Liquidity remains a primary concern as the firm reported a -27.3% free cash flow margin in 2026Q1, exacerbated by a $2.4 million outflow from working capital.
| Cash from Operations | -9.42M | -11.01M | -17.95M | -19.7M | -36.87M | -24.58M | -21.61M | -25.03M |
| Operating CF Margin % | - | -11.01% | -22.46% | -30.11% | -81% | -54.39% | -52.53% | -67.69% |
| Operating CF Growth % | 165.44% | 38.68% | 8.89% | 46.56% | -50.01% | -13.73% | 13.65% | - |
| Net Income | -21.57M | -21.46M | -27.14M | -32.96M | -47.08M | -36.08M | -24.28M | -29.97M |
| Depreciation & Amortization | 2M | 1.95M | 1.77M | 1.6M | 2.99M | 296K | 312K | 421K |
| Stock-Based Compensation | 8.46M | 11.09M | 10.28M | 9.56M | 8.35M | 4.29M | 1.38M | 1.44M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 5.48M | 0 | 0 |
| Other Non-Cash Items | 3.71M | 1.43M | 2.59M | 4.58M | 3.67M | 1.07M | 3.04M | 3.08M |
| Working Capital Changes | -2.03M | -4.01M | -5.45M | -2.48M | -4.79M | 368K | -2.07M | 9K |
| Change in Receivables | 647K | -1.83M | -537K | -4.85M | -391K | 1.3M | -2.38M | -750K |
| Change in Inventory | -3.31M | -3.67M | 251K | -1.7M | -2.13M | -1.16M | 672K | -1.64M |
| Change in Payables | 499K | -730K | 671K | 240K | 647K | 479K | -5K | -82K |
| Cash from Investing | -412K | -332K | 8.99M | 23.03M | 23.8M | -85.4M | -10.77M | 3.62M |
| Capital Expenditures | -412K | -332K | -306K | -173K | -603K | -384K | -62K | -468K |
| CapEx % of Revenue | 0.41% | 0.33% | 0.38% | 0.26% | 1.32% | 0.85% | 0.15% | 1.27% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4K |
| Cash from Financing | -1.67M | 19.6M | 4.33M | 8.13M | 490K | 102.53M | 55.01M | 21.37M |
| Debt Issued (Net) | -133K | -2.07M | 0 | 0 | 0 | -4.09M | 24.46M | 21.33M |
| Equity Issued (Net) | 123K | 22.21M | 3.28M | 7.89M | 0 | 109.09M | 31.7M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | -49.55M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.66M | -543K | 1.05M | 239K | 490K | -2.47M | -1.15M | 42K |
| Net Change in Cash | -12.24M | 8.26M | -4.63M | 11.45M | -12.58M | -7.45M | 22.63M | -38K |
| Free Cash Flow | -9.84M | -11.34M | -18.25M | -19.87M | -37.47M | -24.96M | -21.67M | -25.49M |
| FCF Margin % | -9.88% | -11.34% | -22.85% | -30.38% | -82.32% | -55.24% | -52.68% | -68.95% |
| FCF Growth % | 45.78% | 37.89% | 8.15% | 46.96% | -50.12% | -15.18% | 15% | - |
| FCF per Share | -0.29 | -0.35 | -0.63 | -0.77 | -1.52 | -1.50 | -1.95 | -2.30 |
| FCF Conversion (FCF/Net Income) | 0.46x | 0.51x | 0.66x | 0.60x | 0.78x | 0.68x | 0.89x | 0.83x |
| Interest Paid | 1.39M | 0 | 0 | 4.48M | 4.46M | 0 | 4.41M | 5.42M |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Persistent cash burn dependency
According to quarterly cash flow statements, NeuroPace consistently reports operating cash flow deficits that track closely with net losses, as evidenced by the 0.88 OCF/NI ratio in 2026Q1, suggesting that the company lacks the accrual-based earnings quality necessary to self-fund its current commercial expansion efforts.
The persistent gap between net income and operating cash flow indicates that the company's accounting losses are not merely non-cash accounting artifacts but reflect actual cash outflows required to support operations. Investors should monitor whether the company can decouple its cash burn from its net loss trajectory as it attempts to scale its RNS system footprint.
As reported in financial filings, NeuroPace's free cash flow trajectory is characterized by significant quarterly fluctuations, with a 2026Q1 FCF margin of -27.3%, highlighting the company's ongoing struggle to achieve positive cash generation despite its high-margin hardware business model and specialized market focus.
The inability to maintain consistent positive free cash flow suggests that the company's current revenue growth is insufficient to cover the heavy clinical support and R&D costs inherent in its business model. This trend warrants further investigation into whether the company's cost structure is inherently too high for its current scale.
Based on the provided cash flow data, working capital changes have been a significant drag on liquidity, including a $2.4 million outflow in 2026Q1, which suggests that the company's operational efficiency is frequently hampered by inventory build-ups or delays in the collection of receivables from hospital systems.
These erratic working capital movements imply that the company's cash management is highly sensitive to the timing of hospital procurement cycles and inventory management. Such volatility may indicate that the company lacks the bargaining power to optimize its cash conversion cycle effectively against its hospital customers.
As evidenced by the quarterly cash flow statements, NeuroPace consistently utilizes stock-based compensation, averaging approximately $2.6 million per quarter, which effectively obscures the true magnitude of the company's cash-based operating expenses and dilutes existing shareholders to sustain its current clinical and commercial headcount.
The reliance on equity-based incentives suggests that the company is attempting to preserve cash by shifting compensation costs to the balance sheet, which may not be a sustainable long-term strategy. Investors should monitor the impact of this dilution on future earnings per share as the company continues to burn through its cash reserves.
Quick answers to the most common questions about buying NPCE stock.
NeuroPace, Inc. (NPCE) generated $-11.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
NeuroPace, Inc. (NPCE) reported negative free cash flow of $11.3M in 2025, indicating capital requirements exceeded cash from operations.
NeuroPace, Inc. (NPCE) spent $0.3M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, NeuroPace, Inc. (NPCE) spent $49.5M on share repurchases. This shows the company's commitment to returning capital to its equity investors.