LivaNova (NasdaqGS:LIVN) FY Conference December 02, 2025 01:30 PM ET Company ParticipantsPhil Kowalczyk - Chief Strategy and Corporate Development OfficerAlex Shvartsburg - CFOModeratorAll right, perfect. We're going to get going here. Welcome to the 2025 Piper Sandler Healthcare Conference. My name is Adam Maeder. I think we're live. Okay, clock's not running, but, but we are live. I'm one of the analysts here at Piper Sandler. Introducing the management team from LivaNova. With us, we have Alex Shvartsbur ...

Financial Data and Key Metrics Changes - The company reported total revenue of $1.4 billion, reflecting a 4% growth on a reported basis and 1% organic growth. Excluding $148 million from CSL and the whole blood divestiture, organic growth was 8% [9][10] - Adjusted gross margin for the fourth quarter was 60.2%, an increase of 620 basis points compared to the prior year, driven by volume growth and improved product mix [27][29] - Adjusted net income for fiscal year 2025 was $231.5 million, up $28 million or 14%, with adjusted earnings per diluted share at $4.57, up 15% compared to the prior year [32] Business Line Data and Key Metrics Changes - Hospital revenue grew 12% in the quarter and 24% in fiscal year 2025 on a reported basis, with organic growth of 9% respectively [12] - Blood Management Technologies revenue grew 6% in the quarter and 10% in fiscal year 2025, driven by strong utilization and share gains [12][13] - The Interventional Technologies franchise delivered 21% reported growth in the quarter and 46% in fiscal year 2025, with 16% organic growth respectively [14] Market Data and Key Metrics Changes - Plasma revenue declined 9% in the quarter and 6% in fiscal year 2025 due to the planned CSL transition, but excluding CSL, plasma revenue grew 11% in the fourth quarter and 5% for fiscal year 2025 [20][22] - Blood center revenue declined 22% in the quarter and 8% in fiscal year 2025 on a reported basis due to the whole blood divestiture [23] - The company anticipates plasma revenue to decline 7% to 10% on a reported basis in fiscal year 2026, with organic growth expected to be 11% to 14% excluding CSL [22][25] Company Strategy and Development Direction - The company is focused on advancing its innovation agenda and sharpening its focus on high-growth opportunities following the divestiture of the whole blood business [31] - The leadership team has been strengthened with new appointments to support scalable long-term growth, particularly in hospital businesses [11] - The company expects to achieve adjusted operating margin improvement to 26% to 27% in fiscal year 2026, supported by continued gains in adjusted gross margin [36] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the strong growth trajectory of the hospital business, projecting reported and organic revenue growth of 8% to 11% in fiscal year 2026 [17] - The company anticipates challenges in the first half of fiscal year 2026 but expects a rebound in collections in the second half [98] - Management highlighted the importance of cash flow generation and expects free cash flow in fiscal year 2026 to be in the range of $160 million to $200 million [38] Other Important Information - The company executed a $150 million share buyback, repurchasing approximately 2.4 million shares, reflecting its commitment to value creation [11] - The adjusted income tax rate was 22% for the fourth quarter and 23% for fiscal year 2025, compared to 21% to 23% for the respective periods of the prior year [31] Q&A Session Summary Question: Insights on plasma collections and guidance - Management remains bullish on plasma, indicating that the 11% to 14% growth guidance is primarily driven by share gains and technology adoption, with modest growth expected in the first half of fiscal year 2026 [46][48] Question: EPS guidance and drivers - The operating margin guidance of 26% to 27% is supported by continued improvement in gross margin and operational efficiencies, with a $0.20 impact from tariffs factored into the guidance [50][53] Question: Vascular closure portfolio performance - Management noted strong growth from newer products like MVP and XL, with efforts focused on improving performance in the legacy PCI side of the business [59][61] Question: Revenue and EPS progression throughout the year - Management indicated that revenue and margin expansion will progress over the course of the year, with a second half load expected due to ongoing growth initiatives [94][97] Question: Update on VIVUSURE Medical acquisition - The company maintains a long-term appetite for acquisitions, with a focus on integrating recent acquisitions before pursuing new opportunities [78][80]