Q2 2026 LivaNova PLC Earnings Call Transcript
Key Points
- LivaNova PLC (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 (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 (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 (LIVN) plans to step in to support the market.
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.
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
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
