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]