NeuroPace (NASDAQ:NPCE) Announces Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Key Points

• NeuroPace beat quarterly expectations, reporting adjusted EPS of ($0.18) versus the consensus estimate of ($0.22), while revenue reached $22.83 million compared with forecasts of $22.61 million.
• The company raised its 2026 revenue guidance to $99.5 million-$101.5 million and improved its adjusted EBITDA loss outlook, supported by 21.3% year-over-year growth in RNS System revenue and record adoption metrics.
• Regulatory uncertainty remains: the FDA deemed NeuroPace’s epilepsy-indication supplement not approvable in its current form and requested more clinical information, potentially delaying approval and creating uncertainty around timing and labeling.

NeuroPace (NASDAQ:NPCE - Get Free Report) released its earnings results on Tuesday. The company reported ($0.18) EPS for the quarter, beating the consensus estimate of ($0.22) by $0.04, FiscalAI reports. NeuroPace had a negative net margin of 21.67% and a negative return on equity of 108.20%. The firm had revenue of $22.83 million during the quarter, compared to analysts' expectations of $22.61 million.

Here are the key takeaways from NeuroPace's conference call:

• NeuroPace reported second-quarter revenue of $22.8 million, with RNS System revenue up 21.3% year over year to $22.5 million. Active prescribers, accounts, and the patient pipeline reached all-time highs, supporting continued adoption and utilization.
• The company raised full-year 2026 revenue guidance to $99.5 million-$101.5 million and adjusted EBITDA loss guidance improved to $7.5 million-$8.5 million. Adjusted gross-margin guidance also increased to 82%-83%, while underlying RNS growth remains forecast at 21%-23%.
• The FDA found NeuroPace’s PMA supplement for an expanded idiopathic generalized epilepsy indication not approvable in its current form and requested additional clinical information. Management expects to pursue a submission issue request meeting and believes approval remains possible, but the timing and labeling outcome remain uncertain.
• NeuroPace launched ECoG Assistant, an AI-based tool designed to streamline intracranial EEG review and support treatment decisions. Management believes the tool can improve physician efficiency, broaden adoption in community settings, and increase RNS utilization, although it is currently bundled with the RNS System rather than sold separately.
• The company ended the quarter with $51.9 million in cash, short-term investments, and restricted cash, down from $54.8 million in the prior quarter, against $59.0 million of long-term borrowings. NeuroPace plans to continue investing in AI, remote care, and its next-generation platform, prioritizing growth over faster profitability.

NeuroPace Price Performance

Shares of NASDAQ:NPCE traded up $0.15 during midday trading on Tuesday, reaching $15.03. 248,094 shares of the company's stock were exchanged, compared to its average volume of 205,910. The company has a debt-to-equity ratio of 4.08, a quick ratio of 4.35 and a current ratio of 5.38. The company's 50 day simple moving average is $15.59 and its two-hundred day simple moving average is $15.42. NeuroPace has a 12 month low of $7.56 and a 12 month high of $19.60. The firm has a market capitalization of $512.37 million, a PE ratio of -23.12 and a beta of 1.92.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in the business. Legal & General Group Plc boosted its holdings in NeuroPace by 86.0% during the second quarter. Legal & General Group Plc now owns 2,679 shares of the company's stock valued at $30,000 after purchasing an additional 1,239 shares in the last quarter. Quarry LP raised its holdings in shares of NeuroPace by 94.9% in the 3rd quarter. Quarry LP now owns 3,845 shares of the company's stock worth $40,000 after buying an additional 1,872 shares in the last quarter. Man Group plc raised its holdings in shares of NeuroPace by 9.7% in the 4th quarter. Man Group plc now owns 21,626 shares of the company's stock worth $334,000 after buying an additional 1,920 shares in the last quarter. Price T Rowe Associates Inc. MD raised its holdings in shares of NeuroPace by 23.0% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 14,836 shares of the company's stock worth $230,000 after buying an additional 2,778 shares in the last quarter. Finally, Quantbot Technologies LP bought a new position in shares of NeuroPace during the 2nd quarter worth approximately $35,000. Institutional investors and hedge funds own 78.83% of the company's stock.

Wall Street Analyst Weigh In

NPCE has been the subject of a number of research analyst reports. HC Wainwright reaffirmed a "buy" rating and set a $20.00 price objective on shares of NeuroPace in a research report on Wednesday, July 29th. Weiss Ratings restated a "sell (d-)" rating on shares of NeuroPace in a research note on Wednesday, June 24th. Guggenheim restated a "neutral" rating on shares of NeuroPace in a research note on Wednesday, July 29th. Finally, Mizuho began coverage on NeuroPace in a report on Thursday, July 23rd. They issued an "outperform" rating and a $22.00 price target for the company. Two analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $19.29.

NeuroPace Company Profile

NeuroPace, Inc is a medical device company based in Mountain View, California, that develops innovative neuromodulation systems for the treatment of neurological disorders. Founded in the late 1990s out of research at Stanford University, the company's mission centers on delivering closed-loop, “smart” therapies that monitor and respond to electrical activity in the brain. In 2020, NeuroPace completed its initial public offering and now trades on the NASDAQ under the ticker NPCE.

The company's flagship product, the RNS® System, is an implantable device designed for adults with medically refractory focal epilepsy.

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