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

MOUNTAIN VIEW, Calif.--( BUSINESS WIRE)--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

Full Year 2025 Financial Highlights

Fourth Quarter 2025 Operational & Strategic Highlights

“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

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.

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™ and Seizure ID™ 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,

(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

Deferred offering costs

—

276

Other assets

113

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

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 December 31,

Year Ended December 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

238

207

Amortization of debt discount and issuance costs

237

228

Non-cash interest expense

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

—

(41

)

(229

)

Inventory write-downs

159

251

Loss on disposal of property and equipment

—

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

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

(in thousands)

March 31, 2025

June 30,

2025

September 30,

2025

December 31,

2025

December 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

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

(in thousands)

March 31, 2025

June 30,

2025

September 30,

2025

December 31,

2025

December 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

238

Adjusted EBITDA (Non-GAAP)

(2,472

)

(3,541

)

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

(in thousands)

March 31, 2025

June 30,

2025

September 30,

2025

December 31,

2025

December 31,

2025

Revenue

4,203

4,019

4,003

3,328

15,553

Cost of goods sold

1,992

2,100

2,005

1,605

7,702

Gross Profit

2,211

1,919

1,998

1,723

7,851

Operating Expenses:

Sales and marketing

598

554

573

223

1,948

DIXI income from operations

1,613

1,365

1,425

1,500

5,903

____________________________

2 The Company did not allocate research and development or general and administrative expenses to its DIXI operations.