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Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:00 a.m. ET Vice President of Investor Relations - Briana Gotlin Chief Executive Officer and member of the Board of Directors - Vladimir Makatsaria Chief Innovation Officer - Ahmet Tezel Chief Financial Officer - Alex Shvartsburg Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good day, ladies and gentlemen, and welcome to the LivaNova PLC Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce you to your host for today's conference, Ms. Briana Gotlin, LivaNova's Vice President of Investor Relations. Briana, please go ahead. Briana Gotlin: Thank you, and welcome to our conference call and webcast discussing LivaNova's financial results for the second quarter of 2026. Joining me on today's call are Vladimir Makatsaria, our Chief Executive Officer and member of the Board of Directors; Alex Shvartsburg, our Chief Financial Officer; and Ahmet Tezel, our Chief Innovation Officer. Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statement. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including, but not limited to, revenue results, which will be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool. You can find the presentation and press release in the Investors section of our website under News, Events and Presentations at investor.livanova.com. With that, I'll turn the call over to Vlad. Vladimir Makatsaria: Thank you, Briana, and thank you, everyone, for joining us today. Welcome to LivaNova's conference call for the second quarter of 2026. Before reviewing our strong quarterly performance, I would like to begin by recognizing something fundamental to LivaNova's long-term success. Exceptional people deliver strong results. Over the past several months, we have continued to strengthen our leadership team while also honoring leaders whose contributions helped shape the company we are today. I want to recognize Franco Poletti, who recently retired after more than 40 years with LivaNova. Franco has been instrumental in building our Cardiopulmonary business into a global leader with lasting contributions across innovation, operations and culture. On behalf of the entire company, thank you, Franco, for 4 decades of extraordinary leadership. It is my pleasure to share that Stefano Folli has joined LivaNova as President of our Cardiopulmonary business. Stefano joins our experienced CP team after a distinguished career with Philips, where he most recently served as Executive Vice President, Global President, Ambulatory Monitoring & Diagnostics. He brings deep industry expertise and strong commitment to advancing our strategy for customers and patients worldwide. Over the past few months, Franco and Stefano have been working closely together on a smooth transition, ensuring our continued momentum into the next chapter of our Cardiopulmonary business. I'd also like to welcome Anne Liddy, our new Chief Legal Officer, who joins us from Hologic, where she most recently served as General Counsel. Anne is an accomplished global executive with extensive legal, compliance and business leadership experience, combined with her deep background in health care will be instrumental as we position the company for its next phase of growth. We look forward to her joining us later this month. For the remainder of the call, I will discuss our second quarter results and provide updated top line guidance for 2026. After my comments, Ahmet will discuss key innovation updates, and Alex will then provide additional details on our results and updated 2026 guidance. I will wrap up with closing remarks before moving to Q&A. We delivered a strong quarter of double-digit reported revenue growth with strength across all regions, driven by robust performance in our Cardiopulmonary and Epilepsy businesses. We are pleased to report record quarterly revenue and earnings per share on a dollar basis, while also continuing to expand margins and drive profitable growth. For the Cardiopulmonary segment, revenue was $222 million in the quarter, an increase of 10% versus the second quarter of 2025, led by strength in Europe. Heart-lung machine revenue grew in the mid-teens in the quarter, driven by an increase in Essenz placements in both a sequential and year-over-year basis and sustained favorable price premiums. Cardiopulmonary consumables revenue encompasses all products in our Cardiopulmonary portfolio, excluding HLM. Consumables grew in the high single digits in the quarter, driven by low double-digit growth in oxygenators and perfusion tubing kits, partially offset by lower growth in autotransfusion systems and cannula. Improvements in third-party component availability, combined with internal manufacturing optimization have driven meaningful year-over-year increases in oxygenator output, supporting our performance year-to-date. I'd now like to provide an update on our strategy to expand oxygenator output and continue gaining market share. Demand continues to exceed the market's ability to supply, and we believe this creates a significant opportunity to expand our market position. Our operational strategy to capitalize on that opportunity is built on 3 key components. First, over the past several years, we have gained share by increasing our output through internal manufacturing process improvements. Second, we have invested in expanding our internal manufacturing capacity with a new production line on track to go live in the second half of this year. Third, our strategy is to further increase long-term manufacturing output by partnering with suppliers to address critical component constraints, which have been the primary factor limiting faster market share expansion. Recently, we advanced that strategy by entering into a long-term agreement with Thermo Fisher Scientific, securing access to a critical oxygenator component. Together, our internal capacity expansion and this agreement position us to increase output, capture underserved demand and consistently supply our customers, all of which contribute to a meaningful competitive advantage. The Thermo Fisher agreement builds on our existing 2026 expansion plans. We expect its benefits to build over the medium to long term, further strengthening the growth outlook for our oxygenator business. For the full year 2026, we now expect Cardiopulmonary revenue to grow 9.5% to 10.5%, up from 8.5% to 9.5% previously. We continue to expect Essenz to represent approximately 80% of annual HLM units placements in 2026, up from 55% in 2025. This forecast assumes continued market share gains in consumables as we execute on our manufacturing expansion plans. Turning to Epilepsy. Revenue increased 10% versus the second quarter of 2025. Epilepsy revenue in the Europe and Rest of World regions increased a combined 15% versus the prior year period, while U.S. Epilepsy revenue increased 8% year-over-year. Performance was driven by favorable realized price and volume, supported by impactful clinical evidence, improved reimbursement and sustained commercial excellence. Improved realized pricing in the second quarter was driven by reduced volume discounting in addition to our standard annual list price increase. We are encouraged by CMS' preliminary recommendation to maintain VNS Therapy new patient implants in the New Tech Ambulatory Payment Classification as well as the proposed additional increase in the end-of-service APC reimbursement in 2027. We believe this increase, if implemented, will be a positive development for patients and providers that expands access to care and supports long-term VNS Therapy growth. At the same time, the CORE data continue to drive meaningful changes in physician behavior. The growing body of real-world evidence is accelerating referrals, strengthening clinicians' confidence and supporting early adoption of VNS Therapy in the treatment pathway. CORE is not only strengthening the clinical value proposition of VNS Therapy, but also serving as an important driver of commercial momentum. The combination of improved reimbursement, expanding market access, a strengthening patient funnel and the growing influence of CORE gives us increasing confidence in the trajectory of the business. As a result, we are raising our full year 2026 Epilepsy revenue growth outlook to 7% to 8%, up from 6% to 7% previously. In summary, we delivered strong second quarter growth, driven by the Essenz upgrade cycle and market share gains in oxygenators and Cardiopulmonary as well as improved U.S. reimbursement and compelling clinical data in Epilepsy. Looking ahead, we expect these drivers to sustain through 2026 and beyond. As a result, we are now guiding full year 2026 revenue growth between 8% and 9%, up from 7% to 8% previously. This top line guidance implies 2026 performance at the high end of the 2025 to 2028 growth framework we outlined at Investor Day. Alex will provide additional details on our 2026 guidance later in the call. With that, I'll hand the call over to Ahmet to cover key innovation updates across the portfolio. Ahmet Tezel: Thank you, Vlad. Innovation is fueling our growth today while positioning us for sustained long-term value creation. Starting with Cardiopulmonary, we're excited about the long-term agreement with Thermo Fisher and look forward to partnering with them. This agreement will supply a critical component for both our current oxygenator portfolio and our clinically differentiated next-generation oxygenator. Our next-generation oxygenator is designed to deliver best-in-class performance through enhanced gas transfer efficiency, low pressure drop and strong platelet preservation, helping reduce blood trauma and supporting better patient outcomes through further increasing the safety margins of the procedure. We believe these attributes represent a meaningful advancement in oxygenator technology and further reinforce our commitment to reliability and supply continuity. We are in the manufacturing scale-up phase with facility expansion and a new dedicated production line both underway. Importantly, this new line will operate separately from the lines currently used for our INSPIRE products and will not require any trade-off in manufacturing space or floor capacity. We continue to expect launch in 2028. In Epilepsy, the limited market release of our cloud-based clinician portal and application continues to progress well with excellent clinician feedback from early users. The U.S. sales force is working to expand adoption across the next wave of accounts ahead of our full launch. As a reminder, the financial impact from the portal is expected to be limited this year. The digital health platform is already delivering meaningful workflow and connectivity benefits for patients and clinicians while establishing the foundation for future capabilities. This includes remote titration with our next-generation IPG that we continue to expect to launch in 2027. More broadly, this is a strategic investment in connected care and Epilepsy is just the first step. Importantly, it also establishes a single shared cloud platform across the entire portfolio. That means the same digital infrastructure we're building for Epilepsy can be leveraged across OSA, depression and Cardiopulmonary, accelerating the cadence of our software and digital health innovation and supporting a connected ecosystem approach. We believe we are at the forefront in leveraging agentic AI in product development and cloud-connected platforms in the medtech space and look forward to better serving our patients and clinicians with this platform. Turning to OSA. We continue to advance our next-generation MRI-compatible system designed to support commercialization with digital features. Based on the current status of our program, we now expect to submit the PMA supplement between the second half of 2026 and the first half of 2027. The timing adjustment does not impact our long-term commercial opportunity. The $200 million to $400 million 2030 revenue target remains unchanged from what we outlined at Investor Day. Our differentiated clinical data supports our entry and competitive position in this underserved market. In June, we shared new data showing that the use of PolySync algorithm increased the cumulative AHI response rate to approximately 85% in patients with moderate to severe OSA treated with our pHGNS technology. These results underscore the strength of our therapy in a challenging patient population, including those with higher BMI, more severe OSA and complete concentric collapse or CCC and highlight a meaningful opportunity to drive even better outcomes through innovation. As a reminder, PolySync builds on our differentiated pHGNS technology, which utilizes a 6-contact electrode positioned on the proximal hypoglossal nerve to enable broader muscle recruitment and flexible therapy optimization. Importantly, PolySync demonstrated the ability to convert nonresponders into responders, further strengthening our competitive profile and expanding the potential addressable patient population. Feedback from our physicians has been overwhelmingly positive. During our recent advisory board discussions, clinicians highlighted the potential for PolySync to further improve patient outcomes. The original OSPREY data without PolySync delivered competitive clinical outcomes in line with the current HGNS alternatives. With PolySync, the number of nonresponders is significantly reduced to just roughly 1 in 7 patients compared to the current standard of care of approximately 1 in 3. This represents a substantial improvement in successful clinical outcomes. This has the potential to expand penetration in a broader range of patients, which significantly strengthens our competitive positioning versus existing HGNS therapy. As we continue to generate clinical evidence and advance innovation, our objective remains clear: to improve outcomes for patients, enhance the experience for physicians and further differentiate our therapy in a large and underpenetrated market. Now turning to difficult-to-treat depression. We remain in active engagement and live dialogue with CMS. As part of our ongoing engagement efforts, our 36-month data from the RECOVER trial has been submitted to preprint list server in advance of the peer-reviewed publication. We expect the preprint will be available this month. The data further validates the long-term benefits of VNS Therapy. Patients in the active treatment arm continue to demonstrate sustained improvements through the 3 years, including ongoing benefits in depressive symptoms as well as durable gains in function and quality of life. Importantly, patients in the control arm experienced meaningful improvements after initiating active therapy, ultimately following a trajectory similar to that observed in the original treatment group. Taken together, these findings further strengthen the growing body of evidence supporting the durability and long-term impact of VNS Therapy for depression. We continue to believe VNS Therapy is a differentiated option for this patient population. We will continue to keep investors updated on material developments as appropriate. In summary, we're encouraged by our recent progress across the portfolio. Collectively, these milestones underscore the depth of our innovation pipeline and the opportunity to continue raising the standard of care. With that, I will turn the call over to Alex to discuss additional details on our results and updated 2026 guidance. Alex Shvartsburg: Thanks, Ahmet. During my portion of the call, I'll share a brief recap of the second quarter results and provide commentary on our updated full year 2026 guidance, which reflects strong performance year-to-date and improved business outlook. Turning to results. Revenue in the quarter was $391 million, an increase of 9.8% on a constant currency basis versus the prior year. Foreign exchange in the quarter had a favorable year-over-year impact on revenue of approximately $3 million or 1%. Adjusted gross margin as a percent of net revenue was 71% compared to 69% in the second quarter of 2025. In the quarter, we received a $6 million net tariff benefit from previously paid IEEPA tariffs. The refund had a benefit of approximately 150 basis points on gross margin in the quarter. The benefit from the tariff refund and improved pricing were partially offset by unfavorable currency. We do not expect the IEEPA tariff refund benefit to occur in future periods. Adjusted SG&A expense for the second quarter was $137 million compared to $121 million in the second quarter of 2025. SG&A as a percent of net revenue was 35% as compared to 34% in the second quarter of 2025. On a year-over-year basis, the increase as a percent of net revenue was driven by planned IT infrastructure spend. Adjusted R&D expense in the second quarter was $50 million compared to $44 million in the second quarter of 2025, which reflects planned increased OSA R&D investment. R&D as a percentage of net revenue was 13%, in line with the prior year. Adjusted operating income was $91 million compared to $77 million in the second quarter of 2025. Adjusted operating income margin was 23% as compared to 22% in the second quarter of 2025. Compared to the prior year, the increase reflects higher revenue and the benefit of the tariff refund, partially offset by planned investments I referenced earlier. Adjusted diluted earnings per share was $1.26 compared to $1.05 in the second quarter of 2025. The increase was primarily driven by higher revenue, reflecting strong growth across both the Cardiopulmonary and Epilepsy businesses as well as a onetime tariff refund benefit. Adjusted diluted EPS benefited from $0.08 of tariff refunds year-over-year. Moving to our cash balance at June 30. Cash was $517 million compared to $636 million at year-end 2025. Total debt at June 30 was $293 million compared to $377 million at year-end 2025. The reduction in both cash and total debt was a result of the early repayment of the outstanding Term Facilities of $98 million, inclusive of accrued interest. Adjusted free cash flow for the quarter was $46 million compared to $48 million in the prior year period. The modest year-over-year decline reflects increased capital spend and higher working capital requirements associated with revenue growth. Capital spend in the first half was $46 million compared to $26 million in the prior year period. The year-over-year increase was driven by Cardiopulmonary capacity expansion initiatives, the next-generation oxygenator manufacturing scale-up as well as investments in IT infrastructure. Now turning to our updated 2026 guidance. As Vlad mentioned, based on performance to date, we're raising full year 2026 revenue and adjusted earnings per share guidance. At the same time, we are lowering adjusted free cash flow guidance to reflect strategic investments in innovation, IT infrastructure and Cardiopulmonary capacity expansion to support the company's growth strategy. We now forecast 2026 revenue growth between 8% and 9% on a constant currency basis, up from 7% to 8% previously. We continue to expect the impact of foreign currency to be a tailwind of approximately 1% based on current exchange rates. Consistent with our prior guidance, we estimate a tariff net impact of less than $5 million on full year adjusted operating income, inclusive of current and anticipated future tariffs, excluding IEEPA-related tariffs. We continue to expect full year adjusted operating income margin to be in the range of 20% to 21%. Adjusted effective tax rate is still forecasted at approximately 23%. To reflect stronger operational performance, we now project adjusted diluted earnings per share in the range of $4.30 to $4.40 with adjusted diluted weighted average shares outstanding to be approximately 56 million for the full year. This EPS range represents approximately 11.5% growth at midpoint. The strength of our execution continues to provide flexibility in how we allocate capital, enabling us to raise our earnings outlook while increasing investments to support growth and long-term value creation. We're increasing our capital spending to $135 million from $120 million previously. The change primarily reflects increased capital investments to support Cardiopulmonary capacity expansion, the next-generation oxygenator manufacturing scale-up and IT infrastructure investments. That said, adjusted free cash flow is now expected to be in the range of $140 million to $160 million compared to our prior guidance of $160 million to $180 million. The decrease reflects higher CapEx as well as the funding associated with the Thermo Fisher agreement, partially offset by the tariff refund benefit and operational improvements. In summary, we're pleased with the record revenue and earnings achieved in the second quarter. Our updated 2026 guidance aligns with the 2025 to 2028 framework presented at our Investor Day and reflects top line performance at the high end of our targeted mid- to high single-digit revenue CAGR. With that, I'll turn the call back over to Vlad for his closing remarks. Vladimir Makatsaria: Thank you, Alex. In closing, I want to reiterate how encouraged we are by the performance of our business. We delivered record quarterly revenue and earnings per share, raised our full year outlook on the top and bottom line and continue to execute against our strategic priorities. These results reflect the dedication of the global LivaNova team and our unwavering focus on improving outcomes for patients. Our focus on talent, execution and innovation will continue to drive value for all our key stakeholders. With that, we're ready to open the call for questions. Operator: [Operator Instructions] Your first question comes from the line of Matthew Taylor with Jefferies. Michael Sarcone: This is Mike Sarcone on for Matt. I guess just wanted to start off on the CP side and the Thermo Fisher partnership. Can you maybe just give us some background for how long that's been in the works? And now that you have that supply for that component, how does that affect your thinking for CP growth kind of going forward? Vladimir Makatsaria: Yes. Matt (sic) [ Mike ], thank you for the question. So maybe just to step back and if you look at our market share progression over the last couple of years, we're very pleased with our progress. We moved market share in oxygenators from around 30% a couple of years ago to about 40% today. And we believe that we can continue to drive the share gain kind of via 2 channels. One is delivering innovation. So we have a new generation oxygenator coming up in the next couple of years. And then we are continuing to expand -- the second one is that we continue to expand our manufacturing output. So -- and then if you then zoom in on the manufacturing output, if you look at our strategy there, we have 3 key components there. So one is improved processes within our current network. And that has driven the improvement in our manufacturing output to date. So then the second one is we are installing a new manufacturing line, and that is expecting to go live in the second half of this year. And this will have material impact on increase of output in 2027. And then the third one is this securing reliable critical component supply kind of -- which will lead to increased output long term and basically removes supply constraint as a governor of growth. So that being said, so we've signed an agreement with Thermo Fisher. We've been working on it for some time. And that agreement basically ensures that mid- to long term, we will have reliable supply of the critical component and kind of completely remove the bottleneck from manufacturing output. I think, obviously, from the business point of view, we have more confidence in our ability to gain share moving forward. But I think more importantly is this is a life-saving nonelective procedure. And from a public health point of view, this just ensures that patients will have products available for this very important surgical procedure. So I think that's, I think from a public health point of view, it's a critical step forward as well. So in summary, we're very pleased with this partnership and already Thermo Fisher have been a really fantastic partner to date for our manufacturing work. Michael Sarcone: That's helpful. And then just second question, I'll switch over to Epilepsy. You talked about higher ASP due to reduced volume discounting. I know you've been benefiting from more favorable reimbursement this year. I guess, can you speak to your thoughts on pricing and how you'll use that as a lever for growth going forward? Vladimir Makatsaria: Yes. Thank you. This is obviously another very important area. Again, let me step back and maybe I'll talk both price and volume. So we're pleased with the tailwinds in the Epilepsy business and the recent momentum in the business. And there are kind of 2 key drivers that are impacting this recent momentum. So one is the strong CORE-VNS clinical outcomes, which are accelerating referrals, they're strengthening clinician confidence in the procedure and they are supporting early adoption of VNS Therapy into the treatment pathway. And then the second one is this increased Medicare reimbursement as of 2026. So as a reminder, it was nearly 50% increase in both new patients and end-of-service procedures versus 2025 rate. And so we're seeing the improvements in both price and volume. On the price side and with respect to -- it's connected to the reimbursement. But in Q2, we saw realized price improve roughly twofold versus what we would normally expect from our annual price increases. And that's basically driven by less discounting. On the volume side, we're seeing an increase in NPI in existing accounts. And that's -- again, that's driven by the improved clinical data that we saw in CORE-VNS study. But also the improved reimbursement has given us ability to open new accounts. So we see some new account activation as well. So I mean, both reimbursement and the strong clinical data, I mean, ultimately will increase access to patients to this procedure. But again, I think price and volume are both contributing to our improved growth momentum. Operator: Your next question comes from the line of Adam Maeder with Piper Sandler. Adam Maeder: Congrats on the quarter. I wanted to start on CP. Global CP had a very solid quarter. U.S. was maybe a little bit softer. So I wanted to ask about that segment in particular. Any one-timers in the quarter? Any changes to kind of CapEx behavior from customers or just kind of like a general maturation of the Essenz rollout in that region? And then I also heard you mention lower -- there's an offset to growth from the autotransfusion systems and cannula. So I would love to kind of understand that dynamic and kind of the impact that it had. And then I have a follow-up. Alex Shvartsburg: Adam, yes, look, our growth drivers remain firmly intact. The U.S. growth was very much in line with our forecast. The drivers continue as we've seen and Vlad has mentioned. So the Essenz upgrade cycle continues. From a consumables perspective, we continue to gain market share and price continues to be a growth driver. It was in the first half, and we expect to see that moving forward. So from a regional perspective, we don't see any outages there. I think it was kind of planned along with our expectations. With regard to your question on the other components, yes, autotransfusion, cannula are the other elements of our consumables portfolio and perhaps grew -- they grew slow -- at a slower pace than our oxygenator business and our HLM business. But there's nothing -- there's no glitches there either just expected sort of phasing of orders, and we're right on track with our plans. Adam Maeder: Okay. Perfect. And then if I could flip to OSA. Obviously, very encouraging data regarding PolySync at the SLEEP Meeting earlier this summer. But actually wanted to ask a little bit just around kind of time lines. I think you talked about the submission of the PMA supplement for the second-gen technology in the back half of this year or first half '27. We just -- it feels like maybe a slight wiggle there. So maybe just kind of what's driving that? And how do we think about any kind of potential ramifications or impact to revenue and even OpEx spend? Ahmet Tezel: Thank you. This is Ahmet. So we are in the final stages of product development. And now we expect the PMA supplement submission to be between the second half of '26 and the first half of 2027 versus our prior expectation of second half of this year. Now our updated timing reflects the work we need to do for the final design verification and validation process. But I want to be very clear, the updated time line does not relate to efficacy or safety of the device. We continue to be very excited about the new design and its feature sets. Now we do have high standards for our patients and the company, and we want to uphold those in our development process, and that's why we updated the time line. But this really doesn't change the conviction we have for our OSA program and the opportunity we have long term. OSA for us still remains a large underserved market where we believe we have the right to win with our clinical outcomes, and we believe we will set a new standard of care for HGNS therapy with the PolySync technology. And given the strength of that data, given the strength of PolySync, our conviction actually increased over the last several months in our ability to win in this market. And you asked about revenue. We continue to commit to the $200 million to $400 million 2030 target in terms of our revenue with OSA. Operator: Your next question comes from the line of Michael Polark with Wolfe Research. Michael Polark: Oxygenator question. I hear all the updates on capacity expansion. Appreciate that. As I look at the updated Cardiopulmonary guide, what's implied for growth in the second half, 7%-ish in 3Q, 4Q after low doubles in the first half. So I want to understand, is there something about the oxy supply-demand situation such that capacity is super tight right now and 2H might be a little lighter on your ability to fill and that's what's reflected in this slower guidance? Or no, you're comfortable that this kind of double-digit oxygenator growth trend has a chance to continue before the new capacity comes online next year? I just want to understand the timing a little bit better. Alex Shvartsburg: Mike, so from an oxy perspective, we have a strong growth trajectory for the full year. And obviously, part of the reason we've increased our guidance this quarter is because of the strong performance we saw in the first half, which gives us confidence that we'll be able to deliver for the full year. I wouldn't read anything into the deceleration of our forecast there. I think it's in line with our philosophy to continue to guide to what we see today and the opportunities in front of us. So we feel confident in the portfolio. All of the improvements that we're making in terms of our operational gains and manufacturing output continue right on track. Michael Polark: As a follow-up, I have a question on cannula as well. There was news last week or earlier this of a major recall from what I think is one of your major competitors in that category. But my feel for cannula category is not super great. So I'm just wondering if you could help us understand those underlying market dynamics and whether a competitor disruption is a good guy for you or no, that's not something we should look forward to. Alex Shvartsburg: Mike, it's a relatively small part of our portfolio. Obviously, we're going to step in and support the market as needed. It is an important part of all cardiac procedures. So we want to be there for our customers when there is a market void. Operator: Your next question comes from the line of David Rescott with Baird. David Rescott: Great. Congrats on the results here. I want to ask maybe a 2-part question on the Epilepsy side. I think you previously had talked about this volume-based discounting, removing that kind of phasing through the year. And I think the comment was pricing is twice as much as what you historically have seen. So I guess, is it fair -- trying to get a sense for where you are in that phasing process, meaning would it be fair to assume that, that 2x normal pricing contribution rate can continue to expand through the year? Or you're primarily through that at this point? And then I think you also mentioned that there's definitely some new accounts coming online for VNS. And just wondering if you could expand a little bit maybe on what some of those types of accounts look like relative to that core comprehensive Epilepsy base you've had in the past? Alex Shvartsburg: Yes, so on pricing, we saw the contract renegotiations that contributed to the growth in the first half. That was a big contributor to growth, and we expect that to continue for the balance of the year. As Vlad mentioned, our realized price, our normal inflationary price increase is 1% to 2% historically, we saw our realized price nearly double in the first half of the year, and we expect that to continue. There are contracts that we haven't been able to capture those renegotiations in the window for this year. So those will be residual renegotiations that will continue into 2027 and should provide a tailwind for that cohort of accounts. With regard to account activation, as we said earlier in the year, our teams, our commercial team was focused on driving penetration in our existing accounts in terms of driving new patient implant volumes, opening accounts that have previously closed due to economic challenges. We're seeing that read through. There's been some success in the first half, and we expect that to continue in the second half as well. David Rescott: Okay. That's helpful. Maybe on the HLM side, I think the commentary for Essenz to represent 80% of sales or placements in 2026 has been fairly consistent, not only this year, but I think you had outlined that in the prior year as well. And this better-than-expected growth maybe implies that you're seeing the benefits from price, but sales or underlying placements are doing better than expected. I guess, is that a fair way to characterize it? And when you think about that Essenz as a percentage of placements expanding maybe closer to nearly all sales in the 2027 time frame, can you give us, I guess, a state of affairs on where you are in that cumulative penetration level and the potential upgrades that are out there and how you would expect that growth in the HLM bucket to maybe trend as you get past those conversions or contribution on the pricing side in the '27-plus time frame? Vladimir Makatsaria: Thank you, David. So from -- let me start with HLM first. So to your question, we are confident in our ability to get to 80% this year in terms of placement penetration. And then as we said, we expect in 2027 to get to 100% of placement penetration. However, there's still many S5s or previous generation devices in the market, and it will take us a few years to get to a kind of full market upgrade. So this will continue over the next few years. But if I step back for a second and just look holistically at the CP business, we have 4 key drivers of our growth. One is the Essenz upgrade. The second one is market share gains in consumables. The third one is kind of next-generation products. So this would include oxygenators, Air Manager, Heater-Cooler as kind of key products that are coming up to the market relatively soon. And then we have price improvements across the portfolio. And so as we look into kind of beyond 2027, you will see a shift in the composition of growth where oxygenator and consumables will play a bigger part in the growth of the portfolio. And that is, I mean, first of all, it's majority of our business. And second, we have 2 major events coming. One is the launch of new oxygenator that is clinically differentiated versus anything on the market today, and that's coming in 2028. And then on top of that, all of our efforts to improve output on the manufacturing side. So those 2 will contribute to acceleration of growth in oxygenators. So kind of when I look at the holistic portfolio, it gives me confidence because we have multiple growth drivers there. And the last thing I'll say on HLM specifically, because we have such a significant fleet out there of the equipment, we have 70% market share approximately on equipment, it gives us an opportunity to drive additional revenue through partial equipment upgrade, through software upgrade, through launch of, like I said, Heater-Cooler for example, or Air Manager, that gives us kind of this additional opportunity to drive growth in HLM itself. Operator: Your next question comes from the line of Anthony Petrone with Mizuho Group. Anthony Petrone: Congrats on another clean print here. Maybe one on depression and one on fleet. You have the 36-month data from RECOVER, I guess, getting ready to be submitted for publication. Just want to -- does CMS have the 36-month data for their consideration? Last quarter, you announced I think there was going to be a couple of meetings in the post 1Q time frame, and that would decide on what the submission has to look like and maybe it would give you more color on timing. So anything more substance on the 36-month data being submitted to CMS and timing? And I'll have a quick follow-up on sleep. Vladimir Makatsaria: Sure. So we just submitted the publication for review on a journal. But it is available online in a website. It's a preprint website called medRxiv. So the rules for CMS is that your data needs to be published before they would consider it. So that is why they are aware that this data is coming and they actually asked about it to us, but they will not take it as a formal consideration until the data is published. But as I mentioned, you can actually see it online now, it's available. Now why we're excited about that data is that it shows that at 3 years, the treatment arm continues to get better. So from symptoms, functionality, quality of life. In -- as you know, in Neuromodulation, the longer the treatment is, the better the outcomes are, and we see this with our treatment arm at 3 years. So that's very exciting. And also the control arm, which was a sham arm in the first 1 year, but is now active for the last 2 years, also shows in line with what we expected that those patients are also seeing very positive benefit from the treatment. So the data is very strong. We're very excited. CMS has asked us about this data, but they will not formally consider until it's published. So it will be part of our submission. We continue to engage with CMS very closely. We continue to have active dialogue with them. They are still asking us questions about the data, including this one, the 3-year arm study. So we are progressing. And I think if there's any material update, we will certainly share it. Anthony Petrone: Helpful. And then on sleep, a competitor out there earlier this week announced that they're submitting for a Category 1 CPT code to the CPT Editorial Board. You now have the PolySync data out there. Are you part of that submission? Is PolySync part of that effort? And if the CPT Cat 1 code were secured, I mean, how -- what do you think the impact would be just on the backdrop in hypoglossal nerve stimulation in sleep? Vladimir Makatsaria: Yes. I mean we're still continuing to work with the societies in terms of how we're going to get the reimbursement. And our position hasn't changed. At the time of launch, whatever are the prevalent CPT codes, that are the ones that we're going to use. In terms of the actual procedure, the 2 systems are similar, and that is why we have the confidence that whatever is the appropriate CPT code at that time, LivaNova will be able to use it. Operator: Your next question comes from the line of Mike Matson with Needham. Michael Matson: So just a few questions on the oxygenator business. So with the new oxygenator that you're developing, it sounds like you're going to be kind of producing that at the same time as the prior generation. Are you going to be selling them kind of side by side? And will there be sort of like a tiered strategy where the new ones got a price premium? And will you eventually phase out the old one? Or will you continue to offer both of them over the longer term? Vladimir Makatsaria: Yes. So our current approach is that we will have both oxygenators on the market, and we will manage it as a portfolio. We are working right now on our pricing strategy. And in terms of your question, will we phase out the previous generation? We haven't made that decision yet. We want to see how the market reacts to it, and it's -- we'll have opportunity to decide to make that decision in the future. Right now, the focus is getting into the market by 2028. And the key thing when we said it is differentiated, what we've seen in the preclinical studies is that from the performance and how it impacts blood performance, it is significantly better than anything on the market today. And that gives us confidence in the ability to launch it successfully. But it will be a portfolio strategy. Michael Matson: Okay. Got it. And then just in Cardiopulmonary, I know you already addressed the slower growth in the U.S., but I was just wondering with Essenz, I think you said it's going to be 80% of your heart-lung machine sales this year or units this year. So I would assume it's higher than that in the U.S. So is it already at 100% in the U.S.? And is that part of the reason that you're seeing a bit slower growth there? Vladimir Makatsaria: Yes, you're correct. In the U.S., we phased out the previous generation. So we're only placing Essenz in the U.S. and then some other developed markets around the world as well. Michael Matson: Okay. And I mean, is that causing growth to be -- is that a factor for the slower growth or not? Vladimir Makatsaria: No. I mean, so far, Essenz placement increased both sequentially and year-on-year basis. and we're able to maintain price premiums as well, and that applies to the U.S. Operator: Your next question comes from the line of Brett Fishbin with KeyBanc. Brett Fishbin: Neuromodulation segment. Maybe starting with Epilepsy. I think you used the phrase strengthening patient funnel at one point in the prepared remarks. I was hoping you could just expand a little bit on what you're seeing there, if it's fair to think underlying volume is increasing because of the favorable reimbursement changes and then like how we should read into growth going forward? Vladimir Makatsaria: I -- so let me start by saying that the volume is positively impacted by both the clinical evidence that we saw in the CORE-VNS study. As a reminder, it's the largest real-world evidence study to date in -- with epilepsy treatment with medical devices. And then the second one is the reimbursement increase. So both reimbursement and clinical data are impacting volumes positively. I can tell you that our patients -- new patient funnel is at the strongest levels it's ever been. And it's coming both from an increase of procedures in the current accounts, but also opening new accounts. And I promise that we will give more color and data to the market with time. But at this point, we want to have a couple of more quarters behind us, so we see more evidence on the market performance, and then we will give a little bit more flavor to the lagging indicators. But the leading indicators right now are very strong. Brett Fishbin: All right. Fair enough. And then second question, just a follow-up on the OSA update. It's clearly reiterating the long-term revenue guidance. But just curious how you think about launch timing given the implied like 0 to 6-month delay, 3 months being the midpoint. Like how does that impact your thoughts on the limited market release timing and then eventually full market release timing? Alex Shvartsburg: We're -- look, we're still confident in the long-term opportunity here. Obviously, the timing is not linear in terms of how you get to our 2030 revenue target of $200 million to $400 million. We have commercial levers that we could pull to drive the ramp. So we're still bullish on the opportunity here. And yes, I think that overall, it's -- our confidence is still strong with OSA. Operator: Your last question comes from the line of Keith Hinton with Freedom Capital Markets. Keith Hinton: Great. Just 2 quick questions on Epilepsy. Starting off with -- if you could just speak a little bit to if you're seeing particular strength in certain subsegments of DRE and kind of any updates on the penetration of VNS into the surgery-eligible population and kind of the competitive landscape on both the device side as well as the pharma side? And then I have a follow-up. Alex Shvartsburg: Keith, this is Alex. So look, we're pleased with our progress to date. The momentum that we continue to build in our patient funnel is continuing. And in terms of any specific segment, there's really nothing to comment there. Our strong results in the first half expected to continue in terms of our new patient implant funnel in the second half. But I just want to remind everyone that we did have -- we're lapping prior year's field safety notice in the first half of the year. So we do expect a tougher comp in the second half. But as far as our trajectory with the new patient funnel, I think it continues to be a strength for us. Keith Hinton: Great. And then just on the ASP side, can you talk a little bit about payer mix within Epilepsy and whether you're seeing the benefit from the increase in CMS reimbursement? Are you seeing that carried over into the commercial segment as well? Alex Shvartsburg: So the CMS reimbursement improvements are reading through. So about 80% of our payer mix is government payers, so about 40% Medicare, 40% Medicaid. The rest is commercial payers. So we do expect the reimbursement improvements to read through on the commercial side, but I think it's still too early. Operator: We have reached the end of the Q&A session. I will now turn the call back to Vladimir Makatsaria for closing remarks. Vladimir Makatsaria: Thank you very much, and thank you, everyone, for joining us today and for the thoughtful questions. And on behalf of our team, we appreciate your support and interest in LivaNova, and have a great day ahead. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in LivaNova Plc, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LivaNova Plc wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. LivaNova (LIVN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

LivaNova PLC recently reported second-quarter 2026 results showing sales rising to US$390.59 million and net income climbing to US$108.57 million, alongside higher earnings per share versus a year earlier. On the back of this performance, the company raised its 2026 constant-currency revenue growth guidance to a range of 8% to 9% and secured a long-term oxygenator supply agreement with Thermo Fisher Scientific to support manufacturing expansion. Now we’ll examine how the raised 2026 growth outlook and manufacturing investments may influence LivaNova’s existing investment narrative. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To own LivaNova, you need to believe its cardiopulmonary and neuromodulation franchises can keep converting procedure demand into profitable, recurring revenue while managing pricing and reimbursement pressure. The Q2 2026 beat and higher revenue outlook support the near term growth catalyst in cardiopulmonary, but also highlight the key risk that higher manufacturing and IT spending, if not carefully controlled, could squeeze margins even as volumes rise. The long term oxygenator supply agreement with Thermo Fisher Scientific is especially relevant here, because it directly addresses prior supply constraints in cardiopulmonary consumables. By securing critical components and supporting capacity expansion, LivaNova is trying to align its manufacturing footprint with the heightened 2026 guidance, which may help underpin the cardiopulmonary growth story while leaving execution and supplier dependence as issues to watch. Yet even with stronger guidance, investors should be aware that higher spending on capacity and IT could still pressure margins if... Read the full narrative on LivaNova (it's free!) LivaNova's narrative projects $1.8 billion revenue and $220.8 million earnings by 2029. Uncover how LivaNova's forecasts yield a $84.80 fair value, a 5% upside to its current price. Some of the lowest ranked analysts were assuming only about 5 percent annual revenue growth and US$177.7 million in earnings by 2029, so compared with today’s stronger guidance and supply agreement, their view reflects a far more cautious stance on supplier bottlenecks and margin pressure that you may want to compare with your own expectations. Explore 2 other fair value estimates on LivaNova - why the stock might be worth just $84.80! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your LivaNova research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision. Our free LivaNova research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate LivaNova's overall financial health at a glance. These stocks are moving-our analysis flagged them today. Act fast before the price catches up: Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. The future of work is here. Discover the 39 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Outshine the giants: these 16 early-stage AI stocks could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LIVN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

LivaNova LIVN reported adjusted earnings per share (EPS) of $1.26 for the second quarter of 2026, up 20% year over year. The figure beat the Zacks Consensus Estimate by 16.7%. GAAP EPS for the quarter was $1.93 compared with 50 cents in the year-ago period. Revenues totaled $390.6 million, up 10.8% year over year and 9.8% at constant currency. The top line surpassed the Zacks Consensus Estimate by 2.9%. Revenue growth reflected strength across all regions, driven by robust performance in Cardiopulmonary and Epilepsy businesses, as well as a one-time tariff refund benefit. Year to date, the company’s shares have gained 27% against the industry’s decline of 10.1%. The broader S&P 500 Index has increased 12.7% in the same time frame. Image Source: Zacks Investment Research LivaNova derives revenues primarily from two reportable segments — Cardiopulmonary and Neuromodulation. Cardiopulmonary Cardiopulmonary revenues were $221.6 million, up 11.2% year over year on a reported basis and up 9.9% at constant currency. Growth was led by Europe and primarily reflected higher Essenz Perfusion System sales, strong consumables demand and favorable realized pricing. Heart-lung machine revenues increased in the mid-teens, supported by higher Essenz placements and sustained favorable price premiums. Cardiopulmonary consumables revenues grew in the high single digits, driven by low-double-digit growth in oxygenators and perfusion tubing kits. This was partly offset by lower growth in autotransfusion systems and cannula. Neuromodulation Neuromodulation revenues totaled $166.9 million, reflecting growth of 10.1% year over year on a reported basis and 9.5% at constant currency. The improvement was driven by higher volumes and favorable realized pricing across all regions. Within Neuromodulation, Epilepsy revenues increased 10% year over year at constant currency. Performance benefited from improved reimbursement, expanding market access and growing clinical evidence supporting Vagus Nerve Stimulation (VNS) Therapy. Management cited reduced volume discounting, annual price increases and stronger new-patient implant activity as contributors to the segment’s growth. In the quarter under review, U.S. revenues totaled $199.4 million, up 5.8% year over year on both a reported and constant-currency basis. Europe revenues totaled $81.8 million, up 22.5% year over year on a reported basis and up 20% at constant currency. Europe was the primary growth driver for the Cardiopulmonary segment in the second quarter, supported by Essenz Perfusion System sales, strong consumables demand and favorable realized price. Rest of World revenues were $109.4 million, up 12.5% year over year on a reported basis and up 10.7% at constant currency. U.S. Epilepsy revenues rose 8%, while combined Europe and Rest of World Epilepsy revenues increased 15% year over year on a constant-currency basis. In the quarter under review, LivaNova’s gross profit increased 14.5% year over year to $273.7 million. The gross margin expanded 230 basis points (bps) to 70.1%. Adjusted gross margin improved 210 bps to 71%, aided by favorable pricing and a $6 million net refund related to previously paid IEEPA tariffs. Selling, general and administrative expenses increased 14.7% year over year to $158.1 million, reflecting planned investments in IT infrastructure. Research and development expenses rose 13.8% to $53.7 million, primarily due to higher spending on the obstructive sleep apnea program. Adjusted operating income totaled $90.8 million, up 17.3% year over year. The adjusted operating margin expanded 130 bps to 23.2%. LivaNova exited second-quarter 2026 with cash and cash equivalents of $516.6 million compared with $539.7 million at the end of first-quarter 2026. Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $81.8 million compared with $86.9 million a year ago. LivaNova has raised its outlook for the full year 2026. The company expects 2026 revenue growth of 8-9% at constant currency (up from 7-8% previously). Foreign currency is projected to provide an approximately 1% tailwind. Cardiopulmonary growth is expected at 9.5-10.5% (up from 8.5-9.5% previously), while Epilepsy growth is forecast at 7-8% (up from 6-7% previously). Adjusted earnings per share are projected between $4.30 and $4.40 (up from $4.20-$4.30 previously). Adjusted operating margin guidance remains 20-21%. However, adjusted free cash flow guidance was lowered to $140-$160 million from $160-$180 million as capital spending rises to $135 million. The Zacks Consensus Estimate for revenues and adjusted EPS is pegged at $1.52 billion and $4.24, respectively. LivaNova PLC price-consensus-eps-surprise-chart | LivaNova PLC Quote LivaNova exited the second quarter of 2026 with better-than-expected earnings and revenues, supported by solid Cardiopulmonary and Epilepsy growth. Record quarterly revenues, margin expansion and raised full-year top- and bottom-line guidance were encouraging. Favorable pricing, higher Essenz placements, oxygenator demand and improved VNS Therapy momentum also supported performance. In Cardiopulmonary, the company entered a long-term agreement with Thermo Fisher Scientific to secure a critical oxygenator component. Combined with internal manufacturing improvements and a new production line expected to begin operations in the second half of 2026, the agreement should support higher oxygenator output and help address unmet demand. LivaNova continues to target a 2028 launch for its next-generation oxygenator. In Neuromodulation, improved reimbursement and CORE-VNS clinical evidence continued to support physician confidence, patient referrals and earlier adoption of VNS Therapy in Epilepsy. The limited market release of LivaNova’s cloud-based clinician portal also progressed, while its next-generation implantable pulse generator remains on track for a 2027 launch. In obstructive sleep apnea, PolySync increased the cumulative apnea-hypopnea index response rate to 84.5%, strengthening the therapy’s clinical profile. The company now expects to submit the MRI-compatible OSA system’s PMA supplement between the second half of 2026 and the first half of 2027. LivaNova currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here. West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%. McKesson reported a first-quarter fiscal 2027 adjusted EPS of $9.93, which beat the Zacks Consensus Estimate by 5.2%. Revenues of $105.4 billion surpassed the Zacks Consensus Estimate by 0.95%. McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 4.3%. Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%. Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LivaNova PLC (LIVN) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report McKesson Corporation (MCK) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in LivaNova PLC? Here are five stocks we like better. Record Q2 performance: Revenue rose 9.8% year over year on a constant-currency basis to $391 million, while adjusted EPS increased to $1.26 from $1.05, supported by double-digit growth in Cardiopulmonary and Epilepsy. 2026 outlook raised: LivaNova increased its full-year revenue-growth guidance to 8%–9% and adjusted EPS guidance to $4.30–$4.40, citing stronger Cardiopulmonary demand, pricing and reimbursement momentum in Epilepsy, and improved execution. Investment weighs on cash flow: The company raised capital-spending guidance to $135 million and cut adjusted free-cash-flow guidance to $140 million–$160 million as it invests in manufacturing capacity, innovation and IT infrastructure; a new oxygenator line is expected to materially increase output in 2027. LivaNova (NASDAQ:LIVN) reported record quarterly revenue and adjusted earnings per share for the second quarter of 2026, citing double-digit reported growth across its Cardiopulmonary and Epilepsy businesses. The company raised its full-year revenue and adjusted EPS outlook while reducing its adjusted free-cash-flow forecast to account for increased investment in manufacturing capacity, innovation and IT infrastructure. Second-quarter revenue totaled $391 million, up 9.8% on a constant-currency basis from a year earlier. Foreign exchange provided an approximately $3 million, or 1%, year-over-year benefit. Adjusted diluted EPS rose to $1.26 from $1.05 in the second quarter of 2025, aided by higher revenue and a one-time tariff refund. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “We delivered a strong quarter of double-digit reported revenue growth with strength across all regions, driven by robust performance in our Cardiopulmonary and Epilepsy businesses,” CEO Vladimir Makatsaria said. Cardiopulmonary revenue was $222 million, an increase of 10% from the prior-year quarter, led by growth in Europe. Heart-lung machine revenue grew in the mid-teens, driven by increased placements of the company’s Essenz system and continued price premiums, according to Makatsaria. → 3 Drone Stocks That Should Soar After the Summer Slump Cardiopulmonary consumables revenue, excluding heart-lung machine consumables, increased in the high single digits. Oxygenators and perfusion tubing kits each posted low-double-digit growth, partly offset by lower growth in autotransfusion systems and cannula products. The company said manufacturing improvements and better availability of third-party components increased oxygenator output year over year. LivaNova also entered a long-term agreement with Thermo Fisher Scientific to secure a critical oxygenator component. Management said the agreement is intended to ease a supply constraint over the medium to long term and support additional market-share gains. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Makatsaria said LivaNova’s oxygenator market share has increased from about 30% several years ago to about 40% currently. A new production line is expected to begin operating in the second half of 2026, with a material impact on output anticipated in 2027. The company is also developing a next-generation oxygenator, which it continues to expect to launch in 2028. For 2026, LivaNova raised its Cardiopulmonary revenue-growth forecast to 9.5% to 10.5%, from 8.5% to 9.5% previously. Essenz is still expected to account for about 80% of annual heart-lung machine placements this year, compared with 55% in 2025. Management said it expects Essenz to reach 100% of placements in 2027, though upgrades of the installed base of older systems will take several years. Epilepsy revenue rose 10% from a year earlier. Revenue in Europe and the rest of world increased a combined 15%, while U.S. epilepsy revenue rose 8%. Management attributed the performance to improved realized pricing and volume growth, supported by clinical evidence, reimbursement improvements and commercial execution. The company said reduced volume discounting, in addition to its annual list-price increases, drove improved realized pricing during the quarter. Makatsaria said U.S. Medicare reimbursement for both new-patient implants and end-of-service procedures increased by nearly 50% in 2026 versus 2025 rates. LivaNova also cited CMS’s preliminary recommendation to keep VNS Therapy new-patient implants in the new-technology ambulatory payment classification, along with a proposed increase in end-of-service reimbursement for 2027. The company said data from its Core VNS study are contributing to higher referral activity, greater clinician confidence and earlier use of VNS Therapy in the treatment pathway. During the question-and-answer session, Makatsaria said the company’s new-patient funnel was at its strongest level to date, reflecting increased procedures at existing accounts and new-account openings. LivaNova raised its 2026 epilepsy revenue-growth outlook to 7% to 8%, compared with prior guidance of 6% to 7%. CFO Alex Shvartsburg said realized pricing growth in the first half was nearly twice the company’s historical annual inflationary increase of 1% to 2%, and management expects contract renegotiations to provide a tailwind through the remainder of 2026 and into 2027. Adjusted gross margin was 71%, up from 69% a year earlier. The quarter included a $6 million net benefit from refunds of previously paid IEEPA tariffs, which added about 150 basis points to gross margin. LivaNova does not expect that refund benefit to recur in future periods. Adjusted operating income was $91 million, compared with $77 million a year earlier. Adjusted operating margin was 23%, compared with 22% in the prior-year quarter. Adjusted SG&A expense rose to $137 million from $121 million, primarily reflecting planned IT infrastructure spending. Adjusted R&D expense increased to $50 million from $44 million, reflecting planned investment in the company’s obstructive sleep apnea program. Adjusted free cash flow was $46 million, compared with $48 million a year earlier. Cash stood at $517 million at June 30, down from $636 million at year-end 2025, while total debt fell to $293 million from $377 million. The company said both balances declined following early repayment of $98 million of outstanding term facilities, including accrued interest. LivaNova increased its full-year constant-currency revenue-growth forecast to 8% to 9%, from 7% to 8%, and now expects foreign exchange to add about 1% to reported revenue based on current exchange rates. The company maintained its adjusted operating margin outlook of 20% to 21% and its adjusted tax-rate estimate of about 23%. Adjusted diluted EPS guidance was raised to $4.30 to $4.40, representing approximately 11.5% growth at the midpoint. However, capital-spending guidance increased to $135 million from $120 million, and adjusted free-cash-flow guidance was lowered to $140 million to $160 million from $160 million to $180 million. Chief Innovation Officer Ahmet Tezel said LivaNova’s cloud-based clinician portal and application for epilepsy remain in a limited market release, with a broader launch planned after further account adoption. The platform is expected to support remote titration alongside a next-generation implantable pulse generator expected to launch in 2027. For obstructive sleep apnea, the company now expects to submit a PMA supplement for its next-generation MRI-compatible system between the second half of 2026 and the first half of 2027. Tezel said the revised timing reflects final design verification and validation work, rather than device safety or efficacy issues. LivaNova maintained its target of $200 million to $400 million in OSA revenue by 2030. The company also said it submitted 36-month data from its RECOVER trial in difficult-to-treat depression to medRxiv ahead of peer-reviewed publication. Management said CMS is aware of the data but will not formally consider it until publication. The data showed sustained improvements among patients receiving active VNS Therapy, according to Tezel. LivaNova plc is a global medical technology company that develops and manufactures products and therapies for the cardiac surgery and neuromodulation markets. Headquartered in London, United Kingdom, and Houston, Texas, LivaNova serves hospitals, clinics and healthcare providers in more than 100 countries. The company's primary focus lies in advancing patient care through innovations in heart–lung bypass, cardiac preservation, circulatory support and neurostimulation therapies. The Cardiac Surgery business unit offers a comprehensive portfolio of products used in cardiopulmonary bypass procedures, including oxygenators, heart–lung machines, arterial filters, cannulae and sutureless heart valves. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "LivaNova Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly revenue and EPS, driven by double-digit growth in Cardiopulmonary and Epilepsy segments across all geographic regions. Cardiopulmonary growth was propelled by the Essenz heart-lung machine upgrade cycle and sustained price premiums, with Essenz now representing approximately 80% of annual HLM unit placements. Oxygenator market share expanded to approximately 40%, up from 30% two years ago, supported by internal manufacturing process improvements and increased output. Epilepsy performance benefited from a nearly 50% increase in Medicare reimbursement for new patient and end-of-service procedures, leading to improved realized pricing through reduced volume discounting. Clinical momentum in Epilepsy is accelerating as CORE-VNS real-world evidence strengthens clinician confidence and supports earlier adoption of VNS Therapy in the treatment pathway. Strategic leadership transitions were completed with new heads for the Cardiopulmonary and Legal departments to support the company's next phase of global growth. Raised full-year 2026 revenue growth guidance to 8% to 9%, reflecting performance at the high end of the long-term strategic framework outlined at Investor Day. Increased 2026 adjusted EPS guidance to $4.30 to $4.40, representing approximately 11.5% growth at the midpoint despite increased strategic investments. Lowered adjusted free cash flow guidance to $140 million to $160 million to account for higher capital expenditures related to manufacturing capacity expansion and IT infrastructure. Cardiopulmonary revenue growth outlook raised to 9.5% to 10.5%, assuming continued market share gains in consumables as new production lines go live in the second half of 2026. Epilepsy revenue growth outlook increased to 7% to 8%, supported by a strengthening new patient funnel and the anticipated carry-over of reimbursement benefits into 2027. Secured a long-term agreement with Thermo Fisher Scientific for a critical oxygenator component, aimed at removing supply constraints as a governor of long-term growth. Reported a one-time $6 million net tariff benefit from previously paid IEEPA tariffs, which provided a 150 basis point boost to gross margin in Q2 but will not recur. Adjusted the PMA supplement submission timeline for the next-generation OSA system to between H2 2026 and H1 2027 due to final design verification requirements. Early repayment of $98 million in outstanding Term Facilities reduced both cash and total debt, strengthening the balance sheet for future innovation investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained the partnership secures mid- to long-term supply of critical components, effectively removing manufacturing bottlenecks that previously limited market share expansion. The agreement complements internal capacity expansions, including a new production line expected to impact output materially starting in 2027. Realized price improved twofold compared to historical annual increases due to reduced discounting following Medicare reimbursement hikes. Management noted that while the second half of 2026 faces tougher comparisons, the new patient funnel is at its strongest level ever, driven by both existing account penetration and new account activations. The slight delay in PMA submission (from H2 2026 to potentially H1 2027) is attributed to rigorous internal validation standards rather than safety or efficacy concerns. Management reaffirmed the $200 million to $400 million revenue target for 2030, citing high conviction in the PolySync algorithm's ability to convert non-responders. LivaNova has submitted 36-month data to a preprint server and a peer-reviewed journal; CMS requires formal publication before the data can be officially considered for coverage decisions. Active dialogue with CMS continues, with the agency specifically inquiring about the long-term durability shown in the 3-year data arm.

– Delivered double-digit reported revenue growth of 10.8%, with constant-currency revenue growth of 9.8% – Raised full-year 2026 revenue and adjusted diluted earnings per share guidance(1) – Entered into a long-term agreement with Thermo Fisher Scientific to strengthen oxygenator component supply to expand manufacturing output and satisfy unmet demand GLOUCESTER, England, August 05, 2026--(BUSINESS WIRE)--LivaNova PLC (Nasdaq: LIVN), a market-leading medical technology company, today reported results for the second quarter ended June 30, 2026 and raised full-year 2026 guidance. Financial Summary and Highlights(1) Second-quarter revenue of $390.6 million increased 10.8% on a reported basis and 9.8% on a constant-currency basis as compared to the prior-year period Second-quarter U.S. GAAP diluted earnings per share of $1.93 and adjusted diluted earnings per share of $1.26 Second-quarter net cash provided by operating activities of $66.6 million and adjusted free cash flow of $45.5 million Raised full-year 2026 revenue growth range by 100 basis points to 8% to 9% on a constant-currency basis. Raised full-year 2026 adjusted diluted earnings per share range by $0.10 at midpoint to $4.30 to $4.40. Lowered full-year 2026 adjusted free cash flow range to $140 million to $160 million Entered into a long-term agreement with Thermo Fisher Scientific that is anticipated to increase availability of a critical oxygenator component. The agreement is expected to support increased oxygenator output over time, strengthening LivaNova’s ability to satisfy unmet customer demand Announced data showing that use of PolySync™ programming algorithm increased the cumulative apnea-hypopnea index response rate to 84.5% in patients with moderate to severe Obstructive Sleep Apnea, improving response rate and expanding the impact of proximal hypoglossal nerve stimulation therapy over time Received a favorable ruling from the Italian tax authority, Agenzia delle Entrate, resulting in the recognition of a discrete tax benefit of €81.8 million ($95.4 million) on the deductibility of the previously recorded SNIA environmental liability Appointed Jette Nygaard-Anderson to the Board of Directors and the Nominating and Corporate Governance Committee, effective June 10 Appointed Stefano Folli as President, Cardiopulmonary, effective August 1, after joining the Company on June 1 Appointed Anne Liddy as Chief Legal Officer, effective August 31 "In the second quarter, LivaNova delivered strong revenue growth driven by sustained performance in our Cardiopulmonary and Epilepsy businesses," said Vladimir Makatsaria, Chief Executive Officer of LivaNova. "We are also pleased to announce an agreement with Thermo Fisher Scientific, an important step in securing a critical component for our oxygenators, supporting the Cardiopulmonary supply chain long-term. Our updated 2026 guidance reflects strong execution in the core businesses as we advance our strategic plan and drive long-term value creation." Second-Quarter 2026 Results The following table summarizes net revenue by segment (in millions): Second-quarter 2026 Cardiopulmonary revenue increased 11.2% on a reported basis and 9.9% on a constant-currency basis versus the second quarter of 2025 driven by growth in Europe, primarily reflecting Essenz™ Perfusion System sales, strong consumables demand, and favorable realized price. Second-quarter 2026 Neuromodulation revenue increased 10.1% on a reported basis and 9.5% on a constant-currency basis versus the second quarter of 2025 with growth across all regions, driven by volume growth and favorable realized price. Earnings Analysis On a U.S. GAAP basis, second-quarter 2026 operating income was $49.5 million, as compared to operating income of $54.2 million for the second quarter of 2025. Adjusted operating income for the second quarter of 2026 was $90.8 million, as compared to adjusted operating income of $77.4 million for the second quarter of 2025. On a U.S. GAAP basis, second-quarter 2026 diluted earnings per share was $1.93 as compared to diluted earnings per share of $0.50 in the second quarter of 2025. Second-quarter 2026 adjusted diluted earnings per share was $1.26, as compared to adjusted diluted earnings per share of $1.05 in the second quarter of 2025. Full-Year 2026 Guidance LivaNova now expects full-year 2026 revenue to grow between 8% and 9% (versus 7% and 8% prior) on a constant-currency basis. Foreign currency is expected to be a tailwind of approximately 1% based on current exchange rates, consistent with prior guidance. Adjusted diluted earnings per share for 2026 is now expected to be in the range of $4.30 to $4.40 (versus $4.20 to $4.30 prior), assuming a share count of approximately 56 million for full-year 2026. In 2026, the Company now estimates adjusted free cash flow in the range of $140 million to $160 million (versus $160 million to $180 million prior) to reflect incremental strategic investments in Cardiopulmonary capacity expansion, innovation, and IT infrastructure to support the Company’s growth strategy. As discussed in the section entitled "Use of Non-GAAP Financial Measures" below, the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Accordingly, the Company is unable to reconcile the forward-looking non-GAAP financial measures included in this section to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts. Webcast and Conference Call Instructions The Company will host a live audiocast at 1 p.m. London time (8 a.m. Eastern Daylight Time) on Wed., August 5, 2026 that will be accessible at www.livanova.com/events. Listeners should register in advance and log on approximately 10 minutes early to ensure proper setup. To listen to the conference call by telephone, dial +1 833 461 5787 (if dialing from within the U.S.) or +1 585 542 9983 (if dialing from outside the U.S.). The conference call meeting ID is 719351329. Within 24 hours of the audiocast, a replay will be available at www.livanova.com/events, where it will be archived and accessible for approximately 90 days. About LivaNova LivaNova PLC is a global medical technology company built on nearly five decades of experience with a vision to change the trajectory of lives for a new day. Through ingenious medical solutions in select neurological and cardiac conditions, LivaNova strives to ignite patient turnarounds. With its registered office in the United Kingdom, approximately 3,300 employees, and a presence in more than 100 countries, LivaNova serves patients, healthcare professionals, and healthcare systems worldwide. For more information, please visit www.livanova.com. Use of Non-GAAP Financial Measures To supplement financial measures presented in accordance with generally accepted accounting principles in the United States (U.S. GAAP or GAAP), management has disclosed certain additional measures not presented in accordance with GAAP known as "non-GAAP financial measures" or "adjusted financial measures." Company management uses these non-GAAP measures to monitor the Company’s operational performance and for benchmarking against other medical technology companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, operational performance measures as prescribed by GAAP. In this news release, the Company refers to revenue and percentage change in revenue on a comparable, constant-currency basis. Company management believes that these non-GAAP measures provide a useful way to evaluate the revenue performance of LivaNova and to compare the revenue performance of current periods to prior periods on a consistent basis. Constant-currency percent change measures the change in revenue between current and prior-year periods using average exchange rates in effect during the applicable prior-year period. LivaNova calculates forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For example, forward-looking net revenue growth projections are estimated on a constant-currency basis and exclude the impact of foreign currency fluctuations. Forward-looking non-GAAP adjusted diluted earnings per share guidance excludes items such as, but not limited to, changes in fair value of certain derivatives and contingent consideration arrangements and asset impairment charges that would be included in comparable GAAP financial measures. The most directly comparable GAAP measure for adjusted free cash flow is net cash provided by operating activities. Adjusted free cash flow is defined as net cash provided by operating activities less cash used for the purchase of property, plant, and equipment excluding the impact of 3T litigation settlement payments, cybersecurity incident insurance proceeds, SNIA environmental liability and related financing costs, contingent consideration payments classified within operating cash flows, and gains related to dividends received from investments and further adjusted as needed for other charges, expenses, or gains that may not be indicative of the Company’s operational performance. However, non-GAAP financial adjustments on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors, including but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, the ultimate outcome of legal proceedings, gains or losses on the potential sale of businesses or other assets, restructuring costs, merger and integration activities, changes in fair value of derivatives, and contingent consideration arrangements, asset impairment charges and the tax impact of the aforementioned items, tax law changes, or other tax matters. Accordingly, the Company does not reconcile non-GAAP financial measures on a forward-looking basis as it is impractical to do so without unreasonable effort. Adjusted financial measures such as adjusted cost of sales, adjusted gross profit, adjusted selling, general, and administrative expense, adjusted research and development expense, adjusted other operating expense, adjusted operating income, adjusted income before income tax, adjusted income tax expense, adjusted net income, and adjusted diluted earnings per share are measures that LivaNova generally uses to facilitate management review of the operational performance of the company, to serve as a basis for strategic planning, and in the design of incentive compensation plans. Additionally, the Company uses the non-GAAP liquidity measure adjusted free cash flow. The Company believes that the presentation of these adjusted financial measures allows investors to evaluate the Company’s operational performance for different periods on a more comparable and consistent basis, and with other medical technology companies by adjusting for items that are not related to the operational performance of the Company or incurred in the ordinary course of business. Safe Harbor Statement Certain statements in this news release, other than statements of historical or current fact, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. These statements include, but are not limited to, LivaNova’s plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects, or future events, and involve known and unknown risks that are difficult to predict. As a result, the Company’s actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. Generally, forward-looking statements can be identified by the use of words such as "may," "could," "seek," "guidance," "predict," "potential," "likely," "believe," "will," "should," "expect," "anticipate," "estimate," "plan," "intend," "forecast," "foresee," or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by LivaNova and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and shareholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause the Company’s actual results to differ materially from the forward-looking statements contained in this news release, and include, but are not limited to, the following risks and uncertainties: risks associated with doing business globally, including volatility in the global market and worldwide economic conditions; adverse changes in export and import costs and other trade restrictions as well as uncertainty over global tariffs; risks relating to supply chain pressures; failure to protect, maintain, or upgrade LivaNova’s IT systems or products, or safeguard against cybersecurity incidents, service disruptions, or data corruption; costs of complying with privacy and security of personal information requirements and laws; changes in technology, including the development of superior or alternative technology or devices by competitors and/or competition from providers of alternative medical therapies; risks related to AI integration and regulation; failure of investments, alliances, supply agreements, acquisitions, or divestitures to achieve expected returns; failure to maintain appropriate working relationships with healthcare professionals to aid in the continuing development of products; the risk of quality issues and the impacts thereof; risks relating to recalls, replacement of inventory, enforcement actions, or product liability claims; failure to comply with, or changes in, laws, regulations, or administrative practices affecting government regulation of the Company’s products; failure to retain talent, maintain an effective succession plan, and negotiate successfully with local works councils; failure to obtain or maintain approvals, clearance, or reimbursement in relation to the Company’s products; unfavorable results from clinical studies or failure to meet milestones; global healthcare policy changes that may lead to restricted access and pricing as well as payback requirements and limited reimbursement; failure to comply with rules relating to healthcare goods and services as well as anti-bribery laws; the unfavorable impact of pending or existing climate change; product liability, intellectual property, shareholder-related, environmental-related, income tax, and other litigation, disputes, losses, and costs, including in the case of the Company’s 3T Heater-Cooler litigation; risks associated with environmental laws and regulations as well as environmental liabilities, violations, and litigation, including in the case of Saluggia and SNIA; failure to protect the Company’s proprietary intellectual property; changes in tax laws and regulations, including exposure to additional income tax liabilities; risks relating to the Company’s indebtedness; risks associated with potential government shutdowns; the potential for impairments of intangible assets, goodwill, and other long-lived assets; risks associated with public health crises; risks associated with shareholder activism; effectiveness of the Company’s internal controls over financial reporting; changes in the Company’s profitability and/or failure to manage costs and expenses; fluctuations in future quarterly operating results and/or variations in revenue and operating expenses relative to estimates; and other unknown or unpredictable factors that could harm the Company’s financial performance. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the Company’s business, including those described in the "Risk Factors" section of the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the U.S. Securities and Exchange Commission by LivaNova. Readers are cautioned not to place undue reliance on the Company’s forward-looking statements, which speak only as of the date of this news release. The Company undertakes no obligation to update publicly any of the forward-looking statements in this news release to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If LivaNova updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. PolySync and Essenz are trademarks of LivaNova USA, Inc. The following table presents the reconciliation of GAAP diluted weighted average shares outstanding, used in the computation of GAAP diluted loss per share, to adjusted diluted weighted average shares outstanding, used in the computation of adjusted diluted earnings per share: View source version on businesswire.com: https://www.businesswire.com/news/home/20260804457807/en/ Contacts Briana Gotlin Vice President, Investor RelationsPhone: +1 281 895 2382e-mail: [email protected]

LivaNova (NASDAQ:LIVN) reported second-quarter results that surpassed Wall Street expectations, prompting the medical technology company to raise its earnings and revenue guidance for the full year. The stronger performance helped lift the shares around 1.3% in after-hours trading. The company delivered adjusted earnings of $1.26 per share, beating the analyst consensus estimate of $1.09. Revenue rose to $390.6 million, ahead of the expected $380.57 million and up 10.8% from $352.5 million in the second quarter of 2025. On a constant-currency basis, revenue increased 9.8% year over year. Following the stronger-than-expected quarter, LivaNova raised its adjusted diluted earnings per share guidance for 2026 to a range of $4.30 to $4.40, compared with its previous forecast of $4.20 to $4.30. The midpoint of the revised guidance, $4.35 per share, is above the Wall Street consensus estimate of $4.25. The company also lifted its constant-currency revenue growth outlook for the year to between 8% and 9%, an increase from its previous forecast of 7% to 8%. Chief Executive Officer Vladimir Makatsaria said the company’s key operating divisions continued to perform well during the quarter. “In the second quarter, LivaNova delivered strong revenue growth driven by sustained performance in our Cardiopulmonary and Epilepsy businesses,” Makatsaria said. “Our updated 2026 guidance reflects strong execution in the core businesses as we advance our strategic plan and drive long-term value creation.” The Cardiopulmonary division generated revenue of $221.6 million, an increase of 11.2% year over year, supported by growing sales of the Essenz Perfusion System in Europe, higher consumables demand and favourable pricing. Neuromodulation revenue rose 10.1% to $166.9 million, benefiting from higher sales volumes and improved pricing across all geographic regions. LivaNova also announced a long-term agreement with Thermo Fisher Scientific aimed at strengthening the supply of oxygenator components while expanding manufacturing capacity. Despite raising its earnings and revenue outlook, the company lowered its adjusted free cash flow guidance for 2026 to between $140 million and $160 million, down from its previous forecast of $160 million to $180 million. Management said the reduction reflects additional strategic investment in manufacturing capacity, product innovation and information technology infrastructure to support future growth. LivaNova stock price

This article first appeared on GuruFocus. Revenue: $391 million in Q2 2026, an increase of 9.8% on a constant currency basis versus the prior year. Cardiopulmonary Revenue: $222 million in the quarter, up 10% year-over-year, led by strength in Europe. Epilepsy Revenue: Increased 10% versus Q2 2025, with Europe and rest of world up a combined 15% and US up 8%. Adjusted Gross Margin: 71% of net revenue, compared to 69% in Q2 2025, benefiting from a $6 million net tariff refund. Adjusted Operating Income: $91 million, compared to $77 million in Q2 2025, with margin expanding to 23% from 22%. Adjusted Diluted EPS: $1.26, compared to $1.05 in Q2 2025, including a $0.08 benefit from tariff refunds. Adjusted Free Cash Flow: $46 million in the quarter, compared to $48 million in the prior-year period. Cash and Debt: Cash at June 30 was $517 million, with total debt of $293 million. 2026 Revenue Guidance: Raised to 8% to 9% growth on a constant currency basis, up from 7% to 8% previously. 2026 Adjusted EPS Guidance: Raised to $4.30 to $4.40, representing approximately 11.5% growth at midpoint. Warning! GuruFocus has detected 4 Warning Signs with SEDG. Is LIVN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. LivaNova PLC (NASDAQ:LIVN) delivered record quarterly revenue and EPS, with total revenue up 9.8% on a constant currency basis, driven by strong double-digit growth in both Cardiopulmonary and Epilepsy segments. The company raised its full-year 2026 revenue growth guidance to 8%-9% (from 7%-8%) and adjusted EPS guidance to $4.30-$4.40, reflecting strong operational performance and confidence in continued momentum. Cardiopulmonary segment showed robust growth, with heart-lung machine revenue up mid-teens, driven by increased Essenz placements and sustained price premiums, and consumables grew high-single digits with low-double digit growth in oxygenators. LivaNova PLC (NASDAQ:LIVN) secured a long-term agreement with Thermo Fisher Scientific for a critical oxygenator component, which is expected to remove supply constraints, support market share gains, and strengthen long-term growth prospects. Epilepsy segment benefited from improved reimbursement (CMS preliminary recommendation to maintain VNS therapy in new tech APC and increase end-of-service APC reimbursement) and strong clinical data (CORE-VNS), leading to a raised full-year growth outlook of 7%-8%. Innovation pipeline advanced: next-generation oxygenator on track for 2028 launch, PolySync algorithm data showed ~85% AHI response rate in OSA, and 36-month RECOVER data for depression submitted for publication, all supporting long-term growth. Adjusted gross margin expanded to 71% (up 200 bps year-over-year), driven by pricing improvements and a one-time tariff refund, while adjusted operating income margin improved to 23%. The company strengthened its leadership team with key hires (Stefano Folli for Cardiopulmonary, Anne Liddy as Chief Legal Officer), ensuring continuity and expertise for future growth. LivaNova PLC (NASDAQ:LIVN) lowered its full-year 2026 adjusted free cash flow guidance to $140-$160 million (from $160-$180 million) due to increased capital spending and funding for the Thermo Fisher agreement. The company increased its capital spending guidance to $135 million (from $120 million) to support capacity expansion and IT infrastructure, which will pressure near-term cash flow. OSA program faced a timeline delay: PMA supplement submission for the next-generation MRI-compatible system is now expected in 2H 2026 to 1H 2027 (previously 2H 2026), which could push back commercialization. US Cardiopulmonary growth was softer than other regions, though management noted it was in line with expectations; however, the US has already phased out the previous-generation heart-lung machine, limiting upgrade-driven growth. The company noted a tougher comparison in the second half for Epilepsy due to lapping a prior-year field safety notice, which could temper growth momentum. Adjusted SG&A expense increased as a percentage of revenue (35% vs. 34% year-over-year) due to planned IT infrastructure spend, and R&D investment increased, pressuring margins. The one-time tariff refund benefit of $6 million (or $0.08 per share) is not expected to recur, which could create a headwind to future earnings comparisons. Autotransfusion systems and cannula growth was lower than other consumables, and a competitor recall in cannula may create market disruption, though LivaNova PLC (NASDAQ:LIVN) plans to step in to support the market. Q: Can you provide background on the Thermo Fisher partnership and how securing this critical oxygenator component affects your thinking for Cardiopulmonary (CP) growth going forward?A: CEO Vladimir Makatsaria explained that the company has grown oxygenator market share from ~30% to ~40% over the past few years. The strategy to expand output has three components: internal process improvements, a new production line going live in H2 2026, and securing critical component supply. The long-term agreement with Thermo Fisher removes supply constraints as a growth governor, providing confidence in future share gains and ensuring product availability for lifesaving procedures. Q: Regarding Epilepsy, you mentioned higher ASPs due to reduced volume discounting. Can you speak to your thoughts on pricing and how you'll use that as a lever for growth going forward?A: CEO Vladimir Makatsaria noted that momentum is driven by strong CORE VNS clinical outcomes and a nearly 50% increase in Medicare reimbursement for 2026. In Q2, realized price improved roughly twofold versus normal annual increases due to less discounting. On the volume side, the company is seeing increased new patient implants in existing accounts and new account activation, with both price and volume contributing to improved growth momentum. Q: Can you provide an update on the OSA program timeline, as the PMA supplement submission appears to have shifted? What's driving this and any impact on revenue or OpEx?A: Chief Innovation Officer Ahmet Tezel stated the PMA supplement submission is now expected between H2 2026 and H1 2027, reflecting work needed for final design verification and validation. He emphasized the update does not relate to efficacy or safety. The conviction in the program remains high, with PolySync data reducing non-responders to roughly 1 in 7 patients versus the standard of care of 1 in 3. The $200 million to $400 million 2030 revenue target remains unchanged. Q: With the updated Cardiopulmonary guidance implying slower growth in H2, is there something about the oxygenator supply-demand situation that might make H2 lighter, or should we expect double-digit growth to continue?A: CFO Alex Shvartsburg clarified that the company has a strong growth trajectory for the full year, and the guidance raise reflects strong H1 performance. He stated there is nothing to read into the forecast deceleration, as it aligns with the company's philosophy of guiding to what they see today. All operational improvements and manufacturing output gains remain on track. Q: On Epilepsy pricing, is it fair to assume the 2x normal pricing contribution can continue to expand through the year, and can you expand on the new accounts coming online?A: CFO Alex Shvartsburg confirmed that contract renegotiations were a big contributor to H1 growth and are expected to continue for the balance of the year. Some contracts not captured in this year's window will provide a tailwind into 2027. Regarding account activation, the commercial team is focused on driving penetration in existing accounts and reopening accounts previously closed due to economic challenges, with success seen in H1 and expected to continue. Q: With Essenz expected to represent 80% of HLM placements in 2026, is the better-than-expected growth implying placements are doing better than expected? How should we think about HLM growth beyond 2027?A: CEO Vladimir Makatsaria confirmed confidence in reaching 80% placement penetration this year and 100% in 2027. However, many S5 devices remain in the market, so the upgrade cycle will continue for several years. Beyond 2027, growth composition will shift toward oxygenators and consumables, driven by the launch of a clinically differentiated next-generation oxygenator in 2028 and manufacturing output improvements. The company's ~70% equipment market share also provides opportunities for software and partial equipment upgrades. Q: Regarding the 36-month RECOVER data for depression, has this been submitted to CMS for their consideration, and what is the timing?A: Chief Innovation Officer Ahmet Tezel stated the data has been submitted to a pre-print server (Med Archive) and is available online. CMS rules require data to be published before formal consideration, so while CMS is aware and has asked about it, they will not formally consider it until published. The data shows the treatment arm continues to improve at three years in symptoms, functionality, and quality of life, and the control arm (now active for two years) is also seeing positive benefits. Q: With the new oxygenator, will you sell it side-by-side with the prior generation, and will there be a tiered pricing strategy? Will you eventually phase out the old one?A: CEO Vladimir Makatsaria stated the company will manage both oxygenators as a portfolio and is currently working on pricing strategy. No decision has been made on phasing out the previous generation, as they want to see market reaction first. The focus is on launching by 2028, with preclinical studies showing significantly better blood performance than anything on the market today. Q: You used the phrase "strengthening patient funnel" in prepared remarks. Can you expand on what you're seeing and whether underlying volume is increasing due to reimbursement changes?A: CEO Vladimir Makatsaria confirmed volume is positively impacted by both the CORE VNS clinical evidence (the largest real-world evidence study in epilepsy) and reimbursement increases. The new patient funnel is at its strongest levels ever, coming from increased procedures in current accounts and new account openings. The company will provide more color on lagging indicators after a couple more quarters, but leading indicators are currently very strong. Q: Can you talk about payer mix within Epilepsy and whether the CMS reimbursement increase is carrying over to the commercial segment?A: CFO Alex Shvartsburg noted that ~80% of the payer mix is government payers (40% Medicare, 40% Medicaid), with the rest commercial. The CMS reimbursement improvements are reading through, and while they expect improvements to eventually read through on the commercial side, it is still too early to see the full effect. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

LivaNova (LIVN) came out with quarterly earnings of $1.26 per share, beating the Zacks Consensus Estimate of $1.08 per share. This compares to earnings of $1.05 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +16.67%. A quarter ago, it was expected that this medical technology company would post earnings of $0.85 per share when it actually produced earnings of $0.98, delivering a surprise of +15.29%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. LivaNova, which belongs to the Zacks Medical - Instruments industry, posted revenues of $390.6 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.90%. This compares to year-ago revenues of $352.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. LivaNova shares have added about 38.7% since the beginning of the year versus the S&P 500's gain of 13%. While LivaNova has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for LivaNova was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.06 on $380.05 million in revenues for the coming quarter and $4.24 on $1.5 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Instruments is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. SINTX TECHNOLOGIES, INC. (SINT), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.69 per share in its upcoming report, which represents a year-over-year change of +24.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. SINTX TECHNOLOGIES, INC.'s revenues are expected to be $0.4 million, up 166.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LivaNova PLC (LIVN) : Free Stock Analysis Report SINTX TECHNOLOGIES, INC. (SINT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research