LivaNova achieved outstanding results in the second quarter of 2026, marking record-breaking revenue and earnings per share. This strong financial performance was primarily driven by the ongoing success of the Essenz upgrade cycle within its Cardiopulmonary division, coupled with notable market share expansion in oxygenators. Additionally, the Epilepsy segment benefited significantly from improved U.S. Medicare reimbursement rates and compelling clinical data from the CORE-VNS study. While strategic investments in manufacturing capacity and digital infrastructure led to a revision in the full-year free cash flow forecast, the company confidently increased its top-line and earnings guidance, signaling robust growth prospects. LivaNova continues to prioritize its innovation pipeline, focusing on next-generation neuromodulation systems and advanced cardiopulmonary technologies to further elevate patient care standards.
During the earnings call held on Wednesday, August 5, 2026, at 8:00 a.m. ET, key executives including CEO Vladimir Makatsaria, Chief Innovation Officer Ahmet Tezel, and CFO Alex Shvartsburg provided insights into the company's performance. The discussions highlighted LivaNova's strategic leadership transitions, including the retirement of Franco Poletti after 40 years and the appointments of Stefano Folli as President of Cardiopulmonary and Anne Liddy as Chief Legal Officer. Makatsaria emphasized the pivotal role of exceptional talent in achieving strong results and driving the company's long-term success.
The Cardiopulmonary division reported a revenue of $222 million, an impressive 10% increase compared to the second quarter of 2025, largely propelled by strong performance in Europe. Heart-lung machine revenue saw mid-teen growth, attributed to increased Essenz placements and sustained price premiums. Consumables also demonstrated high single-digit growth, with significant contributions from oxygenators and perfusion tubing kits. LivaNova's strategy to boost oxygenator output involves internal manufacturing process improvements, the installation of a new production line by late 2026, and a crucial long-term agreement with Thermo Fisher Scientific for critical component supply. These initiatives are expected to solidify LivaNova's market position and address unmet demand, reinforcing the company's guidance for Cardiopulmonary revenue growth of 9.5% to 10.5% for the full year.
In the Epilepsy segment, revenue climbed 10% year-over-year, with Europe and the Rest of World regions collectively increasing by 15%, and U.S. revenue growing by 8%. This growth was fueled by favorable pricing and increased patient volumes, supported by robust clinical evidence and enhanced reimbursement policies. The company's VNS Therapy saw improved realized pricing due to reduced volume discounting and increased Medicare reimbursement rates, including a nearly 50% increase for new patient implants and end-of-service procedures. The CORE data continued to influence physician behavior, driving referrals and early adoption of VNS Therapy. The combination of strong clinical data, improved reimbursement, and expanding market access led LivaNova to raise its full-year Epilepsy revenue growth outlook to 7% to 8%.
Innovation remains a cornerstone of LivaNova's strategy. In Cardiopulmonary, a next-generation oxygenator, slated for launch in 2028, promises best-in-class performance through enhanced gas transfer efficiency, low pressure drop, and superior platelet preservation. For Epilepsy, the cloud-based clinician portal and application are progressing well, establishing a shared digital infrastructure that will benefit the entire product portfolio, including OSA and depression treatments. While the submission of the PMA supplement for the next-generation Obstructive Sleep Apnea (OSA) system has been adjusted to between the second half of 2026 and the first half of 2027, the long-term revenue target of $200 million to $400 million by 2030 remains unchanged. The PolySync algorithm demonstrated significant efficacy in OSA patients, reducing non-responders to approximately 1 in 7, a substantial improvement over existing therapies. Additionally, the 36-month data from the RECOVER trial for difficult-to-treat depression showed sustained improvements in depressive symptoms, function, and quality of life for VNS Therapy patients, further strengthening the evidence supporting its long-term benefits.
LivaNova's financial strategy prioritizes capital allocation to support innovation and long-term growth. Despite increased investments in manufacturing capacity and IT infrastructure, which led to a revised adjusted free cash flow guidance of $140 million to $160 million, the company's strong operational performance enabled it to raise its full-year adjusted diluted earnings per share guidance to a range of $4.30 to $4.40. This reflects an 11.5% growth at the midpoint. The company's proactive management of its financial resources and strategic focus on innovation underscores its commitment to delivering sustained value for stakeholders and driving advancements in medical technology.
