NeuroPace FY Conference Summary Company Overview - **Company**: NeuroPace (NasdaqGM: NPCE) - **Industry**: Medical Technology, specifically focused on epilepsy treatment through neurostimulation Key Highlights 1. **Mission Statement**: NeuroPace aims to transform the lives of people suffering from epilepsy by reducing or eliminating debilitating seizures, demonstrating a strong commitment to patients and clinicians [2][3] 2. **Strategic Positioning**: The company is well-positioned for growth with strong fundamentals, best-in-class technology, and a significant market opportunity in the neurostimulation space for drug-resistant epilepsy [3][4] 3. **Revenue Milestone**: NeuroPace achieved $100 million in revenue for the first time, marking a significant milestone with a 25% year-on-year growth for 2025 [5][6] 4. **Core Technology**: The RNS System is a unique cranial implant that continuously monitors and tailors therapy based on individual patient needs, leading to improved outcomes over time [4][11] 5. **Market Opportunity**: The total addressable market (TAM) for drug-resistant epilepsy is estimated to exceed $3 billion, with approximately 1.2 million patients in the U.S. suffering from drug-resistant epilepsy [5][11] Financial Performance 1. **2025 Results**: - Total revenue: $100 million - Core RNS revenue: $81.7 million, also reflecting a 25% growth [5][6] - Gross margins: 77.2% for the year [6] 2. **2026 Guidance**: Projected revenue of $98-$100 million with RNS revenue growth of $20-$22 million and gross margins between 81% and 82% [10][45] Growth Strategy 1. **Indication Expansion**: Plans to expand indications for idiopathic generalized epilepsy and pediatric patients, with a focus on leveraging real-world data for growth [9][10] 2. **Product Development**: Development of AI tools to enhance therapy effectiveness and efficiency, including remote programming capabilities and next-generation hardware [10][20] 3. **Market Development**: Expansion into community centers and Level 3 epilepsy centers to increase access to RNS therapy [35][36] Clinical Insights 1. **Patient Outcomes**: The RNS System has shown up to 82% median seizure reduction at three years, with best-in-class data supporting its efficacy [15][16] 2. **Unique Dataset**: NeuroPace has amassed over 24 million individualized EEG recordings, which will be utilized to develop AI algorithms for personalized therapy [17][18] Competitive Landscape 1. **Generalized Epilepsy Market**: There are currently no FDA-approved devices for drug-resistant idiopathic generalized epilepsy, presenting a significant opportunity for NeuroPace [41][42] 2. **Strategic Partnerships**: Collaborations with pharma and biotech companies to monitor biomarker responses in clinical trials, enhancing the value of the RNS device [43][44] Conclusion - NeuroPace is positioned for strong growth with a focus on expanding its market presence, enhancing its technology, and improving patient outcomes through innovative solutions in epilepsy treatment. The company is optimistic about its future, with a robust strategy in place for 2026 and beyond [49][50]

Financial Performance & Growth - Preliminary 2025 total revenue is expected to be approximately $100 million, representing a 25% year-over-year increase[12, 15, 18] - Core RNS System revenue grew by 25% in 2025, driven by sustained demand and increased utilization[12, 18] - Q4 2025 total revenue is estimated at $26.6 million, a 24% increase year-over-year[15] - Gross margin for 2025 is approximately 77.2%, an increase of 330 basis points year-over-year[15] - The company projects revenue between $98 million and $100 million for FY26, with RNS revenue growth of approximately 20-22% and gross margin around 81-82%[21] RNS System & Clinical Data - The RNS System has been used in over 8,000 patients[12] - The RNS System demonstrated a median seizure reduction of 75% at 9 years in the original FDA study results[35] - The RNS Post-Approval Study showed an 82% median seizure reduction at 3+ years[35, 37] - Preliminary NAUTILUS results showed an 18-month median seizure reduction of 77% in LGS patients[61] Market & Expansion - The annual target market opportunity is estimated at over $3.5 billion[12] - Approximately 1.2 million people in the U S have drug-resistant epilepsy (DRE)[25, 56] - The company is focused on expanding access to the RNS System in generalized epilepsy, pediatrics, and community channels[74]

Financial Performance & Growth - NeuroPace's 2024 revenue reached $79.9 million, demonstrating a 22% year-over-year growth[12] - Q3 2025 revenue was $27.4 million, a 30% increase year-over-year[15] - Gross margin in Q3 2025 was 77.4%, a 417 bps increase year-over-year[15] - FY 2025 revenue guidance is projected to be between $97 million and $98 million, representing an 18%-23% growth[64] RNS System & Clinical Data - The RNS System has been implanted in over 6,000 patients[12] - The RNS System demonstrated a 75% median seizure reduction at 9 years in the original FDA study results[28] - The FDA post-approval study results showed an 82% median seizure reduction at 3+ years[28] Market Opportunity & Expansion - The annual target market opportunity is estimated to be over $3.5 billion[12] - The company is targeting a $55 billion+ total addressable market (TAM) for drug-resistant epilepsy (DRE)[41] - There are approximately 1.2 million people in the U S with drug-resistant epilepsy[18]

Financial Data and Key Metrics Changes - The company reported record revenue of $23.5 million for Q2 2025, representing a 22% increase compared to $19.3 million in the prior year period [6][25]. - Gross margin was above 77%, with RNS gross margin exceeding 80%, reflecting strong operational discipline [6][9]. - Operating expenses, excluding one-time items, grew 13% year-over-year, significantly below the revenue growth rate [6][29]. Business Line Data and Key Metrics Changes - Revenue from the RNS System grew 16% in the quarter and 21% year-to-date in 2025, driven by increased sales and prescriber engagement [7][25]. - The company is winding down its distribution agreement with Dixie Medical, which is expected to phase out by the end of 2026 [26][29]. Market Data and Key Metrics Changes - The company is expanding access to RNS Therapy through new service sites and clinical indication expansion, contributing to the growth in prescribers and active accounts [5][6]. - Project CARE continues to drive growth by enabling referrals and implants in community settings, with sequential increases in site engagement and implant volumes [8][25]. Company Strategy and Development Direction - The company is focused on deepening adoption of RNS Therapy while expanding access through new clinical indications and service sites [5][6]. - The strategic direction includes enhancing the RNS platform with AI-powered tools and advancing clinical development programs [17][19]. - The company plans to continue engaging with CMS to advocate for improvements in reimbursement structures [20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability and trajectory of growth, raising full-year revenue guidance to a range of $94 million to $98 million [9][26]. - The company anticipates total gross margin to trend towards 80% over time as RNS volumes scale and lower-margin sales phase out [27][28]. - Management remains optimistic about the long-term growth potential of the RNS system, expecting to achieve cash flow breakeven by 2027 [34][47]. Other Important Information - The company completed a refinancing of its existing debt, enhancing financial flexibility and removing near-term debt maturity concerns [9][34]. - The post-approval study of the RNS system has shown compelling results, particularly in reducing generalized tonic-clonic seizures [11][12]. Q&A Session Summary Question: FDA submission strategy for IgE - The company plans to pursue an indication involving the totality of data across the entire population, demonstrating clinically meaningful treatment effects [40][41]. Question: Outlook for gross margin - Management indicated that the higher gross margin performance was encouraging, and while guidance implies a potential decline, it reflects a conservative approach [42][45]. Question: Dynamics with existing base and Project CARE - The company reported strong implant growth from Project CARE, with existing accounts contributing positively to implant volumes [51][53]. Question: Long-range plan and RNS growth - Management remains confident in achieving a 20% growth rate for the RNS business, even with the divestiture of Dixie revenue [84][89]. Question: Development of next-gen RNS offering - The next-generation platform is on track, with ongoing testing and characterization of key components meeting or exceeding expectations [96][98]. Question: Therapeutic partnerships - The company is actively pursuing collaborations, including a recent agreement with UCB, and sees potential for future partnerships to expand [99][100].

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]

Financial Performance & Growth - NeuroPace's revenue grew by 24% to $22.5 million in Q1 2025[10] - Excluding NAUTILUS study implants in Q1 2024, RNS System revenue grew by 29%[10] - The company anticipates revenue between $93 million and $97 million for 2025, representing a 16%-21% year-over-year growth[71] - Gross margin for Q1 2025 was 77%[71] - Operating expenses for Q1 2025 were $22.5 million[71] - Total cash balance was $66.3 million as of March 31, 2025[69] Market Opportunity & Expansion - The total U S addressable market is >$55 billion[9] - The annual core market opportunity within Comprehensive Epilepsy Centers (CECs) is >$2 billion[9] - Approximately 40% of Drug-Resistant Epilepsy (DRE) patients have generalized epilepsy[57, 61, 66] - Project CARE aims to expand access to the RNS System outside of Level 4 CECs, targeting an additional 1,800 epileptologists and all functional neurosurgeons[53, 61, 66]