NPCE — NeuroPace, Inc.

NeuroPace Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Q4 Revenue: $26.6 million, a 24% increase year-over-year, driven by RNS System sales of $22.4 million (up 26%).
• Full Year Revenue: $100 million, a 25% increase from 2024.
• Gross Margin: 77.4% in Q4, improved from 75.4% year-over-year; RNS gross margin was 80.5%.
• Operating Expenses: $22.3 million in Q4, up 13% year-over-year, but below revenue growth, indicating operating leverage.
• Net Loss: $2.7 million in Q4, improved from a loss of $5.3 million in Q4 2024.
• Adjusted EBITDA: Positive $900,000 in Q4, marking the second consecutive quarter of positive adjusted EBITDA.
• Cash Position: $61.1 million at the end of Q4, with positive operating cash flow of approximately $500,000.

2. Strategic Updates and Business Highlights:

• Market Growth: Continued strong adoption of the RNS System, particularly in Level 4 centers, with a focus on expanding referral pathways.
• Clinical Development: Submitted a PMA supplement to the FDA for an expanded indication in idiopathic generalized epilepsy (IGE), supported by positive clinical data.
• Product Development: Advancements in AI tools, such as Seizure ID, aimed at improving clinician workflow and patient outcomes. Remote care capabilities are also being developed.
• Commercial Investments: Increased focus on sales personnel and nurse navigators to enhance patient referral processes and streamline access to RNS therapy.

3. Forward Guidance and Outlook:

• 2026 Revenue Guidance: Reiterated guidance of $98 million to $100 million, reflecting 20-22% growth in the core RNS business.
• Q1 2026 Revenue Guidance: Expected to be in the range of $21 million to $22 million, with a typical seasonal slowdown in the first half.
• Adjusted EBITDA for 2026: Anticipated loss in the range of $9 million to $10 million, with expected improvement in the second half of the year.

4. Bad News, Challenges, or Points of Concern:

• DIXI Medical Partnership: Revenue from DIXI Medical declined by 4% in Q4, with the partnership ending in December 2025, which may impact future revenue.
• Operational Challenges: Potential bottlenecks in the referral process were noted, although management believes there is sufficient capacity in implanting centers.
• Investment Risks: Increased operating expenses due to aggressive commercial investments could pressure profitability in the near term.

5. Notable Q&A Insights:

• Generalized Epilepsy Opportunity: Management discussed the steps needed post-approval for IGE, including extending coverage with private payers and training referring physicians.
• Pricing Impact: Historical pricing strategies have contributed to gross margin improvements, with no significant changes noted in Q4.
• Seizure ID Implementation: The Seizure ID tool will be integrated into the RNS System usage without additional costs to physicians, aimed at improving clinical efficiency.
• Pediatric Collaboration: Ongoing work with the NEST collaboration for pediatric indications is progressing, but no specific submission timeline was provided.

Overall, NeuroPace demonstrated solid financial growth and strategic progress in 2025, setting the stage for potential transformative developments in 2026, particularly with the anticipated FDA approval for IGE. However, challenges related to the end of the DIXI partnership and operational bottlenecks remain areas to monitor.