NeuroPace Boosts Guidance, Bets on AI to Reshape Epilepsy Treatment

MOUNTAIN VIEW, CA – August 11, 2026 – NeuroPace, Inc. (Nasdaq: NPCE) delivered a strong message to investors today, reporting robust second-quarter financial results that beat expectations and raising its full-year revenue guidance. The epilepsy-focused medical device company showcased significant momentum in its core business, coupled with strategic advancements in artificial intelligence that aim to create a formidable data moat in the field of neuromodulation.

Beneath the headline numbers of revenue growth and narrowing losses lies a more intricate story of a company executing a dual strategy: tightening financial discipline while simultaneously accelerating innovation. By leveraging its unique, long-term brain data, NeuroPace is positioning itself not just as a device manufacturer, but as a data-driven, personalized therapy platform, a move that could fundamentally reshape the standard of care for drug-resistant epilepsy.

A Picture of Financial Health

NeuroPace reported total revenue of $22.8 million for the second quarter of 2026, a 17% increase year-over-year. The growth was overwhelmingly driven by its flagship RNS System, which generated $22.5 million in revenue, up 21.3% from the same period in 2025. This sustained, above-20% growth in its core product highlights the increasing adoption of its novel therapy among physicians and epilepsy centers.

More importantly for investors tracking the company's path to profitability, NeuroPace demonstrated significant operating leverage. The company's net loss from continuing operations improved to ($6.2) million, a substantial reduction from the ($10.0) million loss reported in Q2 2025. Adjusted EBITDA loss, a key metric of operational performance, narrowed to ($2.8) million, an improvement of $2.1 million year-over-year. This progress reflects a disciplined approach to spending, even as the company invests in its product pipeline.

Underscoring this positive momentum, NeuroPace raised its full-year 2026 financial guidance. The company now expects total revenue to be between $99.5 million and $101.5 million. It also improved its Adjusted EBITDA guidance to a loss of between ($7.5) million and ($8.5) million for the full year. “Second-quarter performance showed continued momentum in our core RNS business driven by increased adoption within our current focal epilepsy indication,” said CEO Joel Becker in the company's press release.

Adding to the clarity of its core performance, NeuroPace has reclassified its former distribution business with DIXI Medical as a discontinued operation. This strategic move sharpens the company’s focus on its high-margin, proprietary RNS System and provides investors with a cleaner view of the underlying strength and growth trajectory of the core business.

The AI Frontier: Building a Data Moat

Perhaps the most significant strategic development from the quarter was the launch of ECoG Assistant™, the first in a planned suite of AI-powered clinical decision support tools. This tool is designed to help physicians more efficiently analyze the vast amounts of intracranial electrocorticography (ECoG) data collected by the RNS System, enabling them to identify trends and patterns that can inform and personalize patient treatment.

What makes this development particularly compelling is its foundation. The ECoG Assistant was built using NeuroPace's proprietary and extensive repository of long-term intracranial EEG data, which the company claims is the largest of its kind in the world. This creates a powerful competitive advantage—a data moat—that is difficult for competitors to replicate. As Becker noted, the tool reinforces “a data advantage that other neuromodulation platforms cannot replicate.”

This is the first step in a broader AI strategy. The company has already submitted its next-generation, cloud-based Patient Data Management System for FDA review, which will serve as the platform for future AI innovations. By transforming raw data into actionable clinical intelligence, NeuroPace is moving beyond the device itself to offer an entire ecosystem of care optimization, deepening its integration into clinical workflows and strengthening its value proposition to hospitals and neurologists.

Expanding Horizons and Navigating Headwinds

A key pillar of NeuroPace's long-term growth strategy is expanding the RNS System's use into new patient populations. The company made significant headway on this front with the publication of 18-month results from its NAUTILUS trial in Epilepsia, a leading peer-reviewed journal. The study evaluated the RNS System for treating drug-resistant Idiopathic Generalized Epilepsy (IGE), a condition with no currently approved neuromodulation therapies.

The results were striking: patients experienced a 77% median reduction in generalized tonic-clonic seizures, the most disabling seizure type. This provides Level 1 clinical evidence for a patient population with a profound unmet need.

However, the path to market is not without its challenges. The company disclosed that the FDA found its Premarket Approval (PMA) supplement for the IGE indication “not approvable in its current form,” requesting additional clinical context. While NeuroPace management expressed confidence in the data and plans to engage with the FDA to find a path forward, this introduces uncertainty into the timeline for this key growth driver. Investors will be watching closely as the company navigates this regulatory process, which remains a critical, albeit delayed, opportunity.

A Differentiated Position in Neuromodulation

NeuroPace's recent performance and strategic initiatives must be viewed within the context of the broader neuromodulation market. Unlike open-loop systems such as Vagus Nerve Stimulation (VNS) or Deep Brain Stimulation (DBS), which deliver continuous or pre-programmed stimulation, NeuroPace's RNS System is a closed-loop, brain-responsive platform. It continuously monitors a patient's brain activity and delivers targeted stimulation only when it detects the precursor to a seizure.

This responsive, personalized approach is the system's core differentiator. The platform not only treats seizures but also collects invaluable data, allowing for therapy to be optimized over time. The long-term efficacy of this approach was recently validated by the publication of 3-year data from its post-approval study, which showed an 82% median reduction in seizures for patients with drug-resistant focal epilepsy. By combining this proven therapeutic platform with its emerging AI capabilities, NeuroPace is solidifying its position as a leader in the evolution of data-driven, personalized treatment for complex neurological disorders.