• Total Revenue (2024): $79.9 million, a 22% increase from $65.4 million in 2023.
• Q4 Revenue (2024): $21.5 million, a 19% increase from $18 million in Q4 2023.
• Gross Margin (Q4 2024): 75.4%, compared to 75.2% in Q4 2023.
• R&D Expense (Q4 2024): $6.1 million, up from $5.4 million in Q4 2023.
• SG&A Expense (Q4 2024): $13.8 million, up from $13.2 million in Q4 2023.
• Total Operating Expenses (Q4 2024): $19.8 million, a 7% increase from $18.6 million in Q4 2023.
• Net Loss (Q4 2024): $5.3 million, compared to $6.2 million in Q4 2023.
• Cash and Short-term Investments (Dec 31, 2024): $52.8 million.
• Pro Forma Cash and Short-term Investments (Feb 28, 2025): Approximately $68.6 million.
• 2025 Revenue Guidance: $92 to $96 million, a projected increase of 15% to 20% over 2024.
• 2025 Gross Margin Guidance: 73% to 75%.
• 2025 Operating Expenses Guidance: $92 to $95 million, including $11 million in stock-based compensation.

• Warning! GuruFocus has detected 5 Warning Signs with NPCE.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NeuroPace Inc (NASDAQ:NPCE) reported a 22% increase in total revenue for 2024, reaching $79.9 million, driven by sales of the RNS system and Dixie Medical SEEG products.
• The company achieved record quarterly revenue in the fourth quarter of 2024, with a 19% growth compared to the same period in 2023.
• NeuroPace Inc (NASDAQ:NPCE) successfully executed its three-part strategy, focusing on expanding adoption and utilization within Level 4 comprehensive epilepsy centers, expanding service delivery with Project Care, and expanding indications for the RNS system.
• The company reported positive three-year safety and effectiveness data from its ongoing five-year prospective post-approval study of the RNS system, showing unmatched seizure control.
• NeuroPace Inc (NASDAQ:NPCE) completed a public offering, strengthening its balance sheet with net proceeds of approximately $69.8 million, which is expected to support planned operations until achieving cash flow break-even.

Negative Points

• Despite revenue growth, NeuroPace Inc (NASDAQ:NPCE) reported a net loss of $5.3 million for the fourth quarter of 2024, compared to a $6.2 million loss in the same period of 2023.
• The company faces material risks and uncertainties that could cause actual results to differ from forward-looking statements, as highlighted in their earnings call.
• Operating expenses increased by 7% in the fourth quarter of 2024, driven by higher R&D and SG&A expenses.
• The gross margin for 2025 is expected to be in the range of 73% to 75%, with potential variability due to fluctuations in the proportion of Dixie Medical revenue.
• NeuroPace Inc (NASDAQ:NPCE) needs to work with payers to expand coverage criteria for new indications, which could pose challenges in reimbursement for generalized and pediatric epilepsy markets.

Q & A Highlights

Q: Can you discuss the guidance for 2025 and what factors could influence reaching the high or low end of the range? A: Joel Becker, President, CEO, and Director, explained that the guidance is influenced by the execution of their three-part strategy, which includes accelerating adoption and utilization within Level 4 centers, expanding Project Care, and ongoing execution with Dixie Medical. Key growth drivers include increasing prescriber growth and utilization within Level 4 centers and doubling implants and referrals from Project Care.

Q: What impact has Project Care had on referrals and implants, and what are the expectations for 2025? A: Joel Becker noted that Project Care showed meaningful impact in Q3 and Q4 of 2024, with increased referrals and implants. The company expects to build on this momentum in 2025, aiming to more than double implants and referrals from Project Care accounts.

Q: How is NeuroPace prioritizing capital investment given the opportunities in indication expansion and product development? A: Joel Becker stated that the focus is on accelerating adoption and utilization within Level 4 centers, expanding the commercial organization, and launching CARE 2.0. Investments are also being made in direct-to-consumer efforts and preparing for indication expansion in idiopathic generalized epilepsy and pediatric populations.

Q: Can you provide insights into the gross margin performance and expectations for 2025? A: Joel Becker and Rebecca Kuhn, CFO, explained that gross margin improvements were driven by volume increases, pricing opportunities, and contracting discipline. They expect gross margins to range between 73% and 75% in 2025, with ongoing improvements from RNS gross margins primarily due to volume.

Q: What are the reimbursement considerations for indication expansion into generalized and pediatric epilepsy markets? A: Rebecca Kuhn stated that reimbursement is well-established for the current patient population. For new indications, the company will work with payers to expand coverage criteria, sharing published peer-reviewed evidence to support policy expansion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.