Neuropace, Inc.

Good afternoon and welcome to NeuroPace fourth quarter 2025 conference call. As a reminder, this call is being recorded. I would now like to turn the call over to Scott Schaefer, head of investor relations at NeuroPace for a few introductory comments.

Thank you, operator, and welcome to NeuroPace's fourth quarter and full year 2025 earnings conference call. Our agenda begins with Joel Becker, Narrow Paces Chief Executive Officer, who will summarize our recent performance and strategic progress, followed by a detailed financial review and outlook from Patrick Williams, our Chief Financial Officer. Following our prepared remarks, we will open the call for questions. Before we begin, I would like to remind you that certain statements made on today's call may constitute forward-looking statements within the meaning of federal securities laws. These statements include, among others, comments regarding our financial outlook for 2026 and the first quarter of 2026, our commercial strategy, clinical and product development initiatives, regulatory matters including our IGE PMA supplement, and our expectations regarding operating performance and profitability. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. A discussion of these risks and uncertainties can be found in today's press release and on our filings with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. We undertake no obligation to update or revise any forward-looking statements except as required by law. In addition, we will discuss certain non-GAAP financial measures on today's call, including adjusted EBITDA. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release, which is available on the investor relations section of our website. With that, I will now turn the call over to Narrow Paces Chief Executive Officer, Joel Becker.

Joel. Thanks, Scott, and good afternoon, everyone. I will start with an overview of our fourth quarter results and how the team is executing against our strategy. I will then provide updates on our key clinical and product development initiatives and close with a brief recap of why 2025 was such an important execution year and how it sets us up for what we believe could be a transformational 2026. After that, Patrick will walk through the financials and our outlook before we open the line for Q&A. The fourth quarter capped off a strong year for NeuroPace. We delivered strong quarterly revenue of $26.6 million, representing 24% year-over-year growth. This performance was primarily driven by strength in our core R&S business, with R&S system revenue of $22.4 million, up 26% year-over-year. These results reflect the execution of the initial parts of our strategy. deepening adoption and utilization within our current adult focal epilepsy indication and customer base, while continuing to expand access to RNS therapy through community pathways and preparing for future indication expansion. We again reached new highs in prescribers' accounts and in our patient pipeline, clear reflections of broad-based momentum across the business. Following R&S growth of more than 30% in the third quarter, our 26% growth in the fourth quarter reflects sustained broad-based momentum and continued commercial execution. Taken together, R&S growth in the second half of 2025 was 29%. The majority of our growth continues to come from level four centers, driven by increased adoption and utilization. At the same time, our community access efforts continue to contribute and scale as we expand referral pathways and site engagement. Stepping back, the message is consistent with what we said last quarter. Our results reflect the compounding effects of the recognition of the differentiated capabilities of the RNS system converging with ongoing best-in-class clinical data development, new tools for ease of use, improved commercial execution, and better referral management, which together are driving higher procedural volumes and expanding the addressable patient funnel. We remain confident in our long-term growth trajectory of growing a minimum of 20% in our core RNS business with our current adult focal epilepsy indication. Financial discipline and operating leverage remained important highlights again this quarter. Gross margin was greater than 77%, up roughly 200 basis points year over year, driven by mix and manufacturing efficiencies, with R&S gross margin, again, greater than 80%. We also delivered our second consecutive quarter of positive adjusted EBITDA along with positive cash generation in the fourth quarter. These are important proof points that our operating model is scaling in a disciplined manner and that we are making meaningful progress towards sustainable profitability and cash flow breakeven. As we mentioned in our pre-announcement in early January, we are reiterating our full year 2026 revenue guidance of $98 million to $100 million. This outlook assumes underlying core RNS growth of 20% to 22% within our current adult focal epilepsy indication and excludes any contribution from an idiopathic generalized epilepsy regulatory approval, service revenue, or Dixie Medical. Patrick will walk through our guidance in more detail, including the investments we plan to make in 2026. Strategically, we are continuing to invest in the commercial organization, including targeted sales representative additions, updates to our incentive structure, and additional nurse navigator resources dedicated to helping patients navigate the funnel from identification to evaluation to implant. We believe these investments will pay dividends as they mature and become productive. Let me now turn to our clinical development initiatives, starting with Nautilus and our pursuit of an expanded indication in idiopathic generalized epilepsy, or IgE. During the quarter, we submitted our PMA supplement to the FDA, seeking an expanded indication for the RNS system in IgE. The submission was supported by clinically meaningful and statistically significant 18-month results from Nautilus, including a robust 77% reduction in median seizure rates and a favorable safety profile in a highly refractory patient population. The data presented at the American Epilepsy Society meeting in December reinforced what physicians have increasingly come to recognize about RNS. It is a safe, durable, and clinically impactful therapy for drug-resistant epilepsy supported by rigorous evidence in a patient population that has long lacked meaningful treatment options. The PMA supplement was submitted on December 15th, and the FDA accepted the submission, initiating the 180-day review clock. Our dialogue with the agency remains productive, and we continue to prepare for a mid-cycle meeting. As a reminder, we have a breakthrough device designation, which has supported a consistent and collaborative engagement process, enabling ongoing dialogue as the review progresses. Based on our interactions today, we believe the process remains on track. To be clear, our 2026 outlook reflects the strength of the core business, and does not include any contribution from IGE. If approved on our current timeline, we would incorporate that into guidance as we gain further visibility around specific potential approval timing. Now, turning to product development. Our focus is on continuing to advance the ease of use, efficiency, and effectiveness of the RNS system, building a scalable data-driven neuromodulation platform. As part of our product pipeline, we are advancing a suite of neural-based AI tools designed to enhance physician workflow, improve patient outcomes, and unlock the full value of the now more than 24 million intracranial EEG recordings. These initiatives span workflow automation, personalized treatment optimization, remote programming capabilities, and long-term platform evolution. The first example of this is seizure ID. Seizure ID is an AI-enabled tool designed to analyze a patient's IEEG records, rapidly identify seizures and seizure trends, and provide clinicians with the most clinically relevant data upon which to focus. Highly desired capability and addresses a real workflow challenge. Clinicians can, at times, spend a meaningful time reviewing data for our next patients. And our goal is to reduce the time required while improving the ability to act on insights. Importantly, the seizure ID submission is paired with moving our clinician platform to the cloud, which improves the scalability and supports faster deployment of software and data products over time. We expect seizure ID approval in the first half of 2026. Second, we are advancing RNS remote care. This capability enables physicians to remotely detect events and adjust therapy settings during telehealth visits, eliminating the need for patients to travel to the clinic for programming. We believe remote care meaningfully improves access. particularly for patients who cannot routinely travel to comprehensive epilepsy centers, and increases physician capacity by allowing clinicians to manage more patients more efficiently. Third, we are also advancing the development of a foundation model, leveraging our proprietary intracranial EEG dataset and clinical experience of now over 8,000 patient implants across 33,000 patient years. We believe this is a key strategic mode, and we also recognize that we are stewards of this data with the responsibility to translate it into meaningful improvements in care. The goal of this work is a multimodal model that integrates multiple data inputs, including IEEG patterns and other clinically relevant signals to help identify optimal treatment settings and improve seizure control with a focus on increasing median seizure reduction rates, increasing the rates of seizure freedom, and expanding the proportion of patients to achieve meaningful clinical benefits. We believe that there are meaningful opportunities to advance the current best-in-class outcomes, and this work also lays the foundation for a future customer-facing adaptive treatment tool that can help clinicians more efficiently deliver personalized neuromodulation at scale. Finally, automated initial detection and therapy programming and our next generation platform remain in development and progressing according to plans. We remain bullish on the R&D pipeline, and we believe we are building a product roadmap that expands the reach and impact of personalized closed-loop neuromodulation. Let me close with a broader reflection on 2025. 2025 was a tremendous year for NeuroPace. We delivered 25% revenue growth to $100 million, improved gross margin to over 77%, with R&S gross margins sustained above 80%, and made significant progress toward cash flow break-evens. We also made significant progress on all three of our development levers, market development, clinical development, and product development. We strengthened the leadership team and increased organizational execution muscle. We sharpened our strategic focus on our core R&S business and achieved multiple favorable reimbursement updates that improved the economic profile for hospitals and physicians. Additionally, we advanced key clinical programs, including models from data generation to submission. We submitted seizure ID and made significant progress on the development of our next generation device platform. We also strengthened our balance sheet and financial flexibility through the refinancing completed earlier in the year. Taken together, 2025 was a strong year of execution. that sets up 2026 to be a transformational year for NeuroPACE, with ongoing momentum in the market from which to build top line growth, the launch of seizure ID designed to improve efficiency and ease of use, the potential for the first of its kind indication expansion into the IgE population for the RNS system, and the planned submission of remote patient care enabling remote patient programming. With that, I'll turn it over to Patrick for a review of the financials and outlook. Patrick?