LivaNova PLC

Good day, ladies and gentlemen, and welcome to the LevaNova PLC Third Quarter 2024 Earnings Conference Call. My name is Lydia, and I'll be your operator today. As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's conference, Mr. Matthew Dodd, LevaNova's Senior Vice President of Corporate Development and IT. Please go ahead, sir.

Thank you, Lydia, and welcome to our conference call and webcast discussing LevaNova's financial results for the third quarter of 2024. Joining me on today's call are Vladimir Makasaria, our Chief Executive Officer and member of the Board of Directors, Alex Schwarzberg, our Chief Financial Officer, Ahmet Tezel, our Chief Innovation Officer, Stephanie Bolton, President of Global Epilepsy, and Brianna Gotland, Director of Investor Relations. Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statement. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including but not limited to revenue results, which will all be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool. You can find the presentation and press release presentations at investor.livanova.com. With that, I will turn the call over to Vlad.

Thank you, Matt, and thank you everyone for joining us. Welcome to Livanova's conference call for the third quarter of 2024. Our 11% revenue increase marks the seventh consecutive quarter of double-digit growth. Our performance is well balanced across geographies and business segments with 12% organic revenue growth year to date. Geographically, we achieved 15% in the U.S. and 9% in the Europe and rest of the world regions. By business, we achieved 15% in cardiopulmonary and 9% in epilepsy. This strength is supported by the following key growth drivers. our markets remain healthy with both cardiopulmonary and epilepsy procedure volumes estimated to be growing mid-single digits. Second, we gain market share by our commercial execution and ability to supply cardiopulmonary consumables. We estimate our oxygenated market share percentage has grown from the low 30s in early 2023 to the mid-30s today. contributing more than 100 basis points of growth year to date. Third, we've leveraged pricing strategies in epilepsy in cardiopulmonary consumables, which contributed approximately 300 basis points of growth year to date. And finally, we've benefited from a successful essence launch, which contributed approximately 400 basis points of growth so far this year. On the innovation front, We're pleased with the progress we have made in our cardiopulmonary and epilepsy pipeline development, as well as in difficult-to-treat depression and obstructive sleep apnea programs. In difficult-to-treat depression, or DTD, we continue our efforts in pursuit of CMS coverage. If any reimbursement is granted, it could represent a transformative opportunity for critically ill patients with DTD while further diversifying our portfolio. In obstructive sleep apnea, or OSA, in November we expect all patients to complete seven months of follow-up for primary endpoints for safety and effectiveness. These growth drivers, our innovation agenda, and focus on talent support the sustainability of above-market growth. For the remainder of the call, I will discuss our third quarter results, and after my comments, Ahmed will discuss our innovation pipeline, and Alex will then provide details on our results and updates for 2024 guidance. I will wrap up with closing remarks before moving to Q&A. In the quarter, we achieved 11% revenue growth versus the prior year. Excluding the impact of the ACS segment wind down, revenue increased 12% versus 2023. This growth was achieved while also significantly expanding operating margin. Based on these results, we are increasing our 2024 four-year guidance. Now turning to segment results. For the cardiopulmonary segment, Revenue was $172 million in the quarter, an increase of 15% versus the third quarter of 2023. Hard long machine revenue increased over 20%, driven by a sense. We are pleased to see a sequential increase in essence placements and continuing strong price mix in the quarter. As a point of reference, We expect Essence will represent approximately 40% of our annual HLM unit placed in 2024. Oxygenator revenue grew approximately 15%, driven by customer demand and price. The oxygenator business continues to see strong demand outpacing global supply, and our efforts to increase manufacturing capacity remain on track. We now expect cardiopulmonary revenue to grow 13 to 14% for full year 2024. Our revised forecast incorporates strong demand for consumables and continued HLM growth despite difficult comparisons versus the fourth quarter of last year. Now turning to epilepsy. Revenue increased 9% versus the third quarter of 2023. U.S. epilepsy revenue increased 10% year over year. Versus prior year, we achieved approximately 10% growth in new patient implants and realized about 8% growth in replacement implants. Epilepsy revenue in Europe and rest of world grew a combined 3% versus prior year, with double-digit growth in rest of world offset by a decline in Europe. For the full year, 2024, we now expect global epilepsy revenue to grow 7 to 8%. Our 2024 forecast continues to incorporate mid-single-digit growth for U.S. new patients and low to mid-single-digit growth for U.S. replacements, which assumes U.S. replacements volume to be flat beginning of the fourth quarter. We now expect the combined Europe and rest of world regions to grow in the low single digits. With that, I will turn the call over to Amit to discuss our innovation pipeline.