CeriBell, Inc. (NASDAQ:CBLL) Q4 2024 Earnings Call Transcript

CeriBell, Inc. (NASDAQ:CBLL) Q4 2024 Earnings Call Transcript March 3, 2025

Operator: Operator Hello, and thank you for standing by. At this time, I would like to welcome you to the CeriBell Q4 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Brian Johnston, Investor Relations. Please go ahead, sir.

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 and year ended December 31, 2024. 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 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. 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. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 25, 2025.

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’ll turn the call over to Jane.

Xingjuan Chao: Thanks, Brian. Good afternoon, and thank you all for joining us today on our fourth quarter and full-year 2024 earnings call. Today, I’ll share key highlights of our fourth quarter results and our outlook and strategic priorities for 2025. Scott will then provide a more detailed analysis of our financial performance and discuss our full-year 2025 guidance. 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. 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 perspective, this likely translates to thousands of saved lives, tens of thousands of patients who avoided unnecessary medication and incubation and potentially hundreds of thousands of unnecessary ICU days avoided. 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, a 64-year-old woman arrived in emergency department of a local hospital who was unable to follow commands and had difficulty speaking. Her care team suspected a stroke and immediately ordered a CT, which came back negative.

The stroke mimicked patient was awake but continued to suffer from a variety of symptoms, including aphasia, facial droop and mouth twitching that suggested ongoing neurological abnormalities. Her care team then applied a CeriBell system to evaluate for seizure activity, which quickly showed a 100% seizure burden, indicating non-convulsive status epilepticus. Empowered by this information, the care team was able to promptly and confidently administer antiseizure 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. 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, 1/3 of stroke mimic patients were found having seizure or high epileptic form abnormality, and CeriBell was found to be a critical tool in detecting non-convulsive seizures in stroke evaluations. This experience is just one of many thousands like it. 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.

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 gross margin of 88% and 87%, respectively. Our strong fourth quarter and full-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 set at 529 accounts as of December 31, 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. Meanwhile, we continue to leverage both sales functions to facilitate high-quality account launch processes. Based on our experience, we believe that this approach to launches enable durable long-term utilization. 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 System.

Moments after our team left, the CeriBell System alerted the 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. Clarity then continuously monitored the patient to assess the treatment effectiveness. This was a breakthrough for the entire care team and hospitals administrators. Aha 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. At a high level, our commercial strategy for 2025 is to maintain our key areas of focus and build upon our success in 2024. We will also continue to invest in and expand our commercial organization, led by Sean Manni, 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 the acute care setting. 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. 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 seizure.

We envision our pipeline across three horizons. Currently, we are focused on becoming the standard of care for seizure management in the acute care setting. In the near term, we expect to have Clarity indication expanded to include pediatric patients following our submission of a 510(k) 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 510(k) 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 detection of a wide variety of other neurological conditions.

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 an application to FDA later this year. This is a market where there is no commercially available diagnostic device despite delirium impacting 20% to 50% of non-mechanically ventilated patients and 60% to 80% mechanically ventilated patients in the ICU.

The occurrence of delirium during a patient’s ICU stay can lead to severe long-term morbidity and is correlated with significantly worse outcome. Following anticipated FDA approval, we believe our novel algorithm will present a paradigm shift in how delirium is managed and ultimately improve patient care. Meanwhile, we have recently accelerated our investment in the development of a stroke detection algorithm. We have collected data on over 200 patients and counting. This data will help us to further refine our algorithm and inform our regulatory strategy. 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 we’ll 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 in the U.S. for the detection and management of seizure in acute care setting. 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.

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, 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 2023. 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 2024 was $50.1 million, an increase of 45% over 2023, 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 2023.

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 2023. Non-cash stock-based compensation expense was $2.2 million in the fourth quarter of 2024. 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%. Full-year 2024 operating expenses included $5.4 million of non-cash stock-based compensation. 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 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 2023. 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 IPO. 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. Our cash and cash equivalents as of December 31, 2021 [sic] [2024] was $194.4 million, which included net proceeds of approximately $188 million from our October IPO. Turning now to our outlook for 2025. We expect full-year 2025 total revenue to be in the range of $81 million to $85 million, representing annual growth of 24% to 30% 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. This accounts for the current 35% tariff on materials sourced from China, which was up from 25% in 2024. We do not rely on Mexico or Canada for any material portion of our supply chain and 100% of our commercialization is in the U.S. 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 R&D talent and make greater investments across our pipeline to facilitate TAM expansion. As Jane mentioned, we have a wealth of opportunities to expand the utility of the CeriBell platform.

With additional engineering and data science talent, we hope to pursue some of these opportunities in parallel rather than sequentially. It should be noted that while we expect these accelerated initiatives to have long-term impact, 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.

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. Finally, the transition to operating as a public company has increased the cost of stock-based compensation given standard public company compensation frameworks and the valuation of the company. We expect stock-based compensation 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. We also see our account backlog as stronger than ever and believe we have significant runway for long-range growth.

With that, I’ll turn the call back to Jane.

Xingjuan 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. We appreciate your support and the continued interest in CeriBell, and we look forward to providing you with updates on our progress in the quarters to come. I’ll now turn the call over to the operator for any Q&A. Operator?

Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Travis Steed from Bank of America. Please go ahead.

Stephanie Piazzola: This is Stephanie Piazzola on for Travis. Thanks for taking the question and congrats on the 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 adds, utilization and pricing? And then if there’s anything we should keep in mind from a quarterly cadence perspective or Q1 in particular?

Scott Blumberg: 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 our guidance. And so 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. We do tend to see a little bit of additional volume in Q4 and Q1 in the winter months, reflective of an ICU census that’s a little higher than the summer months.

Stephanie Piazzola: And then maybe just one follow-up. You mentioned that the 25 account adds 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? And then maybe how we should think about Q1 since I think you typically would see 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 Blumberg: Look, 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 in 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.

Operator: Our next question comes from the line of Robbie Marcus from JPMorgan. Please go ahead.

Robert Marcus: Great. Congratulations on a good first quarter as a public company and thanks for taking the questions. I wanted to ask on the P&L and the profitability. Gross margin came in a good deal better than expected versus the guidance you gave on the third quarter call. And what are your thoughts for both gross margin and OpEx spend in 2025?

Scott Blumberg: Thanks, Robbie. On gross margins, as I mentioned, we do have exposure to China as it relates to supply chain. We source materials for the quarter and some labor associated with the headbands. So our tariffs have gone up from 25% to 35%. Our guidance of mid to high 80% margin reflects that. And of course, if the environment changes there, our opinion will change and we have contingencies in place the extent we need to exercise them. 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 as a public company as well as the valuation of the business, we expect stock-based comp to increase quite a bit year-over-year. It’s consistent with where other public companies are. And of course, it’s non-cash; it doesn’t affect time to profitability. And then finally, on the commercial front, we’re marching along as planned, building to 55 reps by midyear. 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.

Robert Marcus: Great. Maybe a quick follow-up for me. It looks like you added about 25 new accounts in the fourth quarter. I think the Street is probably just under that is the average for 2025. Maybe speak to your thoughts on 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 you’re doing with the sales force to – once you already have accounts to go deeper and drive greater utilization at hospitals across different departments and doctors within those departments?

Xingjuan Chao: Yes. 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 midyear. 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 on the floor outside ICU, physicians have a lower awareness, both non-convulsive seizure as well as our 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 1 recommendation from cardiac – post cardiac arrest patient from American Heart Association that need prompt EEG. Many hospitals are either not aware of it or having resource challenges to integrate to this protocol. So our clinical account team form as good partners with our customer. So overall, it’s continue to raise disease awareness, help hospitals to realize this can help provide better patient care as well as apply – be compliant with different guidelines.

Operator: Our next question comes from the line of Margaret Kaczor from William Blair. Please go ahead.

Macauley Kilbane: This is Macauley on for Margaret tonight. Thanks for taking our question and congrats on a solid finish to the year here. 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?

Xingjuan Chao: Yes. We are 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 patients get imaging, the clinical researcher would put CeriBell. 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 TAM, but we are very excited and confident about this market. We focus on seizure. When we 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.

Macauley Kilbane: That’s great to hear. Thanks for that. 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 that has been during the quarter? And how should we expect that ratio between TMs and CAM to progress throughout 2025?

Scott Blumberg: Sure. Yes, at year-end, we were in the kind of high 40s, pushing to around 50 range. So 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. The TM staffing is really a matter of capital investment versus speed. And the more folks you hire, you can manage them, the more rapid you grow, but there’s a cost associated with that. The CAM infrastructure is limited by the number of accounts they can cover. We’ve, except for turnover in open territories, we’ve largely staffed up the CAM work to cover our current account base. And so that will grow at effectively the same rate as our account base going forward.

Macauley Kilbane: That’s helpful. Thanks, again.

Operator: Our next question comes from the line of Josh Jennings of TD Cowen. Please go ahead.

Joshua Jennings: Hi. Good evening. Thanks for taking the questions. Congratulations on another strong quarter. I was hoping to build on the last question just on indication expansion. And for delirium, I was hoping just if 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?

Xingjuan Chao: Yes. So we had a pre-submission discussion with FDA already and trying to understand FDA’s expectation. The core metrics FDA is looking at is whether or not the algorithm can detect delirium either as accurately or not inferior compared to a standard of care, which is the CAM ICU, which is a nursing procedure to detect delirium. It’s a nursing questionnaire currently. And of course, the details would be – we’ll have a lot more certainty about the details as we submit. 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 510(k) 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 details on.

Joshua Jennings: Excellent. Thanks for that. And just as a follow-up, I mean, I think you’ve stated over the medium term, the company’s goal is to make EEG a new vital sign and indication expansion is a big part of that. But I guess what – maybe just help us or remind us what that means? I mean how do you see – once you have stroke, delirium seizure detection indications under the belt, how do you see utilization picking up from there in the ICU setting or even the ED setting? Thanks for taking the questions.

Xingjuan Chao: Yes. Thank you, Josh. When you think about even in the best ICUs, brain often remain a black box, 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 rule in or out is stroke. The second thing is often non-convulsive 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 the disease states have major synergy. And that’s why we are working on this often the top few differentiating risk doctors go through, stroke, seizure, delirium and sedation. So we do not see these indications as stand-alone. We see these indications work together.

So it helps doctors to decide what to do with patients neurologically in ICU or in other acute care setting. 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. In terms of specific TAM, we are not providing specific guidance and quantifying it. Of course, there is going to be overlapped population. We also see a major expansion in the ICU and ED patient population as well. Certain indications might have a bigger implication on OUS like stroke. So there are a lot of learning and market research we’ll do in the next quarters and years. We are exceptionally excited about making each new vital sign, the patients we can help and the impact we could achieve.

Joshua Jennings: That’s understandable. Thanks for all that intel.

Operator: Our next question comes from the line of Bill Plovanic from Canaccord. Please go ahead.

William Plovanic: Yes. Great. Thanks for taking my questions and good evening. So just to start out with to piggyback off of Josh’s question on utilization. Q3 was a nice bump from some stocking. Q4, by our math, 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 off in the first or second quarter? Or is that kind of a new base to work with? And then I have a couple of follow-ups.

Scott Blumberg: Yes, Bill. So largely speaking, we see an upward trajectory in our usage. Now the things that compound 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.

William Plovanic: 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, does that impact account adds in the – or is that a 2026, 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?

Scott Blumberg: It’s really more 2026. The training time plus sales cycle plus launch time, it’s really 12 to 18 months before a rep is noticeably contributing. And so the reps that we started hiring in Q3 should be turning on right about the end of the year.

William Plovanic: Okay. And then just on the non-Clarity accounts, I mean, you’ve had NTAP in place. You’ve talked about that helping you convert those non-Clarity accounts. I was wondering just if you could give us some inkling of 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?

Scott Blumberg: 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. 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.

William Plovanic: And then last question, and I’ll jump back in. It’s just 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 questions.

Xingjuan Chao: We have been – 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.

Operator: There are no further questions at this time. Jane Chao, I will turn the call back over to you.

Xingjuan Chao: Thank you. 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. Bye.

Operator: This concludes today’s call. You may now disconnect.