Summary of LivaNova's Conference Call Company Overview - **Company**: LivaNova - **Event**: 2025 Piper Sandler Healthcare Conference - **Key Management**: Alex Shvartsburg (CFO), Phil Kowalczyk (Chief Strategy and Corporate Development Officer) Financial Outlook - **Q4 2025 Outlook**: Expected revenue deceleration and margin step down due to HLM investment impacting Q4, but overall business momentum remains strong [6][7] - **Full Year Growth Guidance**: Projected growth of 9.5%-10.5% for the full year, with Q4 comps being challenging due to the launch of Essence in Q4 2023 [7] - **2026 Revenue and EPS Growth**: Anticipated mid- to high-single-digit growth for both revenue and adjusted EPS, with margin expansion expected in core businesses [8][11] Product Developments - **OSA Device**: Investment in next-generation OSA device with a soft launch in the first half of 2026 and full launch in the second half of 2027. Expected to break even by 2029 with mid-20s% operating margin [12][15] - **HLM Growth**: Significant contributor to 2026 growth, with a shift from legacy S5 platform to Essence expected to reach 80% mix by the end of 2026 [18][19] - **New Revenue Streams**: Introduction of Essence Air Manager and new heater/cooler expected to drive growth in 2026 [20][21] Market Dynamics - **Oxygenators**: Next-generation oxygenator expected to launch in 2028, with a premium pricing strategy reflecting clinical value. Current market share has increased from low 30s% to high 30s% [26][31][36] - **Epilepsy Market**: Significant reimbursement changes for VNS technology, with a 40%-50% increase in facility reimbursement effective January 1, 2026, expected to remove barriers to adoption [38][40] - **Clinical Data**: New data showing a 76% median seizure reduction will be used to enhance market penetration for VNS therapy [51] Strategic Initiatives - **Obstructive Sleep Apnea (OSA)**: Revenue target of $200 million-$400 million by 2030, with assumptions based on market growth and share capture. Hiring of a global head of commercialization to enhance market presence [52][55] - **Depression Treatment**: Plans to leverage existing infrastructure for commercialization, with potential synergies with the neuromodulation business [60][62] Key Takeaways - LivaNova is focused on maintaining growth momentum while navigating challenges in Q4 2025 - Strategic investments in product development and market expansion are expected to drive future revenue growth - Significant changes in reimbursement for epilepsy treatments are anticipated to enhance market adoption and financial performance [39][40][46]