リバノバ（LIVN）2026年第3四半期決算説明会：売上高およびEPS予想を上方修正

LivaNova PLC（NASDAQ: LIVN）は、心臓肺事業およびてんかん事業の2桁成長に支えられ、2026年第3四半期の売上高が前年同期比10%増加したと発表しました。経営陣は通期の売上高および調整後1株当たり利益（EPS）の見通しを引き上げる一方、営業利益率およびフリー・キャッシュ・フローの見通しを維持しました。

主なポイント

• 第3四半期の売上高は前年同期比10%増の3億9,300万ドルとなり、為替の影響はごくわずかでした。
• 調整後営業利益は前年同期の8,000万ドルから9,200万ドルに増加し、調整後営業利益率は23%から約24%に改善しました。
• 調整後希薄化後EPSは1.11ドルから1.23ドルに増加しました。経営陣は通期の調整後EPS見通しを4.40〜4.50ドルに引き上げました。
• 心臓肺事業の売上高は、四半期として過去最高のEssenzの導入台数と消耗品の2桁台前半の成長に牽引され、11%増の2億2,500万ドルとなりました。
• てんかん事業の売上高は11%増加し、そのうち米国が10%増、欧州およびその他の地域が合計で14%増となりました。
• LivaNovaは、両中核事業に対する強気の見通しを反映し、為替影響を除く2026年の売上高成長率見通しを従来の8%〜9%から9%〜10%に引き上げました。

主要業績ハイライト

事業および業績動向

心臓肺事業

心臓肺事業の売上高は前年同期比11%増の2億2,500万ドルに達しました。人工心肺装置の売上高は、四半期として過去最高のEssenz導入台数と好調な価格プレミアムに支えられ、2桁台前半のペースで増加しました。Essenzは、2025年の55%に対し、2026年の年間人工心肺装置導入台数の約80%を占めると予測されています。

消耗品も人工肺や灌流チューブキットに牽引され、2桁台前半の成長を記録しました。サードパーティ製部品の調達状況の改善と社内製造の最適化により、人工肺の生産能力が向上しました。

新設された人工肺専用生産ラインは稼働を開始していますが、経営陣によると現在はまだ在庫を構築中であり、業績への貢献は2027年以降になる見込みです。LivaNovaは、新ライン、業務改善、およびサーモフィッシャーとの部品供給契約に支えられ、2027年の人工肺生産量が2026年比で2桁成長すると見込んでいます。

次世代人工肺の発売は予定通り2028年を計画しています。経営陣はまた、段階的な規制承認取得を前提として、温調装置（ヒーター・クーラー）やエアマネージャー製品が2028年から売上高に実質的な影響を与えると見込んでいます。

てんかん事業

てんかん事業の売上高は11%増加し、すべての地域で2桁成長を達成しました。米国の売上高は10%増加し、欧州およびその他の地域は合計で14%増加しました。

成長は販売数量の増加と実現価格の引き上げを反映したものです。経営陣は価格面でのメリットについて、定例の年次定価引き上げに加え、大口割引の削減によるものとしています。LivaNovaは、実現価格の引き上げ幅が通常の年次値上げの約2倍で推移しており、契約再交渉が続く中で2027年にも一定の好影響が残るとの見通しを示しました。

36か月間にわたるCORE-VNS臨床研究には、16か国60以上の施設で800人以上の患者が参加しました。3年時点での発作頻度の減少率中央値は76%で、参加者の64%が少なくとも50%の減少を達成したと報告されています。発作に関連する入院期間は73%減少しました。

クラウドベースの臨床医向けプラットフォームは、1,000人以上の患者に使用されてきました。LivaNovaは、将来のリモート設定調整機能を含め、次世代の植込み型パルスジェネレータおよびより広範なデジタルヘルスプラットフォームのリリースを2027年に予定しています。経営陣はまた、次世代製品にプレミアム価格を適用する機会があると見ていますが、価格の詳細については明らかにしませんでした。

閉塞性睡眠時無呼吸症候群（OSA）

LivaNovaは、閉塞性睡眠時無呼吸症候群向けの近位舌下神経刺激プラットフォームの開発を進めています。経営陣は2027年に限定的な商用ローンチを計画しており、より本格的な商業化投資の拡大は2028年から開始する予定です。

同社によると、OSPREYサブグループデータにおいて、評価対象となった患者群全体で臨床的に意味のある効果が示されました。同社のPolySyncアルゴリズムは、当初無反応であった患者の大部分を反応者に変換することで、累積無呼吸低呼吸指数（AHI）レスポンス率を65%から85%に向上させました。

経営陣は、本技術には該当患者層の約25%に見られる完全同心円状虚脱に関する禁忌事項がないことを強調しました。またLivaNovaは、製品ローンチおよびその後の増産に対応できる十分な製造能力を有していると述べました。

米国医師会（AMA）編集パネルは、最終決定を条件として、LivaNovaの技術を含む新たなカテゴリI CPTコードを承認しました。このコードは2028年1月1日に有効となる見込みです。

治療抵抗性うつ病

LivaNovaは36か月間にわたるRECOVERデータを査読付き学術誌に提出し、その結果を米国医療保険主導センター（CMS）と共有しました。経営陣はCMSとの協議は引き続き活発であると述べたものの、正式な申請手続きが開始されたわけではないと説明しました。

業績見通し（ガイダンス）

EPSの見通しには、約4億ドルのSNIA支払いの想定時期が2026年第3四半期から第4四半期にズレ込んだことによる0.03ドルの押し上げ効果が含まれています。

経営陣は、第4四半期においてOSA製品開発、心臓肺の生産能力拡張、および次世代人工肺製造への投資が増加すると予想しています。また、計画されていたR&D費用の一部も第3四半期から第4四半期に繰り延べられました。

リスクと注視事項

• 経営陣は、特に2023年第4四半期にEssenzが発売されたため、第4四半期の前年比較は厳しいものになると説明しました。
• 人工肺の需要は引き続き業界の供給量を上回っており、生産能力の拡張や部品調達の改善にもかかわらず、LivaNovaの受注残（バックログ）は解消されていません。
• 舌下神経刺激（HGNS）市場の短期的な成長は、コード適用や保険償還の不確実性に直面していますが、経営陣はこれらの圧力を一時的なものと見ています。
• 新しいCPTコードは依然として最終決定待ちであり、2028年1月1日までは有効にならない見込みです。
• 延期されていたR&D費用や、計画されていた生産能力および商業化への投資が実行されるため、第4四半期の費用は増加する見込みです。
• LivaNovaは2026年第4四半期に約4億ドルのSNIA支払いを見込んでおり、計上済みの引当金が引き続き負債の最良の見積もりであると述べました。

アナリスト質疑応答の要点

• 心臓肺事業の成長：経営陣によると、同セグメントは15四半期連続で2桁成長を達成しました。第4四半期は消耗品の寄与が大きくなる見通しで、新しい人工肺ラインは2027年から売上高に貢献し始める予定です。
• OSAの商業化：LivaNovaは2027年に大規模な商業化体制の構築を予定していません。同年は限定的なローンチが計画されており、本格的な商業化投資の拡大は2028年に続く予定です。
• てんかん製品の価格と販売量：新規患者へのインプラント数が増加しており、割引率の縮小が実現価格を支えています。経営陣は、価格面でのさらなるメリットが2027年にも引き継がれると見込んでいます。
• 営業利益率：経営陣はインベスター・デイで示した財務フレームワークに変更はないと再表明しましたが、2027年の具体的な利益率見通しは提示しませんでした。
• OSA市場の機会：経営陣は、HGNSの低い普及率、完全同心円状虚脱の禁忌がないこと、そしてPolySyncの85%という累積レスポンス率を、競争優位性の鍵となる要素として挙げました。

決算説明会文字起こし全文

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決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, ladies and gentlemen, and welcome to the LivaNova PLC Third Quarter 2026 Earnings Call.

[Operator Instructions]

As a reminder, this conference call is being recorded. I would now like to introduce you to our host for today's conference, Ms. Brianna Gotlin, LivaNova's Vice President of Investor Relations. Briana, please go ahead.

Briana Gotlin

Thank you, and welcome to our conference call and webcast discussing LivaNova's financial results for the third quarter of 2026.

Joining me on today's call are Vladimir Makatsaria, our Chief Executive Officer and member of the Board of Directors; Alex Shvartsburg, our Chief Financial Officer; and Ahmet Tezel, our Chief Innovation Officer.

Before we begin, I would like to remind you that 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 discussion will include certain non-GAAP financial measures with respect to 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 this presentation and the press release in the Investors section of our website under News, Events and Presentations at investor.livanova.com.

With that, I'll turn the call over to Vlad.

Vladimir Makatsaria

Thank you, Brianna, and thank you, everyone, for joining us today. Welcome to LivaNova's conference call for the third quarter of 2026.

LivaNova delivered another quarter of double-digit revenue growth with strength across all regions, driven by commercial execution and healthy demand for our cardiopulmonary and epilepsy technologies.

The core businesses continue to fuel both current performance and disciplined investments, enabling us to further strengthen our existing franchises while advancing new growth opportunities such as obstructive sleep apnea or OSA.

As we're prepared to enter this attractive high-growth, high-margin market, our team is focused on building a strong foundation for long-term success in OSA.

Importantly, we're not building from the ground up. We're leveraging our neuromodulation capabilities developed through our epilepsy business, including product development expertise, established supply chain infrastructure, a global footprint, and market access competencies.

To complement this existing strength, we have also made key hires across the OSA commercial leadership team, adding targeted expertise as we prepare for commercialization.

The strength of LivaNova's capabilities supports future market access for proximal hypoglossal nerve stimulation or PHGNS.

Recently, LivaNova contributed its robust clinical evidence to the CPT code application reviewed by the AMA Editorial Panel. Our OSPREY randomized controlled trial provided Level 1 evidence to support this application.

We are pleased with the decision to establish new Category 1 codes that will include LivaNova's technology. Subject to finalization, the new codes are expected to take effect on January 1, 2028.

We believe this decision is an important development that further bolsters our ability to achieve appropriate reimbursement. We're proud to have supported efforts to improve patient access to care and look forward to leveraging these new category codes once effective in the commercialization of our OSA technology.

With PHGNS, we believe we have a clear right to win, supported by rigorous clinical evidence, a differentiated technology designed for a broader and more complex patient population, and leading neuromodulation capabilities across LivaNova.

For the remainder of the call, I will discuss the third quarter results and provide updated top-line guidance for 2026. After my comments, Ahmed will discuss key innovation updates, and 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 $225 million in the quarter, an increase of 11% versus the third quarter of 2025, led by double-digit growth in both Europe and the U.S.

Heart-lung machine revenue grew low double digits in the quarter, marked by quarterly record Essenz placements and sustained favorable price premiums.

Cardiopulmonary consumables revenue, which encompasses all non-HLM products in our cardiopulmonary portfolio, grew low double digits in the quarter. This was led by strength in oxygenators and perfusion tubing kits.

Improvements in third-party component availability and internal manufacturing optimization drove significant year-over-year increases in oxygenator output, supporting strong performance year-to-date.

Oxygenator market demand continues to exceed the industry's ability to supply, which represents a significant opportunity to expand our market position.

As a reminder, our 3 key operational initiatives to capture this opportunity are optimizing processes across our supply chain network, adding a new oxygenator production line, and strengthening the reliability of critical component supply.

The operational launch of the new dedicated oxygenator manufacturing line marks another key milestone in the execution of our strategy.

Together with the Thermo Fisher component agreement announced last quarter, this represents significant progress across these 3 initiatives and positions us to drive double-digit capacity expansion in 2027.

Strong performance across our leading product lines, combined with healthy underlying global demand and operational execution, reinforces our confidence in the durability of growth in the cardiopulmonary business.

As the market leader in HLM with a global installed base of more than 10,000 systems and Essen representing only about 20% of that base today, we see a significant multiyear upgrade opportunity ahead.

For the full year 2026, we now expect cardiopulmonary revenue to grow 10.5% to 11.5%, up from 9.5% to 10.5% previously. We continue to expect Essen to represent approximately 80% of annual HLM unit placements in 2026, up from 55% in 2025.

This forecast also assumes continued market share gains in consumables as we execute on our manufacturing expansion plans.

Turning to epilepsy. Revenue increased 11% versus the third quarter of 2025, with double-digit growth across all regions. U.S. epilepsy revenue increased 10% versus the prior-year period, while epilepsy revenue in the Europe and Rest of World regions increased a combined 14% year-over-year.

Performance was driven by volume and favorable realized price, supported by impactful clinical evidence, improved reimbursement, and sustained commercial excellence.

Similar to the prior quarter, improved realized price in the third quarter benefited from reduced volume discounting in addition to our standard annual list price increase.

The long-term clinical evidence from our core VNS study is strengthening physician confidence, accelerating referrals, and will support earlier adoption of VNS therapy in the patient care pathway.

At the same time, improved U.S. reimbursement is translating into stronger provider economics and broader access, driving higher procedure volumes.

As a result, we are raising full-year 2026 epilepsy revenue growth outlook to 8% to 9%, up from 7% to 8% previously.

In summary, our third-quarter performance reflects the strength of growth drivers across our portfolio, including the ongoing Essenz upgrade cycle and continued oxygenator market share gains in cardiopulmonary, as well as favorable U.S. reimbursement dynamics and growing clinical evidence supporting VNS therapy in epilepsy.

We expect this trend to continue supporting sustainable growth while positioning us to advance our OSA strategy. As a result, we are now guiding full-year 2026 revenue growth between 9% and 10%, up from 8% to 9% previously.

Alex will provide additional details on our 2026 guidance later in the call.

With that, I'll hand the call over to Ahmet to cover key innovation updates across the portfolio.

Ahmet Tezel

Thank you, Vlad. LivaNova's innovation engine continues to drive growth today while building the foundation for sustained long-term value creation.

Starting with cardiopulmonary, we're excited to announce that the new dedicated manufacturing line for LivaNova's oxygenators is now live and operational.

The new line will increase output for this critical product where demand continues to outpace supply.

Combined with the additional component supply unlocked from the Thermo Fisher agreement, we are accelerating production of this life-saving product to better serve our customers and patients, and are eager to ramp up further.

Turning to the next-generation oxygenator. We are now in the design verification and validation phase of product development.

As a reminder, our next-generation product will have its own dedicated manufacturing line separate from and incremental to the line supporting our current-generation product.

The next-gen oxygenator is designed to deliver best-in-class performance through enhanced gas transfer efficiency, low pressure drop, and strong platelet preservation, helping reduce blood trauma and supporting better patient outcomes.

We believe these attributes represent an important advancement in oxygenator technology, with launch still expected in 2028.

In epilepsy, the Journal of Neuromodulation recently published the full 36-month results from CORE VNS, the largest prospective multinational real-world study of VNS therapy devices in people with drug-resistant epilepsy or DRE.

Across more than 60 sites in 16 countries and over 800 patients, the study showed a 76% median reduction in seizure frequency at 3 years, with 64% of participants achieving at least a 50% reduction and nearly half seeing a reduction of 80% or more.

Benefits appeared as early as 3 months after implantation, were sustained through 36 months, and continue to improve over time.

The study also showed meaningful improvements beyond seizure reduction, including better quality of life, less use of rescue medication, and a 73% reduction in seizure-related hospital stays.

This evidence reinforces the durability of VNS therapy in managing DRE and continues to demonstrate the benefits of VNS Therapy as a less invasive treatment option with strong efficacy for patients.

Additionally, the limited market release of our cloud-based clinician portal and application continues to progress well with excellent clinician feedback and high engagement from early users.

Physicians have used this technology with more than 1,000 patients to date.

The digital health platform is already delivering meaningful workflow and connectivity benefits for patients and clinicians while establishing the foundation for future capabilities, including remote titration enabled by our next-generation IPG platform.

As a reminder, the next-generation IPG and digital health platform market release are both expected in 2027.

Turning to OSA. We continue to advance our next-generation platform, which adds digital features and utilizes our policy algorithm. This device is designed to support a strong competitive entry and a commercial launch.

We are pleased with how design verification and validation have progressed. We are confident in the previously communicated timeline for PMA supplement submission and look forward to updating you once we have submitted.

As we prepare to launch, we continue to strengthen the clinical evidence supporting PHGNS, highlighted by multiple presentations at the International Surgical Sleep Society, or ISSS, and American Academy of Otolaryngology meetings in October.

Notably, a new subgroup analysis from the OSPREY randomized controlled trial earned first-place poster honors at ISS and demonstrated consistent clinically meaningful benefit across all patient subgroups evaluated, including those with severe OSA, elevated BMI, high hypoxic burden, and higher predictive risk of complete concentric collapse or CCC.

Importantly, the versatility of our 6-contact electrode architecture with our PolySync algorithm offers simultaneous contact simulation to convert most initial nonresponders into responders, increasing the cumulative AHI response rate from 65% to 85% and demonstrating the flexibility to customize therapy to patients with more complex needs.

As a reminder, PolySync will be available for all patients at therapy initiation, starting with their first titration.

Together, these findings reinforce the broad applicability of PHGNS, combining strong efficacy, therapy optimization flexibility, and the absence of a CCC contraindication.

We believe this differentiated approach has the potential to address a broader patient population than currently available HGNS therapies.

As we prepare for launch, physician feedback remains highly encouraging, with clinicians highlighting the potential for PolySync to further improve patient outcomes.

We believe the growing body of evidence and continued innovation further strengthens LivaNova's competitive position in this large and underserved market.

Now turning to difficult-to-treat depression. We have submitted the 36-month RECOVER data to a peer-reviewed journal, which has also been shared with CMS.

VNS Therapy for DTD continues to gain support from the clinical community, and the unmet need among these patients continues to drive our work.

We believe VNS therapy is a differentiated option for this severely ill population. We remain in active dialogue with CMS, and we'll continue to keep investors updated on developments as appropriate.

In summary, we are pleased with our progress across the portfolio. Together, these milestones underscore the depth of our innovation pipeline and the opportunity to continue raising the standard of care.

With that, I will turn the call over to Alex to discuss additional details on the third quarter results and updated 2026 guidance.

Alex Shvartsburg

Thanks, Ahmet. During my portion of the call, I'll share a brief recap of the third quarter results and provide commentary on our updated full-year 2026 guidance, which reflects solid execution year-to-date and improved business outlook.

Turning to results. Third quarter revenue was $393 million, an increase of 10% versus the prior year. As a reminder, the prior-year quarter benefited from a $3.1 million reduction to our reserve for the Italian med tech payback measure.

This was reflected in other revenue related to product sales of previously divested businesses. Foreign exchange in the quarter had a negligible year-over-year impact.

Adjusted gross margin as a percent of net revenue was 69%, in line with the prior-year period. Adjusted SG&A expense for the third quarter was $136 million compared to $123 million in the third quarter of 2025.

SG&A as a percent of net revenue was 35% compared to 34% in the third quarter of 2025. On a year-over-year basis, the increase was primarily driven by planned commercial and IT infrastructure investments.

Adjusted R&D expense in the third quarter was $45 million, in line with the third quarter of 2025. R&D as a percentage of net revenue was 11% compared to nearly 13% in the third quarter of 2025.

The decrease as a percent of net revenue primarily reflects the timing of planned OSA R&D investments, with certain spending shifting from the third quarter of 2026 into the fourth quarter of 2026.

Adjusted operating income was $92 million compared to $80 million in the third quarter of 2025. Adjusted operating income margin was approximately 24% compared to 23% in the third quarter of 2025.

Compared to the prior year, the increase reflects higher revenue. The adjusted effective tax rate for the quarter was 23%, up modestly from 22% in the prior-year period, reflecting the geographic mix of income.

Adjusted diluted earnings per share was $1.23 compared to $1.11 in the third quarter of 2025. The increase was primarily driven by higher revenue, reflecting strong growth across both the cardiopulmonary and epilepsy businesses.

Moving to cash balance at September 30. Cash was $563 million compared to $636 million at year-end 2025. Total debt at September 30 was $299 million compared to $377 million at year-end 2025.

The reduction in both cash and total debt was a result of the early repayment of the outstanding term facilities in the amount of $98 million, inclusive of accrued interest.

Adjusted free cash flow for the quarter was $56 million compared to $62 million in the prior-year period.

The year-over-year decline reflects increased planned capital investments and higher working capital requirements associated with revenue growth.

Capital spend in the first 9 months of 2026 was $77 million compared to $49 million in the prior-year period.

The year-over-year increase was driven by the next-generation oxygenator manufacturing scale-up, investments in the digital health platform, cardiopulmonary capacity expansion initiatives, as well as investments in IT infrastructure.

Now turning to our updated 2026 guidance. As Vlad mentioned, based on performance to date, we are raising full-year 2026 revenue and adjusted earnings per share guidance.

At the same time, we're maintaining adjusted free cash flow guidance. We now forecast 2026 revenue growth between 9% and 10% on a constant currency basis, up from 8% to 9% previously.

We continue to expect the impact of foreign currency to be a tailwind of approximately 1% based on current exchange rates. Consistent with prior guidance, we estimate a net impact from tariffs of less than $5 million on the full-year adjusted operating income, inclusive of current and anticipated future tariffs.

Full-year adjusted operating income margin is still expected to be in the range of 20% to 21%.

As a reminder, this outlook reflects increased investment in the fourth quarter to support OSA product development, cardiopulmonary capacity expansion initiatives, and next-generation oxygenator manufacturing scale-up, along with phasing of certain planned investments from the third quarter of 2026 into the fourth quarter of 2026.

Adjusted effective tax rate is still forecasted at approximately 23%. To reflect stronger operational performance, we raised EPS guidance by $0.10 at midpoint, and now project adjusted diluted earnings per share in the range of $4.40 to $4.50.

We continue to expect adjusted diluted weighted average shares outstanding to be approximately 56 million for the full year. This EPS range represents approximately 14% growth at midpoint relative to 2025.

This range now reflects a shift in our assumed timing of the approximately $400 million SNIA payment from the third quarter of 2026 to the fourth quarter of 2026, resulting in a $0.03 benefit to EPS this year.

We believe the amount reserved for SNIA remains our best estimate of the liability, and we have sufficient resources to satisfy the liability.

Adjusted free cash flow is still expected to be in the range of $140 million to $160 million. This range includes $135 million in capital spending, consistent with prior guidance.

This level of investment remains aligned with the initiatives discussed throughout the year, including cardiopulmonary capacity expansion, next-generation oxygenator manufacturing scale-up, and investments in IT infrastructure to support the company's growth strategy.

With the successful operational launch of our new oxygenator manufacturing line, we are seeing tangible returns on these investments, positioning us to support future growth and meet customer demand.

In summary, our third quarter results underscore the strength of the business. Our updated guidance implies 2026 performance at or above the 2025 to 2028 financial framework outlined at Investor Day.

With that, I'll turn the call back over to Vlad for his closing remarks.

Vladimir Makatsaria

Thank you, Alex. In closing, our third quarter results reflect the focus, dedication, and execution of teams across LivaNova.

I want to thank our colleagues for their commitment to our patients, customers, and one another. We're encouraged by the opportunities ahead and remain confident in our ability to create long-term value.

We continue to strengthen LivaNova's core businesses, expand the capabilities needed to serve customers more effectively, and invest in innovation that addresses unmet patient needs.

With that, we're ready to open the call for questions.

Operator

[Operator Instructions]

Your first question comes from the line of Adam Maeder with Piper Sandler.

質疑応答

Adam Maeder

Congrats on the nice print and broad-based results. Maybe to start, I would like to spend a little bit of time on cardiopulmonary, specifically as it relates to next year.

And I was hoping you could talk about some of the key puts and takes, things like the new dedicated manufacturing line for oxies; how quickly could that potentially show up in numbers?

And then maybe just remind us of timing for the new heater cooler and air manager products and kind of how you're thinking about impact to growth?

Vladimir Makatsaria

Adam, thank you for the question. So maybe before I go specifically to some of the things you asked about, I just want to step back and talk a little bit about overall cardiopulmonary performance over the past period.

We raised this year 350 bps since the beginning of the year. This is now 15 consecutive quarters of double-digit growth for our cardiopulmonary business and 6 consecutive quarters of double-digit growth in disposables.

So we're very pleased with where we are. I mean, the other thing that we're really pleased with in our cardiopulmonary business is that the quality of growth is improving. And that means that the growth is well balanced across the portfolio within the cardiopulmonary business.

So, both coming from price, the upgrade of Essenz, which continues to be a strong driver, and now significant growth coming from disposables. So that is a little bit of a backtrack.

In terms of significant events that happened recently. Number one is the launch of a new oxygenator line. It went very well. So we are now live in production, and we will see a significant improvement in the output early next year.

We are looking at double-digit growth improvement in output for 2027 versus 2026. So that's number one. Number two, I just want to remind everybody that we are on track to launch a new oxygenator in 2028.

That new generation oxygenator will be clinically differentiated from anything on the market today. And then finally, the heater-cooler and air Manager will continue to be on track in terms of development, and we are planning a phased launch.

This is going to be governed by regulatory approvals across the world, and the first in line will be EMEA or EU.

But I think the significant impact, or material impact, in terms of revenue will be beyond 2027, so starting in 2028.

Adam Maeder

And maybe for the follow-up, just one kind of more near-term focus question. It looks like with the guidance raise, the implied Q4 outlook, at least on the top line, suggests maybe a little bit of a decel.

Is there anything to call out there, or perhaps maybe just some conservatism, but I wanted to ask about the implied 4Q guide on the top line.

Alex Shvartsburg

Adam, it's Alex. So first of all, again, pleased with our performance on both businesses year-to-date. And our confidence in the year continues to increase.

Despite the difficult comps in Q4, the underlying drivers of the business are strong. As we said in our prepared remarks, we continue to trend at the upper end of our Investor Day targets.

Our increased guidance is really in line with our philosophy on prudent guidance. And our performance year-to-date and our expectations for Q4- this is more from an OpEx perspective- just enables us to invest from a position of strength.

So that's the story on Q4. And again, really pleased with how the year is shaping up.

Operator

Your next question comes from the line of Matt Taylor with Jefferies.

Michael Sarcone

This is Mike Sarcone on for Matt Taylor. I guess just to start, Vlad, you opened up the prepared commentary highlighting your excitement and confidence in the OSA market and your opportunity there.

I guess, can you just kind of remind us about commercialization timelines and the size of the commercial organization that you think you're going to need to at least start addressing the market?

Vladimir Makatsaria

Yes. So what we are planning to do is that our time 0 is our regulatory submission for the U.S. FDA.

As I mentioned in my remarks, we're very confident in the timelines that we communicated. Our confidence is continuing to increase in that. So we do not have a large buildup in 2027.

We communicated that earlier. That's still the plan. The real increase in commercial investment starts in 2028, but we continue to plan a limited launch in 2027.

Michael Sarcone

And I guess just one more follow-up on the OSA market. Just given where things stand today, do you have a rough sense or outlook for growth in the market today and how that might look in 2027?

Vladimir Makatsaria

Yes. Well, first of all, we are closely monitoring, obviously, everything that's happening in the market.

We believe that the market remains a very attractive space for us to compete. And that is driven by a number of things.

Number one is that there is a significant unmet need from a patient point of view: up to 1 million patients discontinue CPAP therapy annually, and HGNS penetration within that population remains below 5%.

So that gives us still significant opportunity from a patient point of view. While there are currently challenges and reimbursement uncertainty in the HGNS market, in the near term, we believe that these dynamics are going to improve, and the challenges and the dynamics are temporary.

And you already saw some of the positive news from new codes being established for 2028. And then finally, when we enter the market, as a reminder, we don't have contraindications for CCC patients.

So, by design, that is going to increase the market size when we enter the market. So we still believe in the attractiveness of this market, both from a growth point of view, but also the margin opportunity on our business, we have strong confidence in our ability to win in this marketplace.

Alex Shvartsburg

And maybe I'll just add one comment around the clinical differentiation. As Vlad said, we do not have a contraindication, which is about 25% of the patient population. So the market is growing.

But we also have a strong clinical differentiation through PolySync where we have cumulatively 85% responder rate. So what that effectively translates into is that today, 1 in 3 patients do not get a great outcome with HGNS, but with PolySync technology, we reduced that to 1 in 7.

So the fundamentals of the therapy are also improving, which gives us that additional confidence that this is a good market for us.

Operator

Your next question comes from the line of David Rescott with Baird.

David Rescott

Congrats on the really strong results. I appreciate the comments on U.S. cardiopulm already.

I recall last quarter when you talked about that first-half high single-digit growth; there's a thought that that's kind of the way we should be thinking about that in the second half. And obviously, you delivered something above that.

So when we think about what's baked into the guide for Q4, I feel like we typically think there's a stronger capital placement cycle maybe in the fourth quarter.

Obviously, the comps are a little bit different versus Q3. You've got this oxygen air line that's now ramping. Maybe there's some level of increased contribution baked into Q4 as well.

But just trying to think through the pieces around some of the U.S. Cardiopulm segments, specifically on that typically stronger capital Q4, plus maybe some of the pieces on the expanding oxygenaire side.

Vladimir Makatsaria

David, yes, you're right. So our capital is a significant component of our growth. But just to remind you, we launched Essenz in Q4 of 2023.

So it's been a challenging comp for us for the last couple of years and will continue to be so in Q4. So consumables are going to play a larger part in our growth story in Q4.

Again, I think our story around Essenz conversion continues to play out. Still expect for the full year, Essenz to represent 80% of placements, up from about 55% last year, which is pretty strong.

So we're going to continue to benefit from the price/mix effect. And our funnel continues to be strong going into 2027.

David Lewis

And maybe on the VNS business, the epilepsy business, it looks like, again, that's been accelerating through the year, maybe 200 basis points or so in the U.S. this quarter.

So wondering if maybe you could unpack how that contribution of price has ramped through the year, specifically relative to Q2, whether or not there has been any underlying change in the de novo or replacement cycles when we think about the core VNS data.

Then, as you look to 2027, 2028 with this next-gen product, it sounds like maybe some of these workflow improvements are a little bit better than what we had assumed.

And wondering if, at all, beyond maybe potential price contribution from that product as well, that maybe that's something that could pull through some additional utilization as well.

Vladimir Makatsaria

Yes. David, thank you for this question. Let me start on overall growth drivers, and then I'll turn it over to Alex to talk about financial components this year.

So if you look at our epilepsy business, we have 3 tailwinds, or 3 important drivers of growth.

Number one is the VNS clinical data that is coming out, and recently it was published and the clinical evidence is being disseminated throughout the clinical community is receiving very strong positive reviews from the clinical community. And so that's number one.

Number two is, as you know, this increase in Medicare reimbursement, approximately a 50% increase. So that's helping with the economics of the providers and, again, a very positive impact.

Then the third one is more the future one. So as we launch new innovation with next-generation IPG and the digital health platform, which will enable remote titration, this has been a significant barrier for patients and caregivers, and unlocking that opportunity with remote titration is going to be a very important growth driver.

So the clinical data and the reimbursement already happened this year, and then the innovation, we expect it to become the third positive driver next year.

So overall, again, we're very pleased with the momentum of the business. And then maybe now to Alex to talk a little bit about components this year.

Alex Shvartsburg

Yes. So, consistent with what we saw in the first half of the year, we're seeing improvement in both volume and price.

On volumes, we're seeing an increase in new patient implants. Our funnel continues to be strong, and that's reading through. On the pricing, we still are seeing consistently seeing that our realized price is reading through at about 2x what we normally expect from the annual price increases really driven by lower discounting.

So both reimbursements and, as I said, the clinical outcomes continue to increase access for patients and drive strong revenue, both from a volume and a realized price perspective.

Operator

Your next question comes from the line of Anthony Petrone with Mizuho.

Anthony Petrone

Congratulations on a strong quarter here. Maybe one on oxygenators and then one on depression.

On oxygenators, maybe, Vlad, can you walk through the scale benefit that the company has built here? We have a larger manufacturing presence. You have the Thermo Fisher agreement in place.

How sustainable is that competitive advantage for oxygenators? And hence, what is the normalized growth rate of that business going forward now that you have that advantage?

And then in terms of depression, maybe any updates you can share with respect to CMS discussions on potentially accepting a formal NCD review process? Just any updates you can provide there would be helpful.

Vladimir Makatsaria

Anthony, thank you for the question. So I'll start with oxygenator, and then I'll turn it over to Ahmet to make comments on depression.

So maybe a couple of points to start with. Number one, as a reminder, I mean, this is a very mature market, obviously growing in mid-single digits.

We were able to increase our market share from approximately 30% to approximately 40% over the last 2 years. And so we do expect this trend to continue. And the upside is going to come from 3 angles.

Number one is commercial excellence. Number two is the ability to scale our manufacturing output faster, and number three is innovation.

So on the supply side, now if I go into the manufacturing scale-up, the market is still operating in the environment where the demand is outpacing supply, and we're still operating in a backlog.

And so there's still a short-term opportunity just by purely improving output to gain significant share. In our strategy, we have 3 important components.

Number one is just continuously improving our operations. And so this has been the driver of our output growth over the last couple of years. So, doing better with the current network that we have.

Thermo Fisher agreement was important because it unlocks the availability of critical components over the long term and gives us the ability to continue to grow market share in a consistent manner over the next several years.

And number three is our own ability to increase our manufacturing output. And so this launch of this new manufacturing line that is live now has been a very important milestone from that point of view.

So I would say a combination of those 3 gives us confidence in double-digit improvement in output next year, and we will be more precise in our guidance when we guide next year.

Ahmet Tezel

Maybe on depression, one of the key developments is that CMS has been inquiring about the 3-year data, the 36-month data. And we got that data in the middle of this year, submitted to a peer-reviewed journal, and we have shared the data with CMS.

We're actually very excited about the data because the durability of the therapy is very strong. And that's not atypical with neuromodulation. Generally, with neuromodulation, the longer you use the device, the better the therapy outcomes are.

So it was not a surprise to us, but having a validation was important. So we are still in active dialogue with CMS. They are reviewing the data we submitted, and we will update investors as appropriate when and if we move to a formal submission.

Operator

Your next question comes from the line of Mike Matson with Needham.

Michael Matson

So I just want to ask one question on epilepsy with regard to pricing. So I understand the drivers there. But looking beyond '26, do you expect these tailwinds to remain in place for pricing?

Then with the new IPG and digital platform coming next year, is that another opportunity to raise prices as well?

Vladimir Makatsaria

Yes. So thanks for the question, Mike. Yes, the realized price, as we said throughout the year, when the reimbursement guidance improved, we started renegotiating contracts with a number of accounts, which we were successful in doing, and that really resulted in a reduction in discounting.

We weren't able to capture all of the accounts. So there will be some residual effect going into 2027. So there will be some incremental realized price benefit going into next year.

In terms of opportunities on the new product, yes, because of the significant value proposition, we think that the product will be premium priced. We're not disclosing what that is at this point, but we do believe there's an opportunity there.

Michael Matson

And then just in terms of the OSA device from a manufacturing perspective, I assume you're going to have adequate capacity to meet any demand there, and that's not going to be a potential bottleneck.

Vladimir Makatsaria

Yes. We have adequate capacity for the OSA launch and to scale the business. So no issue there.

Operator

Your next question comes from the line of Brett Fishbin with KeyBanc Capital Markets.

Unknown Analyst

This is Will on for Brett. With respect to the new line, I was just wondering if you could parse out how additive that was to the quarter in terms of growth.

And then, given the fact that it is a new line, could you maybe just speak to any margin opportunities with that going forward?

Vladimir Makatsaria

Yes. Will, before I answer your question, I just want to go back to Anthony's question real quick on DTD and just add to what Ahmet said.

If you are interested in learning a little bit more, there was an important article that was featured in the American Journal of Psychiatry and also an interview by Dr. Conway; it's in a monthly podcast.

So it gives a really nice flavor to the clinical data and how our key opinion leaders are viewing it. So, Anthony, just to add to your question. And then, Will, on your point, what I can tell you about the new manufacturing line is obviously, it's a complex process to launch a new manufacturing line.

I think the team has done a wonderful job executing it in a timely manner, and we are starting to see production coming out of that new line.

Because of the timing of the launch, we are still building inventory on that. So we won't see any impact on our business until next year. So that's number one.

And look, in terms of margin, I mean, we've guided, and Alex, maybe you can comment there, but we've guided our goals in terms of margin improvement on our CP business. Obviously, the launch of that line is a component of that strategy.

This is the business where scale matters. And so having larger scale gives us an opportunity to continuously improve our margin.

Alex Shvartsburg

Yes. As Vlad said, we have invested in this new capital equipment to scale the business. So obviously, the more market share we're able to gain and drive higher volumes through this fixed cost base, it will have a positive effect on our margins.

Operator

Your next question comes from the line of Keith Hinton with Freedom Capital Markets.

Keith Hinton

I wanted to start off with some questions on 2027, specifically around the margin puts and takes.

So when you did the Investor Day early last year, I think you talked about, in the 2027, 2028 time frame, maintaining operating margins in the low 20s.

Obviously, a number of things have happened since then: some outperformance on margin this year, but also the new deals and the expanded CapEx and all those types of things. So just how should we be thinking about operating margin next year in terms of up, down, or flat versus '26?

And what are the most important puts and takes we should be thinking about? And then I have a follow-up as well.

Vladimir Makatsaria

Keith, so look, our Investor Day financial framework continues to stay intact.

Our long-range plan was comprised of 2 phases. The first phase was '25 through '28. And as we guided at that point in time, our operating margin will be at 20% to 21%, or I should say, above 20% in the near term.

So that's our expectation as we look at the near-term outlook; we obviously have a big opportunity with the OSA launch next year.

So possibly, I think we're at this point in time, we're not ready to talk about 2027 in terms of guidance, but we are aligned with our framework that we communicated at Investor Day.

Keith Hinton

And then just a follow-up on OSA, just 2 questions here. Number one is: when should we expect to see the detailed substudy data published in the journal?

And then maybe just a broader question in terms of the market leader has been around this space for a long time, and it's still a very underpenetrated market.

So is it your view that the market just needs additional competitors, additional commercial investment? Or are some of the advantages that you see with your product, do you see those as driving increased uptake as well?

Vladimir Makatsaria

Yes. So I'll start, and then I'll also ask Alex to add. So the subgroup analysis was actually presented in ISSS, and it actually won the best poster award as well in that.

What is really exciting is that we did not see differences in subgroups. So the technology works homogeneously despite your BMI and your comorbidity. So that's the interesting part of it.

What is really important for us is PolySync's ability to have a very high responder rate. I think earlier, I alluded to it. Going from 1 in 3 patients not having an ideal outcome to only 1 in 7, we believe, is a fundamental change.

In terms of your question around the market, we do believe the diagnosis of OSA is improving. GLP-1s are actually helping that. The technology is becoming more mainstream.

The fact that we don't have a contraindication grows the market by 25% on day 1. So we feel very strong based on the clinical data, the technology differentiation, and the fact that diagnosis is improving in terms of how the market will continue to grow.

Alex Shvartsburg

I would just say our confidence in this market continues to build. We think we have a compelling value proposition with our technology and the clinical evidence that Ahmet just talked about.

Historically, this market has grown at a double-digit rate. And the current slowdown in the market growth, I think, is a temporary phenomenon driven largely by the confusion around coding and reimbursement, but that will work itself out by the time we're out in the marketplace.

Vladimir Makatsaria

And maybe add one more thing. In terms of the CMS CPT codes, we are very pleased with the panel's decision, and we did participate in the application.

Actually, our RCT data, because we are the only RCT for FDA approval in the United States, was utilized as the Level 1 evidence for the CPT code. So we also think that once the reimbursement piece is clearer now with this recommendation of AMA starting January 2028, there's clarity for us in terms of reimbursement.

We do believe that's also going to significantly help the market growth.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Vladimir Makatsaria for closing remarks.

Vladimir Makatsaria

Okay. Well, thank you very much, and thank you, everyone, for joining the call today. And on behalf of the entire LivaNova team, we really appreciate your support and interest in LivaNova, and have a great day ahead.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.