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 - LivaNova reported a 10% organic revenue growth compared to the previous year, driven by strong performance in the cardiopulmonary and neuromodulation segments [5][29] - Revenue for the quarter was $353 million, reflecting a 9% increase on a constant currency basis and a 10% increase on an organic basis [29] - Adjusted gross margin increased to 69% from 68% in the previous year, attributed to positive pricing and geographic mix [30] - Adjusted diluted earnings per share rose to $1.05 from $0.93 in the prior year [34] - Cash balance increased to $594 million from $429 million at year-end 2024, while total debt decreased to $431 million from $628 million [34][35] 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%, with U.S. revenue growing by 5% and Europe and rest of the world combined growing by 9% [13][14] - The company expects cardiopulmonary revenue to grow 12-13% for the full year 2025, up from a previous forecast of 9-10% [12] - Epilepsy revenue growth forecast for 2025 was raised to 4.5-5.5% from 4-5% previously [16] Market Data and Key Metrics Changes - The company anticipates launching the Essence heart-lung machine in China in Q3 2025, which is expected to be a significant market for the product [12][72] - The CMS proposal to increase reimbursement for end-of-service procedures to level five could significantly impact procedure penetration, as it affects 70% of implants in the U.S. [52][53] Company Strategy and Industry Competition - LivaNova is focused on expanding its portfolio into high-growth markets, particularly in obstructive sleep apnea (OSA) and difficult-to-treat depression (DTD) [42] - The company is investing in its core businesses to sustain market leadership and clinical excellence, with a strong emphasis on innovation and regulatory achievements [42][27] - The company is optimistic about the competitive landscape, noting that it has gained market share in the cardiopulmonary segment [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain growth and capitalize on opportunities in the epilepsy and cardiopulmonary segments [42] - The management highlighted the importance of recent clinical data in driving awareness and adoption of VNS therapy for drug-resistant epilepsy [20][49] - The company remains focused on addressing significant unmet needs in the market, particularly in OSA and DTD [42] Other Important Information - The company is working closely with CMS to seek national Medicare coverage for VNS therapy in treatment-resistant depression [22][24] - The company is also making significant investments in IT infrastructure and innovation to drive long-term efficiencies and scalability [32][39] 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 [46][49] Question: What is the expected impact of the CMS proposal to boost end-of-service procedures to level five? - Management noted that this proposal could significantly improve reimbursement for providers, potentially increasing procedure penetration [52][53] Question: Can you break down the oxygenator business and its demand versus capacity? - Management indicated healthy procedure growth and market share gains, but noted that supply is not yet catching up with demand [59][60] Question: What are the expectations for the launch in China? - Management expressed confidence in the Essence product's launch in China, indicating it is a significant market for the company [72] Question: What are the plans for the obstructive sleep apnea program? - Management is confident in its ability to commercialize the OSA portfolio internally but remains open to partnerships if beneficial [96]

Financial Data and Key Metrics Changes - The company achieved $317 million in revenue for Q1 2025, reflecting a 9% increase on a constant currency basis and a 10% increase on an organic basis compared to the prior year [29][30] - Adjusted operating income rose to $65 million, up from $53 million in Q1 2024, resulting in an adjusted operating income margin of 20% compared to 18% in the prior year [31][32] - Adjusted diluted earnings per share increased to $0.88 from $0.73 in Q1 2024, driven by operating income growth despite a higher effective tax rate [32] Business Line Data and Key Metrics Changes - Cardiopulmonary segment revenue was $176 million, a 15% increase year-over-year, with heart-lung machine revenue growing approximately 30% [12][13] - Epilepsy revenue increased by 4%, with Europe and the rest of the world regions growing a combined 13% [15][17] - The company expects cardiopulmonary revenue to grow 9% to 10% for the full year 2025, up from a previous forecast of 7% to 8% [13][14] Market Data and Key Metrics Changes - The U.S. Epilepsy business experienced a 2% growth year-over-year, impacted by procedure deferrals due to a voluntary field safety notification [16][17] - The company anticipates low single-digit growth in the U.S. for epilepsy, while Europe and the rest of the world are expected to grow in the low double digits [17][19] Company Strategy and Development Direction - The company is focused on expanding its portfolio in areas of high unmet clinical need, particularly in neuromodulation and OSA [52][43] - The recent twelve-month data from the OSREY trial positions OSA as a significant long-term growth opportunity [8][43] - The company is investing in additional manufacturing capacity to support growth in cardiopulmonary and neuromodulation segments [14][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff impacts, estimating a negligible effect on adjusted operating income for the year [39][75] - The Italian Supreme Court's decision regarding the SNEA matter is seen as a positive development, allowing for greater capital allocation flexibility [36][43] - The company raised its overall organic growth outlook by 100 basis points to between 7% and 8% for 2025, reflecting strong first-quarter performance [19][40] Other Important Information - The company recorded a liability of $360 million related to the SNEA litigation, which is expected to retire a long-standing overhang [9][35] - Adjusted free cash flow for the quarter was $20 million, up from $11 million in the prior year, driven by stronger operating results [33][37] Q&A Session Summary Question: Can you help us understand the OSSPREY data in a competitive context? - Management highlighted the strength of the clinical data, noting that the trial included more severe patients and achieved a rapid therapeutic response [47][48] Question: What is the outlook for the HLM business and Essence rollout? - Management indicated strong demand for oxygenators and a significant increase in Essence placements, with regulatory approval in China being a major milestone [54][56] Question: Can you elaborate on the changes in the OUS Neuromodulation business? - Management noted improved commercial execution in Europe, with a focus on strengthening talent and customer segmentation [64][66] Question: What is the impact of tariffs on the company's guidance? - Management confirmed that the $5 million tariff impact is included in the guidance, with some pricing actions assumed to offset costs [70][75] Question: How does the company view its leverage ratio and capital allocation? - Management expressed confidence in a healthy leverage ratio and indicated a focus on investing in core businesses while remaining open to inorganic growth opportunities [88][89]

Financial Data and Key Metrics Changes - The company achieved 11% organic revenue growth in 2024, marking the second consecutive year of double-digit organic growth [5][10] - Adjusted operating income grew by 41%, and adjusted diluted earnings per share increased by 21% [11] - Free cash flow for the full year 2024 was $163 million, representing a 70% increase from the prior year [34] Business Line Data and Key Metrics Changes - Cardiopulmonary segment revenue for Q4 was $182 million, an 11% increase year-over-year, with full-year revenue of $684 million, growing 14% [11][13] - Epilepsy revenue increased by 1% in Q4, with U.S. epilepsy revenue growing by 4% year-over-year [15][16] - The company expects cardiopulmonary revenue to grow by 7% to 8% in 2025 and global epilepsy revenue to grow by 4% to 5% [13][17] Market Data and Key Metrics Changes - The hypoglossal nerve stimulation market for obstructive sleep apnea is expected to approach $2 billion by the end of the decade [7] - The company noted a growing worldwide prevalence of obstructive sleep apnea, with significant unmet needs in the market [60] Company Strategy and Development Direction - The company is focusing on innovation and growth, with a clear strategy to enhance its talent and culture [8][40] - Investment will be increased to accelerate product development in obstructive sleep apnea and difficult-to-treat depression [7][26] - The company aims to leverage its clinical and scientific expertise to expand into new therapeutic areas [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering strong financial results and achieving significant milestones in innovation [5][40] - The company is optimistic about the future growth potential in both core and new markets, driven by strong clinical data and market demand [60][100] Other Important Information - The company plans to submit a PMA for obstructive sleep apnea in the first half of 2025, with a limited commercial launch expected thereafter [63] - Adjusted free cash flow is projected to be between $135 million and $155 million for 2025, reflecting increased capital spending [36] Q&A Session Summary Question: Can you help us understand the U.S. and EU cardiopulmonary performance in the quarter? - Management acknowledged a challenging comparison due to previous high growth but noted sequential growth in HLM placements and strong demand for consumables [46] Question: What is the impact of the launch of the new ECMO related product? - Management highlighted that innovation is a key focus and expects the new product to drive growth in 2025 [50][57] Question: How much are you spending to prepare for the sleep apnea launch? - The company invested $27 million in 2024 and plans to invest an additional $8 million in 2025, shifting focus from clinical spend to product development [61] Question: What are the execution issues in the OUS epilepsy business? - Management identified personnel issues as isolated across different markets and expressed confidence in returning to growth [66] Question: Can you provide insight into revenue phasing for 2025? - Management indicated that Q1 is typically the lowest quarter, with growth expected to ramp up throughout the year [69] Question: What is the expected impact of the Siena ruling? - Management stated that they do not anticipate a decision at the upcoming hearing but expect a ruling in the first half of 2025 [78] Question: How does the company view capital allocation between core business and new initiatives? - Management emphasized the importance of sustaining growth in core businesses while also investing in new growth opportunities [100]