Financial Data and Key Metrics Changes - LivaNova reported a revenue of $358 million for Q3 2025, reflecting an 11% increase on a constant currency basis and a 13% increase on an organic basis compared to the prior year [10][11] - Adjusted diluted earnings per share rose to $1.11, up from $0.90 in Q3 2024, primarily driven by adjusted operating income growth [12][13] - Adjusted operating income was $80 million, compared to $64 million in Q3 2024, resulting in an adjusted operating income margin of 23%, up from 20% [12][18] - Cash balance increased to $646 million from $429 million at year-end 2024, with total debt reduced to $434 million from $628 million [13] Business Line Data and Key Metrics Changes - The cardiopulmonary segment generated $203 million in revenue, a 16% increase year-over-year, with heart-lung machine revenue growing over 20% [5][6] - Epilepsy revenue increased by 6% compared to Q3 2024, with growth across all regions, particularly a 12% increase in Europe and Rest of World [7][8] - The company raised its overall organic revenue growth outlook to between 9.5% and 10.5% for the full year 2025 [9] Market Data and Key Metrics Changes - The cardiopulmonary revenue growth forecast for 2025 was adjusted to 12.5-13.5%, up from 12-13% previously, reflecting strong market and share growth for consumables [7] - The epilepsy revenue growth forecast for 2025 was raised to 5-6%, up from 4.5-5.5%, indicating strong commercial execution globally [8] Company Strategy and Development Direction - LivaNova launched a new strategic framework and branding to reflect its focus on growth and innovation [5] - The company is investing in obstructive sleep apnea and difficult-to-treat depression programs, which are seen as significant opportunities for future growth [19] - The company aims to leverage its neuromodulation expertise to expand into additional attractive markets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum and creating lasting value for patients, customers, and shareholders [19] - The company acknowledged the dynamic environment regarding tariffs and indicated a proactive approach to manage their impact [17] Other Important Information - Adjusted gross margin was 69%, slightly down from 70% in Q3 2024, influenced by unfavorable currency changes and product mix [11] - The company expects to see a significant impact from the ESSENCE product launch in China, with a majority of growth anticipated in 2026 [6][40] Q&A Session Summary Question: Insights on Q4 guidance and implied earnings outlook - Management indicated that the Q4 guidance reflects a conservative approach, with the impact of the printed circuit board investment being a key factor [24][25] Question: Clarification on oxygenator capacity and third-party supply - Management confirmed ongoing capacity expansion of approximately 15% but noted that actual output would be below 10% due to third-party component supply limitations [27][28] Question: Expectations for the Chinese market and ESSENCE rollout - The commercial launch in China received positive feedback, and management expects significant contributions to growth starting in 2026 [39][40] Question: Trajectory of the epilepsy business and market penetration - Management highlighted strong execution and positive feedback from the clinical community regarding the core VNS study, which is expected to drive market penetration [44][91] Question: Updates on the depression program and reimbursement process - Management indicated that the timeline for the depression program remains unchanged, with expectations for a decision within approximately one year [50][51]