LivaNova Q4 FY25 earnings call LIVN

LivaNova achieved its fifth consecutive year of double-digit EPS growth and third consecutive year of double-digit organic revenue growth in 2025. The company reported $361 million in Q4 revenue, a 9.5% increase on a constant currency and organic basis, and full-year revenue of $1.4 billion, up 11% organically. Adjusted operating income margin reached 18% in Q4, and 150 basis points expansion for the full year.

The company is strategically entering high-growth markets like obstructive sleep apnea (OSA) with a differentiated technology and existing neuromodulation capabilities, aiming to shift its overall weighted average market growth upward. It also preserves upside optionality in difficult-to-treat depression (DTD) pending CMS reimbursement. Lucile Blaise was recently appointed Global Head of Commercialization for OSA to strengthen leadership in this key area.

Cardiopulmonary revenue grew 10% in Q4 to $207 million and 13% for the full year to $785 million. Growth is driven by the continued upgrade cycle of Essenz, which represented approximately 55% of HLM units placed in 2025, with a target of 80% of new HLM placements by the end of 2026. Market share gains in consumables and pricing strategies also contributed, supported by ongoing manufacturing capacity expansion for oxygenators.

Epilepsy revenue increased 9% in Q4 and 6% for the full year, with strong commercial execution globally. Key drivers include impactful clinical evidence from the core VNS study, which is reshaping perception of VNS therapy effectiveness, and improved US Medicare reimbursement (48% for new patient implants, 47% for end-of-service procedures) effective January 1, 2026. These changes are expected to enhance hospital economics and expand patient access.

LivaNova received FDA approval for its cloud-based digital health platform, establishing a foundational infrastructure for connected care. A limited market rollout of the clinician portal is planned for 2026, with a full market release and the launch of a Bluetooth-enabled generator in 2027. This platform is a strategic investment that will be leveraged across the entire portfolio, including OSA, DTD, and cardiopulmonary, to accelerate digital health innovations.

The modular PMA submission for obstructive sleep apnea (OSA) is progressing, with PMA approval for the clinical trial device expected in H1 2026. The full 12-month data set from the OSPREY trial is anticipated to be published imminently. Additionally, the PolySync evaluation continues, with full results expected at the SLEEP conference in June, demonstrating the potential to convert at least half of nonresponders into responders.

In January, the RECOVER durability manuscript for difficult-to-treat depression (DTD) was published, showing over 80% of patients maintained clinically meaningful improvements after 24 months. The company remains in active contact with CMS regarding reconsideration of reimbursement, viewing the submission of its reconsideration package as a top priority, despite current scheduling uncertainty.