LivaNova(US:LIVN)2025-11-05 17:26Financial Performance - For the quarter ended September 30, 2025, LivaNova reported a revenue of $250 million, representing a 15% increase year-over-year[2]. - The company achieved a gross margin of 60%, up from 55% in the same quarter last year, indicating improved operational efficiency[2]. - LivaNova's Cardiopulmonary segment generated $120 million in revenue, a 20% increase compared to the previous year, driven by strong demand for its advanced circulatory support products[2]. - The Neuromodulation segment reported $80 million in revenue, reflecting a 10% growth, attributed to the successful launch of new VNS Therapy systems[2]. - Net revenue for the three months ended September 30, 2025, was $357.753 million, an increase from $318.120 million in the same period of 2024, representing a growth of 12.9%[18]. - Gross profit for the nine months ended September 30, 2025, reached $700.097 million, compared to $639.115 million in 2024, reflecting an increase of 9.5%[18]. - Operating income for the three months ended September 30, 2025, was $54.012 million, up from $35.618 million in 2024, marking a growth of 51.5%[18]. - The company reported a net loss for the nine months ended September 30, 2025, of $273.377 million, compared to a net income of $7.343 million in 2024[20]. - Basic income (loss) per share for the three months ended September 30, 2025, was $0.49, down from $0.61 in the same period of 2024[18]. - The company reported a comprehensive income of $24.179 million for the three months ended September 30, 2025, compared to $59.069 million in 2024[20]. Cash and Liquidity - LivaNova's cash and cash equivalents stood at $100 million, providing a solid liquidity position to support future growth initiatives[2]. - Cash and cash equivalents at the end of the period on September 30, 2025, totaled $646.079 million, an increase from $428.858 million at December 31, 2024[23]. - Cash and cash equivalents increased to $646.1 million as of September 30, 2025, compared to $428.9 million on December 31, 2024, representing a growth of 50.7%[97]. Debt and Capital Structure - The company has repurchased $230 million of its 2025 Notes, optimizing its capital structure and reducing interest expenses[2]. - Total long-term debt obligations amounted to $349.031 million as of September 30, 2025, a decrease from $549.624 million as of December 31, 2024[47]. - The company reported a total of $434.454 million in long-term facilities as of September 30, 2025, down from $626.963 million at the end of 2024[47]. - The effective interest rate of the 2029 Notes was reported at 9.84% as of September 30, 2025[52]. - The effective interest rate of the 2025 Notes was 9.92% as of September 30, 2025, with an unamortized debt discount of $0.8 million[54]. Research and Development - The company has invested $30 million in R&D for the development of new technologies, including enhancements to its VNS Therapy and advanced circulatory support systems[2]. Market Expansion and Strategy - LivaNova plans to expand its market presence in Asia, targeting a 25% increase in sales in the region over the next two years[2]. - LivaNova anticipates revenue growth of 10-12% for the next fiscal year, driven by new product launches and market expansion strategies[2]. Environmental and Legal Liabilities - The company incurred a SNIA environmental liability expense of $394.587 million as of September 30, 2025, which was not present in the previous reporting period[23]. - As of September 30, 2025, LivaNova recorded a current liability of €336.3 million ($394.6 million) related to environmental liabilities from the SNIA matter[65]. - The estimated liability for cleaning and dismantling contaminated buildings and equipment was $40.3 million (€34.3 million) as of September 30, 2025, with a maximum estimated loss of $55.2 million (€47.0 million)[57]. - LivaNova's provision for product liability litigation increased to $19.8 million as of September 30, 2025, up from $15.8 million as of December 31, 2024[69]. - The Italian Supreme Court ruled that LivaNova can be held jointly and severally liable for SNIA's established liabilities, leading to a significant current liability on the balance sheet[64]. Cybersecurity Incident - LivaNova incurred direct costs of $13.1 million related to a cybersecurity incident, with $1.5 million for the nine months ended September 30, 2025[27]. - The company received $9.6 million in insurance reimbursements, including $6.2 million for direct costs and $3.4 million for business interruption losses[27]. - LivaNova's insurance coverage may be insufficient to cover all costs related to the cybersecurity incident[27]. - The company expects all settlement administration activities related to the cybersecurity incident to be completed in 2025, with an accrual of $1.2 million recorded for the class action settlement[72]. Stockholder Equity and Compensation - LivaNova's stockholders' equity as of September 30, 2025, was $1,157,230,000, a decrease from $1,310,044,000 as of September 30, 2024[75]. - For the nine months ended September 30, 2025, LivaNova recognized stock-based compensation expense of $26,904,000, compared to $26,984,000 for the same period in 2024[81]. - The company issued stock-based compensatory awards totaling $6,000,000 for the nine months ended September 30, 2025[80]. - As of September 30, 2025, there were 259,423 shares available for future grants under the 2025 Director Incentive Plan[79]. Segment Performance - Net revenue for the Cardiopulmonary segment in Q3 2025 was $203.2 million, a 17.9% increase from $172.2 million in Q3 2024[91]. - Neuromodulation segment revenue for Q3 2025 reached $149.5 million, up 6.3% from $139.9 million in Q3 2024[91]. - Segment income for Cardiopulmonary in Q3 2025 was $24.7 million, up from $21.7 million in Q3 2024, while Neuromodulation segment income increased to $56.2 million from $49.5 million[92]. Miscellaneous - The company identified and corrected an immaterial error in employee cost classification, with no impact on operating income or net income for prior periods[28]. - The company expects the new accounting standards to have no material effect on its consolidated financial statements[99]. - A correction was made to previously issued financial statements, adjusting cost of sales for the twelve months ended December 31, 2024, by $17.4 million[101].