NeuroPace misses, cuts 2026 revenue guidance, targets 2027 RNS growth re-acceleration

 

NeuroPace misses Q3 estimates, cuts 2026 revenue guidance, and targets 2027 RNS growth re-acceleration

• Q3 total revenue $23.1M, down 1.1% YoY; RNS revenue up only 1.4%.
• Shortfall blamed on disruptions at large accounts, sales force restructuring, and SEEG exit timing.
• 2026 revenue guidance cut to $91–92M from $99.5–101.5M; implies modest Q4 growth.
• Adjusted gross margin improved to 84.8%; full‑year margin and operating expense guidance both raised favorably.
• Q3 adjusted EBITDA turned slightly positive at $0.4M; cash balance $49.5M versus $51.9M in Q2.
• Preliminary 2027 outlook targets ~15% RNS growth, accelerating to 15–20% exiting the year, below its long-term framework of more than 20%.
• IGE PMA supplement amendment targeted around year‑end; potential mid‑2027 FDA approval excluded from guidance.
• Adolescent focal epilepsy AURORA real‑world study may support 2027/early 2028 approval, sizable incremental TAM.
• Remote Care tele‑programming submitted early; potential Q2 2027 approval to broaden access and utilization.
• Key debate: execution risk and competition versus attractive long‑term epilepsy device growth catalysts in 2027+.
• Main concern: Whether NeuroPace can restore durable double‑digit growth before 2027 indication and product catalysts materialize.
• Weak quarter, driven by account disruptions and sales execution challenges despite improving margins and near‑breakeven profitability.
• NeuroPace reported a Q3 adjusted loss of 3 cents per share.

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