LivaNova (NASDAQ:LIVN) executives highlighted double-digit revenue growth, operating margin expansion and stronger cash generation in 2025, while outlining expectations for more moderate top-line growth in 2026 driven by continued momentum in cardiopulmonary and epilepsy and ongoing investment in innovation programs such as obstructive sleep apnea (OSA) and connected care.
2025 performance and strategic focus
Chief Executive Officer Vladimir Makatsaria said 2025 delivered “strong performance,” citing double-digit revenue growth, “meaningful” adjusted operating margin expansion and “robust” cash generation. He said 2025 marked LivaNova’s fifth consecutive year of double-digit EPS growth and its third consecutive year of double-digit organic revenue growth.
Cardiopulmonary: Essenz rollout and consumables demand
In the cardiopulmonary segment, Makatsaria reported fourth-quarter revenue of $207 million, up 10% versus the prior-year period, and full-year revenue of $785 million, up 13%.
Management said heart-lung machine (HLM) revenue grew in the mid-single digits in the quarter, driven by Essenz placements and favorable price premiums. Some planned Essenz placements and tender activity shifted into 2026, which moderated fourth-quarter contribution. Makatsaria said Essenz represented about 55% of annual HLM units placed in 2025, and the company expects roughly 80% of new HLM placements to be Essenz by the end of 2026.
Consumables revenue grew in the mid-teens in the quarter, driven by market share gains, procedure growth and pricing. Management said oxygenator demand continues to outpace the market’s ability to supply, and that LivaNova’s manufacturing capacity expansion plans remain on track, with additional work underway with third-party suppliers to increase component supply.
For 2026, the company guided cardiopulmonary revenue growth of 7% to 8%. In Q&A, Makatsaria said the same growth drivers from 2025 remain in place—Essenz upgrades, consumables share gains and price—while CFO Alex Shvartsburg said the tender shift from Q4 was “not super material” and would be “fully recapture[d]” in the first quarter. Management also described conservative assumptions in the outlook, including moderation in Essenz price premiums and caution around oxygenator output given third-party supply constraints experienced in 2025.
On China, Makatsaria said the Essenz launch was progressing as planned. He described China as the company’s second-largest market by placed units, said LivaNova is the market leader there, and cited a win rate above 80%. He added that 2025 was a year of preparation and launch, with the first placement in November, and characterized 2026 as the first year of “significant impact,” with China expected to be a major contributor to increased Essenz penetration.
Epilepsy: clinical evidence and reimbursement tailwinds
LivaNova reported epilepsy revenue growth of 9% in the fourth quarter, with growth across all regions. Europe and Rest of World grew a combined 17% in the quarter, while U.S. epilepsy revenue rose 8% year-over-year. For the full year, epilepsy revenue grew 6%, with Europe and Rest of World up a combined 13% and the U.S. up 5%.
Management emphasized three strategic levers for epilepsy growth: clinical evidence, innovation and commercial execution/reimbursement. Makatsaria pointed to the CORE-VNS study, presented at the American Epilepsy Society in the fourth quarter, as being “well-received” and prompting clinicians to reevaluate where VNS Therapy fits in treatment.
On reimbursement, the company said that effective Jan. 1, 2026, Medicare provider reimbursement for VNS Therapy procedures for drug-resistant epilepsy increased significantly, with hospital outpatient payments rising about 48% for new patient implants and 47% for end-of-service procedures versus 2025 rates. Makatsaria said the changes reduce a known barrier, noting that historical hospital rates for Medicare patients did not fully cover procedure costs. In Q&A, Shvartsburg said the 2026 epilepsy guide assumes price as a “short-term contributor,” while penetration gains would take time as the company works to change physician behavior and reopen closed accounts. He also noted that roughly two-thirds of U.S. epilepsy revenue comes from replacement implants, which provides recurring revenue but means higher new-patient volume has “less of an impact” on overall growth in 2026.
For 2026, the company guided epilepsy revenue growth of 5.5% to 6.5%, incorporating mid-single-digit U.S. growth and high-single-digit combined growth in Europe and Rest of World. On potential Medicare prior authorization dynamics raised by an analyst, management said it had not seen denials in cohorts it was tracking and noted that many Medicare patients are covered by Medicare Advantage plans that already require prior authorization.
Innovation updates: connected care, OSA milestones, and depression reimbursement process
Chief Innovation Officer Ahmet Tezel said LivaNova recently received FDA approval for its cloud-based digital health platform, which establishes the foundation for a connected care roadmap. The company plans a limited market rollout of a cloud-based clinician portal in 2026 to validate workflow and drive clinical engagement, with “limited financial impact.” A full release is planned for 2027 alongside a next-generation Bluetooth-enabled implantable pulse generator.
Tezel also said the company completed a “design freeze” for its next-generation oxygenator and is moving toward manufacturing scale-up.
In OSA, Tezel said the modular PMA submission continues to progress, and timing expectations are unchanged. LivaNova continues to expect PMA approval for the clinical trial device in the first half of the year, followed by a PMA supplement for the commercial MRI-compatible device. The company reiterated plans for a limited market release in the first half of 2027 and a broader commercial launch in the second half of 2027.
Tezel also said a full 12-month dataset from the OSPREY trial is expected to be published “imminently,” describing OSPREY as the first randomized controlled trial in the hypoglossal nerve stimulation space. He said the PolySync evaluation is continuing and that the company expects to share full results at the SLEEP Conference in June, adding that management is “confident” it can convert at least half of non-responders into responders using the PolySync algorithm and intends to make the algorithm available at launch.
On difficult-to-treat depression, Tezel said the RECOVER durability manuscript was published in the International Journal of Neuropsychopharmacology, and that RECOVER showed that after 24 months, more than 80% of patients maintained clinically meaningful improvements. Regarding CMS, Tezel said the company remains in active contact and is working toward its next meeting, but did not speculate on timing due to scheduling uncertainty.
Financial details and 2026 outlook
Shvartsburg reported fourth-quarter revenue of $361 million, up 9.5% on a constant currency and organic basis. He said foreign exchange provided a favorable year-over-year impact of approximately $9 million, or 3%.
Fourth-quarter adjusted gross margin was 68%, in line with the prior year, as favorable product mix and pricing were offset by unfavorable currency changes and tariff impacts. Adjusted operating income was $64 million versus $56 million a year earlier, with adjusted operating margin at 18% versus 17%.
Adjusted diluted EPS was $0.86, up from $0.81. Shvartsburg said results included about $0.04 of favorable impact versus prior guidance assumptions tied to cardiopulmonary investment timing, while noting the printed circuit board conversion program remains on track and reflected in 2026 guidance.
Cash at Dec. 31 was $636 million, up from $429 million at year-end 2024, driven by improved operating cash flows and the release of $295 million of restricted cash following SNIA Litigation Guarantee termination. Total debt fell to $377 million from $628 million, reflecting a $200 million early repayment of term facilities and repayment of $58 million of 2025 convertible notes. The company also fully repaid outstanding term facilities on Jan. 8 via an early payment of $98 million, including accrued interest.
For 2026, LivaNova guided:
- Revenue growth: 6% to 7% on a constant currency basis (with foreign currency expected to be a ~1% tailwind)
- Adjusted operating income margin: 20% to 21%
- Adjusted effective tax rate: ~23%
- Adjusted diluted EPS: $4.15 to $4.25 (about 8% growth at the midpoint), assuming ~56 million weighted average shares
- Adjusted free cash flow: $160 million to $180 million, including $120 million in capital spending
Shvartsburg said the EPS outlook incorporates an assumed third-quarter SNIA payment of about $400 million and a $0.06 unfavorable EPS impact due to lower interest income. He also noted that on Jan. 30 the Court of Appeal set the next SNIA hearing for June 2026 to allow discussions of a possible out-of-court resolution, and said the company believes the amount reserved remains its best estimate and it has sufficient resources to satisfy the liability.
Management also said guidance incorporates its best estimate of the impact of currently applicable tariffs, estimating a net impact of less than $5 million on adjusted operating income for the year.
About LivaNova (NASDAQ:LIVN)
LivaNova plc is a global medical technology company that develops and manufactures products and therapies for the cardiac surgery and neuromodulation markets. Headquartered in London, United Kingdom, and Houston, Texas, LivaNova serves hospitals, clinics and healthcare providers in more than 100 countries. The company’s primary focus lies in advancing patient care through innovations in heart–lung bypass, cardiac preservation, circulatory support and neurostimulation therapies.
The Cardiac Surgery business unit offers a comprehensive portfolio of products used in cardiopulmonary bypass procedures, including oxygenators, heart–lung machines, arterial filters, cannulae and sutureless heart valves.
