LivaNova PLC Q3 FY2025 earnings call

• Launched a new strategic framework and refreshed logo/visual identity. - Cardiopulmonary segment showed strong growth with heart-lung machine and consumables. - Epilepsy segment had growth across regions, with CORE-VNS commercial rollout and reimbursement improvements. - Sustained strong organic growth, margin expansion, and cash generation. - Investor Day scheduled for November 12 to discuss strategic priorities.

Cardiopulmonary Segment: Revenue was $203 million in the quarter, an increase of 16% versus Q3 2024. Heart-lung machine revenue grew over 20% driven by Essenz placements and price premiums; Essenz was launched in China in August. Cardiopulmonary consumables revenue grew mid-teens. Full-year 2025 cardiopulmonary revenue forecast revised to 12.5% to 13.5% from 12% to 13%, with Essenz expected to represent approximately 60% of annual HLM unit placements in 2025. Epilepsy Segment: Revenue increased 6% versus Q3 2024, with growth across all regions. Europe and Rest of World regions combined grew 12%, US grew 5%. Full-year 2025 epilepsy revenue forecast revised to 5% to 6% from 4.5% to 5.5%.

• Raised overall organic revenue growth outlook to between 9.5% and 10.5%. - Revised 2025 revenue guidance: constant currency growth 8.5%-9.5%, organic growth 9.5%-10.5%. - Adjusted diluted earnings per share guidance to $3.80 to $3.90. - Adjusted free cash flow guidance to $160 million to $180 million. - Printed circuit board investment impact in Q4.

• Tariff impact, but mitigation plan in place. - Dependence on third-party component supply for cardiopulmonary. - Regulatory and market access risks for obstructive sleep apnea and difficult-to-treat depression programs.

Q: Michael Polark asked about Q4 implied guidance and PCBA conversion.

A: Alex Shvartsburg said the printed circuit board investment is happening in Q4, a planned investment.

Q: Adam Maeder inquired about Essenz launch in China.

A: Vladimir Makatsaria said the launch in China started in August, with most impact expected in 2026.

Q: Matthew Taylor asked about epilepsy growth and CORE-VNS.

A: Ahmet Tezel commented on the CORE-VNS study showing strong seizure reduction results.

Q: David Rescott asked about gauging CORE-VNS benefits.

A: Ahmet Tezel talked about earlier VNS therapy utilization and dosing/titration importance.

Q: David Rescott also asked about China rollout contribution and oxygenator capacity.

A: Vladimir Makatsaria discussed share gain strategy and capacity expansion.

Q: John McAulay asked about free cash flow and M&A capacity.

A: Alex Shvartsburg said strong cash flow supports strategic initiatives.

Q: Matthew Miksic asked about DTD and OSA investments.

A: Alex Shvartsburg said details will be unpacked at Investor Day.