08-05-2025
LivaNova PLC (LIVN) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic Advances
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
LivaNova PLC (NASDAQ:LIVN) achieved 10% organic revenue growth in Q1 2025, marking the 8th time in the past 9 quarters with double-digit growth.
The Osprey trial for obstructive sleep apnea showed a 65% responder rate at 12 months, validating the potential of their neurostimulation therapy.
Cardiopulmonary segment revenue increased by 15% year-over-year, with heart-lung machine revenue growing approximately 30%.
Regulatory approval for the Essence heart-lung machine in China, the second-largest market after the US, was received ahead of schedule.
The company has a strong cash position, with a cash balance of $738 million, up from $429 million at the end of 2024, allowing for strategic investments and debt repayment.
Negative Points
LivaNova PLC (NASDAQ:LIVN) recorded a $360 million liability related to an Italian Supreme Court decision, impacting financial results.
The US epilepsy business experienced procedure deferrals due to a voluntary field safety notification, impacting revenue by less than $2 million.
Adjusted gross margin decreased to 70% from 71% in the prior year, driven by unfavorable product mix and inflationary headwinds.
The company faces an uncertain tariff environment, with an estimated impact of less than $5 million on adjusted operating income for the year.
Adjusted R&D expenses decreased, reflecting investment optimization, but this could impact future innovation and development.
Q & A Highlights
Q: Can you help us understand where the Osprey trial data puts you in terms of market competitiveness and your plans for commercial development? A: Ahmed Tull, Chief Innovation Officer: The Osprey trial enrolled more severe patients and did not exclude those with complete concentric collapse (CCC), achieving a 65% responder rate at 12 months. We plan to optimize this technology further using personalized titration. The modular PMA submission to the FDA is complete, and we anticipate a relatively quick review. Commercially, we are confident in our ability to market this ourselves but are also exploring partnerships. Full strategy details will be shared at the investor day.
Q: Can you provide more detail on the outlook for the Heart-Lung Machine (HLM) business and the oxygenator side? A: Vladimir Makassara, CEO: We've gained market share in oxygenators and are expanding capacity by 10% this year, with a new manufacturing line expected next year. For HLM, Essence placements are expected to reach 60% this year, with regulatory approval in China, our second-largest market. We maintain a price premium, which is a significant growth driver.
