Summary of NeuroPace (NPCE) Q2 2026 Earnings Call

1Key Financial Results and Metrics

Total Revenue: $22.8 million, up 17% year-over-year from $19.5 million.

RNS System Revenue: $22.5 million, representing a 21% increase from $18.6 million in Q2 2025.

Service Revenue: $302,000, down from $937,000 a year ago, impacting overall revenue growth.

Adjusted Gross Margin: 83.4%, slightly down from 84.0% due to higher material costs.

Adjusted Operating Expenses: $21.9 million, a 3% increase year-over-year, reflecting disciplined spending.

Adjusted Net Loss: $3.9 million, improved from a loss of $6.8 million in Q2 2025.

Cash Position: $51.9 million at quarter-end, down from $54.8 million at the end of Q1 2026.

2Strategic Updates and Business Highlights

Continued growth in the RNS business with all-time highs in active prescribers and patient pipeline.

Launched ECoG Assistant, an AI tool designed to enhance clinical decision-making by analyzing intracranial EEG data.

Ongoing development of the IGE PMA supplement; FDA requested additional data but did not issue a disapproval.

Focus on expanding referral pathways and increasing adoption among community and Level 3 centers.

Advancements in product development, including AI-enabled tools and remote care capabilities.

3Forward Guidance and Outlook

Revenue Guidance for 2026: Increased to $99.5 million - $101.5 million, up from previous guidance of $99 million - $101 million.

RNS Revenue Growth: Expected to remain at 21%-23% year-over-year.

Adjusted EBITDA Loss: Projected to improve to a loss of $7.5 million - $8.5 million for the full year.

Anticipated continued growth in the second half of 2026, with RNS revenue growth expected to match the first half's rate of approximately 20%.

4Bad News, Challenges, or Points of Concern

The FDA's response regarding the IGE PMA supplement was not as expected, requiring additional information which could delay approval.

Service revenue decline poses a headwind, impacting overall revenue growth.

The company faces uncertainty regarding the timing of IGE indication approval, which could affect future growth projections.

5Notable Q&A Insights

SIR Meeting: The date is not yet set, but the company is preparing to align with the FDA on additional data needed for the IGE application.

Community Center Expansion: NeuroPace is actively expanding into community centers ahead of IGE label expansion, leveraging existing adult focal indications.

Clinical Community Reaction: Physicians remain confident in the clinical data and are supportive of the company's efforts to address FDA concerns.

Next-Generation Platform: Development is ongoing, with improvements expected in device capabilities and communication, enhancing future product offerings.

AI Initiatives: Current focus is on improving RNS unit sales through enhanced patient management efficiency rather than monetizing AI tools separately. This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a balanced view of NeuroPace's current position and future outlook.