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What were the key takeaways from NeuroPace’s earnings call?

- **Revenue Beat**: Q3 $27.4M (+30% YoY), RNS up 31% to $22.6M, DIX Milestone**: First positive EBITDA, grossI winding down.
- **Margin margin 77.4% (vs 73.2% YoY), 2025 guide 76-77%.
- **Pipeline Catalysts**: NAUTILUS PMA Q4, pediatric PMA via real-world evidence, Seizure ID FDA submission.
- **Growth Drivers**: 20%+ RNS core, growth AI tools, and expanding into Level 3/Community centers.
- **Operational Strength**: $60M cash, 21% opex vs 30% rev, disciplined expense mgmt.

**【CEO Summary Section】**
- **Record Revenue Growth**: Q3 revenue of $27.4M, up 30% YoY, driven by RNS System sales of $2% YoY growth). 
- **R2.6M (31NS Expansion**: Broad-based utilization across geographies, with Level 4 centers leading procedural volumes. Direct-to-consumer efforts and Project CARE contributed to growth.
- **Gross Margin Milestone**: First quarter of positive adjusted EBITDA, reflecting operational efficiency.
- **Pipeline Progress**: NAUTILUS PMA supplement submission on track for Q4, pediatric indication collaboration with FDA ongoing.
- **AI Integration**: Seizure ID AI tool submitted to FDA, part of broader AI-enabled neuromodulation suite.

**【CFO Financial Commentary】**
- **Revenue Guidance Update**: Full year 2025 revenue raised to $97-98M (21-23% YoY growth), driven by RNS System strength.
- **Gross Margin Expansion**: Q3 gross margin 77.4%, up from 73.2% YoY, with RNS >80% margin. 2025 gross margin guidance raised to 76-77%.
- **Operating Leverage**: Operating expenses up 21% YoY but below revenue growth (30%), with focus on R&D and sales overperformance.
- **Cash Flow**: $60M cash balance, supporting DIXI wind-down (Q1 2026 completion).

**【Q&A Highlights】**
- **2026 Outlook**: RNS core growth 20%+; NAUTILUS PMA expected mid-2026; pediatric strategy using real-world evidence.
- **Gross Margin Stability**: 80%+ RNS margin sustainable post-DIXI; service revenue monetizes data partnerships.
- **Competitive Position**: Outpacing peers via market expansion (Level 4 centers) and tech differentiation (closed-loop AI).
- **Pipeline Momentum**: Seizure ID AI tool first of suite; IGE PMA submission Q4; pediatric PMA via real-world evidence collaboration.
- **Replacement Revenue**: <10% of total, but growing as initial implants mature; focus on RNS initial sales for now.

NeuroPace, Inc. (NPCE) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NPCE

NPCE fundamentals

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