LivaNova (LIVN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $319 million, up 10% year-over-year (9.6% constant-currency), with double-digit growth in Cardiopulmonary and high single-digit growth in Neuromodulation.

• Adjusted diluted EPS rose to $0.93 from $0.78 in Q2 2023, reflecting operational leverage and segment wind-downs; GAAP diluted EPS was $0.30.

• Full-year 2024 revenue and adjusted EPS guidance were raised, driven by strong performance in core segments and improved operating income.

• Strategic focus remains on maximizing core businesses, advancing DTD and OSA programs, and optimizing investment in depression programs to improve 2025 financials.

• Major restructuring and ACS segment wind-down underway to focus on Cardiopulmonary and Neuromodulation.

Financial highlights

• Q2 revenue: $319 million, up 10% year-over-year; 11% growth excluding ACS wind-down.

• Adjusted gross margin: 69% (down from 72% in Q2 2023), impacted by Italian Payback provision; GAAP gross margin: 68.7%.

• Adjusted operating income: $67 million (21% margin), up from $49 million (17% margin) in Q2 2023.

• Adjusted diluted EPS: $0.93, up from $0.78 in Q2 2023.

• Adjusted free cash flow: $42 million, up from -$10 million prior year; full-year target $95–$115 million.

Outlook and guidance

• 2024 constant currency revenue growth expected at 7–8%, or 9–10% excluding ACS exit; foreign currency is a 1% headwind.

• Adjusted diluted EPS guidance raised to $3.10–$3.20 for 2024.

• Adjusted free cash flow expected at $95–$115 million, with capital spending forecast at $60 million.

• ACS wind-down and restructuring to be substantially complete by year-end 2024, with total pre-tax charges of $15–20 million.

• DTD investment to be reduced in 2025, delivering at least $20 million pre-tax savings.