LivaNova PLC

What they do

LivaNova operates two reportable segments: Cardiopulmonary, which makes heart-lung machines (including the Essenz Perfusion System), oxygenators such as the Inspire lineup, autotransfusion systems, perfusion tubing and cannulae used in cardiopulmonary bypass, and Neuromodulation, which sells the VNS Therapy System for drug-resistant epilepsy, difficult-to-treat depression and development of the aura6000 System for obstructive sleep apnea. Its former ACS segment was wound down during 2024, and non-cannula ACS results plus unallocated corporate expenses are reported in Other.

Revenue drivers

• Cardiopulmonary — Q2 2026 revenue of $221.6 million (about 57% of total company revenue), up 11.2% reported and 9.9% constant currency, from HLMs, heater-coolers, oxygenators, autotransfusion systems, tubing and cannulae.
• Neuromodulation — Q2 2026 revenue of $166.9 million (about 43% of total company revenue), up 10.1% reported and 9.5% constant currency, from the VNS Therapy System pulse generator and lead for DRE and DTD.
• Other revenue — Q2 2026 revenue of $2.1 million, up 30.6%, consisting of rental and site services income not allocated to segments.

Recent performance

Second-quarter 2026 revenue was $390.6 million, up 10.8% reported and 9.8% constant currency versus the prior-year period, with both segments growing double digits. GAAP diluted EPS was $1.93 and adjusted diluted EPS was $1.26; the quarter included a discrete tax benefit of 81.8 million euros ($95.4 million) after a favorable Italian tax authority ruling on deductibility of the SNIA environmental liability. Operating cash flow was $66.6 million and adjusted free cash flow was $45.5 million. Full-year 2025 revenue was $1.39 billion with a net loss of $242.5 million and diluted EPS of -$4.45, while 2025 operating cash flow was $254.3 million. At June 30, 2026, total assets were $2.64 billion, total liabilities $1.32 billion, equity $1.33 billion, and cash and equivalents $516.6 million against long-term debt of $289.9 million.

Strategy

Management raised full-year 2026 revenue growth guidance by 100 basis points to 8%-9% constant currency and raised adjusted diluted EPS guidance by $0.10 at the midpoint to $4.30-$4.40, while lowering adjusted free cash flow guidance to $140-$160 million. The company entered a long-term agreement with Thermo Fisher Scientific intended to increase availability of a critical oxygenator component and support higher oxygenator output over time. LivaNova is also promoting the aura6000 System for obstructive sleep apnea, citing data that its PolySync programming algorithm raised the cumulative apnea-hypopnea index response rate to 84.5% in patients with moderate to severe OSA. Recent leadership changes include Stefano Folli as President, Cardiopulmonary (effective August 1), Anne Liddy as Chief Legal Officer (effective August 31), and Jette Nygaard-Anderson's appointment to the Board effective June 10.

Risks

• Supply chain and tariffs — A significant number of Cardiopulmonary products and components are sourced and produced outside the U.S., including in Italy and Germany, while Neuromodulation products are made in the U.S. and often distributed internationally, exposing the company to tariffs and trade policy changes.
• Oxygenator component dependence — The new Thermo Fisher Scientific agreement is intended to secure a critical oxygenator component; failure to increase availability could constrain the company's ability to satisfy unmet customer demand.
• Legal and regulatory — The company discloses ongoing legal and regulatory proceedings in Note 6, Commitments and Contingencies, and its 10-Q states there have been no material changes in risk factors from the 2025 Form 10-K.
• Iran-related activities — Two non-U.S. subsidiaries sell cardiopulmonary and neuromodulation products to distributors and a non-governmental organization in Iran, generating $3.4 million gross revenue and $1.7 million net profit in the six months ended June 30, 2026, with limited visibility into end customers.

Outlook

For full-year 2026, management guides to constant-currency revenue growth of 8% to 9% and adjusted diluted EPS of $4.30 to $4.40, with adjusted free cash flow of $140 million to $160 million. The company cites sustained performance in Cardiopulmonary and Epilepsy and the Thermo Fisher component agreement as supports for expanding oxygenator output. Management states the updated guidance reflects execution in the core businesses as it advances its strategic plan. Forward-looking non-GAAP measures are not reconciled to GAAP because the company cannot predict certain items with reasonable certainty.