NeuroPace Inc Q4 FY2024 earnings call

• 2024 was a strong year with 22% revenue growth to $79.9M, driven by RNS system and Dixie Medical sales. • Strategy focuses on expanding adoption in level four comprehensive epilepsy centers, Project CARE program for site of service expansion, and expanding RNS system indications. • In 2024, active prescribers of RNS therapy reached record levels, and Project CARE pilot program showed early positive trends with increasing implants and referrals. • Clinical development progress: positive three-year safety/effectiveness data from RNS system post-approval study; Nautilus pivotal study on idiopathic generalized DRE expected to have data readout and FDA submission in H2 2025; progress on pediatric indication with NEST and PERC. • Product development: AI-enabled software with seizure classifier and next-generation platform in development. • Recent public offering strengthened balance sheet, repurchased shares from KCK, and brought in new long-term investors.

In 2024, total revenue grew to $79.9 million, an increase of 22% from $65.4 million in 2023. The fourth quarter of 2024 had revenue of $21.5 million, a 19% growth from $18 million in the fourth quarter of 2023. Revenue growth was primarily driven by increased sales of the RNS system. Dixie Medical products contributed approximately 17% of total revenue in 2024 compared to approximately 15% in 2023.

• 2025 total revenue expected to be in the range of $92 million to $96 million, a 15%-20% increase from 2024. • Gross margin expected to be in the range of 73% to 75% in 2025. • Operating expenses for 2025 expected to range between $92 and $95 million, including approximately $11 million in stock-based compensation.

• Material risks and uncertainties associated with forward-looking statements, including those related to projections, business opportunities, commercial expansion, market conditions, clinical trials, operating trends, future financial performance, expense management, market opportunity, revenue growth, which could cause actual results to differ from implied forward-looking statements. • Risks related to regulatory approvals for new indications (idiopathic generalized epilepsy, pediatric) and potential fluctuations in gross margin due to changes in Dixie Medical revenue proportion and other factors.

Q: Please talk about the guidance for 2025, including what gets you to the high end versus the low end and growth contribution from Project Care.

A: Joel Becker mentioned that execution within level four centers (increasing prescribers and utilization), expansion of Project Care, expanded direct-to-consumer efforts, and ongoing growth with Dixie are key drivers. Execution within level four centers is the foundation, and expansion of Project Care and direct-to-consumer efforts can accelerate growth.

Q: On gross margin, what were the primary drivers and how expected to trend in 2025?

A: Joel Becker said primary drivers include ongoing volume increases, low single-digit pricing, and good contracting discipline. Rebecca Kuhn added that there may be some fluctuations due to factors like compensation costs and distributed product line gross margin, but the guide is 73%-75% for 2025.

Q: Regarding indication expansion and reimbursement for generalized epilepsy and pediatric, what's the plan?

A: Rebecca Kuhn stated that reimbursement is established for current indication. For new indications, they'll work with payers to expand coverage criteria by sharing peer-reviewed evidence.

Q: On 2025 revenue cadence, will there be a step up from Q4 to Q1?

A: Joel Becker said looking at past trends, there's a smoothed out progression of growth north of 20%, with second half of year stronger than first half, and expects similar cadence in 2025.

Q: On Project Care market expansion to double implants and referrals in 2025, any additional details?

A: Joel Becker said focused on building off pilot program, expanding educational and awareness programs, expanding number of centers, implanting centers, and programming centers.

Q: On manufacturing capacity with expanding RNS system to pediatrics?

A: Joel Becker explained that for pediatric focal patients, phase two monitoring primarily in comprehensive epilepsy centers; for idiopathic generalized epilepsy, phase one monitoring may allow broader adoption in level three or outside level four centers.

Q: On Nautilus top-line data forum and timeline?

A: Joel Becker said they expect data readout after finalizing patient follow-up in March, then statistical analysis, data lock, alignment with agency, submission, and plan to do a data readout with high profile publication and presentation to clinicians.