NeuroPace beats Q2 estimates, lifts 2026 revenue outlook
NeuroPace delivered stronger-than-expected second-quarter results, driven by robust growth in its RNS System and a subsequent upward revision to its full-year financial guidance.
NeuroPace, Inc. (NPCE) reported a second-quarter 2026 loss per share of 18 cents, a significant improvement from the 30-cent loss recorded in the same period last year. This performance beat the Zacks Consensus Estimate by 5.3%. Total revenues reached $22.8 million, marking a 17.1% year-over-year increase and exceeding market expectations by 0.6%.
The revenue growth was primarily fueled by the RNS System, which generated $22.5 million in sales, up 21.3% year over year. This increase was driven by a higher volume of initial implants and replacement procedures. Active prescribers, accounts, and the patient pipeline all reached record highs during the quarter. Service revenues declined to $302,000 from $937,000 in the prior year, as NeuroPace now classifies the DIXI Medical business as discontinued operations.
Margin expansion drives operational efficiency
Adjusted gross profit rose 16.1% year over year to $19 million. However, the adjusted gross margin contracted by 60 basis points to 83.4%, a result of slightly higher material costs that were only partially offset by favorable pricing. Sales and marketing expenses increased 5.5% to $12.1 million, while research and development costs rose 0.8% to $6.9 million.
General and administrative expenses decreased significantly by 17.2% to $5.0 million. Overall, adjusted operating expenses increased 2.5% year over year to $21.9 million. Consequently, the adjusted operating loss narrowed to $2.8 million, down from $5.0 million in the same quarter of the previous year.
Company raises 2026 revenue guidance
Management raised its full-year 2026 revenue guidance to a range of $99.5 million to $101.5 million, up from the previous estimate of $99 million to $101 million. This revision reflects an expected increase in service revenues to approximately $1 million, nearly doubling the prior projection of $500,000. The RNS revenue growth outlook remains steady at 21% to 23%.
NeuroPace ended the second quarter with total cash, cash equivalents, and short-term investments of $51.7 million, a slight decrease from $53.9 million at the end of the first quarter. Cumulative net cash used in operating activities stood at $9.8 million, compared with $9.6 million a year earlier. According to GN markets/earnings (en-US), the stock has seen minor fluctuations since the report, but the core financial momentum remains positive.
