LivaNova Plc Q1 FY2025 earnings call

• OSPREY Trial: 12-month top line data showed 65% responder rate for moderate to severe OSA, completed PMA submission to FDA. - SNIA Litigation: Recorded a $360 million liability in Q1 due to Italian Supreme Court decision, repaid $200M of term facilities. - Tariffs: Assessed as a small and manageable headwind, impact <$5M to adjusted operating income. - Cardiopulmonary: Strong Essenz placements, HLM growth, oxygenator demand outpacing supply; full-year growth revised. - Epilepsy: Improved commercial execution in Europe, U.S. procedure deferrals from field safety notice, but confident in long-term trajectory. - OSA and DTD Programs: OSA PMA submission, DTD revenue guidance increased due to program optimization and CMS coverage efforts.

Cardiopulmonary: Revenue was $176 million in the quarter, an increase of 15% versus Q1 2024. Heart-lung machine revenue grew ~30% y-o-y. Oxygenator revenue grew in the high-single digits. Full-year 2025 guidance revised to 9%-10% growth from 7%-8% previously, incorporating HLM growth and consumables demand. Epilepsy: Revenue increased 4% versus Q1 2024, led by Europe and Rest of World (13% growth). U.S. Epilepsy had procedure deferrals from a field safety notice affecting <$2M in revenue. Full-year 2025 guidance 4%-5% growth.

• Revenue growth: Constant currency 6%-7%, organic 7%-8%, foreign currency impact 0%-1% headwind. - Adjusted effective tax rate ~24%, up 300 basis points from 2024. - SNIA impact: Adjusted EPS range $3.60-$3.70, repaid $200M term facilities, net interest expense now included in operational results. - Tariffs: Impact <$5M to adjusted operating income, managed through supply chain assessment and potential pricing actions.

• Tariffs: Uncertain environment remains a headwind, though managed. - SNIA Litigation: Previously a longstanding overhang, now resolved but had financial impact. - U.S. Epilepsy: Procedure deferrals from field safety notice, but confident in long-term growth potential in the large, underpenetrated market.

Q: Rick Wise asked about OSPREY data, market competitive basis and timelines.

A: Ahmet Tezel discussed OSPREY trial results, modular PMA submission, and potential for further optimization with personalized titration. Vlad Makatsaria added on commercial strategy and potential partnerships.

Q: Rick Wise followed up on HLM business, Essenz rollout, and oxygenator capacity.

A: Vlad Makatsaria discussed Essenz placement growth, China approval, oxygenator demand and capacity expansion, and share gain momentum.

Q: David Roman asked about OUS neuromodulation business progression and sustainability.

A: Stephanie Bolton discussed improved commercial execution in Europe, talent changes, and confidence in long-term trajectory.

Q: Adam Maeder asked about tariffs and guidance sequencing.

A: Alex Shvartsburg discussed manageable tariff impact, capital allocation, and quarterly OpEx ramping.

Q: Mike Sarcone asked about U.S. Epilepsy channel visibility.

A: Stephanie Bolton expressed confidence in long-term U.S. Epilepsy growth and mission to maximize VNS therapy access.

Q: Mike Matson asked about balance sheet leverage and capital allocation.

A: Alex Shvartsburg discussed healthy leverage, capital allocation priorities, and disciplined approach to inorganic growth.

Q: David Rescott asked about EPS outlook and FX impact.

A: Alex Shvartsburg discussed naturally hedged FX impact and balanced top line and OpEx.

Q: Michael Polark asked about DTD revenue and OSA case time/pricing.

A: Alex Shvartsburg discussed DTD revenue increase due to program optimization, Ahmet Tezel discussed OSA case time efficiency and surgical training, Alex Shvartsburg commented on pricing strategy.