U.S. Tariffs Prompt Ceribell To Estimate Limited Near-Term Impact On Costs For China-Sourced Headbands, With Sufficient U.S. Inventory To Cover Demand Through Q3 2025 And No Material Financial Effect Expected Until Q4

Author: Benzinga Newsdesk | April 11, 2025 08:08am

The U.S. government has recently announced a broad range of tariffs ("incremental tariffs") on goods imported into the United States. In response to apparent market uncertainty, CeriBell, Inc. ("Ceribell" or the "Company") is providing estimates to clarify the potential impact from these incremental tariffs on the cost of goods sourced from its two contract manufacturers in China. These contractors manufacture and assemble Ceribell's headband product, with final quality inspection and packaging performed at the Company's headquarters in Sunnyvale, California.

The Company expects product inventory currently located within the United States as of April 11, 2025 to enable sufficient supply of finished goods headband product through at least the third quarter of 2025. Because the Company accounts for product inventory cost of goods sold on a first-in, first-out basis, the Company does not expect any material impact to its financial results from incremental tariffs until at least the fourth quarter of 2025.

The Company's total gross margin recorded for the fiscal year ended December 31, 2024 was 87%. Based on currently available information, including an effective total tariff rate of 145% on all goods sourced from China, and assuming no other potential mitigating actions, the Company expects an impact on total gross margins of 8 to 10 percentage points after the existing finished goods inventory is depleted. The Company does not expect the incremental tariffs to have an impact on the cost of revenue associated with its subscription products.

Posted In: CBLL