to facilitate CAM expansion. As Jane mentioned, we have a wealth of opportunities to expand the utility of the Parallel Platform. With additional engineering and data science talent, we hope to pursue some of these opportunities in parallel rather than sequentially.
Speaker Change: Regarding operating expenses, we expect to utilize proceeds from our significantly upsized IPO to strategically invest in initiatives designed to enable durable long range growth.
Speaker Change: More specifically, we expect to accelerate hiring plans for key R&D talent to make greater investments across our pipelines us facilitate tam expansion.
Speaker Change: As Jay mentioned, we have a wealth of opportunities to expand the utility of the turbo platform with.
Speaker Change: With additional engineering and data science talent, we hope to pursue some of these opportunities in parallel rather than sequentially. It.
Scott Holmberg: It should be noted that while we expect these accelerated initiatives to have long-term impacts, they are unlikely to meaningfully drive revenue in the near term. As for investment in our commercial infrastructure, we remain focused on achieving our previously communicated goal to reach 55 territory managers by the end of Q2. We will be continually reviewing our commercial opportunities and tracking core metrics to evaluate additional investments in commercial infrastructure that can accelerate growth. We feel fortunate to be able to explore these opportunities to invest in CeriBell's future as a result of our highly successful upsized IPO.
Speaker Change: It should be noted that while we expect these accelerated initiatives to have long term and that they are unlikely to meaningfully drive revenue in the near term.
Speaker Change: As for investment in our commercial infrastructure, we remain focused on achieving our previously communicated goal to reach 55 territory managers by the end of Q2.
Speaker Change: We will be continually reviewing our commercial opportunities and tracking core metrics to evaluate additional investments in commercial infrastructure that can accelerate growth.
Speaker Change: We feel fortunate to be able to explore these opportunities to invest in <unk> future as a result of our highly successful upsized IPO, we remain committed to our goal of achieving cash flow breakeven with cash on hand, and the strength of our balance sheet gives us a high degree of confidence that we can achieve this.
Scott Holmberg: We remain committed to our goal of achieving cash flow break-even with cash on hand, and the strength of our balance sheet gives us a high degree of confidence that we can achieve that. Finally, the transition to operating as a public company has increased the cost of stock-based competition given standard public company competition frameworks and the valuation of the company. We expect stock-based competition to contribute approximately $15 million to operating expenses for the full year 2025. Overall, we remain encouraged by our fourth quarter performance, our strong margin profile, and the underlying unmet need and demand for our platform.
Speaker Change: Finally, the transition to operating as a public company has increased the cost of stock based compensation given standard public company compensation framework from the valuation of the company.
Speaker Change: We expect stock based compensation to contribute approximately $15 million to operating expenses for the full year 2025.
Speaker Change: Overall, we remain encouraged by our fourth quarter performance, our strong margin profile and the underlying unmet need and demand for our platform.
Scott Holmberg: We also see our account backlog is stronger than ever and believe we have significant runway for long-range growth.
Speaker Change: We also see our account backlog is stronger than ever and believe we have significant runway for long range growth.
Jane Chao: With that, I'll turn the call back to James.
Speaker Change: That I will turn the call back to Jane.
Jane Chao: Thank you, Scott. In closing, 2024 represented a monumental year for CeriBell. Thanks to the effort from our entire team and the support of our customers and our shareholders, we are exceptionally well positioned to continue our success through 2025 and beyond.
Jane: Thank you Scott.
Jane: In closing 2024 represented a monumental year for Taro Bell, thanks to the effort from our entire team and the support of our customers and our shareholders. We're exceptionally well positioned to continue our success through 2025 and beyond.
Jane Chao: We appreciate your support and continued interest in CeriBell. And we look forward to providing you with updates on our progress in the quarters to come.
Jane: We appreciate your support and continued interest in <unk>.
Jane: And we look forward to providing you with updates on our progress in the quarters to come.
Operator: I'll now turn the call over to the operator for any Q&A. Operator? Thank you.
Jane: I will now turn the call over to the operator for any Q&A operator.
Jane: Thank you we will now begin the question and answer session.
Operator: 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.
Speaker Change: Dan I would like to ask a question. Please press star one on your telephone keypad raise your hand and joined the queue I would like to withdraw your question simply press Star one again.
Operator: If you would like to withdraw your question, simply press star 1 again.
Stephanie Piazzola: Our first question comes from the line of Travis T. from Bank of America. Please go ahead.
Speaker Change: Our first question comes from the line of drivers Steve from Bank of America. Please.
Speaker Change: Go ahead.
Stephanie Piazzola: Hi, this is Stephanie Piazzola on for Travis. Thanks for taking the question, and congrats on a good quarter. I was hoping you could elaborate a little bit more on the guidance, on what's underlying the guidance range for this year and some of the different assumptions for the building blocks, like account ads, utilization, and pricing. And then if there's anything we should keep in mind from a quarterly cadence perspective or Q1 in particular.
Stephanie Ola: Hi, This is Stephanie appears Ola on for Travis Thanks for taking the question and congrats on a good quarter.
Speaker Change: I was hoping you could elaborate a little bit more on the guidance.
Speaker Change: On what's underlying the guidance range for this year and some of the different assumptions for the building blocks like account add utilization and pricing and then if there's anything we should keep in mind from a quarterly cadence perspective or Q1 in particular.
Scott Holmberg: Hi, Stephanie. Thank you for the question. As far as our guidance goes, as we've talked about in the past, we started investing in our sales infrastructure in Q3 and are continuing to invest through mid-2025. This is really going to result in acceleration of growth in 2026 and beyond, so we expect 2025 to look reasonably consistent with 2024 in terms of growth. I'll also point out that we appreciate, as a newly public company, the importance of hitting your guidance. We've applied an appropriate level of conservatism to our guidance in issuing it. As far as trends go, we don't have year-end seasonality like a lot of elective procedures.
Speaker Change: Yes, Hi, Stephanie Thank you for the question.
Speaker Change: As far as our guidance goes as we've talked about in the past.
Speaker Change: We started investing in our sales infrastructure in Q3 and are continuing to invest through mid 2025. This is really going to result in accelerated growth and acceleration of growth in 2026 and beyond so we expect 2025 to look reasonably consistent with that with $1 24 in terms of growth I'll also point out that we appreciate as a newly public company of the <unk>.
Speaker Change: <unk> of hitting your guidance is so and so.
Speaker Change: Applied an appropriate level of conservatism to our guidance an issue here.
Speaker Change: As far as the trends go we don't have year end seasonality like a lot of electric procedures, we do tend to see a little bit of additional volume in Q4 and Q1.
Scott Holmberg: We do tend to see a little bit of additional volume in Q4 and Q1 in the winter months, reflective of an ICU census. It's a little higher than the summer months. Thank you.
Speaker Change: The winter months reflective of an ICU census, its a little higher than the summer months.
Speaker Change: Okay.
Speaker Change: Thank you and then maybe just one follow up you mentioned that the 25 account ads you saw in the quarter were ahead of your expectations. So maybe if you could just speak to the strength of those adds in Q4 and some of the traction that you're getting there.
Scott Holmberg: And then maybe just one follow-up. You mentioned that the 25 account ads you saw in the quarter were ahead of your expectations. So maybe if you could just speak to the strength of those ads in Q4 and some of the traction that you're getting there. And then maybe how we should think about Q1, since I think you typically would see, you know, some delayed account ads in Q4 come through in Q1. So just how we should think about that, given the strength this quarter. Thank you.
Speaker Change: And then maybe how we should think about Q1 since I think you typically would see.
Speaker Change: Some delayed account adds in Q4 come through in Q1. So just how we should think about that given the strength this quarter. Thank you.
Scott Holmberg: Sure, yeah, we were fairly upfront with our sales team and our customers about why we shut down account launches in mid-December. We did do that. The strength of the quarter is really a reflection of good planning and ensuring that customers were aware that they needed to launch early enough if they wanted to launch a Q4. So as you look to Q1, really some of those launches that would have happened in Q1 we were able to pull forward because of the excellent planning. So Q4 should be roughly an approximation of how we're looking at Q1.
Speaker Change: Sure. Yes, we were we were fairly upfront with our sales team and our customers about why we shut down account launches in mid December we did do that.
Speaker Change: The strength of the quarter is really a reflection of good planning and ensuring that customers were aware that they need to launch.
Speaker Change: Early enough if they wanted to launch in Q4, so as you look to Q1.
Speaker Change: Really some of those launches that would've happened in Q1, we were able to pull forward because of the excellent planning. So Q4 should be roughly an approximation of how we're looking at Q1.
Robbie Marcus: Our next question comes from the line of Robbie Marcus from J.P. Morgan. Please go ahead.
Robbie Marcus: Our next question comes from the line of Robbie Marcus from Jpmorgan. Please go ahead.
Scott Holmberg: Oh great, congratulations on a good first quarter as a public company and thanks for taking the question. Um... I wanted to ask on the P&L and the profitability, gross margin. Came in a good deal better than expected, first the guidance you gave on the third quarter call, and what are your thoughts? for both gross margin and OPEX spend in 25. Thanks, Ravi. On gross margins, as I mentioned, we do have exposure to China as it relates to supply chain. We source materials for the recorder and some labor associated with the headband. So our tariffs have gone up from 25 to 35%.
Robbie Marcus: Oh great.
Speaker Change: Congratulations on a good.
Speaker Change: First quarter as a public company and thanks for taking the questions.
Speaker Change: <unk>.
Speaker Change: I wanted to ask.
Speaker Change: On the P&L on the profitability gross margin.
Speaker Change: Came in a good deal better than expected.
Speaker Change: First the guidance you gave on the third quarter call.
Speaker Change: And what are your thoughts.
Speaker Change: For both gross margin and Opex.
Speaker Change: Opex spend in 'twenty five.
Speaker Change: Thanks Ravi.
Speaker Change: On gross margins.
Speaker Change: As I mentioned, we do have exposure to China as it relates to supply chain, we source manufacturing materials for the for the quarter and the.
Speaker Change: Some labor associated with the head bands so our tariffs have gone up from 25% to 30, 35%.
Scott Holmberg: Our guidance of mid to high 8% margin reflects that. And of course, if the environment changes there, our opinion will change and we have contingencies in place to the extent we need to exercise them.
Speaker Change: Our guidance of mid to high <unk> margin reflects that and of course if the.
Speaker Change: The environment changes there are.
Speaker Change: Opinion will change and we have contingencies in place the extent, we need to exercise them.
Scott Holmberg: On OPEX, the two material things to note, I think, are R&D. As it relates to the upsized IPO, we feel very fortunate for our ability to invest some of the additional proceeds that we didn't expect in some longer-range R&D projects. We originally slated to approach in sequence, and now we'll do those in parallel. So we expect a bit of an increase in R&D, looking at somewhere in the range of 40% to 60% increase year-over-year in R&D expense. The other thing noted is, given our status of the company, as well as the valuation of the business, we expect stock-based comp to increase quite a bit year-over-year.
Speaker Change: On Opex, the two material things to note I think our R&D.
Speaker Change: As it relates to.
Speaker Change: The Upsized IPO, we feel very fortunate for our ability to invest some of the additional proceeds that we didn't expect in some longer range R&D projects.
Speaker Change: We originally slated to approach in peril.
Speaker Change: In sequence and now we'll do those in parallel to reflect a bit of an increase in.
Speaker Change: R&D looking at somewhere in the range of 40% to 60% increase year over year in R&D expense.
Speaker Change: The other thing noted is given our satisfied the company as well as the.
Speaker Change: Valuation of the business, we expect stock based comp to increase.
Scott Holmberg: It's consistent with where other public companies are. Of course, it's non-cash. It doesn't affect time to profitability.
Speaker Change: Quite a bit year over year, it's consistent with what other companies are and of course as noncash doesn't affect time to profitability.
Scott Holmberg: And then finally, on the commercial front, we're marching along as planned, building to 55 reps by mid-year. We will evaluate at that time some of the core commercial metrics that we have and look at investing more there to drive nearer-term growth. But we're really focused over the next two quarters on executing to our plan, and then we'll evaluate that along the way.
Speaker Change: And then finally on the commercial front.
Speaker Change: We're marching along as planned building 55 reps by mid year.
Speaker Change: We will evaluate at that time some of the core commercial metrics that we have and look at investing more there to drive near term growth.
Speaker Change: But we're really focused over the next two quarters on executing to our plan and then more.
Speaker Change: We'll evaluate that along the way.
Robbie Marcus: Great. Maybe a quick follow-up from me. It looks like you added about 25 new accounts. in the fourth quarter. I think the street's probably just under that as the average for 2025.
Speaker Change: Great.
Speaker Change: A quick follow up for me it looks like you added about 25 new accounts.
Speaker Change: In the fourth quarter.
Speaker Change: It's probably just under that is the average for 2025, maybe speak to your thoughts on.
Robbie Marcus: Maybe speak to your thoughts on new account ads and some of the initiatives. I know you've spent a lot of time over the past two, three years of going deeper within accounts.
Speaker Change: New account adds and some of the initiatives I know you spent a lot of time over the past two three years of going deeper within accounts, maybe just spend a minute on what youre doing with the sales force to once you already have accounts to go deeper and drive greater utilization.
Jane Chao: Maybe just spend a minute on what you're doing with the sales force once you already have accounts to go deeper and drive greater utilization at hospitals across different departments and doctors within those departments. Yeah, thank you, Robbie. As you pointed out, we continue to focus on both account acquisition and driving utilization. For the account acquisition front, as Scott mentioned and you pointed out as well, we'll continue to expand the territory manager to 55 mid-year.
Speaker Change: At hospitals across different departments and doctors within those departments.
Speaker Change: Thank you Ravi.
Speaker Change: As you pointed out we continue to focus on both account acquisition and driving utilization, but the account acquisition front as Scott mentioned that you pointed out as well well continue expand the territory manager.
Speaker Change: 255 mid year.
Jane Chao: On the clinical management front, we are taking a multi-pronged approach. On one hand, we continue our education of the physician, especially in certain areas like emergency department. And on the floor outside ICU, physicians have a lower awareness, both non-convulsive seizure as well as their device. So we have the team collaborating with society, with our marketing and clinical team to disseminate those clinical evidence. The other prong we focus on is to help the nursing team to standardize rapid EEG into their protocol. For example, there is a level one recommendation from post-cardiac arrest patient from American Heart Association that needs prompt EEG.
Speaker Change: The clinical management front, we are taking a multi pronged approach.
Speaker Change: One hand, we continue our.
Speaker Change: Education of the physician, especially in certain areas like emergency Department.
Speaker Change: The floor outside ICU physicians have a lower awareness, both non convulsive seizure as wires or device.
Speaker Change: We have the team collaborating the society and we do our marketing and clinical team to disseminate those clinical evidence.
Speaker Change: The Pearl we focus on is to help with the nursing team to standardize.
Speaker Change: Happy to EG into their protocol for example, there is a level one recommendation from cardiac arrest pay post cardiac arrest patients from American Heart Association that need prompt AEG, many hospitals are either <unk> or heavy.
Jane Chao: Many hospitals are either not aware of it or having resource challenges to integrate to this protocol. So our clinical account team forms good partners with our customers. So overall, we continue to raise disease awareness, help hospitals to realize this can help provide better patient care as well as be compliant with different guidelines.
Speaker Change: So it's challenge to integrate two this protocol Dharma clinical account team.
Speaker Change: Good partners based on customer. The overall is continue raise disease awareness help hospital, which will be allies does kind of help provide better patient care as well as.
Speaker Change: Apply <unk>.
Speaker Change: Compliant with different guidelines.
Speaker Change: Great. Thank you very much.
Speaker Change: Okay.
Macaulay Kilbane: Our next question comes from the line of Margaret Caxter from William Blair. Please go ahead. Hi, everyone.
Speaker Change: Our next question comes from the line of Margaret Cancer from William Blair. Please go ahead.
Speaker Change: Hi, everyone. This is Macquarie on for Margaret Tonight, Thanks for taking our questions and congrats on a solid finish to the year here.
Macaulay Kilbane: This is Macaulay on for Margaret tonight. Thanks for taking our questions and congrats on a solid finish to the year here.
Jane Chao: Maybe to start one for Jane, you mentioned the accelerated development in stroke with over 200 patients now, at least in terms of that data. So wondering if you can provide some additional detail on the results you're seeing thus far, maybe any additional updates we could expect to see during 2025 as you continue to refine that algorithm and ultimately just how you're thinking about that stroke opportunity longer term. Yeah, we're very pleased with what we have accomplished in the stroke trial. So the stroke study is mostly focused on data collection to train the algorithm. The study happens in the emergency department, and right before or after a patient gets imaging, the clinical researcher would put CeriBell on.
Speaker Change: Maybe just start one for Jean <unk>.
Speaker Change: You mentioned the accelerated development in stroke with with over 200 patients now.
Speaker Change: At least in terms of that data. So I'm wondering if you can provide some.
Speaker Change: Additional detail on the results Youre seeing thus far maybe any additional updates we could expect to see during 2025 as you continue to refine that algorithm and ultimately just how youre thinking about that that stroke opportunity longer term.
Speaker Change: Yeah, we're very pleased with what we have accomplished in the stroke trial.
Speaker Change: Stroke study is mostly focused on data collection to trained algorithm.
Speaker Change: Only happens in the emergency department and right before or after a patient get imaging.
Speaker Change: The clinical researcher with puts Arabel first of all it's a very unique only rapid EG like Sandra Bell kind of acquire signals like this so so far we've got 200.
Jane Chao: First of all, it's very unique. Only a rapid EEG like CeriBell can acquire signals like this. So, so far with that 200 patients, our data science team were already able to build prototype algorithms to see signal whether or not EEG can detect stroke, and that has been very encouraging. In this year, especially with the proceeds from IPO, we also plan to significantly expand the enrollment speed so that we can have even more patient data to train the algorithm. It's a little bit too early for us to give specific milestone in terms of FDA submission or specific, specific time, but we are very excited and confident about this market.
Speaker Change: And our data science team, we're already able to build.
Speaker Change: Prototypes.
Speaker Change: <unk> seen no better now EEG can detect stroke and that has been very encouraging and this year, especially with the proceeds from IPO. We also plan to significantly expand.
Speaker Change: Enrolment speed, so that we can have even more patients.
Speaker Change: Data to train the algorithm.
Speaker Change: It is a little bit too early for us to give specific milestones in terms of.
FDA submission or specifics specific 10, but we are very excited and confident about about this market. When you focus on seizure about me say seizure timings brain of course those rates originated.
Scott Holmberg: We focus on seizure, but I may say seizure time is brain. Of course, this phrase originated from stroke. So being able to make stroke detection even more available will be a significant breakthrough. That's great to hear. Thanks for that.
Speaker Change: Stroke, so being able to make stroke detection, even more available will be significant.
Speaker Change: <unk>.
Scott Blumberg: That's great to hear thanks for that and maybe just as a follow up Scott.
Scott Holmberg: And maybe just as a follow-up, Scott, you mentioned you were on pace to achieve the 55 TMs by mid-2025. Wondering if you can provide where you were exiting the year, or maybe at least directionally, how the pace of ads has been during the quarter, and how should we expect that ratio between TMs and CAM to progress throughout 2025? Sure. At year end, we were in the kind of high 40s, pushing to around 50 range. So it's slightly ahead of where you'd be if you drew a straight line there. And as far as the ratio goes, they're run independent of each other.
Robbie Marcus: You mentioned you were on pace to achieve the 55 Tms by mid 2025, I'm wondering if you can provide where you were exiting the year or maybe at least directionally, how the pace of that has been during the quarter.
Scott Blumberg: And how should we expect that that ratio between Tms and Cam.
Robbie Marcus: Progress throughout 2020.
Scott Blumberg: Sure.
Scott Blumberg: And we were in the kind of high <unk> high Forty's pushing to around 50 range. So slightly ahead of where you'd be if you drew a straight line.
Scott Blumberg: There.
Scott Blumberg: As far as the ratio goes there run independent of each other.
Scott Holmberg: The TM staffing is really a matter of capital investment versus speed. And, you know, the more folks you hire, if you can manage them, the more rapid you grow. But, you know, there's a cost associated with that. The CAM infrastructure is limited by the number of accounts they can cover. We've, except for, you know, turnover in open territories, we've largely staffed up the CAM org to cover our current account base. And so that will grow at effectively the same rate as our account base going forward. That's helpful.
Scott Blumberg: The TM staffing is really a matter of capital investment versus speed and the more folks are higher and as you can manage them in a more rapid you grow but theres a cost associated with that.
Scott Blumberg: <unk> infrastructure is limited by the number of accounts they can cover.
Scott Blumberg: Except for turnover turnover in open territories, we've largely staffed up that can work to cover our current account base and so that will grow.
Scott Blumberg: Effectively the same rate as our account base going forward.
Scott Blumberg: That's helpful. Thanks again.
Scott Holmberg: Thanks again.
Josh Jennings: Our next question comes from the line of Josh Jennings from TD Cowan. Please go ahead. Hi, good evening. Thanks for taking the questions and congratulations on another strong quarter.
Speaker Change: Our next question comes from the line of Josh Jennings from TV Cowen. Please go ahead.
Hi, good evening, thanks for taking the questions and congratulations on another strong quarter I was hoping to build on the last questions just on indication expansion and for Delirium I was hoping that you could share some details Jane on just what the FDA is requiring for the submission.
Josh Jennings: I was hoping to build on the last questions just on indication expansion and for delirium, I was hoping just you could share some details, Jane, on just what the FDA is requiring for the submission. I understand it's going to happen this year and that you ran a clinical trial, but what else needs to be done before that submission can be filed and what are the requirements? Yeah, so we had a pre-submission discussion with FDA already and trying to understand FDA's expectation. The core matrix FDA is looking at is whether or not the algorithm can detect delirium either as accurately or not inferior compared to standard of care, which is the CAM-ICU, which is the nursing procedure to detect delirium.
Speaker Change: I understand it's going to happen this year.
Speaker Change: You ran a clinical trial, but what else needs to be done before that submission.
Speaker Change: Can be filed and what are the requirements.
Speaker Change: Yeah.
Speaker Change: So we had a pre submission discussion with FDA already and trying to understand fda's expectation.
Speaker Change: Core Magic's FDA is looking at is whether or not the algorithm can detect delivery.
Speaker Change: Either as accurately or not if you're a real compared to standard of care, which is the Cam ICU, which you said nursing procedure with <unk>.
Jane Chao: It's a nursing questionnaire currently. And of course, the details would be, will have a lot more certainty about the details as we submit. But what we are working on is to, A, continuously improve the algorithm so that we can get into that higher confidence that FDA would accept the performance level. And second is also to prepare the FDA submission itself. We're still working with FDA to clarify this is a 510K or de novo. It should be one of the paths. And as we submit this year and later this year, we should have clarity on all the next level of information we need to have more detail.
Speaker Change: It's a nursing questionnaire currently.
Speaker Change: And of course, the details would be.
Speaker Change: We'll have a lot more certainty about the details as we submit.
Speaker Change: We are working on is to a continuous improve the algorithm.
Speaker Change: So that we can get into that higher confidence that FDA would accept the performance level and secondly is also to prepare the the FDA submission itself.
Speaker Change: Working with FDA to clarify this is a 500 10-K or de novo it should be one of the paths and as we submit this year later this year, we should have clarity on the.
Speaker Change: The next level of information, we need to have more details.
Jane Chao: Excellent. Thanks for that. And just as a follow-up, I mean, I think you stated over the medium term, companies' goal is to make EEG a new vital sign, and indication expansion is a big part of that. But, you know, I guess maybe just help us or remind us what that means. I mean, how do you see, you know, once you have stroke, delirium, seizure detection indications under the belt, you know, how do you see utilization picking up from there in the ICU setting or even the ED setting? Thanks for taking the question. Yeah, thank you, Josh.
Speaker Change: Excellent thanks for that and then just.
Speaker Change: Just as a follow up I know that you've stated over the medium term companies close to make Aegean new vital sign an indication expansion is a big part of that but I guess, maybe just help us.
Speaker Change: Can you remind us what that means I mean, how do you see once you have stroke delirium.
Speaker Change: Detection indications.
Speaker Change: Yeah.
Speaker Change: Under the belt.
Speaker Change: How do you see utilization picking up from inherently in the ICU setting or even the EDI, Sir hey, thanks for taking the questions.
Speaker Change: Yes, Thank you Josh.
Jane Chao: When you think about even the best ICUs, the brain often remains a black box, that when patients are cognitively deteriorating, it's hard for doctors to know what's actually happening. Usually, doctors try to differentiate. The first thing they want to rule in and rule out is stroke. The second thing is often non-compulsive seizures. And then is it delirium? Is it sedation? There's a whole cluster of neurological abnormalities doctors need to figure out. So a lot of these disease states have major synergy. And that's why we're working on this, often the top few differentiating risk doctors go through.
Speaker Change: When you think about even the best Icu's brain I'll say remain a black box.
Speaker Change: That when patient cognitively deteriorating, it's hard for doctors to know what's actually happening usually doctors try to differentiate the first thing they want to win without a stroke. The second thing is often nonconvulsive seizures.
Speaker Change: And then is it delivery is it say nation as a whole cluster on neurological Aetna abnormalities doctor need to figure out. So a lot of this disease state have major synergy and Thats why we are working on this often the top few differentiate differentiating risk doctors go through stroke seizure.
Jane Chao: Stroke, seizure, delirium, and sedation. So we do not see these indications as standalone. We see these indications work together. So it helps doctors to decide what to do with patients neurologically in the ICU or in other acute care settings. And another major synergy we see is it's the same call point. It's a similar patient population. It's the same ICU patients, the same altered mental status patients on the floor or in the emergency department.
Speaker Change: And sedation.
Speaker Change: We don't we do now see these indications as standalone, we'd see these indications work together, so a health doctor to decide what to do with patient neurological in ICU or in other acute care setting.
And another major synergy we see is.
Speaker Change: It's the same call point its a similar patient population is the same ICU patients the same altered mental status patient on the floor or in the emergency Department.
Jane Chao: In terms of specific time, we're not providing specific guidance and quantifying it. Of course, there is going to be an overlapped population. We also see a major expansion in the ICU and ED patient population as well. Certain indications might have a bigger implication of OUS like stroke. So there are a lot of learning and market research we'll do in the next quarters and years.
Speaker Change: In terms of specific 10, we're not we're.
Speaker Change: We're not provide specific guidance and quantifying yet of course, there is gone be overlap. The population. We also see a major expansion in the ICU and patient population as well certain indication might have a big implication O U S. Like stroke. So there are a lot of learning and market research will do in the <unk>.
Speaker Change: Next quarters and years and we are exceptionally excited about making each annual vita aside the patients we can help and the impact we could we could achieve.
Jane Chao: And we're exceptionally excited about making each a new vital sign, the patients we can help and the impact we could achieve. That's understandable. Thanks for all that intel.
Speaker Change: Okay. That's understandable thanks for attending.
Bill Plovanic: Our next question comes from the line of Bill Plovanic from Canaccord. Please go ahead. Yeah, great. Thanks for taking my questions and good evening.
Speaker Change: Our next question comes from the line of Bill <unk> from Canaccord. Please go ahead.
Speaker Change: Okay, great. Thanks for taking my questions and good evening.
Bill Plovanic: So just to start out with, you know, to piggyback off of Josh's question on utilization, you know, Q3 was a nice bump from some stocking, Q4, you know, by our math, you've been you've been doing over 45 headbands per account for the past couple of quarters now. Kind of wondering, is there a reason that would back, you know, back off in the first or second quarter? Or is that kind of a new base to work with? And then I have a couple follow up. Yeah, Bill. So, largely speaking, we see an upward trajectory in our usage.
Speaker Change: So just to start out with to piggyback off of.
Speaker Change: Josh just a question on utilization.
Speaker Change: Q3 was a nice bump from some stocking in Q4 by our math you've been you've been doing over 45.
Speaker Change: Headbands per account for the past couple of quarters now kind of wondering is there a reason that would back.
Speaker Change: Back off.
Speaker Change: The first or second quarter or is that kind of a new base to work with.
Speaker Change: And then I have a couple of follow ups.
Speaker Change: Yes.
Speaker Change: Largely speaking, we see an upward trajectory and our usage.
Scott Holmberg: Now, the things that confound that a little bit is the seasonality I mentioned previously, in which Q4 and Q1 are typically a little better than Q2 and Q3. And the other is the feature we talked about in Q3, which is that whereas our usage patterns are very, very consistent, sometimes our purchasing patterns are a little less consistent, and that's totally customer-driven. We have no incentive for our reps to stock accounts, but some customers like to order a full quarter, some just order as needed. So, generally speaking, we expect the number to continue to increase. We're only 25% or 30% penetrated into the patient populations within our active account base, but it may not be completely linear given those two functions.
Speaker Change: And the other things that can found that a little bit is the seasonality I mentioned previously in which Q4 and Q1 are typically a little better than Q2, and Q3 and the other is the.
Speaker Change: The feature we talked about in Q in Q3, which is that.
Speaker Change: Whereas our usage patterns are very very consistent sometimes our purchasing patterns are a little less consistent and thats totally customer driven we have no incentive for our reps to the stock accounts, but some customers like to order a full quarter. So im just order as needed.
Speaker Change: So generally speaking we expect the number to continue to increase we're only.
Speaker Change: 25% or 30% penetrated into the patient populations within our active account base, but it may not be completely linear given those two functions.
Scott Holmberg: Okay and then you know as you talked about with the reps kind of coming on I think a little faster than all of us had originally expected from the success of the IPO, you know does that impact account ads in the or is that a 26 as you kind of mentioned just kind of that 25 a quarter in terms of new accounts roughly is the way to think about it as these reps kind of still get matured. It's really more 26. The training time plus sales cycle plus launch time, you know, it's really 12 to 18 months before a rep is noticeably contributing.
Speaker Change: Okay, and then as you talked about with the reps kind of coming on I think a little faster than all of US had originally expected from the success of the IPO.
Speaker Change: Does that impact account as well.
Speaker Change: Or is that a 2006 as you kind of mentioned just kind of.
Speaker Change: The 25, a quarter in terms of new accounts roughly is the way to think about it as these reps kind of still get matured.
Speaker Change: Okay.
Speaker Change: It's really more 2006 the.
Speaker Change: The training time, plus sales cycle plus launch time.
Speaker Change: It's really 12 to 18 months before wrap is noticeably contributing and so the reps that we started hiring Q3 should be turning on right about the end of the year.
Scott Holmberg: And so the reps that we started hiring Q3 should be turning on right about the end of the year. Okay.
Bill Plovanic: And then just, you know, on the non-clarity accounts, I mean, you've had NTAP in place, you've talked about that helping you get into convert those non-clarity accounts.
Speaker Change: Okay, and then just on the non clarity accounts I mean, <unk> had and tap in place you've talked about that helping you gain the convert those non clarity accounts I was wondering just if you could give us.
Scott Holmberg: I was wondering just if you could give us some inkling of, you know, kind of maybe the percent penetration or the number of accounts that are non-clarity left, kind of where did you sit at the end of the year? And how should we think about that NTAP, the success of NTAP converting those non-clarity accounts? We're in the low 80% range on base accounts. Recall, those are all legacy accounts, all new customers are Clarity accounts. We've had some success converting them, but with 5,500 customers that have no rapid EEG solution, we're disproportionately focused on that. So to some extent, we do try to convert those customers over, but we really focus more on new account acquisition.
Speaker Change: Some inkling of kind of maybe the percent penetration or the number of accounts that are non clarity last kind of where did you sit at the end of the year and how should we think about that.
Speaker Change: The success and tap converting those non clarity accounts.
Speaker Change: Okay.
Speaker Change: In the low 80% range on base accounts.
Speaker Change: Recall those are all legacy accounts, all new customers or clarity accounts, we've had some success converting them.
Speaker Change: But with 5500 customers that have no <unk>.
Speaker Change: Rapid EEG solution, we're disproportionately focused on that.
Speaker Change: So to some extent, we do try to convert those customers over.
Speaker Change: But we.
Speaker Change: We really focus more on new account acquisition. So the way to think about it is that really diluting down overtime and becoming an immaterial portion of our account base and of course, along the way we will continue to to push to vet.
Scott Holmberg: So the way to think about it is that really diluting down over time and becoming an immaterial portion of our account base. And of course, along the way, we'll continue to push to convert those over.
Speaker Change: Those over.
Bill Plovanic: Okay, and then last question, and I'll jump back in is just, you know, we had the ATO that went into place early November. You got that hunting license on the 200 VA facilities. Just kind of any update on that, and thanks for taking my question. Yeah, we have a dedicated sales director partnering with the sales team focused on the VA hospital system, and so far we have gained a lot of interest, both from top down, from the corporate, as well as the bottom up. So we are very optimistic of what to come, and we hope next quarter we can have even more tangible milestones to share.
Speaker Change: Okay, and then last question and I'll jump back in is just we had the Ato that went into place early November you got that hunting license in 200, VA facilities, just kind of any update on that and thanks for taking my questions.
Speaker Change: Yeah.
Speaker Change: We have been we have a dedicated now.
Speaker Change: <unk>.
Speaker Change: Sales director partnering with the sales team focus on.
Speaker Change: The VA hospital system, and so far we have gained a lot of interest both from.
Speaker Change: Top down from the.
Speaker Change: Cooperate as well as the bottom up.
Speaker Change: So we are very optimistic.
Speaker Change: More to come and we hope next quarter. So we can have even more tangible milestones to share.
Jane Chao: If there are no further questions at this time, Jane Chao will turn the call back over to you. Thank you.
Speaker Change: There are no further questions at this time, Jane Hsiao I'll turn the call back over to you.
Speaker Change: Thank you.
Jane Chao: Oh, we're very excited about the past quarter and even more the quarter coming and really want to thank you everyone for your support and for joining the call today.
Jane Hsiao: We're very excited about the past quarter, and even more the quarter coming and really want to thank you everyone for your support and for joining our call today.
Operator: Bye.
Speaker Change: Hi.
Operator: This concludes today's call. You may now disconnect.
Speaker Change: This concludes today's call you may now disconnect.
Speaker Change: [music].