LivaNova (LIVN) Piper Sandler 36th Annual Healthcare Conference summary

Financial performance and guidance

• Q3 showed strong results with raised guidance; Q4 growth expected to decelerate due to tough prior-year comparisons and pent-up demand in heart-lung machines last year.

• Epilepsy replacement units are slowing as comps from previous years become more challenging.

• Teams are executing well, with strong commercial and operational performance.

• 2025 revenue growth drivers remain healthy markets, market share gains, capacity expansion, and pricing.

• Margin expansion remains a goal, with reduced DTD program spend and reinvestment in high-growth areas; tax rate expected to rise to 24%-25% in 2025.

Market dynamics and competitive environment

• Cardiopulmonary and epilepsy markets are growing at mid-single-digit rates, with share gains in CP consumables.

• Oxygenator market share increased from low 30s to mid-30s over 18 months, driven by capacity expansion and pricing.

• Procedure growth for oxygenators estimated at 4%-5% volume, higher than historical rates due to post-COVID trends and emerging markets.

• Competitors face capacity constraints; focus remains on expanding own output by 10% annually.

• Pricing contributed 300 basis points of growth YTD; future increases expected to be low single-digit.

Product and pipeline updates

• Essenz heart-lung machine placements are ramping: 20% last year, 40% this year, targeting 60% next year, with a three-year full replacement curve.

• Essenz offers a 30% price premium for base models and up to double for fully loaded units; most customers opt for fully loaded.

• Epilepsy business expected to maintain durable mid-single-digit growth, with new patient implants growing 4%-5% and OUS business set to accelerate.

• Over a million drug-resistant epilepsy patients remain underpenetrated.