NeuroPace Q1 Earnings Call Highlights

Key Points

• NeuroPace raised its 2026 revenue guidance to $99 million-$101 million after first-quarter revenue of $22.1 million showed strong demand for its RNS System and better commercial execution. Management said the updated outlook reflects improved visibility in both service revenue and the core RNS business.
• First-quarter performance improved on a non-GAAP basis, with RNS revenue up 19.5% year over year and adjusted EBITDA loss narrowing to $3.3 million from $4.1 million. The company also said operating expenses grew more slowly than revenue, indicating operating leverage as it scales.
• NeuroPace’s growth remains centered on Level 4 epilepsy centers, while the company continues to pursue an FDA review for a potential idiopathic generalized epilepsy indication expansion. It also highlighted AI and product-development initiatives, including an expected second-quarter 2026 approval for ECoG Assistant.

NeuroPace NASDAQ: NPCE raised its 2026 revenue outlook after reporting first-quarter results that management said reflected continued demand for its RNS System and improving commercial execution across epilepsy treatment centers.

The company reported total revenue of $22.1 million for the first quarter of 2026. Excluding DIXI Medical, revenue was $22 million, with RNS System revenue of $21.7 million. Chief Financial Officer Patrick Williams said non-GAAP revenue excluding DIXI Medical rose 20.1% from $18.3 million in the prior-year quarter, while RNS System revenue increased 19.5% from $18.2 million in the first quarter of 2025.

Chief Executive Officer Joel Becker said the company reached all-time highs in active prescribers, accounts and patient pipeline during the quarter. He said those metrics are “leading indicators” that support confidence in demand for the RNS System.

Guidance Raised on RNS and Service Revenue Visibility

NeuroPace increased its full-year 2026 revenue guidance to a range of $99 million to $101 million, up from its prior outlook of $98 million to $100 million. Williams said the $1 million increase at the midpoint reflects about $500,000 of improved visibility into service revenue and about $500,000 of improved visibility into the core RNS business.

The updated outlook implies underlying RNS revenue growth of 21% to 23% in the company’s existing adult focal epilepsy indication. Management emphasized that the guidance does not include any contribution from a potential expansion into idiopathic generalized epilepsy, or IGE.

Williams said NeuroPace continues to expect full-year adjusted gross margin of 81.5% to 82.5% and adjusted operating expenses of $90 million to $92 million, excluding about $10 million in stock-based compensation. The company now expects a full-year adjusted EBITDA loss of $8.5 million to $9.5 million, improved from its previous expectation for a loss of $9 million to $10 million.

Operating Loss Narrows on Non-GAAP Basis

Excluding DIXI Medical, NeuroPace reported non-GAAP gross margin of 82.5% in the first quarter, compared with 83.6% a year earlier. Williams noted that the prior-year quarter included a one-time inventory revaluation benefit of about 120 basis points; excluding that impact, he said underlying gross margin expanded year over year, driven mainly by favorable pricing conversion.

Non-GAAP operating expenses were $21.5 million, up from $19.4 million in the prior-year quarter. Williams said the increase remained below revenue growth, demonstrating operating leverage as the business scales. Non-GAAP sales and marketing expense rose to $11 million from $9.6 million, while non-GAAP research and development expense was $6.5 million, slightly below $6.6 million a year earlier. Non-GAAP general and administrative expense increased to $4 million from $3.3 million.

Non-GAAP loss from operations was $3.3 million, compared with a loss of $4.1 million in the prior-year quarter. Adjusted EBITDA loss was also $3.3 million, improving from a $4.1 million loss a year earlier. GAAP net loss was $6.7 million, compared with a GAAP net loss of $6.6 million in the first quarter of 2025. NeuroPace ended the quarter with $54.8 million in cash equivalents, short-term investments and restricted cash, down from $61.2 million at the end of 2025.

Commercial Activity Centers on Level 4 Epilepsy Centers

Becker said most of NeuroPace’s growth continues to be driven by Level 4 comprehensive epilepsy centers, which remain the company’s primary commercial focus. He also said community relationships are increasingly serving as referral channels and could become relevant if the company expands into IGE.

During the question-and-answer portion of the call, Becker said growth was supported by increased adoption and utilization within Level 4 centers, contributions from community settings, direct-to-patient efforts and the company’s nurse navigator team. He said pricing was a tailwind in the quarter, but most revenue growth came from unit volume rather than price.

Williams said NeuroPace expects to continue taking low-single-digit price increases where possible.

Becker also described ongoing investments in the commercial organization, including targeted sales representative additions, updates to sales incentives and resources to help patients move from identification to implant. He said the company expects those investments to become increasingly productive throughout 2026.

IGE Review Remains on Track, Management Says

NeuroPace said it completed an FDA mid-cycle review meeting for its NAUTILUS PMA supplement, which relates to a potential IGE indication expansion. Becker said the FDA paused the 180-day review clock to request additional information and clarification, a step he characterized as a standard and constructive part of the process.

Becker said the company has responded to the FDA’s requests and continues to believe a mid-year determination remains on track. He said the FDA questions focused on clarification and context around aspects of the data and related analyses.

Becker highlighted 18-month NAUTILUS data presented at the American Academy of Neurology annual meeting, including a 77% median reduction in generalized tonic-clonic seizures, sustained reductions over time and favorable safety outcomes. He also cited reductions in absence and myoclonic seizures, an approximately 30% decline in injury events and a 44% reduction in use of benzodiazepines as rescue medication for generalized tonic-clonic seizures compared with baseline.

If approved, management said any contribution from IGE would begin in the second half of the year, but reimbursement timing remains a key factor. Williams said a launch would likely be back-end loaded over the first 12 months as coverage policies are expanded, particularly among private payers.

AI and Product Development Remain Priorities

Becker said NeuroPace’s product roadmap remains on track, with priorities including NeuroPace AI tools, a multimodal foundational model, remote care, automated detection and next-generation system development.

The company expects approval in the second quarter of 2026 for ECoG Assistant, previously known as SeizureID. Becker described the product as an AI-enabled tool designed to help clinicians analyze intracranial EEG records and identify likely electrographic seizure activity. He said the tool is intended to reduce barriers for new physicians adopting RNS and improve efficiency for existing centers.

NeuroPace is also training a multimodal foundational model using its proprietary intracranial EEG data set. Becker said the company has accumulated more than 26 million intracranial EEG recordings, based on more than 8,000 patient implants and 35,000 patient years. He said the EEG component is about one-third of the way through training and is outperforming prior internal algorithmic approaches in early validation work.

In closing remarks, Becker said 2026 has “transformational potential” for NeuroPace as it continues to grow its current focal epilepsy business, pursue a potential IGE indication expansion and develop AI-enabled tools tied to its neuromodulation platform.

About NeuroPace NASDAQ: NPCE

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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