LivaNova (LIVN) Q4 2025 earnings summary

Executive summary

• Achieved double-digit reported and organic revenue growth for full-year 2025, with continued operating margin expansion and strong adjusted EPS and free cash flow growth.

• Robust performance in Cardiopulmonary and Neuromodulation/Epilepsy segments, driven by strong consumables demand, new system sales, and disciplined investment in innovation.

• Advanced long-term strategy with entry into high-growth markets like obstructive sleep apnea (OSA), progress in difficult-to-treat depression, and strengthened leadership and digital platform capabilities.

• Key developments included increased U.S. CMS reimbursement for VNS Therapy, FDA approval for a cloud-based digital health platform, and publication of RECOVER durability data.

• Appointed new Global Head of Commercialization for OSA and published positive clinical outcomes for VNS Therapy in depression.

Financial highlights

• Full-year 2025 net revenue rose to $1.39B, up 10.7% reported, 10% constant-currency, and 11% organically; Q4 2025 revenue was $361 million, up 9.5% year-over-year on a constant currency and organic basis.

• Adjusted gross margin for 2025 was 68.6%; Q4 adjusted gross margin was 68%.

• Adjusted operating income for Q4 was $64 million (18% margin), up from $56 million (17% margin) in Q4 2024; full-year adjusted operating margin was 20.6%.

• Adjusted diluted EPS for Q4 was $0.86, up from $0.81 in Q4 2024; full-year adjusted diluted EPS was $3.90, up 15% year-over-year.

• Full-year adjusted free cash flow was $183 million, up from $163 million in 2024, with an 85% conversion rate; year-end cash balance was $636 million.

Outlook and guidance

• 2026 revenue growth expected between 6%-7% on a constant currency basis, with a 1% FX tailwind; adjusted diluted EPS projected at $4.15-$4.25.

• Cardiopulmonary revenue projected to grow 7%-8%; epilepsy/neuromodulation revenue expected to grow 5.5%-6.5%, with high single-digit growth in Europe and Rest of World.

• Adjusted operating income margin forecasted at 20%-21%; adjusted free cash flow expected between $160 million-$180 million.

• Capital spend for 2026 planned at $120 million, focused on capacity expansion, IT, and innovation.

• Continued investment in OSA product development and pursuit of CMS coverage for VNS Therapy in DTD.