LivaNova Plc Q3 FY2024 earnings call

• LivaNova achieved 11% revenue growth in the third quarter of 2024, marking the seventh consecutive quarter of double-digit growth. Geographically, 15% growth in the US and 9% in Europe and rest of the world; by business, 15% in cardiopulmonary and 9% in epilepsy. - Key growth drivers include healthy markets with mid-single-digit procedure volume growth, gaining market share via commercial execution and supply of cardiopulmonary consumables, leveraging pricing strategies, and successful Essenz launch. - On innovation front, progress in cardiopulmonary and epilepsy pipeline development, DTD pursuit of CMS coverage, and OSA expecting all patients to complete seven months of follow-up for primary endpoints in November.

For the cardiopulmonary segment, revenue was $172 million in the quarter, an increase of 15% versus the third quarter of 2023. It is expected to grow 13% to 14% for full year 2024. For the Epilepsy segment, revenue increased 9% versus the third quarter of 2023. For full year 2024, global epilepsy revenue is expected to grow 7% to 8%.

• 2024 revenue growth on constant currency basis between 8.5% and 9.5%, and between 10% and 11% when excluding ACS business exit. - Full year adjusted effective tax rate between 21% and 22%. - Adjusted diluted earnings per share in range of $3.30 to $3.40. - Adjusted free cash flow expected in range of $110 million to $130 million. - Forecast contemplates higher operating expenses in fourth quarter, including higher R&D investments and SG&A peaking in fourth quarter.

Q: David Roman asked about portfolio management and R&D deployment for higher-risk programs like DTD and OSA.

A: Vladimir Makatsaria said they are maximizing core businesses, setting directions for DTD and OSA, and waiting for reimbursement and clinical data.

Q: Rick Wise asked about oxygenator outlook.

A: Vladimir Makatsaria said procedure growth and industry capacity constraints are factors, and they are on track with capacity expansion.

Q: David Rescott asked about EPS margin expansion and DTD.

A: Vladimir Makatsaria said they intend to grow margins faster than revenue in 2025, and Ahmet Tezel talked about DTD's high unmet medical need and CMS process.