NeuroPace (NPCE) 2025 Conference September 04, 2025 09:45 AM ET Speaker0There we go. Thank you.Alright. We're gonna get started. My name is Ross Osborne. I'm the med tech and diagnostics analyst here at Cantor Fitzgerald. And this morning, we have Neuropace, and we have the company's CEO, Joel Becker, and newly appointed CFO, Patrick Williams.So with that, Joel, you can provide a brief background on yourself.Speaker1I will. Thank you. And thank you, Ross, and thank you, Kenneth Fitzgerald, for having us her ...

Company Performance - NeuroPace, Inc. reported a quarterly loss of $0.26 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.24, marking an earnings surprise of -8.33% [1] - The company posted revenues of $23.52 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.75% and showing an increase from $19.26 million in the same quarter last year [2] - Over the last four quarters, NeuroPace has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - NeuroPace shares have declined approximately 20.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.20 on revenues of $24.32 million, and for the current fiscal year, it is -$0.85 on revenues of $95.36 million [7] Industry Outlook - The Medical - Instruments industry, to which NeuroPace belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact NeuroPace's stock performance [5]

NeuroPace (NPCE) Q2 2025 Earnings Call August 12, 2025 04:30 PM ET Speaker0As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Scott Shaver, Head of Investor Relations at Neuropace Inc. Please go ahead.Speaker1Good afternoon. Thank you for joining us for Neuropace's second quarter twenty twenty five financial and operating results conference call. On today's call, we will hear from Joel Becker, Chief Executive Officer and Patrick Williams, Chief Financial Officer. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-40337 NEUROPACE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2 ...

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) NeuroPace reported **record quarterly revenue** of **$23.5 million** in Q2 2025, a **22%** year-over-year increase, and subsequently raised its **full-year 2025 revenue guidance** to between **$94 million** and **$98 million**, while also increasing its **gross margin guidance** and confirming CMS maintains current MS-DRG assignment for RNS System procedures, ensuring **reimbursement stability**, with NAUTILUS data on track for FDA submission for IGE indication expansion - Reported **record quarterly revenue** of **$23.5 million** in Q2 2025[1](index=1&type=chunk) - Increased **full-year 2025 revenue guidance** to between **$94 million** and **$98 million**[2](index=2&type=chunk) - Increased **gross margin guidance** to between **75%** and **76%**[2](index=2&type=chunk) - CMS maintains current MS-DRG assignment for RNS System® procedures, preserving **reimbursement stability**[2](index=2&type=chunk)[5](index=5&type=chunk) - Remain on track to submit NAUTILUS data to FDA for potential IGE indication expansion in the second half of 2025[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) NeuroPace's Q2 2025 revenue grew **22%** year-over-year to **$23.5 million**, with RNS System revenue increasing **16%** in Q2 and **21%** in the first half of 2025, achieving a strong gross margin of **77.1%** due to manufacturing efficiencies and a positive product mix, and successfully refinanced its existing debt into a new **$75 million** credit facility Q2 2025 Revenue and Gross Margin Highlights | Metric | Q2 2025 | YoY Growth | | :------------------- | :-------- | :--------- | | Revenue | $23.5 million | 22% | | RNS System Revenue (Q2) | N/A | 16% | | RNS System Revenue (H1) | N/A | 21% | | Gross Margin | 77.1% | N/A | - Refinanced existing debt into a new **$75 million** credit facility with MidCap Financial at **favorable terms**[5](index=5&type=chunk) [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) The NAUTILUS study for RNS therapy in IGE demonstrated a **statistically significant safety profile** and **clinically meaningful improvement** in secondary effectiveness endpoints, including a **79%** median GTC seizure reduction at 12 months, while NeuroPace also saw **increased momentum** from Project CARE, achieved **record highs** in active accounts and prescribers, and secured a favorable CMS outcome for RNS procedures - Announced compelling one-year preliminary data from the NAUTILUS study evaluating RNS therapy in IGE, demonstrating a **statistically significant safety profile** and **clinically meaningful improvement** across multiple prespecified secondary effectiveness endpoints, including **79%** median GTC seizure reduction at 12 months[5](index=5&type=chunk) - Built on Project CARE **momentum** with an increasing contribution in the second quarter compared with the first quarter of 2025[5](index=5&type=chunk) - Achieved **record highs** in number of both active accounts and prescribers[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Joel Becker highlighted the company's continued momentum in Q2 2025, emphasizing significant progress in key initiatives for sustained long-term growth, including advancing RNS therapy access and adoption, supporting operating leverage, and making important clinical, regulatory, and R&D advancements, such as the NAUTILUS and pediatric PMA supplement programs, and AI software development - Advancing strategy to drive increased access to and adoption of RNS therapy and supporting operating leverage as the company scales[4](index=4&type=chunk) - Made important clinical and regulatory and research and development progress, including advancing NAUTILUS and pediatric PMA supplement programs[4](index=4&type=chunk) - Advancing AI software development programs, reflecting **leadership in the field** and commitment to addressing **unmet patient needs**[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) NeuroPace reported Q2 2025 total revenue of **$23.5 million**, a **22%** increase year-over-year, **primarily driven by** RNS System sales, with gross margin improving to **77.1%**, total operating expenses rising to **$25.0 million** largely due to **one-time personnel costs**, resulting in a net loss of **$8.7 million**, and the company ending the quarter with **$62.1 million** in cash, cash equivalents, and short-term investments, and improved free cash flow to (**$2.3 million**) Q2 2025 Key Financial Metrics | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :------------------------- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $23,520 | $19,256 | +22.1% | | Gross Margin | 77.1% | 73.4% | +3.7 ppts | | Total Operating Expenses | $24,956 | $20,364 | +22.5% | | Loss from Operations | $(6,824) | $(6,230) | +9.5% | | Net Loss | $(8,651) | $(7,514) | +15.1% | | Net Loss Per Share (basic & diluted) | $(0.26) | $(0.26) | 0% | - Revenue growth **primarily driven by** increased sales of the RNS System and meaningful revenue from SEEG products[6](index=6&type=chunk) - Total operating expenses increase largely driven by **one-time personnel expenses** totaling **$1.9 million**, including severance and recruiting, and **$1.6 million** in personnel-related expenses for an executive transition[7](index=7&type=chunk)[8](index=8&type=chunk) Cash and Debt Position (as of June 30, 2025) | Metric | Amount (in millions) | | :-------------------------------------- | :------------------- | | Cash, cash equivalents and short-term investments | $62.1 | | Long-term borrowings | $58.6 | | Free cash flow (Q2 2025) | ($2.3) | | Free cash flow (Q2 2024) | ($4.0) | [Updated Full Year 2025 Financial Guidance](index=2&type=section&id=Updated%20Full%20Year%202025%20Financial%20Guidance) NeuroPace has increased its **full-year 2025 total revenue guidance** to between **$94 million** and **$98 million**, representing **18%-23%** growth over 2024, and raised its **gross margin guidance** to **75%-76%**, while maintaining its total operating expenses guidance range of **$92 million** to **$95 million** Updated Full Year 2025 Financial Guidance | Metric | Previous Guidance | Updated Guidance | YoY Growth (vs. $79.9M in 2024) | | :----------------------- | :---------------- | :--------------- | :------------------------------ | | Total Revenue | $93M - $97M | $94M - $98M | 18% - 23% | | Gross Margin | 73% - 75% | 75% - 76% | N/A | | Total Operating Expenses | $92M - $95M | $92M - $95M | N/A | - Total operating expenses guidance includes approximately **$11 million** in stock-based compensation, a **non-cash expense**[12](index=12&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [Webcast and Conference Call Information](index=2&type=section&id=Webcast%20and%20Conference%20Call%20Information) NeuroPace hosted a conference call on August 12, 2025, to discuss its second quarter 2025 financial results, with details for accessing the live and archived webcast, as well as participating via telephone, provided - Conference call held on Tuesday, August 12, 2025, at **4:30 P.M. Eastern Time**[11](index=11&type=chunk) - Live and archived webcast available at https://viavid.webcasts.com/starthere.jsp?ei=1724652&tp_key=858d589533[11](index=11&type=chunk) - Webcast will be archived on the Company's investor relations website for at least **90 days**[11](index=11&type=chunk) [About NeuroPace, Inc.](index=3&type=section&id=About%20NeuroPace%2C%20Inc.) NeuroPace, Inc. is a medical device company based in Mountain View, Calif., dedicated to improving the lives of individuals with epilepsy by reducing or eliminating debilitating seizures, with its RNS System being the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source, aiming to establish a new standard of care for drug-resistant epilepsy and potentially other brain disorders - NeuroPace is a medical device company focused on transforming the lives of people living with epilepsy[13](index=13&type=chunk) - Its RNS System is the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source[13](index=13&type=chunk) - The platform aims to drive a better standard of care for patients with drug-resistant epilepsy and has potential for other brain disorders[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding NeuroPace's future plans, including **potential indication expansion** for its RNS System, **increased adoption** of RNS therapy, and anticipated financial performance for 2025, cautioning investors that actual results may **materially differ** from these statements due to various risks, such as market acceptance, regulatory compliance, and product development challenges, as detailed in the company's SEC filings - Statements include expectations regarding **potential indication expansion** for the RNS System and software/product development efforts[14](index=14&type=chunk) - Includes expectations for increasing access to and adoption of RNS therapy, and the ability to maintain or increase gross margin[14](index=14&type=chunk) - Anticipated revenue, gross margin, and operating expenses for the year ending 2025 are forward-looking[14](index=14&type=chunk) - Actual results or events could **materially differ** due to various factors, including market acceptance, regulatory risks, and operating expenses, as described in SEC filings[14](index=14&type=chunk) [Investor Contact](index=3&type=section&id=Investor%20Contact) This section provides contact information for NeuroPace's investor relations, including the Head of Investor Relations, Scott Schaper, and general investor email addresses - Investor Contact: Scott Schaper, Head of Investor Relations[15](index=15&type=chunk) - Email contacts: sschaper@neuropace.com and investors@neuropace.com[15](index=15&type=chunk) [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) The unaudited condensed statements of operations detail NeuroPace's financial performance for the three and six months ended June 30, 2025, and 2024, presenting key figures such as revenue, cost of goods sold, gross profit, operating expenses, loss from operations, and net loss Condensed Statements of Operations (Unaudited) | (in thousands, except share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $23,520 | $19,256 | $46,044 | $37,380 | | Cost of goods sold | $5,388 | $5,122 | $10,570 | $9,903 | | Gross profit | $18,132 | $14,134 | $35,474 | $27,477 | | Sales and marketing | $12,043 | $9,756 | $23,046 | $19,789 | | Research and development | $6,845 | $6,065 | $14,285 | $11,849 | | General and administrative | $6,068 | $4,543 | $10,114 | $9,614 | | Total operating expenses | $24,956 | $20,364 | $47,445 | $41,252 | | Loss from operations | $(6,824) | $(6,230) | $(11,971) | $(13,775) | | Net loss and comprehensive loss | $(8,651) | $(7,514) | $(15,240) | $(16,439) | | Net loss per share attributable to common stockholders, basic and diluted | $(0.26) | $(0.26) | $(0.47) | $(0.58) | [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) The unaudited condensed balance sheets provide a snapshot of NeuroPace's financial position as of June 30, 2025, and December 31, 2024, detailing current and total assets, current and long-term liabilities, and stockholders' equity Condensed Balance Sheets (Unaudited) | (in thousands, except share and per share amounts) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $22,857 | $13,430 | | Short-term investments | $39,284 | $39,325 | | Total current assets | $93,742 | $81,339 | | Total assets | $106,114 | $94,647 | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $4,721 | $2,954 | | Total current liabilities | $17,143 | $15,156 | | Long-term debt | $58,616 | $59,525 | | Total liabilities | $86,676 | $86,634 | | Total stockholders' equity | $19,438 | $8,013 |

Core Insights - NeuroPace, Inc. reported record quarterly revenue of $23.5 million for Q2 2025, representing a 22% increase from $19.3 million in Q2 2024 [1][4][6] - The company raised its full-year 2025 revenue guidance to between $94 million and $98 million, indicating growth of 18% to 23% compared to $79.9 million in 2024 [1][15] - Gross margin guidance for 2025 was increased to between 75% and 76%, up from previous guidance of 73% to 75% [1][15] - NeuroPace is on track to submit NAUTILUS data to the FDA for potential IGE indication expansion in the second half of 2025 [1] Financial Performance - Total revenue for Q2 2025 was $23.5 million, a 22% increase year-over-year [4][6] - RNS System revenue grew 21% in the first half of 2025 compared to the first half of 2024, and 16% in Q2 2025 compared to Q2 2024 [4][6] - Gross margin for Q2 2025 was 77.1%, compared to 73.4% in Q2 2024 [5][6] - Total operating expenses in Q2 2025 were $25.0 million, up from $20.4 million in the same period of the prior year [7] Strategic Developments - The company made significant progress in clinical and regulatory initiatives, including advancing the NAUTILUS and pediatric PMA supplement programs [3] - NeuroPace achieved record highs in the number of active accounts and prescribers [6] - The company received a favorable outcome in CMS's FY 2026 Inpatient Prospective Payment System final rule, maintaining reimbursement stability for RNS procedures [6] Cash Flow and Debt - Cash, cash equivalents, and short-term investments as of June 30, 2025, totaled $62.1 million, down from $66.3 million at the end of the prior quarter [10] - Free cash flow for the quarter was ($2.3) million, an improvement from ($4.0) million in Q2 2024 [10] - The company refinanced existing debt into a new $75 million credit facility with favorable terms [6]

Core Viewpoint - NeuroPace, Inc. has responded positively to the Centers for Medicare & Medicaid Services (CMS) decision not to finalize the proposed reassignment of epilepsy neurostimulator cases in the FY 2026 Inpatient Prospective Payment System (IPPS) rule, maintaining the current reimbursement structure for its RNS System procedures [1][2]. Company Overview - NeuroPace, Inc. is a medical technology company based in Mountain View, California, focused on improving the lives of individuals with epilepsy by reducing or eliminating seizures through its innovative RNS System [3]. - The RNS System is the first and only commercially available brain-responsive platform that provides personalized, real-time treatment at the source of seizures, aiming to enhance care for patients with drug-resistant epilepsy and potentially benefiting those with other brain disorders [3]. Regulatory Engagement - The company appreciates CMS's willingness to consider public comments and its decision to retain the existing MS-DRG assignment for RNS System procedures, which supports hospitals serving Medicare beneficiaries with epilepsy [2]. - NeuroPace plans to continue collaborating with CMS on improvements related to MS-DRG and reimbursement policies to ensure access to the RNS System for all eligible patients [2].

Company Overview - NeuroPace, Inc. is a medical device company based in Mountain View, California, focused on transforming the lives of people living with epilepsy by reducing or eliminating debilitating seizures [3] - The company has developed the RNS System, which is the first and only commercially available brain-responsive platform that delivers personalized, real-time treatment at the seizure source [3] - The RNS System aims to improve the standard of care for patients with drug-resistant epilepsy and has potential applications for other brain disorders [3] Financial Results Announcement - NeuroPace will report its financial results for the second quarter of 2025 after market close on August 12, 2025 [1] - A conference call will be held at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the results [1] Conference Call Participation - Investors can access the live webcast of the conference call at the provided link [2] - For those wishing to participate via telephone, the call can be accessed by dialing +1-877-407-3982 and referencing Conference ID 13754370 [2] - The webcast will be archived on the company's investor relations website and available for replay for at least 90 days after the event [2]

Company Overview - NeuroPace, Inc. is a medical device company focused on transforming the lives of people living with epilepsy by reducing or eliminating debilitating seizures through its RNS System, which is the first and only commercially available brain-responsive platform that delivers personalized, real-time treatment at the seizure source [5] Leadership Change - Patrick F. Williams has been appointed as Chief Financial Officer, effective June 20, 2025, bringing over 25 years of financial and operational management experience in public medical device companies [2][3] - Rebecca Kuhn will depart from her CFO role but will remain in an advisory capacity for twelve months, having contributed significantly to the company over her 25-year tenure [2][3] Strategic Importance - The appointment of Mr. Williams is seen as timely, as the company is at a critical point in its growth trajectory and has significant opportunities for its RNS System [3] - Mr. Williams expressed excitement about joining NeuroPace, highlighting the potential to serve approximately 1.2 million U.S. patients living with drug-resistant epilepsy and the goal of making the RNS System the standard of care [4] Market Potential - The RNS System is positioned to expand access and utilization, with a commitment to product and data development aimed at improving patient outcomes [4]

Group 1 - The Schall Law Firm is investigating claims on behalf of investors of NeuroPace, Inc. for potential violations of securities laws [1] - The investigation centers on whether NeuroPace made false or misleading statements or failed to disclose important information to investors [2] - NeuroPace's press release on May 27, 2025, revealed that the NAUTILUS study did not achieve statistical significance for its primary effectiveness endpoint, leading to a nearly 28.4% drop in shares on the same day [2]