NeuroPace(US:NPCE)2025-11-04 22:30Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $27.4 million, representing a 30% year-over-year growth compared to $21.1 million in Q3 2024 [4] - RNS revenue was $22.6 million, reflecting a 31% year-over-year growth [4] - Gross margin for Q3 2025 was 77.4%, up from 73.2% in the prior year quarter [18] - Adjusted EBITDA was positive $0.1 million, a significant improvement from negative $1.6 million in Q3 2024 [26] Business Line Data and Key Metrics Changes - RNS System sales drove revenue growth, totaling $22.6 million, with increased procedural volumes and utilization across existing centers [15] - Dixie sales grew 8% to approximately $4 million, but the focus is shifting away from Dixie products as the distribution agreement winds down [16] - Research service revenue was approximately $770,000, tied to ongoing data collaborations [15] Market Data and Key Metrics Changes - All sales regions exceeded planned sales for the quarter, with prescribers, accounts, and utilization reaching all-time highs [5] - Growth was broad-based across geographies, customers, and programs, particularly from Level 4 centers [5] Company Strategy and Development Direction - The company aims for a long-term growth trajectory of at least 20% in its core RNS business [5] - Focus on expanding indications, including pediatric populations and idiopathic generalized epilepsy (IGE) [9][10] - The company is committed to leveraging AI and data analytics to enhance clinical outcomes and support drug development partnerships [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential, citing strong execution and positive market trends [31] - The company is raising its full-year revenue guidance to a range of $97 million to $98 million, reflecting continued strength in RNS sales [7] - Management highlighted the importance of the RNS system in the evolving landscape of epilepsy care, emphasizing its unique capabilities [11][27] Other Important Information - The company generated positive adjusted EBITDA for the first time in its history, indicating progress towards sustainable profitability [6] - The PMA supplement for the Nautilus study is on track for submission before year-end 2025 [8] Q&A Session Summary Question: Outlook for 2026 and RNS growth - Management indicated confidence in maintaining a growth rate of over 20% for the RNS business, despite the wind-down of Dixie revenues [30][32] Question: Feedback on partnerships and data utilization - Management noted that partnerships are leveraging the unique capabilities of the RNS system to support drug development and personalized medicine [36] Question: Implied growth for Q4 and Dixie impact - Management explained that the expected decline in Dixie sales is the primary reason for the lower implied growth in Q4, but RNS sales are off to a solid start [40][42] Question: PMA submission timeline for Nautilus - The PMA supplement for Nautilus is expected to be submitted before year-end 2025, with a potential approval timeline around mid-2026 [43] Question: Industry awareness and off-label use - Management clarified that there was no significant impact from off-label use related to Nautilus data in the current quarter [51] Question: Growth from market expansion vs. market share - Management believes growth is a combination of both market expansion and increased utilization of RNS technology [52]