Financial Data and Key Metrics Changes - Revenue for Q2 2025 was €1,300,000, an increase of 73.8% compared to €800,000 in Q2 2024 [16] - Gross margin for Q2 2025 was 63.4%, essentially flat compared to the previous year [16] - Total operating loss for Q2 2025 was $19,900,000, up from $13,300,000 in Q2 2024, driven by increased commercial investments in the U.S. [16][17] - Cash position as of June 30, 2025, was €43,000,000, down from €63,000,000 at March 31, 2025 [17] Business Line Data and Key Metrics Changes - The GENIOR system received FDA PMA approval, marking a significant advancement in treatment options for obstructive sleep apnea (OSA) patients in the U.S. [5][6] - The device demonstrated a compliance rate of 85.9% and a patient satisfaction score of 90% [10] Market Data and Key Metrics Changes - The U.S. market for OSA treatment is concentrated, with approximately 1,400 implanting accounts, of which 350 to 400 are high-volume accounts representing 75% to 80% of total revenue [34][35] - The company has identified demand from patients hesitant about receiving implanted batteries, which the GENIOR system addresses with its unique design [13] Company Strategy and Development Direction - The company has a two-pronged launch strategy targeting high-volume hypoglossal neurostimulation implanting centers and developing strong referral networks with physicians managing large populations of OSA patients [11][36] - The company aims to differentiate itself through its unique technology benefits and patient focus, particularly in the context of competition with GLP-1 treatments [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the success of the U.S. launch, citing enthusiastic responses from physicians and patients [19] - The remainder of 2025 is expected to be transformative as the company establishes GENIOR in the U.S. market [20] Other Important Information - The company has stopped enrollment in the ACCESS study, believing that the current number of patients enrolled is sufficient for meaningful conclusions [8] - A patent lawsuit initiated by Inspire Medical against the company will not impact the U.S. commercial launch [15] Q&A Session Summary Question: Year-end 2025 metrics and indicators to focus on - Management will track the number of trained physicians and value analysis committee applications as leading indicators [22][24] Question: Leveraging the differentiated label - The company plans to capitalize on the label differentiation by emphasizing the ability to treat positional OSA and the lack of contraindication for complete concentric collapse (CCC) patients [26][28] Question: Commercial strategy and targeted accounts - The sales team will focus on high-volume implanting accounts, which represent a significant portion of revenue [34][35] Question: Reimbursement strategy and payer onboarding - The company expects to see pre-authorization decisions coming in this year, while coverage decisions may be more of a 2026 story [41][42] Question: Access trial and CCC patient treatment - The company will not promote off-label indications but is optimistic about treating CCC patients once the ACCESS trial data is available [69][71] Question: Pricing strategy - The company intends to follow the same pricing strategy as competitors, pricing at approximately $25,000 [74] Question: Initial surgeon engagement and market share - Surgeons must present five defined patient cases before being trained, and the company does not set specific market share expectations at this stage [77][79]

Financial Data and Key Metrics Changes - LivaNova reported a 10% organic revenue growth compared to the previous year, driven by strong performance in the cardiopulmonary and neuromodulation segments [5][28] - Revenue for the quarter was $353 million, reflecting a 9% increase on a constant currency basis and a 10% increase on an organic basis [28] - Adjusted gross margin increased to 69% from 68% in the previous year, attributed to positive pricing and geographic mix [29] - Adjusted diluted earnings per share rose to $1.05 from $0.93 in the prior year [34] Segment Performance Changes - Cardiopulmonary segment revenue was $199 million, a 13% increase year-over-year, with heart-lung machine revenue growing in the low double digits [11][12] - Epilepsy segment revenue increased by 6% year-over-year, with U.S. revenue growing by 5% and Europe and rest of the world combined growing by 9% [13][14] - The company expects epilepsy revenue growth for the full year to be between 4.5% and 5.5%, up from previous guidance of 4% to 5% [16] Market Data and Key Metrics Changes - The cardiopulmonary segment anticipates a revenue growth of 12% to 13% for the full year, revised from 9% to 10% [12] - The company is preparing to launch the Essence product in China, which is expected to be a significant market for heart-lung machines [12][72] Company Strategy and Industry Competition - LivaNova is focused on expanding its portfolio into high-growth markets and addressing large patient populations with significant unmet needs, particularly in obstructive sleep apnea and difficult-to-treat depression [41] - The company is making progress towards CMS reimbursement reconsideration for VNS therapy in treatment-resistant depression, which could enhance market access [41][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong organic growth due to robust demand and disciplined execution across the portfolio [5] - The company is optimistic about the impact of the proposed CMS reimbursement changes for end-of-service procedures, which could significantly improve hospital economics [52][51] Other Important Information - The company has initiated a process with CMS to seek national Medicare coverage for VNS therapy in unipolar patients with treatment-resistant depression [21] - LivaNova's cash balance increased to $594 million, up from $429 million at the end of 2024, primarily due to the reclassification of restricted cash [34] Q&A Session Summary Question: Can you elaborate on the positive data from the epilepsy business and its implications for growth? - Management highlighted the large study demonstrating significant seizure reduction, which is expected to enhance patient access and drive growth [45][46] Question: What is the expected impact of the CMS proposal to boost end-of-service procedures to level five? - Management noted that this change could lead to a 48% increase in reimbursement, positively impacting procedure penetration and provider sustainability [51][52] Question: Can you break down the oxygenator business and underlying demand? - Management indicated healthy procedure growth and market share gains, with supply not yet catching up to demand [56][58] Question: How does the company view the commercialization of the obstructive sleep apnea program? - Management expressed confidence in internal commercialization capabilities while remaining open to potential partnerships [96][97]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $217.1 million, an 11% increase from $195.9 million in Q2 2024 [23] - U.S. revenue was $207.2 million, a 10% increase from $187.8 million in the prior year [23] - Gross margin decreased to 84% from 84.8% year over year, primarily due to a $2.1 million charge for excess INSPIRE IV subcomponents [23][24] - Operating loss for the quarter was $3.3 million compared to an operating income of $5.1 million in the prior year [25] - Net loss for the quarter was $3.6 million, representing a loss per share of $0.12 compared to net income of $0.32 per share in Q2 2024 [25][26] - Adjusted EBITDA for the quarter was $44.1 million, a 14% increase compared to $38.7 million in the prior year [26] Business Line Data and Key Metrics Changes - The majority of units sold in Q2 were INSPIRE IVs, leading to minimal inventory destocking [9] - The transition to INSPIRE V faced challenges, with many centers not completing necessary training and onboarding [6][7] - Over 50% of U.S. centers have completed the implementation of SleepSync, which is crucial for the transition to INSPIRE V [8] Market Data and Key Metrics Changes - Revenue outside the U.S. was $9.9 million, a 23% increase year over year [23] - The approval of CPT code 64568 for INSPIRE V for Medicare patients was announced in April, but billing could only begin on July 1, impacting the transition [10] Company Strategy and Development Direction - The company is focused on advancing the transition to INSPIRE V and has ramped up marketing and footprint expansion efforts in the second half of the year [11][12] - Investments in digital scheduling and community health talks are aimed at increasing patient awareness and building capacity [12] - The company aims to drive high-quality patient flow and increase provider capacity through training and certification of additional surgeons [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the commercial rollout of INSPIRE V but remains confident in the platform's potential [6][21] - The company adjusted its full-year revenue guidance to $900 million to $910 million, reflecting a 4% reduction at the midpoint from previous guidance [13] - Management expressed optimism about future growth, expecting revenue growth to exceed 12% to 13% in 2026 [38] Other Important Information - The company announced the retirement of Randy Bann, Executive Vice President, Patient Access and Therapy Awareness, effective January 2026 [19][20] - The national average Medicare hospital reimbursement for CPT code 64568 is proposed to increase to $32,000, a 4% increase from 2024 [16] Q&A Session Summary Question: Can you provide more detail on the revised guidance and the headwinds faced? - Management identified the completion of training and the ability to bill Medicare as the primary factors impacting guidance [33][34] Question: Will revenue in 2026 accelerate beyond the 12% to 13% growth expected for 2025? - Management indicated that they expect revenue growth to exceed the current guidance for 2025 due to ongoing investments [38] Question: Can you clarify the EPS guidance change? - The reduction in EPS guidance is primarily due to lower revenue expectations and increased direct-to-consumer spending [42] Question: What is the current uptake of Medicare billing since the software update? - Uptake has been limited as many sites were not fully operational until they could bill Medicare [87] Question: What is driving the 20% increase in patient implants for INSPIRE V? - The increase is attributed to reduced surgical complexity and improved capacity at centers that have transitioned to INSPIRE V [75]