LivaNova PLC

Good day, ladies and gentlemen, and welcome to the Levenova PLC First Quarter 2026 Earnings Conference Call. If you would like to register a question during today's event, please press star 1 on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Brianna Gotland, Levenova's Vice President of Investor Relations. Please go ahead.

Thank you and welcome to our conference call and webcast discussing Leva Nova's financial results for the first quarter of 2026. Joining me on today's call are Vladimir Makatsaria, our Chief Executive Officer and member of the Board of Directors, Alex Schwartzberg, our Chief Financial Officer, and Ahmet Tuzel, our Chief Innovation Officer. 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 statements. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including but not limited to revenue results, which will 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 in the investor section of our website under news events and presentations at investor.livanova.com. With that, I'll turn the call over to Vlad.

Thank you, Brianna, and thank you everyone for joining us today. Welcome to Livanova's conference call for the first quarter of 2026. In the quarter, Livanova delivered 11% revenue growth with strength across all regions, driven by durable performance in our cardiopulmonary and epilepsy businesses. Our core businesses continue to serve as both the drivers of current performance and enablers of discipline, investment and innovation. We expect these investments to fuel the long term durability of our core performance, as well as expansion into high growth, high margin markets to build a more sustainable financial profile for value creation over time. One such market is obstructive sleep apnea. We continue to view the OSA market as attractive. Up to 1 million patients drop out of CPAP treatment annually, and the HGNS penetration into that population is less than 5%, which creates a significant opportunity. We recognize that there are current challenges in the HGNS market. but view the current dynamic and ambiguity in reimbursement as temporary and the long-term effect of GLP-1s on the market as net positive. With PHGNS, we have a clear right to win supported by rigorous clinical evidence and differentiated technology designed for broader and more complex patient population and leading neuromodulation capabilities across Livanova. We recently achieved key regulatory and clinical milestones, establishing a strong foundation for our planned entry into the OSA market next year. The first of these milestones occurred in March when Livanova received US FDA pre-market approval for the Aura 6000 system for the treatment of adult patients with moderate to severe OSA. Notably, This is the first and only hypoglossal nerve stimulation device approved by the FDA without a complete consent to collapse, counter-indication or warning. The second important OSA milestone is on the clinical evidence front where the full 12 months results from our Osprey randomized control trial were recently published in the annals of internal medicine, demonstrating clinically meaningful responses and sustained improvements over time. Ahmed will share additional details later in the call on how we're leveraging these milestones to advance our OSA program. For the remainder of the call, I will discuss our first quarter segment results and provide updated top line guidance for 2026. After my comments, Ahmed will discuss key innovation updates, including recent regulatory and clinical progress. Alex will then provide additional details on our results and updated 2026 guidance. I will wrap up with closing remarks before moving on to Q&A. Now turning to segment results. For the cardiopulmonary segment, revenue was $209 million in the quarter, an increase of 14% versus the first quarter of 2025. Heart-lung machine revenue grew in the high teens in the quarter, driven by an increase in essence placements on both a sequential and year-over-year basis, and sustained favorable price premiums. The results for the quarter also included a modest benefit from the recapture of essence placements and tenders that were previously deferred from the fourth quarter of 2025. The performance was otherwise driven by underlying demand and the associated favorable price mix effect. Cardiopulmonary consumables revenue grew in the mid-teens in the quarter. driven by the market share gains, procedure growth, and price. While demand for oxygenators continues to outpace the market's ability to supply, improvements in the third-party component availability has enabled us to increase our manufacturing output. For the full year, 2026, we now expect cardiopulmonary revenue to grow eight and a half to 9.5%, up from 7% to 8% previously. Our forecast reflects continued HLM growth as we drive essence penetration globally. We still expect essence to represent approximately 80% of annual HLM unit placement in 2026, up from 55% in 2025. This forecast assumes continued market share gains in consumables as we execute on our manufacturing expansion plans. Within this guidance, we expect our full year manufacturing output to increase by low double digits, driven by a new manufacturing line scheduled to go live in the second half of the year. This represents a significant acceleration versus 2025 levels additionally we'll continue to work with third-party suppliers to increase component availability which could enable additional oxygenator output growth beyond current assumptions turning to epilepsy revenue increased eight percent versus the first quarter of 2025 with growth across all regions Epilepsy revenue in the Europe and rest of world regions increased a combined 12% versus the prior year period, while U.S. epilepsy revenue increased 7% year over year. Performance was driven by total implant growth and favorable realized price supported by impactful clinical evidence, improved reimbursement, and sustained commercial excellence. Consistent with what we have shared previously, the results from our core VNS study have been well received by key opinion leaders and have become an important component of our commercial engagement and education efforts. In recent conversations in our inaugural VNS forum, which brought together approximately 150 clinicians, participants shared that the data is reshaping their perception of the effectiveness of BNS therapy for epilepsy. They also indicated that the findings support broader adoption as they reevaluate the therapy's role within their treatment algorithms. Notably, over 50 leading experts have requested permission to independently present the data. Effective January 1st, 2026, U.S. Medicare reimbursement for VNS therapy procedures in drug resistant epilepsy increased meaningfully with hospital outpatient payments rising approximately 48% for new patient implants and 47% for end of service procedures compared to 2025 levels. These U.S. reimbursement changes improve hospital economics for VNS therapy, creating a more sustainable model for providers, and supporting expanded patient access. In the US, there are approximately 1 million GRE patients, yet fewer than 10% receive advanced treatment. The updated reimbursement rate reduced a known barrier to procedure penetration, as historic Medicare rates did not fully cover VNS therapy procedure costs. As a result, we saw improved realized pricing in the first quarter, driven by less volume discounting, as well as our normal annual list price increase. For the full year 2026, we now expect epilepsy revenue growth of 6% to 7%. up from 5.5% to 6.5% previously. This forecast is driven by improved growth rates in the US, Europe, and the rest of the world. The improved outlook is supported by strong global acceptance of core VNS, as well as both reduced volume discounting and the strengthening of the patient funnel in the US, driven by improved reimbursement. In summary, Levanova's first quarter growth was driven by healthy markets, continued success of the essence upgrade cycle, sheer gains in cardiopulmonary consumables, and strong epilepsy commercial execution. We expect these drivers to sustain through 2026, supported by continued execution in cardiopulmonary and the combination of compelling clinical evidence and improved reimbursement dynamics in epilepsy, which should expand patient access over time. As a result, we're now guiding full year 2026 revenue growth between 7% and 8%, up from 6% to 7% previously. The stop-line guidance implies performance at the high end of the 2025 to 2028 growth framework we outlined at investor day. Alex will provide additional details on our 2026 guidance later in the call. With that, I'll hand the call over to Ahmed to cover the strong momentum across our innovation agenda, including recent clinical, regulatory, and digital advances across our portfolio.