Asked about the impact of reduced volume discounting and improved reimbursement on Epilepsy pricing and how it will be used as a growth lever.

Management explained that strong CORE-VNS clinical outcomes accelerate referrals and clinician confidence, while increased Medicare reimbursement (nearly 50% increase in 2026) drives both price and volume. Realized price improved roughly twofold due to less discounting, and volume increased from NPI in existing accounts and new account activation. “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.”

Asked about softness in U.S. CP, potential one-timers, Essenz rollout maturation, and the impact of lower growth in autotransfusion systems and cannula.

Management stated U.S. growth was in line with forecasts, with Essenz upgrade cycle, market share gains in consumables, and price continuing as drivers. No specific outages were noted. Autotransfusion and cannula grew slower than oxygenators/HLM but were within expected phasing of orders. “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.”

Inquired about the reason for the slight delay in the next-gen OSA system PMA submission (H2 2026 - H1 2027) and its impact on revenue/OpEx.

The adjustment reflects work for final design verification and validation, not efficacy or safety concerns. The company maintains high standards. The delay does not impact the long-term commercial opportunity or the $200M-$400M 2030 revenue target, as conviction in the program has increased due to PolySync data. “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.”

LIVN

LivaNova (LIVN) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 5, 2026

Source: earnings call transcript

Executive summary

LivaNova Q2 FY26 — Record Revenue & EPS Driven by CP and Epilepsy Strength

LivaNova delivered a strong second quarter, achieving record revenue and EPS, driven by robust performance in its Cardiopulmonary and Epilepsy segments. The company raised its full-year revenue and EPS guidance, reflecting confidence in its operational execution and strategic investments, despite a lowered free cash flow outlook due to increased capital expenditures and a slight delay in the next-gen OSA system submission.

Highlights

Record quarterly revenue of $391 million, up 9.8% constant currency YoY.
Record adjusted diluted EPS of $1.26, up from $1.05 in Q2 FY25.
Full-year 2026 revenue growth guidance raised to 8%-9% (constant currency) from 7%-8%.
Cardiopulmonary revenue grew 10% YoY to $222 million, with HLM revenue up mid-teens and consumables up high single-digits.
Epilepsy revenue increased 10% YoY, driven by improved realized price, volume, and clinical evidence.

Concerns

Adjusted free cash flow guidance lowered to $140M-$160M from $160M-$180M due to increased capital spending and funding for Thermo Fisher agreement.
PMA supplement submission for next-gen OSA system adjusted to H2 2026 - H1 2027, from prior expectation of H2 2026.
Autotransfusion systems and cannula experienced lower growth, partially offsetting Cardiopulmonary consumables.
Cash balance decreased to $517 million at June 30 from $636 million at year-end 2025, primarily due to debt repayment.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue Growth (constant currency)	8% to 9% high materiality	FY26	High
Full-year 2026 Adjusted Diluted EPS	$4.30 to $4.40 high materiality	FY26	High
Full-year 2026 Cardiopulmonary Revenue Growth	9.5% to 10.5% medium materiality	FY26	High
Full-year 2026 Epilepsy Revenue Growth	7% to 8% medium materiality	FY26	High
Full-year 2026 Adjusted Operating Income Margin	20% to 21% medium materiality	FY26	High
Full-year 2026 Adjusted Effective Tax Rate	approximately 23% low materiality	FY26	High
Full-year 2026 Capital Spending	$135 million medium materiality	FY26	High
Full-year 2026 Adjusted Free Cash Flow	$140 million to $160 million high materiality	FY26	Medium
Essenz HLM Units as % of Annual HLM Units	approximately 80% medium materiality	FY26	High
Essenz HLM Units as % of Annual HLM Units	100% medium materiality	FY27	High
Next-generation oxygenator launch	Launch medium materiality	FY28	High
Next-generation IPG launch	Launch low materiality	FY27	High
OSA 2030 Revenue Target	$200 million to $400 million high materiality	FY30	High
OSA Next-generation MRI-compatible system PMA supplement submission	Between H2 2026 and H1 2027 medium materiality	H2 FY26 - H1 FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Cardiopulmonary Led by strength in Europe, with Essenz placements and favorable price premiums driving HLM growth. Consumables growth supported by improved component availability and manufacturing optimization. Heart-lung machine revenue: mid-teens growthCardiopulmonary consumables revenue: high single digits growthOxygenators and perfusion tubing kits growth: low double-digitsEssenz HLM placements: increased sequentially and year-over-yearEssenz HLM units as % of annual HLM units: 80% (expected 2026), 55% (2025)	$222 million	10%	—	—
Epilepsy Performance driven by favorable realized price and volume, supported by impactful clinical evidence (CORE data), improved reimbursement, and sustained commercial excellence. Europe and Rest of World Epilepsy revenue growth: 15%U.S. Epilepsy revenue growth: 8%Realized price: improved roughly twofold vs. normal annual increasesNew patient implant funnel: strongest levels ever	—	10%	—	—

Deals & partnerships

Thermo Fisher Scientific Long-term agreement to secure access to a critical oxygenator component. long-term

Recently, we advanced that strategy by entering into a long-term agreement with Thermo Fisher Scientific, securing access to a critical oxygenator component.

Risks & headwinds

Lower growth in autotransfusion systems and cannula Q2 FY26

partially offset by lower growth

Mitigation:Alex Shvartsburg noted it was 'expected sort of phasing of orders.'

Increased capital spending and funding for Thermo Fisher agreement Full year 2026

Lowered adjusted free cash flow guidance to $140M-$160M from $160M-$180M. Increased capital spending to $135M from $120M.

Mitigation:Strategic investments to support growth and long-term value creation.

PMA supplement submission for next-gen OSA system delayed H2 2026 - H1 2027

Expected between H2 2026 and H1 2027 (previously H2 2026).

Mitigation:Reflects work for final design verification and validation; does not impact long-term commercial opportunity or 2030 revenue target.

Tougher year-over-year comparison for Epilepsy in H2 FY26 H2 FY26

Due to lapping prior year's field safety notice.

Mitigation:Management expects continued strong new patient funnel trajectory.

What to watch in Q3 FY26

Oxygenator new production line go-live

H2 FY26

Current On track

Target Live

Why it matters

This new line is expected to materially increase oxygenator output, supporting market share gains and addressing demand.

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.

Find out whether LIVN delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the duration of the Thermo Fisher partnership in the works and its impact on future CP growth, especially oxygenators.

Management stated the partnership was in the works for some time, ensuring reliable critical component supply mid- to long-term, removing growth bottlenecks. This builds on internal process improvements and a new production line (H2 2026). It increases confidence in market share gains and ensures product availability for life-saving procedures.

“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.”

asked by Michael Sarcone · answered by Vladimir Makatsaria

2 min read 6 chapters

Detailed narrative

Cardiopulmonary Business Momentum

LivaNova's Cardiopulmonary segment reported $222 million in revenue, a 10% increase year-over-year, primarily driven by strong performance in Europe. Heart-lung machine revenue grew in the mid-teens, fueled by increased Essenz placements and favorable price premiums. Consumables saw high single-digit growth, with oxygenators and perfusion tubing kits growing low double-digits, supported by improved component availability and manufacturing optimization.

Oxygenator Output Expansion Strategy

The company is actively expanding its oxygenator output to capitalize on unmet market demand. This involves internal manufacturing process improvements, a new production line going live in the second half of 2026, and a long-term agreement with Thermo Fisher Scientific to secure critical component supply.

These initiatives are expected to strengthen the growth outlook for the oxygenator business, with a next-generation oxygenator planned for launch in 2028.

Epilepsy Segment Strength

Epilepsy revenue increased 10% year-over-year, with Europe and Rest of World regions growing 15% and the U.S. growing 8%. This performance was attributed to favorable realized pricing (due to reduced volume discounting and annual price increases), increased volume, impactful clinical evidence from the CORE data, and improved reimbursement.

CMS' preliminary recommendation to maintain VNS Therapy in the New Tech APC and propose an additional increase in end-of-service APC reimbursement for 2027 further supports the business trajectory.

OSA Program Updates and PolySync Data

The PMA supplement submission for the next-generation MRI-compatible OSA system is now expected between the second half of 2026 and the first half of 2027, a slight adjustment due to design verification. Despite this, the long-term 2030 revenue target of $200 million to $400 million remains unchanged.

New data on the PolySync algorithm showed an increased cumulative AHI response rate to approximately 85%, significantly reducing non-responders and strengthening the competitive profile.

Depression Trial Progress and CMS Engagement

The 36-month data from the RECOVER trial for difficult-to-treat depression has been submitted to a preprint server, demonstrating sustained improvements in depressive symptoms, function, and quality of life for patients on VNS Therapy. The company remains in active engagement with CMS regarding reimbursement, awaiting peer-reviewed publication of the data for formal consideration.

Capital Allocation and Investments

LivaNova increased its full-year capital spending guidance to $135 million to support Cardiopulmonary capacity expansion, next-generation oxygenator manufacturing scale-up, and IT infrastructure investments. This increased investment, along with funding for the Thermo Fisher agreement, led to a revised (lower) adjusted free cash flow guidance for the year.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.