LivaNova Q2 Earnings & Revenues Beat Estimates, '26 Outlook Raised

LIVN's Q2 Revenue Performance

Revenues totaled $390.6 million, up 10.8% year over year and 9.8% at constant currency. The top line surpassed the Zacks Consensus Estimate by 2.9%. Revenue growth reflected strength across all regions, driven by robust performance in Cardiopulmonary and Epilepsy businesses, as well as a one-time tariff refund benefit.

Year to date, the company’s shares have gained 27% against the industry’s decline of 10.1%. The broader S&P 500 Index has increased 12.7% in the same time frame.

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LIVN’s Q2 Segmental Performance

LivaNova derives revenues primarily from two reportable segments — Cardiopulmonary and Neuromodulation.

Cardiopulmonary

Cardiopulmonary revenues were $221.6 million, up 11.2% year over year on a reported basis and up 9.9% at constant currency. Growth was led by Europe and primarily reflected higher Essenz Perfusion System sales, strong consumables demand and favorable realized pricing.

Heart-lung machine revenues increased in the mid-teens, supported by higher Essenz placements and sustained favorable price premiums. Cardiopulmonary consumables revenues grew in the high single digits, driven by low-double-digit growth in oxygenators and perfusion tubing kits. This was partly offset by lower growth in autotransfusion systems and cannula.

Neuromodulation

Neuromodulation revenues totaled $166.9 million, reflecting growth of 10.1% year over year on a reported basis and 9.5% at constant currency. The improvement was driven by higher volumes and favorable realized pricing across all regions.

Within Neuromodulation, Epilepsy revenues increased 10% year over year at constant currency. Performance benefited from improved reimbursement, expanding market access and growing clinical evidence supporting Vagus Nerve Stimulation (VNS) Therapy. Management cited reduced volume discounting, annual price increases and stronger new-patient implant activity as contributors to the segment’s growth.

LivaNova’s Geographical Analysis

In the quarter under review, U.S. revenues totaled $199.4 million, up 5.8% year over year on both a reported and constant-currency basis.

Europe revenues totaled $81.8 million, up 22.5% year over year on a reported basis and up 20% at constant currency. Europe was the primary growth driver for the Cardiopulmonary segment in the second quarter, supported by Essenz Perfusion System sales, strong consumables demand and favorable realized price.

Rest of World revenues were $109.4 million, up 12.5% year over year on a reported basis and up 10.7% at constant currency.

U.S. Epilepsy revenues rose 8%, while combined Europe and Rest of World Epilepsy revenues increased 15% year over year on a constant-currency basis.

LivaNova’s Margin and Cost Trends

In the quarter under review, LivaNova’s gross profit increased 14.5% year over year to $273.7 million. The gross margin expanded 230 basis points (bps) to 70.1%. Adjusted gross margin improved 210 bps to 71%, aided by favorable pricing and a $6 million net refund related to previously paid IEEPA tariffs.

Selling, general and administrative expenses increased 14.7% year over year to $158.1 million, reflecting planned investments in IT infrastructure. Research and development expenses rose 13.8% to $53.7 million, primarily due to higher spending on the obstructive sleep apnea program.

Adjusted operating income totaled $90.8 million, up 17.3% year over year. The adjusted operating margin expanded 130 bps to 23.2%.

LIVN’s Financial Position

LivaNova exited second-quarter 2026 with cash and cash equivalents of $516.6 million compared with $539.7 million at the end of first-quarter 2026.

Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $81.8 million compared with $86.9 million a year ago.

LivaNova's Raised 2026 Outlook

LivaNova has raised its outlook for the full year 2026.

The company expects 2026 revenue growth of 8-9% at constant currency (up from 7-8% previously). Foreign currency is projected to provide an approximately 1% tailwind. Cardiopulmonary growth is expected at 9.5-10.5% (up from 8.5-9.5% previously), while Epilepsy growth is forecast at 7-8% (up from 6-7% previously).

Adjusted earnings per share are projected between $4.30 and $4.40 (up from $4.20-$4.30 previously). Adjusted operating margin guidance remains 20-21%. However, adjusted free cash flow guidance was lowered to $140-$160 million from $160-$180 million as capital spending rises to $135 million. The Zacks Consensus Estimate for revenues and adjusted EPS is pegged at $1.52 billion and $4.24, respectively.

LivaNova’s Innovation and Commercial Progress

LivaNova exited the second quarter of 2026 with better-than-expected earnings and revenues, supported by solid Cardiopulmonary and Epilepsy growth. Record quarterly revenues, margin expansion and raised full-year top- and bottom-line guidance were encouraging. Favorable pricing, higher Essenz placements, oxygenator demand and improved VNS Therapy momentum also supported performance.

In Cardiopulmonary, the company entered a long-term agreement with Thermo Fisher Scientific to secure a critical oxygenator component. Combined with internal manufacturing improvements and a new production line expected to begin operations in the second half of 2026, the agreement should support higher oxygenator output and help address unmet demand. LivaNova continues to target a 2028 launch for its next-generation oxygenator.

In Neuromodulation, improved reimbursement and CORE-VNS clinical evidence continued to support physician confidence, patient referrals and earlier adoption of VNS Therapy in Epilepsy. The limited market release of LivaNova’s cloud-based clinician portal also progressed, while its next-generation implantable pulse generator remains on track for a 2027 launch. In obstructive sleep apnea, PolySync increased the cumulative apnea-hypopnea index response rate to 84.5%, strengthening the therapy’s clinical profile. The company now expects to submit the MRI-compatible OSA system’s PMA supplement between the second half of 2026 and the first half of 2027.

LIVN’s Zacks Rank & Other Key Picks

LivaNova currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

McKesson reported a first-quarter fiscal 2027 adjusted EPS of $9.93, which beat the Zacks Consensus Estimate by 5.2%. Revenues of $105.4 billion surpassed the Zacks Consensus Estimate by 0.95%.

McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 4.3%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%.

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