Press Release: NeuroPace Reports Fourth Quarter and Full Year 2025 Financial Results and Reiterates 2026 Outlook

Dow Jones03-04 05:05

-- Reported quarterly revenue of $26.6 million in Q4 2025 representing 24% growth --

-- Reiterates previously issued 2026 guidance assuming 20% to 22% growth in core RNS$(R)$ revenue from existing indications, excluding any contribution from idiopathic generalized epilepsy $(IGE)$ --

-- Continues to expect IGE contribution following potential NAUTILUS PMA-Supplement (PMA-S) approval in mid-2026 --

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--March 03, 2026-- 

NeuroPace, Inc. (Nasdaq: NPCE), a medical device company focused on transforming the lives of people living with epilepsy, today reported financial results for the fourth quarter and full year ended December 31, 2025, and provided a corporate update.

Fourth Quarter 2025 Financial Highlights

   --  Total revenue of $26.6 million, representing growth of 24% compared to 
      the fourth quarter of 2024 
 
   --  RNS System revenue of $22.4 million, representing growth of 26% 
      compared to the fourth quarter of 2024 
 
   --  Total gross margin of 77.4%, a 200-basis point increase compared to the 
      fourth quarter of 2024, driven by positive product mix and manufacturing 
      efficiencies. RNS gross margin in the fourth quarter of 2025 was of 80.5%, 
      a 40 basis point increase compared to the fourth quarter of 2024 
 
   --  Delivered Adjusted EBITDA of $0.9 million for the second consecutive 
      quarter 
 
   --  Cash, cash equivalents and short-term investments of $61.1 million at 
      December 31, 2025, a $1.0 million increase from September 30, 2025 

Full Year 2025 Financial Highlights

   --  Total revenue of $100.0 million, representing growth of 25% compared to 
      the full year 2024 
 
   --  RNS System revenue of $81.7 million, representing growth of 25% 
      compared to the full year 2024 
 
   --  Total gross margin of 77.2%, a 330-basis point increase compared to the 
      full year 2024. RNS gross margin for the full year 2025 of 81.9%, a 
      350-basis point increase compared to the full year 2024 
 
   --  Adjusted EBITDA of ($5.0) million 

Fourth Quarter 2025 Operational & Strategic Highlights

   --  Submitted PMA-S to FDA seeking expanded RNS System indication IGE. The 
      PMA-S was supported by clinically meaningful and statistically 
      significant 18-month results from the NAUTILUS trial, which demonstrated 
      robust 77% median seizure reduction and a favorable safety profile in 
      this highly refractory patient population 
   --  Received favorable reimbursement updates in both the CY 2026 Outpatient 
      Prospective Payment System (OPPS) Final Rule, increasing the average 
      hospital Medicare reimbursement for RNS System replacements by 47% 
      beginning January 1, 2026 and the CY2026 Medicare Physician Fee Schedule 
      $(PFS)$, increasing by approximately 43% for initial implant procedure and 
      45% for the replacement procedure 
   --  Submitted Seizure ID$(TM)$ to the FDA for review. Seizure ID is the first 
      of a suite of planned NeuroPace AI(TM) tools designed to further improve 
      clinical outcomes through deeper data insights along with enhanced and 
      accelerated iEEG review. Built on years of proprietary, patient-level 
      brain data captured through the RNS System, Seizure ID empowers 
      clinicians to be supported in making faster, more confident treatment 
      decisions. 
   --  Showcased new clinical and AI-driven advances at the American Epilepsy 
      Society $(AES)$ meeting that underscored the Company's focus on delivering 
      life-changing outcomes and enabling physicians to provide more confident, 
      data-informed care for people living with epilepsy. The RNS System was 
      featured in over 80 scientific presentations and posters, the most of any 
      neuromodulation therapy. 
   --  Entered into an amendment to the Distribution Agreement with DIXI 
      Medical to end the wind down period and cease commercial partnership 
      activities on December 31, 2025, earlier than the previously agreed wind 
      down period ending March 31, 2026 
   --  Reached new all-time highs in both prescribers, accounts and patient 
      pipeline 

"2025 marked an important execution year for NeuroPace, with strong growth and significant improvement toward cash flow break-even, increasing focus on our core RNS business, and meaningful progress across our strategic priorities," said Joel Becker, Chief Executive Officer of NeuroPace. "Looking ahead, we believe 2026 has the potential to be a transformational year for the Company, as we build on commercial momentum, prepare for indication expansion, and launch as well as advance new products that expand the reach and impact of personalized neuromodulation."

Fourth Quarter 2025 Financial Results

Total revenue in the fourth quarter of 2025 grew 24% to $26.6 million, compared with $21.5 million in the fourth quarter of 2024. The Company's revenue growth was primarily driven by increased sales of the RNS System which totaled $22.4 million in the fourth quarter of 2025, representing growth of 26% compared to the fourth quarter of 2024.

Gross margin for the fourth quarter of 2025 was 77.4%, compared with 75.4% in the fourth quarter of 2024 and 77.4% in the third quarter of 2025. The year-over-year improvement is primarily due to increasing revenue contribution from higher margin RNS revenue, benefit from improved manufacturing efficiency, and increasing average selling price resulting from strong pricing conversion. RNS gross margin for the fourth quarter of 2025 was 80.5%, compared with 80.1% in the fourth quarter of 2024.

Total operating expenses in the fourth quarter of 2025 were $22.3 million, compared with $19.8 million in the fourth quarter of 2024.

Sales and marketing expense in the fourth quarter of 2025 was $10.9 million, compared with $10.0 million in the fourth quarter of 2024. The year-over-year increase was largely due to personnel-related expenses associated with ongoing scaling of commercial activities, investment in direct-to-consumer marketing and other sales related expenses.

Research and development expense in the fourth quarter of 2025 was $7.0 million, compared with $6.1 million in the fourth quarter of 2024. The year-over-year increase was primarily driven by personnel-related expenses associated with the development of a next-generation platform, AI-enabled tools, and ongoing clinical trials.

General and administrative expense in the fourth quarter of 2025 was $4.4 million compared with $3.8 million in the fourth quarter of 2024. This increase was primarily due to an increase in personnel-related expenses.

Loss from operations was ($1.8) million in the fourth quarter of 2025, compared with loss from operations of ($3.7) million in the fourth quarter of 2024. Net loss was ($2.7) million for the fourth quarter of 2025 compared with net loss of ($5.3) million in the fourth quarter of 2024.

The Company's cash, cash equivalents and short-term investments balance as of December 31, 2025 was $61.1 million compared with $60.0 million at the end of the prior quarter. Long-term borrowings totaled $58.9 million as of December 31, 2025.

Full Year 2025 Financial Results

Total revenue for the year ended December 31, 2025 grew 25% to $100.0 million, compared with $79.9 million in 2024. The Company's revenue growth was primarily driven by increased sales of the RNS System, which totaled $81.7 million for the full year 2025, representing growth of 25% compared to 2024.

Gross margin for the year was 77.2%, compared with 73.9% in 2024. The year-over-year improvement is primarily due to increasing revenue contribution from higher margin RNS revenue, benefit from improved manufacturing efficiency, and favorable pricing. RNS gross margin for the year was 81.9%, compared with 78.4% in 2024.

Total operating expenses for the year were $93.6 million, compared with $80.8 million in 2024.

Sales and marketing expense for the year was $46.6 million, compared with $39.7 million in 2024. The year-over-year increase was largely due to personnel-related expenses associated with ongoing scaling of commercial activities, increased variable compensation due to sales performance, investment in direct-to-consumer marketing and other sales related expenses.

Research and development expense for the year was $27.9 million, compared with $23.7 million in 2024. The year-over-year increase was primarily driven by personnel-related expenses as well as lower grant funding received compared to 2024.

General and administrative expense for the year was $19.1 million compared with $17.4 million in 2024. This increase was primarily due to an increase in personnel-related expenses, including non-recurring items related to executive transition in the second quarter of 2025.

Discontinued Operations

The Company expects to begin reporting its DIXI Medical related financial results as a discontinued operation beginning with its first quarter 2026 financial results and in accordance with U.S. GAAP, the Company's continuing operations basis will exclude the impact of DIXI for both the 2026 reporting periods and the applicable comparable periods presented. Refer to Table 4 for selected historical DIXI Medical related operating results, including revenue, gross profit and operating expenses.

Full Year 2026 Financial Guidance on a Continuing Operations Basis

   --  Total revenue guidance for full year 2026 to be between $98 million and 
      $100 million, representing underlying RNS growth of 20% to 22% compared 
      to full year 2025 
 
   --  Total revenue for first quarter 2026 to be between $21 million and $22 
      million 
 
   --  Non-GAAP gross margin to be between 81.5% and 82.5%, excluding $0.5 
      million in stock-based compensation, a non-cash expense. Including 
      stock-based compensation, GAAP gross margin to be between 81% and 82%. 
 
   --  Total non-GAAP operating expenses to be between $90 million and $92 
      million, excluding approximately $10 million in stock-based compensation, 
      a non-cash expense. Including stock-based compensation, GAAP operating 
      expenses range between $100 million and $102 million. 
 
   --  Adjusted EBITDA to be between ($9.0) and ($10.0) million 

Beginning in the first quarter of 2026, the Company will present gross margin and operating expenses on an adjusted basis, excluding stock-based compensation, for each line item. This change is intended to provide greater transparency into the underlying operating performance of the business, enhance the visibility of our operating leverage, and improve comparability across periods. The Company will continue to disclose stock-based compensation and provide appropriate reconciliations to GAAP results.

Non-GAAP Measure

To supplement NeuroPace's condensed financial statements presented in accordance with GAAP, the Company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include Adjusted EBITDA, non-GAAP gross margin, non-GAAP cost of goods sold, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating expenses, and non-GAAP loss from operations. NeuroPace believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the Company's historical financial performance. The presentation of the Company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the Company's financial results prepared in accordance with GAAP, and the Company's non-GAAP measures may be different from non-GAAP measures used by other companies.

GAAP to Non-GAAP Supplemental Financial Information

The Company has included supplemental reconciliations of GAAP to non-GAAP financial measures to provide investors with additional insight into the performance of its core business.

   --  Table 1 presents a reconciliation of GAAP to non-GAAP financial 
      measures excluding DIXI Medical related operating results. Management 
      believes this presentation provides a more meaningful basis for 
      evaluating period over period performance of the Company's continuing 
      operations and core RNS business. Beginning in 2026, the Company's 
      reported continuing operations results will be compared against these 
      2025 continuing operations amounts for year over year analysis. 
 
   --  Table 2 presents the Company's 2026 financial guidance on a continuing 
      operations basis. This table reflects, gross margin, and operating 
      expense ranges excluding the impact of DIXI Medical. Operating expense 
      guidance is presented by functional line item and includes stock-based 
      compensation expense within each respective category. These non-GAAP 
      expense line items will be the primary focus of the Company's reporting 
      and performance evaluation framework going forward, providing greater 
      transparency into the cost structure of the continuing operations. 
      Together with revenue and gross margin, these line items form the basis 
      for the Company's projected Adjusted EBITDA. 
 
   --  Table 3 presents a reconciliation of GAAP to non-GAAP financial 
      measures for the periods presented. Both GAAP and non-GAAP financial 
      measures in this table include DIXI Medical related operating results. 
 
   --  Table 4 presents selected historical DIXI Medical related operating 
      results, including revenue, gross profit and operating expenses, to 
      provide transparency into the financial contribution from DIXI Medical 
      related operations prior to its classification as discontinued 
      operations. 

Webcast and Conference Call Information

NeuroPace will host a conference call to discuss the fourth quarter and full year 2025 financial results after market close on Tuesday, March 3, 2026, at 4:30 P.M. Eastern Time. Investors interested in listening to the conference call may do so by accessing a live and archived webcast of the event at (click here). Individuals interested in participating in the call via telephone may access the call by dialing + 1 (800) 715-9871 and referencing Conference ID 8467256. The webcast will be archived on the Company's investor relations website at https://investors.neuropace.com/news-and-events/events and will be available for replay for at least 90 days after the event.

About NeuroPace, Inc.

Based in Mountain View, Calif., NeuroPace is a medical device company focused on transforming the lives of people living with epilepsy by reducing or eliminating the occurrence of debilitating seizures. Its novel and differentiated RNS System is the first and only commercially available, brain-responsive platform that delivers personalized, real-time treatment at the seizure source. This platform can drive a better standard of care for patients living with drug-resistant epilepsy and has the potential to offer a more personalized solution and improved outcomes to the large population of patients suffering from other brain disorders.

Forward Looking Statements

This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "aims," "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "intends," "may," "plans," "possible," "potential," "seeks," "will" and variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. NeuroPace may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding: Expectations regarding the Company's future revenue and growth based on a continued operations basis without DIXI Medical revenue; NeuroPace's expectations, forecasts and beliefs with respect to potential indication expansion for its RNS System and its software, technology and other product development efforts; increasing access to and adoption of RNS therapy as the standard of care in drug-resistant epilepsy; NeuroPace's continued execution on its long-term revenue growth strategy, including with respect to sustained revenue growth and long-term value creation. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various factors, including: actual operating results may differ significantly from any guidance provided; uncertainties related to market acceptance and adoption of NeuroPace's RNS System and impacts to NeuroPace's revenue for 2026 and in the future; risks that NeuroPace's operating expenses could be higher than anticipated and that it could use its cash resources sooner than expected; risks that NeuroPace's gross margin may be lower than forecast; risks related to the pricing of the RNS System and availability of adequate reimbursement for the procedures to implant the RNS System and for clinicians to provide ongoing care for patients treated with the RNS System; risks related to regulatory compliance and expectations for regulatory approvals to expand the market for NeuroPace's RNS System, including risks related to the NAUTILUS submission; risks related to product development, including risks related to the development of AI-powered software, including NeuroPace AI(TM) and Seizure ID(TM) and the next generation device platform, including risks related to Seizure ID(TM) ; risks related to NeuroPace's reliance on contractors and other third parties, including single-source suppliers and vendors; and other important factors. These and other risks and uncertainties include those described more fully in the section titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in NeuroPace's public filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 3, 2026, as well as any other reports that it may file with the SEC in the future. Forward-looking statements contained in this announcement are based on information available to NeuroPace as of the date hereof. NeuroPace undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing NeuroPace's views as of any date subsequent to the date of this press release and should not be relied upon as a prediction of future events. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of NeuroPace.

 
                                NeuroPace, Inc. 
           Condensed Statements of Operations and Comprehensive Loss 
                                   (unaudited) 
                            Three Months Ended 
                               December 31,           Year Ended December 31, 
                        --------------------------  ---------------------------- 
(in thousands, except 
for share and per 
share amounts)              2025          2024          2025          2024 
                         ----------    ----------    ----------    ---------- 
Revenue                 $    26,588   $    21,466   $    99,986   $    79,906 
Cost of goods sold            6,010         5,278        22,766        20,821 
                         ----------    ----------    ----------    ---------- 
    Gross profit             20,578        16,188        77,220        59,085 
Operating expenses: 
  Sales and marketing        10,936         9,951        46,580        39,669 
  Research and 
   development                7,027         6,050        27,888        23,653 
  General and 
   administrative             4,382         3,840        19,090        17,434 
                         ----------    ----------    ----------    ---------- 
     Total operating 
      expenses               22,345        19,841        93,558        80,756 
                         ----------    ----------    ----------    ---------- 
       Loss from 
        operations           (1,767)       (3,653)      (16,338)      (21,671) 
Interest income                 638           681         2,816         3,024 
Interest expense             (1,600)       (2,192)       (7,457)       (8,798) 
Other income 
 (expense), net                  --           (86)         (486)          304 
                         ----------    ----------    ----------    ---------- 
        Net loss and 
         comprehensive 
         loss           $    (2,729)  $    (5,250)  $   (21,465)  $   (27,141) 
                         ==========    ==========    ==========    ========== 
Net loss per share 
 attributable to 
 common stockholders, 
 basic and diluted      $     (0.08)  $     (0.18)  $     (0.66)  $     (0.93) 
                         ==========    ==========    ==========    ========== 
Weighted-average 
 shares used in 
 computing net loss 
 per share 
 attributable to 
 common stockholders, 
 basic and diluted       33,385,740    29,914,786    32,722,438    29,126,314 
                         ==========    ==========    ==========    ========== 
 
 
                             NeuroPace, Inc. 
                         Condensed Balance Sheets 
                                (unaudited) 
                                           December 31,     December 31, 
(in thousands)                                  2025            2024 
                                              ---------       --------- 
Assets 
Current assets: 
    Cash and cash equivalents              $     21,692    $     13,430 
    Short-term investments                       39,366          39,325 
    Accounts receivable                          14,681          12,851 
    Inventory                                    16,896          13,381 
    Prepaid expenses and other current 
     assets                                       1,438           2,352 
                                              ---------       --------- 
        Total current assets                     94,073          81,339 
Property and equipment, net                       1,125           1,052 
Operating lease right-of-use asset               10,132          11,843 
Restricted cash                                     122             122 
Deferred offering costs                              --             276 
Other assets                                        113              15 
                                              ---------       --------- 
        Total assets                       $    105,565    $     94,647 
                                              =========       ========= 
Liabilities and Stockholders' Equity 
Current liabilities: 
    Accounts payable                       $      2,217    $      2,954 
    Accrued liabilities                          13,339           9,787 
    Operating lease liability                     2,117           1,860 
    Deferred revenue                                141             555 
                                              ---------       --------- 
        Total current liabilities                17,814          15,156 
Long-term debt                                   58,884          59,525 
Operating lease liability, net of 
 current portion                                  9,836          11,953 
                                              ---------       --------- 
        Total liabilities                        86,534          86,634 
                                              ---------       --------- 
Stockholders' equity: 
    Common stock, $0.001 par value                   34              30 
    Additional paid-in capital                  571,412         538,933 
    Accumulated deficit                        (552,415)       (530,950) 
                                              ---------       --------- 
        Total stockholders' equity               19,031           8,013 
                                              ---------       --------- 
            Total liabilities and 
             stockholders' equity          $    105,565    $     94,647 
                                              =========       ========= 
 
 
                          NeuroPace, Inc. 
                Condensed Statements of Cash Flows 
                            (unaudited) 
                         Three Months Ended   Year Ended December 
                            December 31,              31, 
                         ------------------  ---------------------- 
(in thousands)             2025      2024      2025       2024 
                          ------    ------    -------    ------- 
Cash flows from 
operating activities 
Net loss                 $(2,729)  $(5,250)  $(21,465)  $(27,141) 
Adjustments to 
reconcile net loss to 
net cash provided by 
(used in) operating 
activities: 
    Stock-based 
     compensation 
     expense               2,607     2,603     11,089     10,282 
    Depreciation              80        48        238        207 
    Amortization of 
     debt discount and 
     issuance costs           63        49        237        228 
    Non-cash interest 
     expense                  75       211        538        954 
    PIK interest 
     incurred but not 
     paid on term loan        --        --         --      1,389 
    Loss on debt 
    extinguishment            --        --        527         -- 
    Amortization of 
     right-of-use 
     asset                   442       403      1,710      1,562 
    Loss (gain) on 
     short-term 
     investments              --        86        (41)      (229) 
    Inventory 
     write-downs              19        55        159        251 
    Loss on disposal of 
     property and 
     equipment                12        --         14         -- 
    Changes in 
    operating assets 
    and liabilities: 
        Accounts 
         receivable          257    (1,289)    (1,830)      (536) 
        Inventory          1,221    (1,352)    (3,673)    (2,418) 
        Prepaid 
         expenses and 
         other assets        809      (237)       943        384 
        Accounts 
         payable          (2,385)      773       (730)       671 
        Accrued 
         liabilities       1,022      (284)     3,552     (1,392) 
        Deferred 
         revenue            (507)     (193)      (414)      (534) 
        Operating lease 
         liabilities        (480)     (420)    (1,860)    (1,627) 
                          ------    ------    -------    ------- 
            Net cash 
             provided 
             by (used 
             in) 
             operating 
             activities      506    (4,797)   (11,006)   (17,949) 
                          ------    ------    -------    ------- 
Cash flows from 
investing activities 
Acquisition of property 
 and equipment               (97)      (39)      (332)      (306) 
Proceeds from sale of 
 short-term 
 investments                  --     2,000         --      9,300 
                          ------    ------    -------    ------- 
            Net cash 
             (used in) 
             provided 
             by 
             investing 
             activities      (97)    1,961       (332)     8,994 
                          ------    ------    -------    ------- 
Cash flows from 
financing activities 
Proceeds from issuance 
of common stock in 
follow-on offering, net 
of underwriting 
discounts and 
commissions                   --        --     69,654         -- 
Repurchase of common 
 stock from KCK Ltd.          --        --    (49,546)        -- 
Proceeds from issuance 
 of common stock under 
 employee plans              723       595      1,875      1,931 
Taxes withheld and paid 
 related to net share 
 settlement of equity 
 awards                      (88)      (92)      (543)      (881) 
Proceeds from 
 At-the-Market 
 offering, net of sales 
 commission                   --       345        232      3,277 
Proceeds from debt, net 
of discounts and 
issuance costs                --        --     58,435         -- 
Repayment of debt             --        --    (60,507)        -- 
                          ------    ------    -------    ------- 
            Net cash 
             provided 
             by 
             financing 
             activities      635       848     19,600      4,327 
                          ------    ------    -------    ------- 
Net increase (decrease) 
 in cash and cash 
 equivalents               1,044    (1,988)     8,262     (4,628) 
Cash, cash equivalents 
 and restricted cash at 
 the Beginning of 
 Period                   20,770    15,540     13,552     18,180 
                          ------    ------    -------    ------- 
Cash, cash equivalents 
 and restricted cash at 
 the End of Period       $21,814   $13,552   $ 21,814   $ 13,552 
                          ======    ======    =======    ======= 
Reconciliation of cash, 
cash equivalents and 
restricted cash to 
balance sheets: 
Cash and cash 
 equivalents             $21,692   $13,430   $ 21,692   $ 13,430 
Restricted cash              122       122        122        122 
                          ------    ------    -------    ------- 
Cash, cash equivalents 
 and restricted cash in 
 balance sheets          $21,814   $13,552   $ 21,814   $ 13,552 
                          ======    ======    =======    ======= 
 
 
                                NeuroPace, Inc. 
         Table 1. GAAP to Non-GAAP Reconciliations (excluding DIXI)(1) 
                                   (unaudited) 
                                     Three Months Ended              Year Ended 
                          ----------------------------------------- 
                           March                           December 
                            31,     June 30,   September     31,      December 
(in thousands)              2025      2025     30, 2025      2025     31, 2025 
                          --------  --------  -----------  --------  ----------- 
GAAP loss from 
 operations               $(5,147)  $(6,824)   $  (2,600)  $(1,767)  $(16,338) 
          Less: DIXI 
           income from 
           operations       1,613     1,365        1,425     1,500      5,903 
          Stock-based 
           compensation     2,626     3,228        2,628     2,607     11,089 
          Depreciation         49        55           54        80        238 
                           ------    ------       ------    ------    ------- 
Adjusted EBITDA 
 (Non-GAAP) (excluding 
 DIXI)                    $(4,085)  $(4,906)   $  (1,343)  $  (580)  $(10,914) 
                           ======    ======       ======    ======    ======= 
 
 
GAAP cost of goods sold   $ 5,182   $ 5,388    $   6,186   $ 6,010   $ 22,766 
          DIXI cost of 
           goods sold       1,992     2,100        2,005     1,605      7,702 
          Stock-based 
           compensation       178       173          168       175        694 
                           ------    ------       ------    ------    ------- 
Non-GAAP cost of goods 
 sold (excluding DIXI)    $ 3,012   $ 3,115    $   4,013   $ 4,230   $ 14,370 
                           ======    ======       ======    ======    ======= 
 
GAAP sales and marketing 
 expense                  $11,003   $12,043    $  12,598   $10,936   $ 46,580 
          DIXI sales and 
           marketing 
           expense            598       554          573       223      1,948 
          Stock-based 
           compensation       783       761          781       727      3,052 
                           ------    ------       ------    ------    ------- 
Non-GAAP sales and 
 marketing expense 
 (excluding DIXI)         $ 9,622   $10,728    $  11,244   $ 9,986   $ 41,580 
                           ======    ======       ======    ======    ======= 
 
GAAP research and 
 development expense      $ 7,440   $ 6,845    $   6,576   $ 7,027   $ 27,888 
Stock-based compensation      872       865          821       848      3,406 
                           ------    ------       ------    ------    ------- 
Non-GAAP research and 
 development expense 
 (1)                      $ 6,568   $ 5,980    $   5,755   $ 6,179   $ 24,482 
                           ======    ======       ======    ======    ======= 
 
GAAP general and 
 administrative expense   $ 4,046   $ 6,068    $   4,594   $ 4,382   $ 19,090 
Stock-based compensation      793     1,429          858       857      3,937 
                           ------    ------       ------    ------    ------- 
Non-GAAP general and 
 administrative expense 
 (1)                      $ 3,253   $ 4,639    $   3,736   $ 3,525   $ 15,153 
                           ======    ======       ======    ======    ======= 
 

(____________________________ 1) The Company did not allocate research and development or general and administrative expenses to its DIXI operations.

 
                             NeuroPace, Inc. 
                Table 2. GAAP to Non-GAAP Reconciliations 
                               2026 Guidance 
 
(in thousands)                                          2026 Guidance 
                                                    ---------------------- 
 
GAAP gross margin                                               81% to 82% 
          Stock-based compensation                                 50 bps 
                                                    ---------------------- 
Non-GAAP gross margin                                       81.5% to 82.5% 
                                                    ---------------------- 
 
GAAP sales and marketing expense                        $49,000 to $51,000 
          Stock-based compensation                                 $3,000 
                                                    ---------------------- 
Non-GAAP sales and marketing expense                    $46,000 to $48,000 
                                                    ---------------------- 
 
GAAP research and development expense                             $30,000 
          Stock-based compensation                                 $3,000 
                                                    ---------------------- 
Non-GAAP research and development expense                         $27,000 
                                                    ---------------------- 
 
GAAP general and administrative expense                           $21,000 
          Stock-based compensation                                 $4,000 
                                                    ---------------------- 
Non-GAAP general and administrative expense                       $17,000 
                                                    ---------------------- 
 
Total GAAP operating expenses                         $100,000 to $102,000 
          Stock-based compensation                                $10,000 
                                                    ---------------------- 
Non-GAAP operating expenses                             $90,000 to $92,000 
                                                    ---------------------- 
 
Total GAAP loss from operations                     ($20,000) to ($21,000) 
          Stock-based compensation (including 
           gross margin)                                          $10,500 
                                                    ---------------------- 
Non-GAAP loss from operations                        ($9,500) to ($10,500) 
                                                    ---------------------- 
 
Total Depreciation & Amortization                                    $500 
 
Total Adjusted EBITDA (Non-GAAP)                     ($9,000) to ($10,000) 
                                                    ---------------------- 
 
 
                                NeuroPace, Inc. 
                   Table 3. GAAP to Non-GAAP Reconciliations 
                                   (unaudited) 
                                     Three Months Ended              Year Ended 
                          ----------------------------------------- 
                           March                           December 
                            31,     June 30,   September     31,      December 
(in thousands)              2025      2025     30, 2025      2025     31, 2025 
                          --------  --------  -----------  --------  ----------- 
GAAP loss from 
 operations               $(5,147)  $(6,824)   $  (2,600)  $(1,767)  $(16,338) 
          Stock-based 
           compensation     2,626     3,228        2,628     2,607     11,089 
          Depreciation         49        55           54        80        238 
                           ------    ------       ------    ------    ------- 
Adjusted EBITDA 
 (Non-GAAP)               $(2,472)  $(3,541)   $      82   $   920   $ (5,011) 
                           ======    ======       ======    ======    ======= 
 
 
GAAP cost of goods sold   $ 5,182   $ 5,388    $   6,186   $ 6,010   $ 22,766 
          Stock-based 
           compensation       178       173          168       175        694 
                           ------    ------       ------    ------    ------- 
Non-GAAP cost of goods 
 sold                     $ 5,004   $ 5,215    $   6,018   $ 5,835   $ 22,072 
                           ======    ======       ======    ======    ======= 
 
GAAP sales and marketing 
 expense                  $11,003   $12,043    $  12,598   $10,936   $ 46,580 
          Stock-based 
           compensation       783       761          781       727      3,052 
                           ------    ------       ------    ------    ------- 
Non-GAAP sales and 
 marketing expense        $10,220   $11,282    $  11,817   $10,209   $ 43,528 
                           ======    ======       ======    ======    ======= 
 
GAAP research and 
 development expense      $ 7,440   $ 6,845    $   6,576   $ 7,027   $ 27,888 
         Stock-based 
          compensation        872       865          821       848      3,406 
                           ------    ------       ------    ------    ------- 
Non-GAAP research and 
 development expense      $ 6,568   $ 5,980    $   5,755   $ 6,179   $ 24,482 
                           ======    ======       ======    ======    ======= 
 
GAAP general and 
 administrative expense   $ 4,046   $ 6,068    $   4,594   $ 4,382   $ 19,090 
         Stock-based 
          compensation        793     1,429          858       857      3,937 
                           ------    ------       ------    ------    ------- 
Non-GAAP general and 
 administrative expense   $ 3,253   $ 4,639    $   3,736   $ 3,525   $ 15,153 
                           ======    ======       ======    ======    ======= 
 
 
                            NeuroPace, Inc. 
                  Table 4. DIXI Operating Results (2) 
                              (unaudited) 
                              Three Months Ended            Year Ended 
                    -------------------------------------- 
                    March    June 
                     31,     30,    September    December    December 

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