NeuroPace, Inc.

What they do

NeuroPace develops and sells the RNS System, an implantable device that continuously monitors brain electrical activity, recognizes patient-specific abnormal patterns, and delivers imperceptible electrical pulses to prevent seizures, averaging about three minutes of stimulation per day. The system also records continuous intracranial EEG data that clinicians can review in person or remotely to adjust therapy. The company sells primarily into Level 4 comprehensive epilepsy centers and, since a 2023 PMA supplement, also to additional epileptologists and functional neurosurgeons outside those centers. As of December 31, 2025, over 8,000 patients had received the RNS System.

Revenue drivers

• RNS System (core) — The sole continuing revenue source; generated $22.5 million in Q2 2026, up 21.3% year over year, and is the product the company markets only for adults with drug-resistant focal epilepsy in the U.S.
• DIXI Medical distribution (discontinued) — A distribution agreement that expired and was wound down; in Q2 2026 the company concluded the abandonment of these product operations met criteria for discontinued-operation presentation, and prior periods were reclassified with no effect on previously reported net loss, assets, liabilities or equity.
• Geographic scope — Revenue is U.S.-only for the RNS System today, as the company states it may later seek regulatory approval and expand operations outside the United States.

Recent performance

Q2 2026 total revenue was $22.8 million, up 17% from $19.5 million in Q2 2025, with RNS System revenue of $22.5 million representing 21.3% growth. Net loss narrowed to $6.2 million from $10.0 million a year earlier, and adjusted EBITDA loss improved to $2.8 million from $4.9 million. Non-GAAP gross margin was 83.4% versus 84.0%, which the company attributed to slightly higher material costs partly offset by favorable pricing. Full year 2025 revenue was $100.0 million with a net loss of $21.5 million and operating cash use of $11.0 million. The company also reported new all-time highs in active prescribers, accounts and patient pipeline, and launched ECoG Assistant, an AI-based clinical decision support tool.

Strategy

NeuroPace's stated priority is sustaining momentum in the core RNS focal epilepsy business, where it is expanding its sales force to reach additional epileptologists and functional neurosurgeons outside Level 4 centers. It is pursuing label expansion into drug-resistant idiopathic generalized epilepsy through a PMA supplement filed in December 2025, and into patients ages 12 to 17 through the RESPONSE study and a 2025 collaboration with NEST and the FDA using real-world data. It launched ECoG Assistant as the first of a planned suite of AI clinical decision support tools built on its proprietary long-term intracranial EEG dataset. Management also cites financial discipline alongside continued investment in the product roadmap.

Risks

• Single-product, single-indication concentration — The RNS System is the primary revenue source and can only be marketed in the U.S. for adults with drug-resistant focal epilepsy, so failure to grow adoption within that limited indication would directly hit sales.
• IGE PMA supplement not approvable as filed — On July 28, 2026 the company received FDA correspondence that the PMA-S for idiopathic generalized epilepsy is not approvable in its current form, and it plans a Submission Issue Request and an amended filing with additional data and patient-population context.
• History of losses and cash use — The company has generated significant losses since inception and used $11.0 million of cash in operations in 2025; at June 30, 2026 it held $12.5 million of cash and equivalents against $59.0 million of long-term debt.
• Dependence on limited accounts and third-party suppliers — The business has depended on widespread adoption within a limited number of accounts, historically Level 4 epilepsy centers, and relies on third-party suppliers for product components, some of which are single-source.

Outlook

For full year 2026, management raised total revenue guidance to $99.5 million to $101.5 million, assuming 21% to 23% growth in core RNS revenue from existing indications. The company says preparation remains on track for a Submission Issue Request meeting with the FDA regarding the IGE PMA supplement, supported by 24-month NAUTILUS data showing a 100% median reduction in GTC seizures among evaluable patients. It describes itself as remaining on track with clinical and regulatory timelines and focused on sustaining core business momentum.