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What changed in LivaNova PLC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LivaNova PLC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+379 added−405 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in LivaNova PLC's 2025 10-K

379 paragraphs added · 405 removed · 308 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

87 edited+12 added−22 removed46 unchanged
Biggest changeOther worldwide regulatory bodies have also approved the VNS Therapy System for treating patients with DRE, many without age or seizure-type restrictions. In 2020, CMS expanded reimbursement for VNS Therapy use in the treatment of Dravet Syndrome and, in January 2022, expanded reimbursement for VNS Therapy use in the treatment of Lennox-Gastaut Syndrome.
Biggest changeIn 2020, CMS expanded reimbursement for VNS Therapy use in the treatment of Dravet Syndrome and, in 2022, expanded reimbursement for VNS Therapy use in the treatment of Lennox-Gastaut Syndrome. In June 2025, the Company announced the completion of the CORE-VNS study, which evaluated outcomes using real-world evidence from more than 800 individuals with DRE treated with VNS Therapy worldwide.
LivaNova’s AspireSR and SenTiva implantable pulse generators provide the traditional benefits of VNS therapy but add an additional stimulation capability: closed loop stimulation (AutoStim), which responds to detection of changes in heart rate potentially indicative of a seizure.
LivaNova’s AspireSR and SenTiva implantable pulse generators provide the traditional benefits of VNS therapy but add an additional stimulation capability: closed-loop stimulation (AutoStim), which responds to the detection of changes in heart rate, potentially indicative of a seizure.
LivaNova works to ensure compliance with such laws and regulations and continues to monitor the laws applicable to LivaNova, which are subject to changing and evolving interpretations. Product Approval and Monitoring Many countries in which LivaNova sells its products subject the Company’s medical devices to their own product approval and requirements regarding performance, safety, and quality.
LivaNova works to ensure compliance with such laws and regulations and continues to monitor applicable laws, which are subject to changing and evolving interpretations. Product Approval and Monitoring Many countries in which LivaNova sells its products subject the Company’s medical devices to their own product approval and requirements regarding performance, safety, and quality.
The management of cross-border transfers of personal information outside of EU member countries is complex, which may complicate LivaNova’s business and clinical research activities, as well as product offerings that involve transmission or use of patient health information. LivaNova continues to adapt its business processes to comply with those standards and requirements applicable to it.
The management of cross-border transfers of personal information outside of EU member countries is complex, which may complicate LivaNova’s business and clinical research activities, as well as product offerings that involve the transmission or use of patient health information. LivaNova continues to adapt its business processes to comply with those standards and requirements applicable to it.
Free of charge through its website, LivaNova makes available its Proxy Statements on Schedule 14A, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and reports relating to beneficial ownership of the Company’s securities filed or furnished pursuant to Section 16 of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the SEC.
Free of charge through its website, LivaNova makes available its Proxy Statements on Schedule 14A, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and reports relating to beneficial ownership of the Company’s securities filed or furnished pursuant to Section 16 of the Exchange Act, as soon as reasonably practicable after 16 electronically filing such material with the SEC.
Heart-lung Machines The HLM product group includes HLMs, heater-coolers, related cardiac surgery equipment and maintenance, and technical services. HLMs temporarily take over the heart and/or lung functions, providing/circulating blood and oxygen to the body, while the heart is stopped during a cardiac surgery procedure. Heater-coolers are used during surgeries to warm or cool patients as part of their care.
HLMs The HLM product group includes HLMs, heater-coolers, related cardiac surgery equipment and maintenance, and technical services. HLMs temporarily take over the heart and/or lung functions, providing/circulating blood and oxygen to the body, while the heart is stopped during a cardiac surgery procedure. Heater-coolers are used during surgeries to warm or cool patients as part of their care.
The UK Bribery Act prohibits both domestic and international bribery, as well as bribery across both public and private sectors. There are similar laws and regulations applicable to LivaNova outside the U.S. and the UK, all of which are subject to evolving interpretations. For additional information, please refer to “Item 1A.
The UK Bribery Act prohibits both domestic and international bribery, as well as bribery across both public and private sectors. There are similar laws and regulations applicable to LivaNova outside the U.S. and the UK, all of which are subject to evolving interpretations. For additional information, refer to “Item 1A.
Specifically, t he federal healthcare Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully offering or paying remuneration, directly or indirectly, to a person to induce them to order, purchase, lease, or recommend a good or service for which payment may be made in whole or in part under a federal healthcare program such as Medicare or Medicaid, unless the arrangement fits within one of several statutory exemptions or regulatory “safe harbors.” Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, plus up to three times the remuneration involved.
Specifically, the federal Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully offering or paying remuneration, directly or indirectly, to a person to induce them to order, purchase, lease, or recommend a good or service for which payment may be made in whole or in part under a federal healthcare program such as Medicare or Medicaid, unless the arrangement fits within one of several statutory exemptions or regulatory “safe harbors.” Violations of the federal Anti-Kickback Statute may result in civil monetary penalties of up to $100,000 for each violation, plus up to three times the remuneration involved.
Two of LivaNova’s non-U.S. subsidiaries currently sell medical devices, including cardiopulmonary and neuromodulation products, to distributors and non-governmental organizations in Iran to support patient care in that country. LivaNova has limited visibility into the identity of the customers of these distributors and 16 non-governmental organizations in Iran.
Two of LivaNova’s non-U.S. subsidiaries currently sell medical devices, including cardiopulmonary and neuromodulation products, to distributors and non-governmental organizations in Iran to support patient care in that country. LivaNova has limited visibility into the identity of the customers of these distributors and non-governmental organizations in Iran.
These agencies require LivaNova to comply with laws and regulations governing the research, development, testing, manufacturing, labeling, pre-market clearance or approval, marketing, distribution, advertising, promotion, record keeping, reporting, tracking, importing, and exporting of LivaNova’s products. LivaNova’s business is also affected by data 12 privacy and security laws, environmental health and safety regulations, and cost containment initiatives worldwide.
These agencies require LivaNova to comply with laws and regulations governing the research, development, testing, manufacturing, labeling, pre-market clearance or approval, marketing, distribution, advertising, promotion, record keeping, reporting, tracking, importing, and exporting of the Company’s products. LivaNova’s business is also affected by data privacy and security laws, environmental health and safety regulations, and cost containment initiatives worldwide.
The U.S. government has obtained multi-million and multi-billion-dollar settlements under the False Claims Act, in addition to individual criminal convictions under applicable criminal statutes.
The 14 U.S. government has obtained multi-million and multi-billion-dollar settlements under the False Claims Act, in addition to individual criminal convictions under applicable criminal statutes.
In 2019, CMS published its final decision on the reconsideration, concluding that CMS will cover the VNS Therapy System for Medicare beneficiaries with treatment-resistant depression through CED when offered in a CMS-approved, double-blind, randomized, placebo-controlled trial with a follow-up duration of at least one year.
In 2019, CMS published its final decision on the reconsideration, concluding that CMS would cover the VNS Therapy System for Medicare beneficiaries with treatment-resistant depression through CED when offered in a CMS-approved, double-blind, randomized, placebo-controlled trial with a follow-up duration of at least one year.
The autotransfusion product group facilitates the collection, processing, and reinfusion of the patient’s own blood lost at the surgical site. Cannulae The cannulae product group is comprised of cardiopulmonary bypass cannulae, or tubing, which is a device used in cardiopulmonary surgery to cannulate the vessels, perfuse the coronary arteries, and interconnect the catheters and cannulae with an oxygenator.
The autotransfusion product group facilitates the collection, processing, and reinfusion of the patient’s own blood lost at the surgical site. Cannulae The cannulae product group comprises cardiopulmonary bypass cannulae, or tubing, which is a device used in cardiopulmonary surgery to cannulate the vessels, perfuse the coronary arteries, and interconnect the catheters and cannulae with an oxygenator.
Risk Factors” of this Report, under the section entitled “ LivaNova is subject to heightened scrutiny on issues relating to sustainability, including environmental laws and regulations, and the risk of environmental liabilities, violations, and litigation in multiple jurisdictions, any of which could have a material impact on LivaNova’s reputation, business, results of operations, cash flows, financial condition, and liquidity .” Applicability of Anti-Corruption Laws and Regulations LivaNova’s worldwide business is subject to the FCPA, the UK Bribery Act, and other anti-corruption laws and regulations applicable in the jurisdictions where LivaNova operates.
Risk Factors” of this Report, under the section entitled “ LivaNova is subject to heightened scrutiny on issues relating to sustainability, including environmental and sustainability laws and regulations, and the risk of environmental liabilities, violations, and litigation in multiple jurisdictions, any of which could have a material adverse effect on LivaNova’s reputation, business, results of operations, cash flows, financial condition, and liquidity .” Applicability of Anti-Corruption Laws and Regulations LivaNova’s worldwide business is subject to the FCPA, the UK Bribery Act, and other anti-corruption laws and regulations applicable in the jurisdictions where LivaNova operates.
Such alignment has created increased levels of price sensitivity among customers for LivaNova’s and its competitors’ products. Some third-party payers must also approve coverage and set reimbursement levels for new or innovative devices or therapies before they reimburse healthcare providers that use the medical devices or therapies.
Such alignment has created increased levels of price sensitivity among customers for LivaNova’s products. Some third-party payers must also approve coverage and set reimbursement levels for new or innovative devices or therapies before they reimburse healthcare providers that use the medical devices or therapies.
R&D The Company’s R&D investment consists of product design and development expenses, including technology, software, clinical study programs, and regulatory activities. LivaNova’s markets are subject to rapid technological advances, and as such, product improvement, software advancements, and innovation are necessary to maintain market leadership.
R&D The Company’s R&D investment consists of product design and development expenses, including technology, AI, software, clinical study programs, and regulatory activities. LivaNova’s markets are subject to rapid technological advances, and as such, product improvement, incorporation of AI, software advancements, and innovation are necessary to maintain market leadership.
In 2017, for example, the EU published its MDR, which has resulted in significant additional pre- and post-market requirements. Certifications to MDR must be achieved by December 2027 or December 2028, based on the risk classification of the device.
In 2017, the EU published its MDR, which has resulted in significant additional pre- and post-market requirements. Certifications to MDR must be achieved by December 2027 or December 2028, based on the risk classification of the device.
LivaNova’s marketing and sales strategy is focused on rapid, cost-effective delivery of high-quality products to a diverse group of customers worldwide, including perfusionists, neurologists, neurosurgeons and other physicians, hospitals, and other medical institutions and healthcare providers.
LivaNova’s marketing and sales strategy is focused on rapid, cost-effective delivery of high-quality products to a diverse group of customers worldwide, including perfusionists, neurologists, neurosurgeons and other healthcare professionals, hospitals, and other medical institutions and healthcare providers.
LivaNova continues to engage researchers to collect clinical and health economic evidence that supports regulatory filings and value dossiers and to establish the value proposition to patients, physicians, and payers for its current and future products. Patents and Licenses LivaNova relies on a combination of patents, trademarks, copyrights, trade secrets, and non-disclosure agreements to protect the Company’s intellectual property.
LivaNova continues to engage researchers to collect clinical and health economic evidence that supports regulatory filings and value dossiers and to establish the value proposition to patients, healthcare professionals, and payers for its current and future products. Patents and Licenses LivaNova relies on a combination of patents, trademarks, copyrights, trade secrets, and non-disclosure agreements to protect the Company’s intellectual property.
Penalties for regulatory non-compliance can be severe, including fines and revocation or suspension of a company’s marketing authorization, mandatory price reductions, and criminal sanctions. LivaNova is also required to comply with the regulations of every country where it commercializes products before the Company can launch or maintain products in the market.
Penalties for regulatory non-compliance can be severe, including fines and revocation or suspension of a company’s marketing authorization, mandatory price reductions, and criminal penalties. LivaNova is also required to comply with the regulations of every country in which it commercializes products before the Company can launch or maintain products in the market.
“Other” includes non-allocated corporate expenses and the non-cannula results of the Company’s former ACS segment, which was wound down during 2024. For further information regarding LivaNova’s reportable segments, historical financial information, and methodology for the presentation of financial results, please refer to “Part IV, Item 15. Exhibits and Financial Statement Schedules” of this Report.
“Other” includes non-allocated corporate expenses and the non-cannula results of the Company’s former ACS segment, which was wound down during 2024. For additional information regarding LivaNova’s reportable segments, historical financial information, and methodology for the presentation of financial results, refer to “Part IV, Item 15. Exhibits and Financial Statement Schedules” of this Report.
Any adverse regulatory action, depending on its magnitude, may limit LivaNova’s ability to market and sell its products effectively, limit its ability to obtain future pre-market approvals, or result in a substantial modification to LivaNova’s business practices and operations. For additional information, see “Item 1A.
Any adverse regulatory action, depending on its magnitude, may limit LivaNova’s ability to market and sell its products effectively, limit its ability to obtain future PMAs, or result in a substantial modification to LivaNova’s business practices and operations. For additional information, see “Item 1A.
LivaNova distributes multiple VNS Therapy devices for the treatment of epilepsy, including Model 103 (Demipulse), Model 106 (AspireSR), Model 1000 (SenTiva), and Model 1000D (SenTiva Duo) pulse generators.
LivaNova distributes multiple VNS Therapy devices for the treatment of epilepsy, including Model 103 (Demipulse), Model 106 (AspireSR), Model 1000 (SenTiva), and Model 1000-D (SenTiva Duo) pulse generators.
In addition to base pay, LivaNova’s rewards, compensation, and benefits programs may include, depending on jurisdiction, annual performance bonuses, stock awards, pensions, health and well-being programs, paid time off and parental leave, financial assistance for education-related purposes, flexible working schedules, hybrid and remote working, employee stock purchase plans, and employee rewards programs, among others.
In addition to base pay, LivaNova’s rewards and benefits programs may include, depending 15 on jurisdiction, annual performance bonuses, share awards, pensions, health and well-being programs, paid time off and parental leave, financial assistance for education-related purposes, flexible working schedules, hybrid and remote working, employee share purchase plans, and employee rewards programs, among others.
The SEC also maintains a website at www.sec.gov that contains reports, proxy statements, and other information about SEC registrants, including LivaNova. 18
The SEC also maintains a website at www.sec.gov that contains reports, proxy statements, and other information about SEC registrants, including LivaNova. 17
Oxygenators exchange oxygen and carbon dioxide in the blood of patients during surgical procedures and are utilized by perfusionists during cardiac surgery in conjunction with an HLM and can also be utilized in ECMO. Autotransfusion Systems One of the key elements for a complete blood management strategy is autologous blood transfusion.
Oxygenators exchange oxygen and carbon dioxide in the blood of patients during surgical procedures and are utilized by perfusionists during cardiac surgery in conjunction with an HLM and can also be utilized in extracorporeal membrane oxygenation. Autotransfusion Systems One of the key elements for a complete blood management strategy is autologous blood transfusion.
Enforcement actions and financial penalties related to privacy issues in the EU continue to grow, and new privacy and data localization laws and restrictions are being passed in other countries, including the U.S.
Privacy standards are often strict. Enforcement actions and financial penalties related to privacy issues in the EU continue to grow, and new privacy and data localization laws and restrictions are being passed in other countries, including the U.S.
Hospitals are also aligning their interests with those of physicians through employment and other arrangements, such as gainsharing, whereby a hospital agrees with physicians to share certain realized cost savings resulting from the physicians’ collective change in practice patterns, such as standardization of devices where medically appropriate, and participation in affordable care organizations.
Hospitals are also aligning their interests with those of healthcare professionals through employment and other arrangements, such as gainsharing, whereby a hospital agrees with healthcare professionals to share certain realized cost savings resulting from the healthcare professionals’ collective change in practice patterns, such as standardization of devices where medically appropriate, and participation in affordable care organizations.
The SenTiva generator is the smallest and lightest VNS device capable of delivering responsive therapy for epilepsy and includes the additional flexibility of LivaNova’s Scheduled Programming and Day & Night Programming capabilities. In 2017, the SenTiva and AspireSR VNS Therapy devices were approved by the FDA for expanded MRI access and similar CE Mark approval followed shortly thereafter.
The SenTiva generator is the smallest and lightest VNS device capable of delivering responsive therapy for epilepsy and includes the additional flexibility of LivaNova’s Scheduled Programming and Day & Night Programming capabilities. In 2017, the SenTiva and AspireSR VNS Therapy devices were approved by the FDA for expanded magnetic resonance imaging access, and CE Mark approval followed shortly thereafter.
There can be no assurance that these agreements will not be breached or will be enforceable, that LivaNova will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information, or that third parties will not otherwise gain access to LivaNova’s trade secrets and proprietary knowledge. For additional information, please refer to “Item 1A.
There can be no assurance that these agreements will not be breached or will be enforceable, that LivaNova will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information, or that third parties will not otherwise gain access to LivaNova’s trade secrets and proprietary knowledge.
Risk Factors” of this Report, under the section entitled “ Failure to comply with anti-bribery laws could materially adversely affect LivaNova’s business and result in civil and/or criminal sanctions. ” Cost Containment Initiatives Government and private sector initiatives to limit the growth of healthcare costs, including price regulation, competitive pricing, bidding and tender mechanics, coverage and payment policies, comparative effectiveness of therapies, technology assessments, and managed-care arrangements, are continuing in many countries where LivaNova does business.
Risk Factors” of this Report, under the section entitled “ Failure to comply with anti-bribery laws could have a material adverse effect on LivaNova’s business and result in civil and/or criminal sanctions. ” Cost Containment Initiatives Government and private sector initiatives to limit the growth of healthcare costs, including price regulation, competitive pricing, bidding and tender mechanics, coverage and payment policies, comparative effectiveness of therapies, technology assessments, and managed-care arrangements, are continuing in many countries where LivaNova does business.
They are especially important during surgeries involving the heart and lungs. Oxygenators and Perfusion Tubing Systems The oxygenators product group is comprised of disposable devices for extracorporeal circulation, including the Inspire systems. The Inspire range of products is comprised of 12 models that provide perfusionists with a customizable approach for the benefit of patients.
They are especially important during surgeries involving the heart and lungs. Oxygenators and Perfusion Tubing Systems The oxygenators product group, which includes the Inspire systems, comprises disposable devices for extracorporeal circulation. The Inspire range of products comprises 12 models that provide perfusionists with a customizable approach for the benefit of patients.
Although physicians are permitted to use their medical judgment to prescribe medical devices for indications other than those cleared or approved by regulatory bodies, LivaNova is prohibited from promoting products for such “off-label” uses and can only market the Company’s products for cleared or approved uses.
Although healthcare professionals and other prescribers, where applicable, are permitted to use their medical judgment to prescribe medical devices for indications other than those cleared or approved by regulatory bodies, LivaNova is prohibited from promoting products for such “off-label” uses and can only market the Company’s products for cleared or approved uses.
Many countries control the export and re-export of goods, technology, and services for public health, national security, regional stability, antiterrorism, and other reasons. Some governments may also impose tariffs, trade restrictions, and economic sanctions against certain countries, persons, or entities.
Many countries control the export and re-export of goods, technology, and services for public health, national security, regional stability, antiterrorism, and other reasons. Some governments may impose tariffs, trade restrictions, and economic sanctions against certain countries, persons, or entities. For additional information, see “Item 1A.
In particular, the Cardiopulmonary segment includes the Essenz Perfusion System, the Company’s next-generation HLM with an embedded patient monitor for tailored patient care strategies and sensing technology for data-driven decision-making during CPB procedures. CPB is frequently utilized in various heart-related procedures.
In particular, the Cardiopulmonary segment includes the Essenz Perfusion System, the Company’s next-generation HLM with an embedded patient monitor for tailored patient care strategies and sensing technology for data-driven decision-making during CPB procedures.
LivaNova’s RECOVER clinical study is examining up to 1,000 patients ages 18 or older who have unipolar or bipolar depression that is difficult to treat and is being carried out at up to 100 leading hospitals and medical centers across the U.S.
LivaNova’s RECOVER clinical study is examining up to 1,000 patients ages 18 or older who have unipolar or bipolar depression that is difficult to treat and is being carried out at up to 100 leading hospitals and medical centers across the U.S. In 2023, LivaNova completed enrollment of the unipolar depression cohort in the RECOVER clinical study.
Cardiopulmonary LivaNova’s Cardiopulmonary segment is engaged in the design, development, manufacture, marketing, and sale of cardiopulmonary products, including HLMs, oxygenators, autotransfusion systems, perfusion tubing systems, cannulae, and other related accessories.
Cardiopulmonary LivaNova’s Cardiopulmonary segment is engaged in the design, development, manufacture, marketing, and sale of cardiopulmonary products, including HLMs, oxygenators, autotransfusion systems, perfusion tubing systems, cannulae, and other related accessories, and provides services related to certain of these products.
The global regulatory environment is becoming increasingly more stringent and unpredictable. Several countries that did not have regulatory requirements for medical devices have established such requirements in recent years, and other countries have expanded, or plan to expand, their existing regulations. While some regulatory bodies have pursued harmonization of global regulations, requirements continue to differ significantly among countries.
Several countries that did not have regulatory requirements for medical devices have established such requirements in recent years, and other countries have expanded, or plan to expand, their existing regulations. While some regulatory bodies have pursued harmonization of global regulations, requirements continue to differ significantly among countries.
Risk Factors” of this Report, under the section entitled 13 “ LivaNova’s products are subject to complex laws and regulations, and failure to obtain product approvals, clearance, or reimbursement may materially adversely affect LivaNova’s business, results of operations, cash flows, and financial condition. ” Governmental Trade Regulations The sale and shipment of LivaNova’s products and services across international borders, as well as the purchase of components and products from international sources, subject LivaNova to extensive governmental trade regulations.
Risk Factors” of this Report, under the section entitled “ LivaNova’s products are subject to complex laws and regulations, and failure to obtain or maintain product approvals, clearance, or reimbursement may have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial condition. ” Governmental Trade Regulations The sale and shipment of LivaNova’s products and services across international borders, as well as the purchase of components and products from international sources, subject LivaNova to extensive governmental trade regulations.
LivaNova’s principal Neuromodulation product, the VNS Therapy System, consists of an implantable pulse generator and connective lead that stimulates the vagus nerve, surgical equipment to assist with the implant procedure, and equipment and instruction manuals that enable a treating physician to set parameters for a patient’s pulse generator.
The VNS Therapy System consists of an implantable pulse generator and connective lead that stimulates the left vagus nerve, surgical equipment to assist with the implant procedure, and 8 equipment and instruction manuals that enable a treating healthcare professional to set parameters for a patient’s pulse generator.
In 2005, the FDA approved the VNS Therapy System for the adjunctive long-term treatment of chronic or recurrent depression for patients 18 years of age or older who are experiencing a major depressive episode and have not had an adequate response to four or more adequate antidepressant treatments.
DTD VNS Therapy received CE Mark approval in 2001 for treatment-resistant depression in the EU. In 2005, the FDA approved the VNS Therapy System for the adjunctive treatment of chronic or recurrent depression for patients 18 years or older who are experiencing a major depressive episode and have not had an adequate response to four or more antidepressant treatments.
LivaNova’s gross revenues and net profits attributable to the above-mentioned Iranian activities were $2.8 million and $1.6 million for the three months ended December 31, 2024, respectively, and $9.5 million and $4.9 million for the year ended December 31, 2024, respectively.
LivaNova’s gross revenues and net profits attributable to the above-mentioned Iranian activities were both $0.1 million for the three months ended December 31, 2025, and $10.9 million and $5.8 million for the year ended December 31, 2025, respectively.
LivaNova believes that these activities also contribute to advancing the expertise of healthcare professionals. Hospitals and other medical device customers are seeking to reduce costs through various mechanisms, such as centralized purchasing and, in some cases, limiting the number of vendors that may participate in a given purchasing program.
Hospitals and other medical device customers are seeking to reduce costs through various mechanisms, such as centralized purchasing and, in some cases, limiting the number of vendors that may participate in a given purchasing program.
The FCPA can be used to prosecute companies in the U.S. for arrangements with physicians or other parties outside the U.S. if the physician or party is a government official of another country and prohibited payments are made to obtain or retain business.
The FCPA can be used to prosecute companies in the U.S. for arrangements with healthcare professionals or other parties outside the U.S. if the healthcare professionals or parties are 13 government officials of another country and prohibited payments are made to obtain or retain business.
LivaNova’s Mirandola, Italy plant is ISO 14001 and ISO 45001 certified, and its Munich, Germany plant is ISO 14001 certified. For additional information related to LivaNova’s manufacturing facilities, refer to “Item 2. Properties” in this Report. Government Regulation and Other Considerations LivaNova’s medical devices are subject to extensive government regulation by numerous government agencies, both within and outside the U.S.
For additional information related to LivaNova’s manufacturing facilities, refer to “Item 2. Properties” in this Report. Government Regulation and Other Considerations LivaNova’s medical devices are subject to extensive government regulation by numerous government agencies, both within and outside the U.S.
Culture LivaNova seeks to foster a culture of continuous understanding and transparency, where open and direct communication is valued. Accordingly, LivaNova regularly conducts employee engagement surveys, called LivaNova4You, to measure overall employment engagement and satisfaction and to provide the Company with actionable data for potential improvement opportunities.
Culture LivaNova seeks to foster an inclusive culture based on diverse perspectives and transparency, where open and direct communication is valued. Accordingly, LivaNova regularly conducts employee engagement surveys, called LivaNova4You, to measure overall employee engagement and satisfaction and to provide the Company with actionable data for potential improvement opportunities.
This method allows the surgical team to oxygenate and circulate the patient's blood, providing the necessary conditions for the surgeon to operate on the heart. The procedures most commonly requiring CPB include traditional coronary artery bypass grafting and valve surgeries. LivaNova’s products enable CPB for neonatal, pediatric, and adult patients.
CPB is frequently utilized in various heart-related medical procedures and allows surgical teams to oxygenate and circulate a patient’s blood, providing the necessary conditions for the surgeon to operate on the heart. Medical procedures most commonly requiring CPB include traditional coronary artery bypass grafting and valve surgeries. LivaNova’s products enable CPB for neonatal, pediatric, and adult patients.
In 2021, LivaNova received approval from the FDA to proceed with its investigational device exemption clinical study, the OSPREY clinical trial, and the first patient was implanted in March 2022 with the aura6000 System. In November 2024, the Company announced the OSPREY clinical study met its primary endpoints for efficacy and safety.
In 2021, LivaNova received approval from the FDA to proceed with its investigational device exemption clinical study, the OSPREY clinical trial, “Treating Obstructive Sleep Apnea Using Targeted Hypoglossal Nerve Stimulation,” and the first patient was implanted in 2022 with the aura6000 System. In 2024, the Company announced the OSPREY clinical trial met its primary endpoints for efficacy and safety.
In addition, the FDA and other U.S. regulatory bodies monitor the manner in which LivaNova promotes and advertises its products.
In addition, regulatory agencies in and outside the U.S. monitor the manner in which LivaNova promotes and advertises its products.
LivaNova’s quality systems, which define how its design, development, manufacturing, warehousing, and distribution processes ensure its products are safe and effective, are ISO 13485 certified. In addition, LivaNova utilizes environmental management systems and safety programs to protect the environment and the Company’s employees.
LivaNova’s quality system, which defines how its design, development, manufacturing, warehousing, and distribution processes ensure that its products are safe and effective, is ISO 13485 certified. In addition, LivaNova utilizes environmental management systems and safety programs to protect the environment and the Company’s employees. LivaNova’s plants in Mirandola, Italy and Munich, Germany are ISO 14001 and ISO 45001 certified.
In addition, governmental authorities may seek to hold LivaNova liable for successor environmental liability violations committed by any companies in which LivaNova invests or acquires or may require LivaNova to clean and remove hazardous substances at its sites that were produced by the operations of prior owners and are unrelated to the Company’s current operations.
In addition, governmental authorities have sought to hold LivaNova liable for successor environmental liability violations or may require LivaNova to clean and remove hazardous substances at its sites that were produced by the operations of prior owners and are unrelated to the Company’s current operations. For additional information, refer to “Note 11.
For additional information, please refer to “Note 11. Commitments and Contingencies” in LivaNova’s consolidated financial statements under the sections entitled “Saluggia Site Hazardous Substances” and “SNIA Environmental Litigation” and “Item 1A.
Commitments and Contingencies” in LivaNova’s consolidated financial statements under the sections entitled “Saluggia Site Hazardous Substances” and “SNIA Environmental Litigation” and “Item 1A.
The PMA process, which is more costly and rigorous than the 510(k) process, requires LivaNova to demonstrate independently that a medical device is safe and effective for its intended use. One or more clinical studies may be required to support a 510(k) application and are almost always required to support a PMA application.
The PMA process, which is more costly and rigorous than the 510(k) process, requires LivaNova to demonstrate independently that a medical device is safe and effective for its intended use.
LivaNova also sells and provides goods, technology, and services to agents, representatives, and distributors who may export such items to customers and end-users, and if these third parties violate applicable export control or economic sanctions laws or regulations when engaging in transactions involving the Company’s products, LivaNova may be subject to varying degrees of liability depending on the extent of its participation in the transaction.
If these third parties violate applicable export control or economic sanctions laws or regulations when engaging in transactions involving the Company’s products, LivaNova may be subject to varying degrees of liability, depending on the extent of its participation in the transaction.
In this 2019 decision, CMS also agreed to cover a VNS Therapy System device replacement for Medicare beneficiaries already implanted with a device. The CED also included the possibility to extend the study to a prospective longitudinal registry. In 2019, CMS accepted the study protocol for LivaNova’s RECOVER clinical study and the first patient was enrolled.
In this 2019 decision, CMS also agreed to cover a VNS Therapy System device replacement for Medicare beneficiaries already implanted with a device. The CED also included the possibility of extending the study to a prospective longitudinal registry.
Over 90% of employees completed the 2024 LivaNova4You engagement survey which encompassed questions relating to health and wellness, employment engagement, transformation and change, and overall culture within the Company.
Over 94% of employees completed the most recent LivaNova4You engagement survey in early 2026, which encompassed questions relating to health and wellness, employee engagement, transformation and change, and overall culture within the Company.
For quality assurance, sole source availability, or cost effectiveness purposes, LivaNova may procure certain components and raw materials from a sole supplier. LivaNova takes countermeasures to reduce supply chain risks, including working with suppliers to ensure continuity of supply while maintaining high quality and reliability and working to minimize the instances in which the Company relies on a sole source.
LivaNova takes countermeasures to reduce supply chain risks, including working with suppliers to ensure continuity of supply while maintaining high quality and reliability, and to minimize instances in which the Company relies on a single supplier.
Performance Management, Leadership Development, and Professional Training LivaNova’s annual performance management process is designed to build employee skills and capabilities and develop and retain enterprise leaders for the future. It includes training to increase the quality of employee/manager talent review discussions and employee performance calibrations among leaders to drive consistency.
Performance Management, Leadership Development, and Professional Training LivaNova’s annual performance management process is designed to build employee skills and capabilities and enable employees to perform at their best by providing regular feedback and guidance. It includes training to increase the quality of employee/manager performance review discussions and employee performance calibrations among leaders to drive consistency.
LivaNova believes its activities are consistent with applicable law, including U.S., UK, EU, and other applicable sanction laws, though such laws are complex and continue to evolve rapidly. The Company intends to continue its business in Iran. Human Capital Management LivaNova has approximately 2,900 employees worldwide, representing more than 70 nationalities and located in 31 countries.
LivaNova believes its activities are consistent with applicable laws, including U.S., UK, EU, and other applicable sanction laws, though such laws are complex and continue to evolve rapidly. The Company intends to continue its business in Iran.
After two ASMs fail to deliver seizure control, the epilepsy is characterized as drug-resistant and adjunctive non-drug options are considered, including VNS therapy, ketogenic diet, surgery, and other neuromodulation therapies.
There are several broad types of treatment available to patients with epilepsy; ASMs typically serve as a first-line treatment and are prescribed for virtually all patients diagnosed with epilepsy. After two ASMs fail to deliver seizure control, the epilepsy is characterized as drug-resistant, and adjunctive non-drug options are considered, including VNS therapy, ketogenic diet, surgery, and other neuromodulation therapies.
Production, Quality Systems, and Raw Materials LivaNova manufactures a majority of its products in facilities located in the U.S., Italy, Germany, Australia, and Brazil. LivaNova purchases raw materials and components used in its products from numerous suppliers located in various countries worldwide.
Production, Quality Systems, and Raw Materials LivaNova manufactures a majority of its products in facilities located in the U.S., Italy, Germany, Australia, and Brazil. LivaNova purchases raw materials and components for its products from numerous suppliers worldwide. In some cases, for quality assurance, sole-source availability, or cost-effectiveness purposes, LivaNova may procure certain components and raw materials from a single supplier.
LivaNova also supports the continuing education of its employees externally. In the U.S. and internationally, eligible employees can access financial aid through education reimbursement programs for approved courses and certifications completed independently.
In addition, LivaNova offers dedicated development and learning offerings which address specific business needs and support organizational priorities including developing enterprise leaders for the future. LivaNova also supports the continuing education of its employees externally. In the U.S. and internationally, eligible employees can access financial aid through education reimbursement programs for approved courses and certifications completed independently.
LivaNova is subject to U.S. federal and state government healthcare regulations and enforcement imposed primarily in connection with government healthcare programs, such as the Medicare and Medicaid programs, as well as healthcare regulations and enforcement imposed by governments in other countries in which LivaNova conducts business. 15 U.S. federal healthcare laws apply when LivaNova or customers submit claims for items or services that are reimbursed under government healthcare programs, including laws related to kickbacks, false claims, self-referrals, or other healthcare fraud.
LivaNova is subject to U.S. federal and state government healthcare regulations and enforcement imposed primarily in connection with government healthcare programs, such as the Medicare and Medicaid programs, as well as healthcare regulations and enforcement imposed by governments in other countries in which LivaNova conducts business.
The lead does not need to be removed to replace a generator with a depleted battery. The 9 Neuromodulation segment is also engaged in the development and management of clinical testing for LivaNova’s aura6000 System for treating OSA. The aura6000 device stimulates the hypoglossal nerve, which engages specific tongue and palate muscles to open the airway while a patient sleeps.
The lead does not need to be removed to replace a generator with a depleted battery. The Neuromodulation segment also includes the development and clinical testing of LivaNova’s aura6000 System for treating OSA.
In 2007, CMS issued an NCD that vagus nerve stimulation is not covered for treatment-resistant depression, significantly limiting access for most patients. In 2017, the American Journal of Psychiatry published the results of the longest and largest naturalistic study on treatments for patients experiencing DTD.
In 2007, CMS issued an NCD that VNS is not covered for treatment-resistant depression, significantly limiting access for most patients. Following the publication of a study on treatments for patients experiencing DTD in 2017, LivaNova requested that CMS reconsider its previous NCD, and in 2018, CMS published a tracking sheet to reconsider.
The EU has established a single regulatory product approval process, pursuant to which a CE Mark certifies conformity with all of the legal requirements of the regulatory process.
One or more clinical studies may be required to support a 510(k) application and are almost always required to support a PMA application. 11 The EU has established a single regulatory product approval process, pursuant to which a CE Mark certifies conformity with all of the legal requirements of the regulatory process.
Administrative fines may be levied for non-compliance with the GDPR’s requirements and can reach the higher of €20 million ($20.8 million as of December 31, 2024) or up to 4% of LivaNova’s total worldwide annual net revenue for the preceding financial year. 14 Environmental Regulation and Management LivaNova is subject to various environmental laws, directives, and regulations both in the U.S. and abroad that have resulted in, and could lead to, increased environmental compliance expenditures and reporting.
Administrative fines may be levied for non-compliance with the GDPR’s requirements and can reach the higher of €20 million ($23.5 million as of December 31, 2025) or up to 4% of LivaNova’s total worldwide annual net revenue for the preceding financial year.
However, uncertainty remains as to the nature of any future legislation or other reforms, making it difficult for LivaNova to predict the potential impact of cost containment trends on future operating results.
Uncertainty remains, however, as to the timing, scope, and impact of future healthcare reforms, macroeconomic conditions, and cost-containment measures, making it difficult to predict their potential effect on future operating results.
Available Information LivaNova’s global headquarters are located at 20 Eastbourne Terrace, London, UK W2 6LG. The Company’s website address is www.livanova.com.
Seasonality The number of medical procedures incorporating LivaNova’s products is generally lower during the summer months, particularly in European countries, due to summer vacation schedules. Available Information LivaNova’s global headquarters are located at 20 Eastbourne Terrace, London, UK W2 6LG. The Company’s website address is www.livanova.com.
Data Privacy and Security Laws As a global medical device technology company, LivaNova is subject to various laws worldwide that protect the privacy, security, and confidentiality of certain data, including employee data and patient health information, and restrict the use and unauthorized disclosure of such information. Privacy standards are often strict.
The activities of these third parties may cause disruption or delays in the distribution and sale of LivaNova’s products or result in restrictions being placed on the Company’s international distribution and sale of products, which may materially impact LivaNova’s business activities. 12 Data Privacy and Security Laws As a global medical device technology company, LivaNova is subject to various laws worldwide that protect the privacy, security, and confidentiality of certain data, including employee data and patient health information, and restrict the use and unauthorized disclosure of such information.
Risk Factors” of this Report, under the section entitled “ Cybersecurity incidents or other disruptions to LivaNova’s information technology systems could lead to reduced revenue, increased costs, liability claims, regulatory fines, litigation, harm to LivaNova’s competitive position, and loss of reputation.” In the EU, the processing of certain data, including employee and patient information, is subject to the privacy, security, and confidentiality provisions set forth in Regulation 2016/679.
Risk Factors” of this Report, under the section entitled “ Failure to protect, maintain, or upgrade LivaNova’s IT systems or products, or safeguard against cybersecurity incidents, service disruptions, or data corruption could have a material adverse effect on LivaNova’s business, results of operations, financial condition and reputation.” In the EU, the processing of certain data, including employee and patient information, is subject to the privacy, security, and confidentiality provisions set forth in Regulation 2016/679.
In 1997, LivaNova’s VNS Therapy System was the first medical device treatment approved by the FDA for the treatment of DRE and today is the only neuromodulation device approved for use in the U.S. in DRE patients as young as four years of age with partial onset or focal seizures.
DRE The VNS Therapy System is designed as an adjunctive treatment to reduce seizures in people with DRE and is approved in many jurisdictions globally, including in the U.S., for patients four years of age or older with partial or focal onset seizures.
LivaNova expects this global regulatory environment will continue to evolve, which could impact the Company’s cost, approval lead time, or ability to maintain existing or obtain future product approvals. Product and Promotional Restrictions Both before and after LivaNova releases a product for commercial distribution, the Company has ongoing responsibilities under various laws and regulations governing medical devices.
Product and Promotional Restrictions Both before and after LivaNova releases a product for commercial distribution, the Company has ongoing responsibilities under various laws and regulations governing medical devices.
These relationships provide LivaNova with a detailed understanding of therapeutic and diagnostic trends, developments, and emerging opportunities, which enable the Company to respond to the changing needs of providers and patients. LivaNova actively participates in medical conferences and conducts comprehensive training and educational activities to enhance its presence in the medical communities it serves.
To achieve this objective, LivaNova develops and preserves appropriate working relationships with customers, and the Company cultivates and maintains close working relationships with professionals in the medical industry. These relationships provide LivaNova with a detailed understanding of therapeutic and diagnostic trends, developments, and emerging opportunities, which enable the Company to respond to the changing needs of providers and patients.
Obstructive Sleep Apnea In 2018, LivaNova acquired full ownership of ImThera, a company developing an implantable neurostimulation device system for the treatment of obstructive sleep apnea. The device stimulates the hypoglossal nerve, which engages specific tongue and palate muscles to open the airway while a patient sleeps.
The device stimulates the hypoglossal nerve, which engages specific tongue and palate muscles to open the airway while a patient sleeps.
In addition, the LivaNova Women’s Network operates a mentorship program created by women and for women that facilitates pairings between mentors and mentees in the U.S. and Latin America. Topics range from career and financial advice to performance management and connection to the Company’s strategy.
LivaNova also supports internal diversity affinity initiatives, including the Multi-Generation Network and Women in Sales, where employees convene to discuss topics that promote diversity in the workplace. In addition to the aforementioned groups, the LivaNova Women’s Network operates a mentorship program created by women and for women that facilitates pairings between mentors and mentees in the U.S. and Latin America.
LivaNova’s ongoing manufacturing and other operations involve the use, storage, and transportation of hazardous and non-hazardous substances regulated under environmental health and safety laws.
Environmental Regulation and Management LivaNova is subject to various environmental laws, directives, and regulations both in the U.S. and abroad that have resulted in, and could lead to, increased environmental compliance expenditures and reporting. LivaNova’s ongoing manufacturing and other operations involve the use, storage, and transportation of hazardous and non-hazardous substances regulated under environmental health and safety laws.
Finally, LivaNova offers internships and apprenticeships across functions around the globe, in partnership with universities and institutions, which may lead to full-time employment with the Company. 17 Valuing People LivaNova recognizes the value in fostering an inclusive work environment and strives to provide a workplace free of harassment or discrimination.
Finally, LivaNova offers internships and apprenticeships across functions around the globe, in partnership with universities and institutions, which may lead to full-time employment with the Company. Valuing People LivaNova values diversity and welcomes all employees and partners regardless of their race, gender, nationality, ethnic origin, religion, age, or sexual orientation.
In 2023, LivaNova randomized the 500th unipolar depression patient into the RECOVER clinical study and completed enrollment in the unipolar cohort. In June 2024, the Company announced the preliminary results for the unipolar patient cohort. The study did not meet its primary endpoint for the unipolar cohort; however, statistically significant and clinically meaningful improvements were achieved in select secondary endpoints.
In 2024, the Company announced that the preliminary results for the unipolar patient cohort did not meet their primary endpoint for this cohort but showed statistically significant and clinically meaningful improvements in multiple secondary endpoints related to measures of quality of life and daily function.
All employees, which include full-time and part-time employees, start the year creating performance-aligned goals that are reviewed with their managers at both mid-year and year-end performance evaluation reviews. Employees have access to an extensive training library called LivaNova University, which contains modules covering different aspects of the business.
All employees develop performance-aligned goals in conjunction with their managers at the beginning of the year that are regularly reviewed with their managers throughout the year. Employees have access to an extensive training library called LivaNova University that encompasses content relating to skill-building and the core business areas. This enables employees to access development resources at their convenience.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf LivaNova’s components fail to meet these standards or fail to adapt to evolving standards, the Company’s reputation as a manufacturer of high-quality products will be harmed, certain of its inventory may become obsolete, its competitive advantage could be damaged, and LivaNova could lose customers and market share. 22 If LivaNova’s marketed medical devices are defective or otherwise pose safety risks, the FDA and similar non-U.S. governmental authorities could require their recall or initiate an enforcement action, or LivaNova may initiate a recall of the Company’s products or stop sales of products voluntarily.
Biggest changeIf LivaNova’s marketed medical devices are defective or otherwise pose safety risks, the FDA and similar non-U.S. governmental authorities could require their recall or initiate an enforcement action, or LivaNova could initiate a recall of the Company’s products or stop sales of products voluntarily. As a healthcare company, LivaNova’s products are subject to the risk of recalls or enforcement actions.
Although LivaNova has in the past elected, and may in the future elect, to hedge certain foreign currency exposures, it is unlikely that any hedging strategy would eliminate its currency risk entirely.
Although LivaNova has elected in the past, and may elect in the future, to hedge certain foreign currency exposures, it is unlikely that any hedging strategy would eliminate its currency risk entirely.
Manufacturers, on their own initiative, may recall a product or stop sales of such product, and the Company has in the past initiated, and may initiate in the future, voluntary product recalls and sale stoppages. Any recall announcement could harm LivaNova’s reputation with customers and negatively affect LivaNova’s reputation, business, results of operations, cash flows, and financial position.
Manufacturers, on their own initiative, may recall a product or stop sales of such product, and the Company has in the past initiated, and may initiate in the future, voluntary product recalls and sale stoppages. Any recall announcement could harm LivaNova’s reputation with customers and negatively affect its reputation, business, results of operations, cash flows, and financial position.
Third parties could obtain patents that may require LivaNova to negotiate licenses to conduct business, and the required licenses may not be available on reasonable terms or at all. LivaNova also relies on non-disclosure and non-competition agreements with certain employees, consultants, and other parties to protect, in part, trade secrets and other proprietary rights.
Third parties could obtain patents that may require LivaNova to negotiate licenses to conduct business, and the required licenses may not be available on reasonable terms or at all. 27 LivaNova also relies on non-disclosure and non-competition agreements with certain employees, consultants, and other parties to protect, in part, trade secrets and other proprietary rights.
LivaNova can provide no assurances as to the financial stability or viability of the Option Counterparties. 31 Risks Relating to Tax and LivaNova’s Jurisdiction of Incorporation LivaNova is incorporated in England and Wales and governed by their laws, which may afford less protection to shareholders than under U.S. laws.
LivaNova can provide no assurances as to the financial stability or viability of the Option Counterparties. Risks Relating to Tax and LivaNova’s Jurisdiction of Incorporation LivaNova is incorporated in England and Wales and governed by their laws, which may afford less protection to shareholders than under U.S. laws.
Similarly, LivaNova may divest and has divested portions of its business, resulting in the migration of data and overlapping data obligations. As a result of such divestitures, LivaNova may face risks due to the migration or modification of controls, 26 procedures, and policies relating to data privacy and cybersecurity internally or en route during migration.
Similarly, LivaNova may divest and has divested portions of its business, resulting in the migration of data and overlapping data obligations. As a result of such divestitures, LivaNova may face risks due to the migration or modification of controls, procedures, and policies relating to data privacy and cybersecurity internally or en route during migration.
Additionally, upon conversion of the 2029 Notes, LivaNova will pay cash up to the aggregate principal amount of the 2029 Notes to be converted and pay or deliver, as the case may be, cash, LivaNova’s ordinary shares, or a combination of cash and LivaNova’s ordinary shares, at LivaNova’s election, in respect of the remainder, if any, of LivaNova’s conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted.
Upon conversion of the 2029 Notes, LivaNova will pay cash up to the aggregate principal amount of the 2029 Notes to be converted and pay or deliver, as the case may be, cash, LivaNova’s ordinary shares, or a combination of cash and LivaNova’s ordinary shares, at LivaNova’s election, in respect of the remainder, if any, of LivaNova’s conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted.
Unfavorable or inconsistent clinical data from existing or future clinical trials, or the unfavorable interpretation of such clinical data by customers, regulatory authorities, or third-party payers, may adversely impact LivaNova’s ability to obtain product approval or clearance, and/or receive reimbursement.
Unfavorable or inconsistent clinical data from existing or future clinical trials, or the unfavorable interpretation of such clinical data by customers, regulatory authorities, or third-party payers, may adversely impact LivaNova’s ability to obtain or maintain product approval or clearance, and/or receive reimbursement.
The original issue discount is amortized and recognized as a component of interest expense over the term of the 2025 Notes and 2029 Notes, which results in an effective interest rate reported in LivaNova’s consolidated statements of income (loss) in excess of the stated interest rate of the 2025 Notes and 2029 Notes.
The original issue discount is amortized and recognized as a component of interest expense over the term of the 2029 Notes, which results in an effective interest rate reported in LivaNova’s consolidated statements of income (loss) in excess of the stated interest rate of the 2029 Notes.
Any termination or delay in the completion of LivaNova’s clinical studies could delay or preclude the filing of regulatory submissions or requests for coverage determinations and, ultimately, LivaNova’s ability to commercialize new or modified products and obtain reimbursement for the Company’s products.
Any termination or delay in the completion of LivaNova’s clinical studies could delay or preclude the filing of regulatory submissions or requests for coverage determinations and, ultimately, LivaNova’s ability to commercialize new or modified products and obtain or maintain reimbursement for the Company’s products.
Patents issued to or licensed by LivaNova in the past or in the future may be challenged or circumvented by competitors, and such patents may be found invalid, unenforceable, or insufficiently broad to protect the 28 Company’s technology, and may limit LivaNova’s competitive advantage.
Patents issued to or licensed by LivaNova in the past or in the future may be challenged or circumvented by competitors, and such patents may be found invalid, unenforceable, or insufficiently broad to protect the Company’s technology, and may limit LivaNova’s competitive advantage.
As a public limited company incorporated under the laws of England and Wales, certain of LivaNova’s capital structure decisions require shareholder approval, which may limit the Company’s flexibility to manage its capital structure. LivaNova is a public limited company incorporated under the laws of England and Wales.
As a public limited company incorporated under the laws of England and Wales, certain LivaNova capital structure decisions require shareholder approval, which may limit the Company’s flexibility to manage its capital structure. LivaNova is a public limited company incorporated under the laws of England and Wales.
The Option Counterparties are financial institutions, and LivaNova is subject to the risk that they might default under the 2025 Capped Calls and 2029 Capped Calls. LivaNova’s exposure to the credit risk of the Option Counterparties is not secured by any collateral.
The Option Counterparties are financial institutions, and LivaNova is subject to the risk that they might default under the 2029 Capped Calls. LivaNova’s exposure to the credit risk of the Option Counterparties is not secured by any collateral.
These types of transactions may require more resources than originally anticipated, may divert management’s attention from the Company’s existing business, and may not result in the expected benefits, savings, or synergies.
These types of investments and transactions may require more resources than originally anticipated, may divert management’s attention from the Company’s existing business, and may not result in the expected benefits, savings, or synergies.
Even an unsubstantiated allegation of impropriety could adversely impact LivaNova’s reputation and/or business operations. Furthermore, LivaNova’s devices, products, and therapies are purchased principally by hospitals or physicians that typically bill various third-party payers, such as governmental healthcare programs (e.g., Medicare, Medicaid, and comparable non-U.S. programs), private insurance plans, and managed-care plans for the healthcare services provided to their patients.
Even an unsubstantiated allegation of impropriety could adversely impact LivaNova’s reputation and/or business operations. Furthermore, LivaNova’s devices, products, and therapies are purchased principally by hospitals or healthcare professionals that typically bill various third-party payers, such as governmental healthcare programs (e.g., Medicare, Medicaid, and comparable non-U.S. programs), private insurance plans, and managed-care plans for the healthcare services provided to their patients.
Ultimately, LivaNova cannot guarantee that its clinical trials will be successful or that the Company will be able to obtain or maintain approval or clearance and/or reimbursement for new products or modifications to existing products.
Ultimately, LivaNova cannot guarantee that its clinical trials will be successful or that the Company will be able to obtain or maintain approval or clearance and/or reimbursement for products or modifications to existing products.
Similarly, unauthorized access to or through, denial of access to, or other incidents involving LivaNova or its vendors’ information systems, whether by the Company’s employees or third parties, including a cyber-attack by criminal hackers, or state-sponsored organizations, who continuously develop and deploy viruses, ransomware, malware, or other malicious software programs or social engineering attacks, have resulted and could in the future result in negative publicity, significant remediation costs, legal liability, notification requirements, and damage to LivaNova’s reputation, which could have a material adverse effect on the Company’s business, results of operations, cash flows, and financial condition.
Similarly, unauthorized access to or through, denial of access to, or other incidents involving LivaNova or its vendors’ 19 IT systems, whether by the Company’s employees or third parties, including a cyber-attack by criminal hackers, or state-sponsored organizations, who continuously develop and deploy viruses, ransomware, malware, or other malicious software programs or social engineering attacks, have resulted and could in the future result in negative publicity, significant remediation costs, legal liability, notification requirements, and damage to LivaNova’s reputation, which could have a material adverse effect on the Company’s business, results of operations, cash flows, and financial condition.
Competitive factors include product quality, reliability and performance; product technology and innovation; breadth of product lines and product services; ability to identify new market trends; changes to the regulatory environment; cost-effectiveness and 21 price; customer support and training; capacity to recruit engineers, scientists, and other qualified employees; ability to navigate the regulatory approval process in the markets in which LivaNova operates; reimbursement approval; reimbursement coverage; and effectiveness of systems and processes.
Competitive factors include product quality, reliability and effectiveness; product technology and innovation; breadth of product lines and product services; ability to identify new market trends; changes to the regulatory environment; cost-effectiveness and price; customer support and training; capacity to recruit engineers, scientists, and other qualified employees; ability to navigate the regulatory approval process in the markets in which LivaNova operates; reimbursement approval; reimbursement coverage; and effectiveness of systems and processes.
Although LivaNova’s compliance program includes mechanisms for detecting and correcting misconduct, including a hotline called the “LivaNova Ethics Line”, it is not always possible to identify and deter misconduct by LivaNova’s employees and other third parties, and the precautions the Company takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting LivaNova from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.
Although LivaNova’s compliance program includes mechanisms for detecting and correcting misconduct, including a hotline called the “LivaNova Ethics Line,” it is not always possible to identify and deter misconduct by LivaNova’s employees and other third parties, and the precautions the Company takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting LivaNova from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.
Furthermore, LivaNova’s security assessments of third-party vendors may be inadequate to determine whether their security protocols are sufficient to prevent a cybersecurity incident or other system or data compromise. LivaNova also cannot be certain that the Company will receive timely notification by its third-party vendors of such matters.
Furthermore, LivaNova’s security assessments of third-party vendors may be inadequate to determine whether their security protocols are sufficient to prevent a cybersecurity incident or other system or data compromise. LivaNova also cannot be certain that the Company will receive timely notification from its third-party vendors of such matters.
In connection with any potential future cybersecurity incident, the Company similarly could become a target of civil litigation or government enforcement actions as a result of a compromise to or loss of data. The global medical device industry is highly competitive, and LivaNova may be unable to compete effectively.
In connection with any potential cybersecurity incident, the Company could become a target of civil litigation or government enforcement actions as a result of a compromise to or loss of data. The global medical device industry is highly competitive, and LivaNova may be unable to compete effectively.
Any material changes in tax laws, regulations, or policies, or their interpretation and enforcement, including with respect to Pillar Two, could result in a higher effective tax rate for LivaNova, and have a material impact on its consolidated statements of income (loss) or financial condition.
Any material changes in tax laws, regulations, or policies, or their interpretation and enforcement, including with respect to Pillar Two and interaction with other tax laws, could result in a higher effective tax rate for LivaNova and have a material impact on its consolidated statements of income (loss) or financial condition.
Other governments have enacted or amended or are enacting similar data protection laws, including data localization laws that require data to stay within their borders and other technical and operational adaptions that may be required given the rapid changes in data protection regulation where LivaNova conducts business.
Other governments have enacted or amended or are enacting similar data protection laws, including data localization laws that require data to stay within their borders and other technical and operational adaptations that may be required, given the rapid changes in data protection regulation where LivaNova conducts business.
If LivaNova fails to attract and retain key personnel in senior management and other positions, or if the Company’s succession planning efforts are not effective, it could have a material adverse effect on LivaNova’s business, financial condition, and results of operations.
If LivaNova fails to attract and retain personnel, particularly senior management and other key positions, or if the Company’s succession planning efforts are not effective, it could have a material adverse effect on LivaNova’s business, financial condition, and results of operations.
Cybersecurity incidents and other system and data compromises could remain undetected for an extended period, which could potentially result in significant harm to the Company’s information technology systems, as well as unauthorized access to, or acquisition of, the information stored on and/or transmitted by the Company’s information technology systems.
Cybersecurity incidents and other system and data compromises could remain undetected for an extended period, which could potentially result in significant harm to the Company’s IT systems, as well as unauthorized access to, or acquisition of, the information stored on and/or transmitted by the Company’s IT systems.
Additionally, transitional climate risks, such as changing customer behaviors and changing dynamics in raw materials and utility markets, could lead to lost revenue due to 24 inability to meet changing customer requirements, increasing costs associated with product adjustments to meet changing customer preferences, increasing costs of inputs and raw materials, and increasing cost of utilities.
Additionally, transitional climate risks, such as changing customer behaviors and changing dynamics in raw materials and utility markets, could lead to lost revenue due to the inability to meet changing customer requirements, increasing costs associated with product adjustments to meet changing customer preferences, increasing costs of inputs and raw materials, and increasing cost of utilities.
LivaNova is, therefore, exposed to the risk that its employees, independent contractors, principal investigators, consultants, vendors, independent sales agents, and distributors may engage in fraudulent or other illegal activity in violation of these laws and LivaNova’s Code of Ethics & Business Conduct.
LivaNova is, therefore, exposed to the risk that its employees, independent contractors, principal investigators, consultants, vendors, independent sales agents, and distributors may engage in fraudulent or other illegal activity in violation of these laws and LivaNova’s Code of Conduct.
This activity could cause or avoid an increase or a decrease in the market price of LivaNova’s ordinary shares, the 2025 Notes, or the 2029 Notes at that time. LivaNova is subject to counterparty risk with respect to the 2025 Capped Calls and 2029 Capped Calls.
This activity could cause or avoid an increase or a decrease in the market price of LivaNova’s ordinary shares or the 2029 Notes at that time. LivaNova is subject to counterparty risk with respect to the 2029 Capped Calls.
Similarly, periodic changes to reimbursement methodologies could have an adverse impact on LivaNova’s business. Adoption of some or all of such healthcare policy and reimbursement proposals could have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial position.
Similarly, periodic changes to reimbursement methodologies could have an adverse impact on LivaNova’s business. Adoption of some or all of such healthcare policies and reimbursement proposals could have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial position.
In addition, upon a default by an Option Counterparty, LivaNova may suffer adverse tax consequences and may, on a net basis, have to pay more cash than the Company currently anticipates to settle exchanges of the 2025 Notes, and to pay more cash or suffer more dilution than the Company currently anticipates with respect to its ordinary shares upon conversions of the 2029 Notes, the effect of which would likely not be compensated for by the Company.
In addition, upon a default by an Option Counterparty, LivaNova may suffer adverse tax consequences and may, on a net basis, have to pay more cash or suffer more dilution than the Company currently anticipates with respect to its ordinary shares upon conversions of the 2029 Notes, the effect of which would likely not be compensated for by the Company.
In addition, there is also some uncertainty as to whether the UK courts would recognize or enforce judgments of U.S. courts obtained against LivaNova or any of its directors or officers. Changes in tax laws or exposure to additional income tax liabilities could have a material impact on LivaNova’s results of operations and financial condition.
In addition, there is also some uncertainty as to whether the UK courts would recognize or enforce judgments of U.S. courts obtained against LivaNova or any of its directors or officers. Changes in tax laws or exposure to additional income tax liabilities could have a material adverse effect on LivaNova’s results of operations and financial condition.
LivaNova’s ability to make payments (including interest, principal upon maturity, and payments to satisfy exchanges for cash or conversions) in respect of and/or to refinance LivaNova’s outstanding Notes or other indebtedness (including any indebtedness under LivaNova’s revolving credit facility or term facilities) depends on the Company’s future performance, which is subject to economic, financial, competitive, and other factors beyond its control.
LivaNova’s ability to make payments (including interest, principal upon maturity, and payments to satisfy conversions) in respect of and/or to refinance LivaNova’s outstanding notes or other indebtedness (including any indebtedness under LivaNova’s revolving credit facility or term facilities) depends on the Company’s future performance, which is subject to economic, financial, competitive, and other factors beyond its control.
Violations of these regulations are punishable by civil and criminal penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts, and revocations or restriction of licenses, as well as criminal fines and imprisonment.
Violations of these regulations are punishable by civil and criminal penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts, and revocations or restrictions of licenses, as well as criminal fines and imprisonment.
The ability of LivaNova’s customers to obtain appropriate reimbursement for products and services from third-party payers is critical because it affects which products customers purchase and the prices they are willing to pay.
The ability of LivaNova’s customers to obtain and/or maintain appropriate reimbursement for products and services from third-party payers is critical because it affects which products customers purchase and the prices they are willing to pay.
The Company collects, stores, and handles personnel and patient data, including sensitive patient health information, which may present material obligations and risks to LivaNova’s business, including significantly expanded compliance burdens, costs, and enforcement risks.
The Company collects, stores, and handles personal and patient data, including sensitive patient health information, which may present material obligations and risks to LivaNova’s business, including significantly expanded compliance burdens, costs, and enforcement risks.
LivaNova is subject to heightened scrutiny on issues relating to sustainability, including environmental laws and regulations, and the risk of environmental liabilities, violations, and litigation in multiple jurisdictions, any of which could have a material impact on LivaNova’s reputation, business, results of operations, cash flows, financial condition, and liquidity.
LivaNova is subject to heightened scrutiny on issues relating to sustainability, including environmental and sustainability laws and regulations, and the risk of environmental liabilities, violations, and litigation in multiple jurisdictions, any of which could have a material adverse effect on LivaNova’s reputation, business, results of operations, cash flows, financial condition, and liquidity.
Component failures, manufacturing defects, software errors, design flaws or inadequate disclosure of product-related risks or product or use-related information, or physician misuse with respect to these or other products the Company manufactures or sells could result in an unsafe condition for, injury to, or death of a patient.
Component failures, manufacturing defects, software errors, design flaws, or inadequate disclosure of product-related risks or product or use-related information, or healthcare professional misuse with respect to these or other products the Company manufactures or sells, could result in an unsafe condition for, injury to, or death of a patient.
It is LivaNova’s understanding that the Option Counterparties, or their respective affiliates, in connection with establishing their initial hedges of the 2025 Capped Calls and/or 2029 Capped Calls, purchased LivaNova’s ordinary shares and/or entered into various derivative transactions with respect to LivaNova’s ordinary shares concurrently with or shortly after the pricing of the 2025 Notes and/or 2029 Notes, as applicable.
It is LivaNova’s understanding that the Option Counterparties, or their respective affiliates, in connection with establishing their initial hedges of the 2029 Capped Calls, purchased LivaNova’s ordinary shares and/or entered into various derivative transactions with respect to LivaNova’s ordinary shares concurrently with or shortly after the pricing of the 2029 Notes.
The Option Counterparties or their respective affiliates may modify these initial hedge positions by entering into or unwinding various transactions with respect to LivaNova’s ordinary shares and/or purchasing or selling its ordinary shares or other of LivaNova’s securities in secondary market transactions prior to the maturity of the 2025 Notes and/or 2029 Notes, as applicable (and are likely to do so during any observation period related to an exchange of the 2025 Notes or conversion of the 2029 Notes, as applicable, or upon a repurchase or redemption of the 2025 Notes or the 2029 Notes, as applicable, by LivaNova, if LivaNova unwinds a corresponding portion of the 2025 Capped Calls or 2029 Capped Calls, as applicable).
The Option Counterparties or their respective affiliates may modify these initial hedge positions by entering into or unwinding various transactions with respect to LivaNova’s ordinary shares and/or purchasing or selling its ordinary shares or other of LivaNova’s securities in secondary market transactions prior to the maturity of the 2029 Notes (and are likely to do so during any observation period related to a conversion of the 2029 Notes or upon a repurchase or redemption of the 2029 Notes by LivaNova, if LivaNova unwinds a corresponding portion of the 2029 Capped Calls).
Cybersecurity threats are constantly expanding and evolving, becoming increasingly sophisticated and complex, increasing the difficulty of detecting and defending against them and maintaining effective security measures and protocols.
Cybersecurity threats are constantly expanding and evolving and becoming more sophisticated and complex, increasing the difficulty of detecting and defending against them and maintaining effective security measures and protocols.
Physicians assist LivaNova as researchers, marketing consultants, product consultants, inventors, and public speakers, and LivaNova relies on these professionals to provide the Company with considerable knowledge and experience.
Healthcare professionals assist LivaNova as researchers, marketing consultants, product consultants, inventors, and public speakers, and LivaNova relies on these professionals to provide the Company with considerable knowledge and experience.
LivaNova is increasingly dependent on its information technology systems and those of third parties to operate its business, and certain products of the Company include integrated software and information technology. Such dependencies have been exacerbated by remote work practices. LivaNova relies on information technology systems to collect and process customer orders, manage product manufacturing and shipping, and support regulatory compliance.
LivaNova is increasingly dependent on its IT systems and those of third parties to operate its business, and certain products of the Company include integrated software and IT. Such dependencies have been exacerbated by remote work practices. LivaNova relies on IT systems to process customer orders, manage product manufacturing and shipping, and support regulatory compliance.
Additionally, artificial intelligence and machine learning may be used for certain cybersecurity incidents, improving or expanding the existing capabilities of threat actors in manners the Company cannot predict at this time, resulting in greater risk of cybersecurity incidents.
Additionally, AI and machine learning may be used for certain cybersecurity incidents, improving or expanding the existing capabilities of threat actors in manners the Company cannot predict at this time, resulting in greater risk of cybersecurity incidents.
If the Company is unable to protect LivaNova’s intellectual property in those countries, it could have a material adverse effect on LivaNova’s reputation, business, results of operations, cash flows, and financial condition. Inadequate funding for U.S. federal government agencies and government shutdowns could negatively affect LivaNova’s business, results of operations, cash flows, and financial condition.
If the Company is unable to protect LivaNova’s intellectual property in China or other countries, it could have a material adverse effect on LivaNova’s reputation, business, results of operations, cash flows, and financial condition. Inadequate funding for U.S. federal government agencies and government shutdowns could negatively affect LivaNova’s business, results of operations, cash flows, and financial condition.
FDA-approved devices 25 reimbursable by federal healthcare programs, LivaNova is subject to the Physician Payments Sunshine Act and similar U.S. state laws, which require the Company to annually report certain payments and other transfers of value LivaNova makes to U.S.-licensed physicians, U.S. teaching hospitals, or other covered recipients.
FDA-approved devices reimbursable by federal healthcare programs, LivaNova is subject to the Physician Payments Sunshine Act and similar U.S. state laws, which require the Company to annually report certain payments and other 24 transfers of value LivaNova makes to U.S.-licensed healthcare professionals, U.S. teaching hospitals, or other covered recipients.
If LivaNova is unable to generate enough cash flow to make payments on the 2025 Notes, the 2029 Notes, or other indebtedness when due, the Company may be required to adopt one or more alternatives, such as selling assets or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.
If LivaNova is unable to generate enough cash flow to make payments on indebtedness when due, the Company may be required to adopt one or more alternatives, such as selling assets or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.
If an Option Counterparty becomes subject to insolvency proceedings, LivaNova will become an unsecured creditor in those proceedings, with a claim equal to the Company’s exposure to that Option Counterparty at that time under the 2025 Capped Calls and/or 2029 Capped Calls.
If an Option Counterparty becomes subject to insolvency proceedings, LivaNova will become an unsecured creditor in those proceedings, with a claim equal to the Company’s exposure to that Option Counterparty at that time under the 2029 Capped Calls.
If a regulatory authority were to disagree with LivaNova’s determinations, it could require the Company to report those actions as recalls.
If a regulatory authority were to disagree with LivaNova’s determinations, it could require the Company to report those actions as a recall.
LivaNova’s global operations and business interactions with healthcare systems, providers, and patients around the world expose the Company to risks associated with public health crises, including epidemics and pandemics such as COVID-19. LivaNova continues to monitor the potential effects of future health epidemics on the Company’s business and operations.
LivaNova’s global operations and business interactions with healthcare systems, providers, and patients around the world expose the Company to risks associated with public health crises, including epidemics and pandemics. LivaNova continues to monitor the potential effects of future health epidemics on the Company’s business and operations.
If holders exchange 2025 Notes during any future period in which such exchange is permitted, LivaNova would be required to settle its exchange obligation through the payment of cash, and if holders convert 2029 Notes during any future period in which such conversion is permitted, LivaNova would be required to pay cash up to the aggregate principal amount of the 2029 Notes to be converted and may elect to settle the remainder of the conversion obligation in cash, shares, or a combination of the two.
If holders convert 2029 Notes during any future period in which such conversion is permitted, LivaNova would be required to pay cash up to the aggregate principal amount of the 2029 Notes to be converted and may elect to settle the remainder of the conversion obligation in cash, shares, or a combination of the two.
LivaNova’s effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. LivaNova is also subject to ongoing tax audits in various non-U.S. jurisdictions.
LivaNova’s effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws such as Pillar Two and OBBBA or their interpretation. LivaNova is also subject to ongoing tax audits in various non-U.S. jurisdictions.
Additionally, the holders of the 2025 Notes and 2029 Notes have the right to require LivaNova to repurchase the aforementioned notes upon the occurrence of a fundamental change (as defined in the respective indentures governing the Notes) at a repurchase price equal to 100% of the principal amount of the 2025 Notes and 2029 Notes to be repurchased, plus accrued and unpaid interest, if any. 29 Any failure by LivaNova to make required payments in respect of its indebtedness (after any applicable grace period) would constitute an event of default in respect of such indebtedness.
Additionally, the holders of the 2029 Notes have the right to require LivaNova to repurchase the notes upon the occurrence of a fundamental change (as defined in the indenture governing the 2029 Notes) at a repurchase price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest, if any. 28 Any failure by LivaNova to make required payments in respect of its indebtedness (after any applicable grace period) would constitute an event of default in respect of such indebtedness.
Programs and systems may require frequent updates or may no longer be supported, which may impact the ability of the Company’s information technology systems to operate properly or without disruption.
Programs and systems may require frequent updates or may no longer be supported, which may impact the ability of the Company’s IT systems to operate properly or without disruption.
If the conditional exchange feature of the 2025 Notes is triggered, holders are entitled to exchange the 2025 Notes at any time during specified periods, at their option, and if the conditional conversion feature of the 2029 Notes is triggered, holders are entitled to convert the 2029 Notes at any time during specified periods, at their option.
If the conditional conversion feature of the 2029 Notes is triggered, holders are entitled to convert the 2029 Notes at any time during specified periods, at their option.
The 2025 Capped Calls and 2029 Capped Calls are expected generally to compensate (through the payment of cash to LivaNova) for potential dilution to LivaNova’s ordinary shares and to offset cash payments due upon exchange of the 2025 Notes or conversion of the 2029 Notes, as applicable, in excess of the principal amount thereof in the event that the market price per ordinary share of LivaNova at the time of exchange of the 2025 Notes or conversion of the 2029 Notes, respectively, is greater than the strike price under the 2025 Capped Calls or 2029 Capped Calls, respectively, with such offset subject to a cap based on the respective cap prices of the 2025 Capped Calls and 2029 Capped Calls.
The 2029 Capped Calls are expected generally to compensate (through the payment of cash to LivaNova) for potential dilution to LivaNova’s ordinary shares and to offset cash payments due upon conversion of the 2029 Notes in excess of the principal amount thereof in the event that the market price per ordinary share of LivaNova at the time of conversion of the 2029 Notes is greater than the strike price under the 2029 Capped Calls with such offset subject to a cap based on the cap prices of the 2029 Capped Calls.
LivaNova will be required to settle any exchanges of the 2025 Notes entirely in cash, while upon any conversions of the 2029 Notes, LivaNova will be required to pay cash up to the aggregate principal amount of the 2029 Notes to be converted and pay or deliver, as the case may be, cash, LivaNova’s ordinary shares, or a combination of cash and LivaNova’s ordinary shares, at LivaNova’s election, in respect of the remainder, if any.
Upon any conversions of the 2029 Notes, LivaNova will be required to pay cash up to the aggregate principal amount of the 2029 Notes to be converted and pay or deliver, as the case may be, cash, LivaNova’s ordinary shares, or a combination of cash and LivaNova’s ordinary shares, at LivaNova’s election, in respect of the remainder, if any.
The costs to the Company to mitigate cybersecurity incidents or other system or data compromises could be significant, and, while the Company has implemented security measures to protect its information technology systems and data, its efforts to address potential information security vulnerabilities may not be successful.
The costs of mitigating cybersecurity incidents or other system or data compromises could be significant, and while the Company has implemented security measures to protect its IT systems and data, its efforts to address potential information security vulnerabilities may not be successful.
These risks, many of which LivaNova has experienced first-hand, include higher danger of terrorist activity, war, or civil unrest; greater exposure to inflation; volatility in freight and labor costs; fluctuating interest and exchange rates; increased exposure to cyber-attacks and supply chain challenges; trade protection measures such as tariffs, evolving sanctions, and import and export licensing requirements; changing energy prices; local product changes and compliance requirements; longer payment terms and collection times for receivables in local jurisdictions; difficulty enforcing agreements; greater exposure to creditworthiness of customers and inconsistent local law enforcement of obligations; ensuring compliance with anti-bribery laws; differing labor regulations and workforce instability; selling by way of distributors and agents; and political and economic instability.
These risks, many of which LivaNova has experienced first-hand, include higher danger of terrorist activity, war, or civil unrest; greater exposure to inflation; volatility in freight and labor costs; fluctuating interest and exchange rates; increased exposure to cyber-attacks and supply chain challenges; changes to trade agreements and relationships between countries, including the uncertainty of global tariffs, trade restrictions, evolving sanctions, and adverse changes in import and export licensing requirements; changing energy prices; local product changes and compliance requirements; longer payment terms and collection times for receivables in local jurisdictions; difficulty enforcing agreements; greater exposure to creditworthiness of customers and inconsistent local law enforcement of obligations; compliance with anti-bribery laws; differing labor regulations and workforce instability; selling by way of distributors and agents; and political and economic instability.
Additional risks and uncertainties not presently known to the Company or that the Company currently believes to be immaterial may also adversely affect its business. Risks Relating to the Company’s Business and Operations LivaNova is subject to the risks of conducting business internationally.
Additional risks and uncertainties not presently known to the Company or that the Company currently believes to be immaterial may also adversely affect its business. Risks Relating to the Company’s Business and Operations LivaNova is subject to the risks of conducting business globally. LivaNova is subject to risks that are inherent in conducting business globally.
However, to the extent LivaNova or its contract sterilizers are unable to sterilize LivaNova’s products, whether due to regulatory, legislative, or other constraints, including on the use of EtO, LivaNova may be unable to transition to alternative internal or external resources or methods in a timely or cost-effective manner or at all, which could have a material impact on LivaNova’s results of operations and financial condition.
While LivaNova is not in violation of any current local or federal regulations, to the extent LivaNova or its contract sterilizers are unable to sterilize LivaNova’s products, whether due to regulatory, legislative, or other constraints, including on the use of EtO, LivaNova may be unable to transition to alternative internal or external resources or methods in a timely or cost-effective manner or at all, which could have a material impact on LivaNova’s results of operations and financial condition.
The 2025 Capped Calls and 2029 Capped Calls described below and elsewhere in this Report are also accounted for as derivative instruments. The valuation of the exchange feature of the 2025 Notes and 2025 Capped Calls utilizes significant observable and unobservable market inputs, including stock price, stock price volatility, risk-free interest rate, and time to expiration of the 2025 Notes.
The 2029 Capped Calls described below and elsewhere in this Report are also accounted for as derivative instruments. The valuation of the conversion feature of the 2029 Notes and 2029 Capped Calls utilizes significant observable and unobservable market inputs, including share price, expected volatility, risk-free interest rate, expected dividend yield, and time to expiration of the 2029 Notes.
The success of any investment, alliance, acquisition, or divestiture may be affected by various factors, including LivaNova’s ability to properly assess, finance, value, and obtain relevant approvals for a potential business opportunity or to successfully integrate any business LivaNova may acquire.
The success of any investment, alliance, acquisition, or divestiture may be affected by several factors, including the Company’s ability to identify and then properly assess and value the potential business opportunity and obtain relevant approvals for a potential business opportunity or to successfully integrate any business LivaNova may acquire.
Although the Company has generally been able to maintain necessary supplies of raw materials and components, supplier shortages and interruptions of certain components, such as PC-coated PMP fiber used in the manufacture of oxygenators, have caused, and may in the future cause, meaningful disruptions to LivaNova’s product manufacturing supply chain.
Although the Company has generally been able to maintain necessary supplies of raw materials and components, supplier shortages and interruptions of certain components, such as the fiber used in the manufacture of oxygenators and rare earth magnets used in the manufacture of heart-lung machines, have caused, and may in the future cause, meaningful disruptions to LivaNova’s product manufacturing supply chain.
While the spread of COVID-19 has stabilized, the Company cannot guarantee that a future outbreak of this or any other widespread epidemic will not occur, which could have the effect of decreasing demand and/or increasing volatility in demand for LivaNova’s products, which could have a material impact on LivaNova’s business, results of operations, cash flows, financial condition, and liquidity.
The Company cannot guarantee that a future outbreak of a widespread epidemic will not occur, which could have the effect of decreasing demand and/or increasing volatility in demand for LivaNova’s products, which could have a material impact on LivaNova’s business, results of operations, cash flows, financial condition, and liquidity.
In connection with the pricing of the 2025 Notes and 2029 Notes, LivaNova entered into the 2025 Capped Calls and 2029 Capped Calls, respectively.
In connection with the pricing of the 2029 Notes, LivaNova entered into the 2029 Capped Calls.
The change in input values at the current period-end compared to the previous period-end may result in a material change in the respective valuations and the gain or loss resulting from the exchange feature of the 2025 Notes and 2025 Capped Calls and the conversion feature of the 2029 Notes and 2029 Capped Calls, as applicable, and may not completely offset each other.
The change in input values at the current period-end compared to the previous period-end may result in a material change in the valuation and the gain or loss resulting from the conversion feature of the 29 2029 Notes and 2029 Capped Calls, and may not completely offset each other.
Commitments and Contingencies” in LivaNova’s consolidated financial statements under the section entitled “Product Liability Litigation.” Moreover, if LivaNova does not adequately address problems associated with its devices, the Company may face additional regulatory enforcement actions, including FDA warning letters, product seizures, injunctions, administrative penalties, or civil or criminal fines, any of which could have a material adverse effect on LivaNova’s business.
Commitments and Contingencies” in LivaNova’s consolidated financial statements under the section entitled “Product Liability Litigation.” Moreover, if LivaNova does not adequately address problems associated with its devices, the Company may face additional regulatory enforcement actions, including FDA warning letters, product seizures, injunctions, administrative penalties, or civil or criminal fines, any of which could have a material adverse effect on LivaNova’s business. 22 Failure to comply with U.S. and international product-related regulatory requirements could have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial condition.
For example, LivaNova’s Saluggia campus contains hazardous substances as a result of nuclear installations built in 1960 under previous ownership, and the Italian government has stated that LivaNova will eventually be responsible for dismantling the nuclear installation on Company property, as well as delivering the aforementioned waste to a national repository.
For example, LivaNova’s Saluggia campus contains hazardous substances as a result of operations under previous ownership, and the Italian government has stated that LivaNova will eventually be responsible for dismantling the nuclear installation and delivering the aforementioned waste to a national repository.
The costs of complying with the requirements of U.S. federal and state and international laws and regulations pertaining to the privacy and security of personal information, including health-related information, and the potential liability associated with failure to comply with such laws and regulations, could materially adversely affect LivaNova’s business and results of operations.
The costs of complying with the requirements of U.S. federal and state and international laws and regulations pertaining to the privacy and security of personal information, including health-related information, and the potential liability associated with failure to comply with such laws and regulations, could have a material adverse effect on LivaNova’s business and results of operations.
Failure to comply with anti-bribery laws could materially adversely affect LivaNova’s business and result in civil and/or criminal sanctions. LivaNova’s operations are subject to anti-corruption laws, including the UK Bribery Act, the FCPA, and other anti-corruption laws that apply in countries where the Company does business.
Failure to comply with anti-bribery laws could have a material adverse effect on LivaNova’s business and result in civil and/or criminal sanctions. LivaNova’s operations are subject to anti-corruption laws, including the UK Bribery Act, the FCPA, and other anti-corruption laws that apply in countries where the Company does business.
Any material change in tax laws, regulations, or policies, or their interpretation and enforcement, including with respect to the OECD’s Pillar Two global minimum tax rules applicable to multinational groups with global revenue over €750 million, could result in a higher effective tax rate and have a material impact on LivaNova’s consolidated statements of income (loss) or financial condition.
Any material changes in tax laws, regulations, or policies, or their interpretation and enforcement, including with respect to the OECD’s Pillar Two global minimum tax rules applicable to multinational groups with global revenue over €750 million, could result in a higher effective tax rate and have a material impact on LivaNova’s consolidated statements of income (loss) or financial condition. 30 LivaNova continues to monitor the adoption of Pillar Two by the taxing jurisdictions in which it operates.
For example, holders are entitled to exchange 2025 Notes or convert 2029 Notes during a given calendar quarter if the closing price of LivaNova’s ordinary shares for at least 20 trading days (whether or not consecutive) during the last 30 consecutive trading days of the immediately preceding calendar quarter was greater than or equal to a set dollar amount ($79.27 per share in the case of the 2025 Notes and $90.22 in the case of the 2029 Notes, subject to adjustment).
For example, holders are entitled to convert 2029 Notes during a given calendar quarter if the closing price of LivaNova’s ordinary shares for at least 20 trading days (whether or not consecutive) during the last 30 consecutive trading days of the immediately preceding calendar quarter was greater than or equal to $90.22, subject to adjustment.
Any of these factors could harm LivaNova’s business, results of operations, cash flows, and financial condition. In addition, if LivaNova incurs additional indebtedness under the revolving credit facility or term facilities, the risks related to LivaNova’s business and its ability to repay the Company’s indebtedness, including under the 2025 Notes and 2029 Notes, would increase.
Any of these factors could harm LivaNova’s business, results of operations, cash flows, and financial condition. In addition, if LivaNova incurs additional indebtedness under the revolving credit facility or term facilities, the risks related to LivaNova’s business and its ability to repay the Company’s indebtedness would increase. For additional information, refer to “Part II, Item 7.
Risks Related to LivaNova’s Indebtedness LivaNova may not have sufficient cash flow from its business operations to pay when due, or be able to raise the funds necessary to pay when due, amounts owed with respect to the 2025 Notes and 2029 Notes and/or any amounts owed under the Company’s revolving credit facility and term facilities, which could adversely affect LivaNova’s business and results of operations.
Risks Related to LivaNova’s Indebtedness LivaNova may not have sufficient cash flow from its business operations to pay when due, or be able to raise the funds necessary to pay when due, amounts owed with respect to LivaNova’s indebtedness, which could adversely affect LivaNova’s business and results of operations.
In addition, certain transfers of LivaNova’s shares to depositories or into clearance services would be subject to UK stamp duty or SDRT at a rate of 1.5% of the consideration paid for the transfer, or 1.5% of the market value of the shares if there is no consideration. 32 The transferee generally pays the UK stamp duty or SDRT, although the position may be different in the case of a transfer to a depository or into a clearance service.
In addition, certain transfers of LivaNova’s shares to depositories or into clearance services would be subject to UK stamp duty or SDRT at a rate of 1.5% of the consideration paid for the transfer, or 1.5% of the market value of the shares if there is no consideration.
Additionally, LivaNova’s patents, trade secrets, or other agreements may not prevent competitors from independently developing or selling similar products and services and may not adequately deter misappropriation or improper use of the Company’s technology. Further, pending patent applications may not result in patents being issued to LivaNova.
Additionally, LivaNova’s patents, trade secrets, or other agreements may not prevent competitors from independently developing or selling similar products and services and may not adequately deter misappropriation or improper use of the Company’s technology.
Any such issues, whether in relation to clinical trials, approvals, clearances, or reimbursement, could have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial condition. The impact of pending or existing climate change may have a material impact to LivaNova’s future operations.
Any such issues, whether in relation to clinical trials, approvals, clearances, or reimbursement, could have a material adverse effect on LivaNova’s business, results of operations, cash flows, and financial condition. Global healthcare policy changes may have a material adverse effect on LivaNova’s business, results of operations, financial condition, and cash flows.
The effective interest rate and related interest expense reported in LivaNova’s consolidated financial statement of operations is significantly greater than the stated interest rate of the 2025 Notes and 2029 Notes and may result in volatility to the Company’s reported financial results, which could adversely affect the price at which LivaNova’s ordinary shares trade.
Any such cash payments upon conversion could adversely affect the Company’s liquidity. The effective interest rate of the 2029 Notes is significantly greater than the stated interest rate, which may result in volatility to the Company’s reported interest expense and financial results and could adversely affect the price at which LivaNova’s ordinary shares trade.
LivaNova’s business, results of operations, cash flows, financial condition, and liquidity could be materially adversely affected by a negative decision in the case of SNIA and could be adversely affected by an increase in anticipated costs relating to disposal of hazardous waste in Saluggia.
LivaNova’s business, results of operations, cash flows, financial condition, and liquidity have been negatively impacted by the Italian Supreme Court in the case of SNIA and could be adversely affected by an increase in anticipated costs relating to the disposal of hazardous waste in Saluggia.
It is unclear as to how any such future changes could impact LivaNova. Furthermore, if LivaNova’s sustainability initiatives fail to satisfy investors, customers, or other stakeholders, the Company’s reputation, its ability to sell products and services to customers, and its attractiveness as an investment, business partner, or acquirer could be negatively impacted.
If LivaNova is unable to achieve these targets or if LivaNova’s sustainability initiatives fail to satisfy investors, customers, or other stakeholders, the Company’s reputation, its ability to sell products and services to customers, and its attractiveness as an investment, business partner, or acquirer could be negatively impacted.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs previously disclosed, in November 2023, the Company initiated its cyber response protocol in response to a cybersecurity incident that resulted in a disruption of portions of its information technology systems. Promptly after detecting the issue and per LivaNova’s cyber response protocol, the Company began an investigation with assistance from external cybersecurity experts and coordinated with law enforcement.
Biggest changeAs previously disclosed, in November 2023, the Company initiated its cyber response protocol in response to a cybersecurity incident that resulted in a disruption of portions of its IT systems.
The Company receives threat intelligence from industry peers, government agencies, industry-specific information sharing and analysis centers, and cybersecurity associations. The Company relies heavily on its supply chain to deliver products and services to its customers, and a cybersecurity incident at a supplier, subcontractor, or service provider could materially adversely impact the Company.
The Company receives threat intelligence from industry peers, government agencies, industry-specific information sharing and analysis centers, and cybersecurity associations. The Company relies heavily on its supply chain to deliver products and services to its customers, and a cybersecurity incident at a supplier, subcontractor, or service provider could adversely impact the Company.
The Company assesses third-party cybersecurity controls through its information security program and includes security and privacy addendums to its contracts where applicable. Historically, risks from cybersecurity threats have not materially affected the Company’s business strategy, results of operations, or financial condition.
The Company assesses third-party cybersecurity controls through its cybersecurity program and includes security and privacy addendums to its contracts where applicable. Historically, risks from cybersecurity threats have not materially affected the Company’s business strategy, results of operations, or financial condition.
The CISO provides key security metrics to the Audit Committee on a quarterly basis, and directly to the chair of the Audit Committee on a case-by-case basis, as needed, at any time during the quarter.
The CISO provides key security updates and metrics to the Audit Committee on a quarterly basis, and directly to the chair of the Audit Committee on a case-by-case basis, as needed, at any time during the quarter.
The Audit Committee reviews these reports, which include, among other things, external events impacting the Company, cybersecurity incidents, user training statistics, and evaluations of user readiness to address cybersecurity incidents. Notwithstanding the Company’s approach to cybersecurity, the Company may not be successful in preventing or mitigating future cybersecurity incidents that could have a material adverse effect on the Company.
The Audit Committee reviews these reports, which include, among other things, external events impacting the Company, cybersecurity incidents, and evaluations of user readiness to address cybersecurity incidents. Notwithstanding the Company’s approach to cybersecurity, the Company may not be successful in preventing or mitigating future cybersecurity incidents that could have a material adverse effect on the Company.
ITEM 1C. CYBERSECURITY Cyber Risk Management and Strategy LivaNova’s enterprise risk management process consists of risk identification, evaluation, control and monitoring, and documentation. The LivaNova Board oversees risk management within the Company, and the legal and compliance teams work in tandem to provide the framework to identify and reduce risks that may materially impact the Company’s business.
ITEM 1C. CYBERSECURITY Cyber Risk Management and Strategy LivaNova’s enterprise risk management process consists of risk identification, evaluation, control and monitoring, and documentation. LivaNova’s Board of Directors oversees risk management within the Company, and the legal and compliance teams work in tandem to provide the framework to identify and reduce risks that may materially impact the Company’s business.
As part of LivaNova’s cyber resiliency strategy and in an effort to mitigate potential cybersecurity risks, the Company employs various measures, including employee training, systems monitoring, testing and maintenance of protective systems, and contingency plans.
As part of LivaNova’s cyber resiliency strategy and in an effort to mitigate potential cybersecurity risks, the Company employs various measures, including employee security awareness training, systems monitoring, testing and maintenance of protective systems, and contingency plans.
LivaNova regularly evaluates itself for appropriate business continuity and disaster recovery planning, with test scenarios that include simulations and penetration tests. In addition, LivaNova routinely engages with third-party service providers to conduct evaluations of its security controls, whether through penetration testing, security assessments, or consulting on best practices to address new challenges.
LivaNova regularly evaluates itself for appropriate business continuity and disaster recovery planning, with test scenarios that include simulations and penetration tests. In addition, LivaNova routinely engages with third-party service providers to conduct evaluations of its security controls, whether through penetration testing, security assessments, or consulting on best practices to address evolving cyber threats.
As part of the enterprise risk management process, regular inquiries and discussions are held with, among others, the CISO, Chief Information Officer, Chief Privacy Officer, and their respective teams to review the cybersecurity risk landscape.
As part of the enterprise risk management process, regular inquiries and discussions are held with, among others, the 31 CISO, Chief Information Officer, Vice President of Digital Health, Chief Privacy Officer, and their respective teams to review the cybersecurity risk landscape.
As part of his duties, the CISO provides relevant information in connection with regular enterprise risk assessments. The CISO also manages the Company’s ISMS program.
As part of his duties, the CISO provides relevant information in connection with regular enterprise risk assessments. The CISO also manages the Company’s cyber risk and assurance program.
Controls and Procedures.” Cyber Governance On a quarterly basis, the CISO presents key security metrics to the Company’s IT Advisory Council, which is composed of functional leaders across the Company and is responsible for IT governance oversight in the Company.
Controls and Procedures.” Cyber Governance On a regular basis, the CISO presents key security updates and metrics to the Company’s Executive Team as well as the IT Advisory Council, which is composed of functional leaders across the Company and is responsible for IT governance oversight in the Company.
Commitments and Contingencies” in LivaNova’s consolidated financial statements in this Report. Additionally, for a description of the Company’s evaluation of its disclosure controls and procedures, management’s report on internal control over financial reporting, and changes in internal control over financial reporting, see “Part II, Item 9A.
For a description of the Company’s evaluation of its disclosure controls and procedures, management’s report on internal control over financial reporting, and changes in internal control over financial reporting, see “Part II, Item 9A.
LivaNova’s CISO has a Master of Science in Accountancy with a specialization in risk management, in addition to over 15 years of experience in the IT Risk Advisory sector. The CISO leads the Company’s information security team, identifies cybersecurity threats, and implements countermeasures in the cybersecurity realm, considering both internal operations and the external landscape.
LivaNova’s CISO has a Master of Science in Cybersecurity with a specialization in technical security and incident response, in addition to over 15 years of experience in the cybersecurity and IT space. The CISO leads the Company’s cybersecurity team, identifies cybersecurity threats, and implements countermeasures in the cybersecurity realm, considering both internal operations and the external landscape.
In addition, the CISO manages a structured cybersecurity incident response program where periodic simulation exercises are performed to prepare and train the Company’s cybersecurity incident responders. The Company deploys security tools to help bolster its defense detection capabilities, such as endpoint detection and response tools, security information and event management tools, and 24/7 monitoring.
In addition, the CISO manages a structured cybersecurity incident response program where periodic simulation exercises are performed to prepare and train the Company’s cybersecurity incident responders. The Company deploys multiple security processes, tools, and security architectures to help bolster its defense detection capabilities.
On an annual basis, the CISO reviews the information security program achievements and reports with the Company’s IS Executive Committee, which is a cross-functional group composed of the CEO, the CFO, the CLO, and other executive leaders 34 of the Company.
On an annual basis, the CISO reviews cybersecurity program achievements and corrective actions with the Company’s Executive Team, which is a cross-functional group composed of the CEO, the CFO, the CLO, or their designees, and other executive leaders of the Company.
As codified in its charter, the Audit Committee is responsible for reviewing the processes by which cybersecurity risks are managed and reporting any issues that arise out of such reviews to the Board.
During fiscal year 2025, the CISO reported to the CLO; as of January 2026, the role reports to the CFO. As codified in its charter, the Audit Committee is responsible for reviewing the processes by which cybersecurity risks are managed and reporting any issues that arise out of such reviews to the Company’s Board of Directors.
Guided by the principles of various industry-leading standards, such as the NIST cybersecurity framework and ISO 27001, the objective of the ISMS program is to continue to strengthen LivaNova’s cyber resiliency in connection with its information technology systems.
Guided by the principles of various industry-leading standards, such as the National Institute of Standards and Technology cybersecurity framework and ISO 27001, the objective of LivaNova’s cyber risk and assurance program is to continue to strengthen LivaNova’s cybersecurity resilience.
The incident has been contained, and the Company’s mitigation efforts are considered complete, but any future cybersecurity event has the potential to materially affect the Company’s results of operations, cash flows, and financial condition. For further information, please refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 11.
The incident was contained, and the Company’s mitigation efforts are considered complete, but any future cybersecurity incident has the potential to materially affect the Company’s results of operations, cash flows, and financial condition.
Removed
The Company implemented remediation measures to mitigate the impact of the incident. The Company also assessed the nature and scope of the affected data, analyzed its statutory notification obligations, and notified affected individuals and regulators as required by applicable law.
Removed
Specifically, this IT Advisory Council is responsible for establishing program strategies in alignment with LivaNova’s business objectives, as well as providing guidance on the implementation of appropriate and necessary security controls in alignment with the Company’s Information Security Policy.
Removed
Among other things, the IT Advisory Council reviews summaries of information security incidents, audit findings, or other test reports, and ensures appropriate root-cause analyses are performed and corrective actions are taken. It also reviews year-over-year goals, security objectives, and priorities for the Company’s information security program.
Removed
Among other things, the IS Executive Committee approves the Company’s Information Security Policy and the allocation of budget and resources to information security program initiatives, performs the annual management review of the information security program, and reviews corrective actions to improve the program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES LivaNova’s principal executive office is located in the UK and is leased by the Company. LivaNova’s business segments are headquartered in the U.S. for Neuromodulation and in Italy for Cardiopulmonary. LivaNova has manufacturing and research facilities located in the U.S., Italy, Germany, Australia, and Brazil. The Company’s manufacturing and research facilities are approximately 1.0 million square feet.
Biggest changeITEM 2. PROPERTIES LivaNova’s principal executive office is located in the UK and is leased by the Company. LivaNova’s business segments are headquartered in the U.S. for Neuromodulation and in Italy for Cardiopulmonary. LivaNova has manufacturing facilities located in the U.S., Italy, Germany, Australia, and Brazil, and research facilities in the U.S. and Italy.
LivaNova also maintains 31 primary administrative offices in 21 countries. Most of these locations are leased. LivaNova is using substantially all of the Company’s currently available productive space to develop, manufacture, and market LivaNova’s products. LivaNova believes that all of its facilities are in good operating condition, suitable for their respective uses, and adequate for current needs.
LivaNova also maintains 28 primary administrative offices in 20 countries. Most of these locations are leased. LivaNova is using substantially all of the Company’s currently available productive space to develop, manufacture, and market LivaNova’s products. LivaNova believes that all of its facilities are in good operating condition, suitable for their respective uses, and adequate for current needs.
The manufacturing and research facilities located in the U.S., Italy, and Brazil are owned by LivaNova. 45% of LivaNova’s manufacturing and research facilities by square feet are located within the U.S., 58% of LivaNova’s manufacturing and research facilities by square feet are owned by the Company, and the balance is leased.
The manufacturing and research facilities located in the U.S., Italy, and Brazil are owned by LivaNova. 44% of LivaNova’s manufacturing and research facilities by square feet are located within the U.S., 56% of LivaNova’s manufacturing and research facilities by square feet are owned by the Company, and the balance is leased.
Added
The Company’s 32 manufacturing and research facilities total approximately 1.0 million square feet.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The following graph compares LivaNova’s five-year cumulative total return with the five-year cumulative total return of the companies on the S&P 500 Index and the companies on the S&P Healthcare Equipment Select Industry Index. This graph assumes the investment of $100 on December 31, 2019 and the reinvestment of all dividends since that date.
Biggest changeShare Performance Graph The graph below matches LivaNova’s cumulative five-year total shareholder return on ordinary shares with the total returns of the S&P 500 index and the S&P 500 Health Care Equipment index.
The information under the caption “Stock Performance Graph” above is not deemed to be “filed” as part of the Report and is not subject to the liability provisions of Section 18 of the Exchange Act.
The information under the caption “Share Performance Graph” above is not deemed to be “filed” as part of the Report and is not subject to the liability provisions of Section 18 of the Exchange Act.
A substantially greater number of holders of LivaNova’s ordinary shares are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policy LivaNova currently has no intention to declare and pay dividends. Issuer Purchases of Securities None.
A substantially greater number of holders of LivaNova’s ordinary shares are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policy LivaNova currently has no intention of declaring and paying dividends. Issuer Purchases of Securities None.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES LivaNova’s ordinary shares are quoted on Nasdaq under the symbol “LIVN.” As of February 18, 2025, according to data provided by LivaNova’s transfer agent, there were 20 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES LivaNova’s ordinary shares are quoted on Nasdaq under the symbol “LIVN.” As of February 18, 2026, according to data provided by LivaNova’s transfer agent, there were 14 shareholders of record.
Added
The graph tracks the performance of a $100 investment in LivaNova’s ordinary shares and in each index (with the reinvestment of all dividends) from December 31, 2020 to December 31, 2025. The share price performance included in this graph is not necessarily indicative of future share price performance.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeCertain percentages presented in this discussion and analysis are calculated from the underlying whole-dollar amounts and therefore may not tie to percentages recalculated from the rounded numbers used for disclosure purposes. The following discussion, analysis, and comparisons generally focus on the operating results for 2024, 2023, and 2022.
Biggest changeCertain percentages presented in this discussion and analysis are calculated from the underlying whole-dollar amounts and therefore may not tie to percentages recalculated from the rounded numbers used for disclosure purposes. The following discussion, analysis, and comparisons generally focus on the operating results for 2025, 2024, and 2023.
ITEM 6. [RESERVED] 36 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, which appear elsewhere in this Report.
ITEM 6. [RESERVED] 34 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, which appear elsewhere in this Report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness” in this Report. 38 Results of Operations The following table presents LivaNova’s annual consolidated results of operations (in thousands): 2024 2023 2022 Net revenue $ 1,253,437 $ 1,153,545 $ 1,021,805 Cost of sales 382,564 382,295 314,577 Gross profit 870,873 771,250 707,228 Operating expenses: Selling, general, and administrative 526,265 518,129 469,243 Research and development 182,514 193,817 155,805 Impairment of goodwill — — 129,396 Impairment of long-lived assets — 89,974 — Other operating expenses 33,043 37,828 29,536 Operating income (loss) 129,051 (68,498) (76,752) Interest expense (63,070) (58,853) (48,250) Loss on debt extinguishment (25,482) — — Foreign exchange and other income/(expense) 47,811 46,125 49,860 Income (loss) before tax 88,310 (81,226) (75,142) Income tax expense (benefit) 25,058 (98,876) 11,051 Loss from equity method investments (18) (104) (53) Net income (loss) $ 63,234 $ 17,546 $ (86,246) Net Revenue The following table presents net revenue by operating segment and geographic region (in thousands, except for percentages): % Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Cardiopulmonary United States $ 242,463 $ 202,358 $ 171,632 19.8 % 17.9 % Europe (1) 168,024 157,414 128,545 6.7 % 22.5 % Rest of World (1) 273,025 244,340 214,021 11.7 % 14.2 % 683,512 604,112 514,198 13.1 % 17.5 % Neuromodulation United States 441,022 407,493 374,542 8.2 % 8.8 % Europe (1) 54,899 57,435 50,291 (4.4) % 14.2 % Rest of World (1) 58,302 54,782 52,160 6.4 % 5.0 % 554,223 519,710 476,993 6.6 % 9.0 % Other Revenue (2) 15,702 29,723 30,614 (47.2) % (2.9) % Totals United States 695,083 635,044 571,558 9.5 % 11.1 % Europe (1) 220,032 214,792 178,802 2.4 % 20.1 % Rest of World (1) 338,322 303,709 271,445 11.4 % 11.9 % $ 1,253,437 $ 1,153,545 $ 1,021,805 8.7 % 12.9 % 39 (1) “Europe” includes the UK, Germany, France, Italy, the Netherlands, Spain, Belgium, Poland, Sweden, Switzerland, Austria, Norway, Portugal, Finland, and Denmark.
Biggest changeNet Revenue The following table presents net revenue by operating segment and geographic region (in thousands, except for percentages): % Change 2025 2024 2023 2025 vs 2024 2024 vs 2023 Cardiopulmonary United States $ 275,859 $ 242,463 $ 202,358 13.8 % 19.8 % Europe (1) 201,044 168,024 157,414 19.7 % 6.7 % Rest of World (1) 308,482 273,025 244,340 13.0 % 11.7 % 785,385 683,512 604,112 14.9 % 13.1 % Neuromodulation United States 463,602 441,022 407,493 5.1 % 8.2 % Europe (1) 65,023 54,899 57,435 18.4 % (4.4) % Rest of World (1) 64,187 58,302 54,782 10.1 % 6.4 % 592,812 554,223 519,710 7.0 % 6.6 % Other Revenue (2) 9,856 15,702 29,723 (37.2) % (47.2) % Totals United States 739,573 695,083 635,044 6.4 % 9.5 % Europe (1) 269,176 220,032 214,792 22.3 % 2.4 % Rest of World (1) 379,304 338,322 303,709 12.1 % 11.4 % $ 1,388,053 $ 1,253,437 $ 1,153,545 10.7 % 8.7 % (1) “Europe” includes the UK, Germany, France, Italy, the Netherlands, Spain, Belgium, Poland, Sweden, Switzerland, Austria, Norway, Portugal, Finland, and Denmark.
Concentration of Credit Risk LivaNova’s trade accounts receivable represents potential concentrations of credit risk. This risk is limited due to the large number of customers and their dispersion across a number of geographic areas, as well as LivaNova’s efforts to control its exposure to credit risk by monitoring its receivables and the use of credit approvals and credit limits.
Credit Risk LivaNova’s trade accounts receivable represents potential concentrations of credit risk. This risk is limited due to the large number of customers and their dispersion across a number of geographic areas, as well as LivaNova’s efforts to control its exposure to credit risk by monitoring its receivables and the use of credit approvals and credit limits.
New Accounting Pronouncements For a discussion of new accounting standards and disclosure requirements, please refer to “Note 19. New Accounting Pronouncements” in LivaNova’s consolidated financial statements included in this Report.
New Accounting Pronouncements For a discussion of new accounting standards and disclosure requirements, refer to “Note 19. New Accounting Pronouncements” in LivaNova’s consolidated financial statements included in this Report.
LivaNova concluded that the fair value of its Cardiopulmonary and Neuromodulation reporting units exceeded the carrying value of the respective reporting units and were, therefore, not impaired on the October 1, 2024 test date. Income Taxes LivaNova is a UK corporation and operates through the Company’s various subsidiaries in a number of countries throughout the world.
LivaNova concluded that the fair value of its Cardiopulmonary and Neuromodulation reporting units exceeded the carrying value of the respective reporting units and were, therefore, not impaired on the October 1, 2025 test date. Income Taxes LivaNova is a UK corporation and operates through the Company’s various subsidiaries in a number of countries throughout the world.
The capped call derivatives are measured at fair value using the Black-Scholes model utilizing observable and unobservable market data, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield, as applicable.
The capped call derivatives are measured at fair value using the Black-Scholes model utilizing observable and unobservable market data, including share price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield, as applicable.
The Company uses historical volatility and implied volatility from options traded to determine expected stock price volatility, which is an unobservable input that is significant to the valuations. For additional information, please refer to “Note 8. Fair Value Measurements” and “Note 9. Financing Arrangements” in LivaNova’s consolidated financial statements included in this Report.
The Company uses historical volatility and implied volatility from options traded to determine expected share price volatility, which is an unobservable input that is significant to the valuations. For additional information, refer to “Note 8. Fair Value Measurements” and “Note 9. Financing Arrangements” in LivaNova’s consolidated financial statements included in this Report.
The following are areas requiring management’s judgment that LivaNova considers critical: Goodwill and Long-Lived Assets LivaNova allocates the purchase price consideration of an acquisition to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including property, plant, and equipment; inventories; accounts receivable; long-term debt; and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill.
The following are areas requiring management’s judgment that LivaNova considers critical: Goodwill and Long-Lived Assets LivaNova allocates the purchase price consideration of an acquisition to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including PP&E; inventories; accounts receivable; long-term debt; and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill.
Critical Accounting Estimates LivaNova has adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP. The Company’s most significant accounting policies are disclosed in “Note 2. Basis of Presentation, Use of Accounting Estimates, and Significant Accounting Policies” and “Note 3. Revenue Recognition” in LivaNova’s consolidated financial statements included in this Report.
Income Taxes” in LivaNova’s consolidated financial statements included in this Report. Critical Accounting Estimates LivaNova has adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP. The Company’s most significant accounting policies are disclosed in “Note 2. Basis of Presentation, Use of Accounting Estimates, and Significant Accounting Policies” and “Note 3.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations located in LivaNova’s Annual Report on Form 10-K for the year ended December 31, 2023 , filed on February 29, 2024, for reference to discussion of 2022, the earliest of the three fiscal years presented.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations located in LivaNova’s Annual Report on Form 10-K for the year ended December 31, 2024 , filed on February 25, 2025, for reference to the discussion of 2023, the earliest of the three fiscal years presented.
LivaNova’s actual results may differ from these estimates. LivaNova considers estimates to be critical if the Company is required to make assumptions about material matters that are uncertain at the time of estimation, or if materially different estimates could have been made or it is reasonably likely that the accounting estimate may change from period to period.
LivaNova considers estimates to be critical if the Company is required to make assumptions about material matters that are uncertain at the time of estimation, or if materially different estimates could have been made or it is reasonably likely that the accounting estimate may change from period to period.
LivaNova files federal and local tax returns in many jurisdictions throughout the world and is subject to income tax examinations for its fiscal year 2019 and subsequent years, with certain exceptions.
LivaNova files national and local tax returns in many jurisdictions throughout the world and is subject to income tax examinations for its fiscal year 2020 and subsequent years, with certain exceptions.
The embedded derivatives are measured at fair value using a binomial lattice model and estimated discounted cash flows that utilize observable and unobservable market data.
The embedded derivative is measured at fair value using a binomial lattice model and estimated discounted cash flows that utilize observable and unobservable market data.
Cardiopulmonary LivaNova’s Cardiopulmonary segment is engaged in the design, development, manufacture, marketing, and sale of cardiopulmonary products, including HLMs, oxygenators, autotransfusion systems, perfusion tubing systems, cannulae, and other related accessories.
Cardiopulmonary LivaNova’s Cardiopulmonary segment is engaged in the design, development, manufacture, marketing, and sale of cardiopulmonary products, including HLMs, oxygenators, autotransfusion systems, perfusion tubing systems, cannulae, and other related accessories, and provides services related to certain of these products.
The Company has accrued $15.2 million, of which $14.1 million is unrecognized tax benefit, as of December 31, 2024. LivaNova periodically assesses the recoverability of its deferred tax assets by considering whether it is more likely than not that some or all of the actual benefit of those assets will be realized.
The Company has accrued $13.4 million, of which $10.2 million is unrecognized tax benefit, as of December 31, 2025. LivaNova periodically assesses the recoverability of its deferred tax assets by considering whether it is more likely than not that some or all of the actual benefit of those assets will be realized.
Market Risk LivaNova is exposed to certain market risks as part of its ongoing business operations, including risks from foreign currency exchange rates, interest rate risks, and concentration of procurement suppliers that could adversely affect LivaNova’s consolidated financial position, results of operations, or cash flows.
Market and Credit Risk LivaNova is exposed to certain market risks as part of its ongoing business operations, including risks from foreign currency exchange and interest rates, as well as credit risk, that could adversely affect LivaNova’s consolidated results of operations, cash flows, and financial position.
For further discussion on legal and regulatory developments, refer to “Note 11. Commitments and Contingencies” in LivaNova’s consolidated financial statements in this Report. The incident has been contained, and the Company’s mitigation efforts are considered complete.
The incident was contained, and the Company’s mitigation efforts are considered complete. For further discussion on related legal and regulatory matters, refer to “Note 11. Commitments and Contingencies” in LivaNova’s consolidated financial statements in this Report.
LivaNova’s principal Neuromodulation product, the VNS Therapy System, consists of an implantable pulse generator and connective lead that stimulates the vagus nerve, surgical equipment to assist with the implant procedure, and equipment and instruction manuals that enable a treating physician to set parameters for a patient’s pulse generator.
The VNS Therapy System consists of an implantable pulse generator and connective lead that stimulates the left vagus nerve, surgical equipment to assist with the implant procedure, and equipment and instruction manuals that enable a treating healthcare professional to set parameters for a patient’s pulse generator.
Geographic and Segment Information” in LivaNova’s consolidated financial statements included in this Report. Cardiopulmonary Cardiopulmonary net revenue for the year ended December 31, 2024 increased 13.1% to $683.5 million compared to the year ended December 31, 2023, with growth across all regions, driven by strong consumables demand and Essenz Perfusion System sales.
Geographic and Segment Information” in LivaNova’s consolidated financial statements included in this Report. Cardiopulmonary Cardiopulmonary net revenue for the year ended December 31, 2025 increased 14.9% to $785.4 million compared to the year ended December 31, 2024, with growth across all regions, driven by strong consumables demand and Essenz Perfusion System sales.
LivaNova’s ordinary shares are listed for trading on the Nasdaq under the symbol “LIVN.” Macroeconomic Environment The current macroeconomic environment, including FX volatility, inflationary pressures, geopolitical instability, and supply chain challenges, has impacted and may continue to impact LivaNova’s business, results of operations, cash flows, and financial condition. Furthermore, LivaNova continues to experience logistical, capacity, and labor constraints.
LivaNova’s ordinary shares are listed for trading on the Nasdaq under the symbol “LIVN.” Macroeconomic Environment and Global Supply Chain The current macroeconomic environment, including FX volatility, inflationary pressures, and geopolitical instability, and global supply chain challenges have impacted and may continue to impact LivaNova’s business, results of operations, cash flows, and financial condition.
Cardiopulmonary segment income for the year ended December 31, 2024 was $76.8 million, compared to $26.4 million for the year ended December 31, 2023. The increase in segment income was primarily due to an increase in net revenue, as described above, as well as a decrease in the litigation provision related to LivaNova’s 3T Heater-Cooler device of $14.8 million.
Cardiopulmonary segment income for the year ended December 31, 2025 was $108.3 million, compared to $76.8 million for the year ended December 31, 2024. The increase in segment income was primarily due to an increase in net revenue, as described above, and a decrease in the litigation provision related to LivaNova’s 3T Heater-Cooler device of $15.3 million.
LivaNova elected not to renew the interest rate swaps. Interest expense associated with the Initial Term Facility is principally offset by holding proceeds from the Term Facilities in a depository account, which earns a floating rate of interest.
Interest expense associated with the Term Facilities is principally offset by holding proceeds from the Term Facilities in a depository account, which earns a floating rate of interest.
Interest Expense LivaNova incurred interest expense of $63.1 million for the year ended December 31, 2024, compared to $58.9 million for the year ended December 31, 2023.
Interest Expense LivaNova incurred interest expense of $49.3 million for the year ended December 31, 2025, compared to $63.1 million for the year ended December 31, 2024.
The total incurred direct costs primarily included external cybersecurity expert and legal fees, system restoration costs, and a $1.2 million provision related to the class action settlement, and do not include business interruption losses. The Company expects to incur additional costs related to this incident in the future. For further discussion on legal and regulatory developments, refer to “Note 11.
The total direct costs incurred primarily include external cybersecurity expert and legal fees, system restoration costs, and $1.2 million related to a class action settlement, and do not include business interruption losses. The Company may incur additional costs related to this incident in the future.
R&D expenses as a percentage of net revenue were 14.6% for the year ended December 31, 2024, a decrease of 2.2 percentage points compared to the year ended December 31, 2023.
R&D expenses as a percentage of net revenue were 13.4% for the year ended December 31, 2025, representing a decrease of 1.2 percentage points compared to the year ended December 31, 2024.
Foreign exchange and other income/(expense) was income of $47.8 million and $46.1 million for the years ended December 31, 2024 and 2023, respectively. For further details, refer to “Note 18. Supplemental Financial Information” in LivaNova’s consolidated financial statements included in this Report. Income Taxes LivaNova PLC is resident in the UK.
Foreign exchange and other income/(expense) was an expense of $2.7 million and income of $47.8 million for the years ended December 31, 2025 and 2024, respectively. For additional information, refer to “Note 18. Supplemental Financial Information” in LivaNova’s consolidated financial statements included in this Report. Income Tax Expense (Benefit) LivaNova PLC is resident in the UK.
Neuromodulation segment income for the year ended December 31, 2024 was $195.3 million compared to $153.4 million for the year ended December 31, 2023.
Neuromodulation segment income for the year ended December 31, 2025 was $215.5 million compared to $195.3 million for the year ended December 31, 2024.
Through December 31, 2024, LivaNova incurred direct costs totaling $11.6 million in connection with this cybersecurity incident, including $9.0 million and $2.6 million during the twelve months ended December 31, 2024 and 2023, respectively.
Through December 31, 2025, LivaNova incurred direct costs totaling $13.1 million in connection with this cybersecurity incident, including $1.5 million, $9.0 million and $2.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.
LivaNova performed a quantitative goodwill impairment assessment for its Cardiopulmonary and Neuromodulation reporting units as of October 1, 2024, including sensitivity analyses of key assumptions. The assessment was conducted using management’s current estimate of future cash flows.
Estimating the fair value of goodwill and indefinite-lived intangible assets requires various assumptions, including discount rates. LivaNova performed a quantitative goodwill impairment assessment for its Cardiopulmonary and Neuromodulation reporting units as of October 1, 2025, including sensitivity analyses of key assumptions. The assessment was conducted using management’s current estimate of future cash flows.
To prepare LivaNova’s consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of the Company’s assets and liabilities, the disclosure of contingent liabilities as of the date of its consolidated financial statements, and the reported amounts of its revenue and expenses during the reporting period.
GAAP, management makes estimates and assumptions that may affect the reported amounts of the Company’s assets and liabilities, the disclosure of contingent liabilities as of the date of its consolidated financial statements, and the reported amounts of its revenue and expenses during the reporting period. LivaNova’s actual results may differ from these estimates.
Cost of Sales and Expenses The following table presents costs and expenses as a percentage of net revenue: 2024 2023 2022 Cost of sales 30.5 % 33.1 % 30.8 % Selling, general, and administrative 42.0 % 44.9 % 45.9 % Research and development 14.6 % 16.8 % 15.2 % Impairment of goodwill — % — % 12.7 % Impairment of long-lived assets — % 7.8 % — % Other operating expenses 2.6 % 3.3 % 2.9 % Cost of Sales Cost of sales consists primarily of direct labor, allocated manufacturing overhead, and the acquisition of raw materials and components.
Cost of Sales and Expenses The following table presents costs and expenses as a percentage of net revenue: 2025 2024 2023 Cost of sales 32.3 % 31.9 % 34.5 % Selling, general, and administrative 39.5 % 40.6 % 43.6 % Research and development 13.4 % 14.6 % 16.8 % Impairment of long-lived assets — % — % 7.8 % Other operating expense 0.4 % 2.6 % 3.3 % Cost of Sales Cost of sales consists primarily of direct labor, allocated manufacturing overhead, and the acquisition of raw materials and components.
Commitments and Contingencies: Product Liability Litigation” in the consolidated financial statements included in this Report. Neuromodulation LivaNova’s Neuromodulation segment is engaged in the design, development, manufacture, marketing, and sale of devices that deliver neuromodulation therapy for treating DRE and DTD.
Neuromodulation LivaNova’s Neuromodulation segment is engaged in the design, development, manufacture, marketing, and sale of devices that deliver neuromodulation therapy for treating DRE and DTD.
Indefinite-lived intangible assets other than goodwill are composed of IPR&D assets acquired in acquisitions. 42 Each reporting period, LivaNova determines whether there are circumstances that warrant an evaluation of the carrying amounts of LivaNova’s property and equipment and its finite-lived intangible assets to determine whether such carrying amounts continue to be recoverable.
Each reporting period, LivaNova determines whether there are circumstances that warrant an evaluation of the carrying amounts of LivaNova’s PP&E and its finite-lived intangible assets to determine whether such carrying amounts continue to be recoverable.
Although LivaNova does not currently foresee a concentrated credit risk associated with these receivables, repayment is dependent on the financial stability of these industry sectors and the respective countries’ national economies and healthcare systems. Factors Affecting Future Operating Results and Share Price The material factors affecting LivaNova’s future operating results and share prices are disclosed in “Part I, Item 1A.
Although LivaNova does not currently foresee a concentrated credit risk associated with these receivables, repayment is dependent on the financial stability of these industry sectors and the respective countries’ national economies and healthcare systems.
In particular, the Cardiopulmonary segment includes the Essenz Perfusion System, the Company’s next-generation HLM with an embedded patient monitor for tailored patient care strategies and sensing technology for data-driven decision-making during CPB procedures. Information on the Cardiopulmonary segment that could potentially impact LivaNova’s consolidated financial statements and related disclosures is incorporated by reference to “Note 11.
In particular, the Cardiopulmonary segment includes the Essenz Perfusion System, the Company’s next-generation HLM with an embedded patient monitor for tailored patient care strategies and sensing technology for data-driven decision-making during CPB procedures.
These increases in segment income were partially offset by increases in sales and marketing and R&D expenses. Neuromodulation Neuromodulation net revenue for the year ended December 31, 2024 increased 6.6% to $554.2 million compared to the year ended December 31, 2023, with growth in the Rest of World and U.S. regions, partially offset by a decline in Europe.
These increases in segment income were partially offset by increases in sales and marketing and R&D expenses. Neuromodulation Neuromodulation net revenue for the year ended December 31, 2025 increased 7.0% to $592.8 million compared to the year ended December 31, 2024, with growth across all regions.
LivaNova estimates the useful lives of its finite-lived intangible assets, which requires significant management judgment, and evaluates its intangible assets each reporting period to determine whether events and circumstances indicate a different useful life.
LivaNova estimates the useful lives of its finite-lived intangible assets, which requires significant management judgment, and evaluates its intangible assets each reporting period to determine whether events and circumstances indicate a different useful life. 40 LivaNova evaluates the goodwill and indefinite-lived intangible assets for impairment annually on October 1st and whenever other facts and circumstances indicate that the carrying amounts of goodwill and other indefinite-lived intangible assets may not be recoverable.
The increase was primarily due to increases in average borrowings and the amortization of debt issuance costs. 41 Loss on Debt Extinguishment In connection with the 2025 Notes Repurchase Transaction, during the year ended December 31, 2024, LivaNova incurred a loss on debt extinguishment of $25.5 million. For additional information, refer to “Note 9.
In connection with the 2025 Notes Repurchase Transaction, for the year ended December 31, 2024, LivaNova incurred a loss on debt extinguishment of $25.5 million. For additional information, refer to “Note 9. Financing Arrangements” in the consolidated financial statements in this Report.
The lead does not need to be removed to replace a generator with a depleted battery. The Neuromodulation segment is also engaged in the development and management of clinical testing for LivaNova’s aura6000 System for treating OSA. The aura6000 device stimulates the hypoglossal nerve, which engages specific tongue and palate muscles to open the airway while a patient sleeps.
The lead does not need to be removed to replace a generator with a depleted battery. The Neuromodulation segment also includes the development and clinical testing of LivaNova’s aura6000 System for treating OSA.
The decrease was primarily due to a decrease in sales and marketing expenses driven by the winding down of the ACS segment, as described above, as well as favorable volume leverage. Research and Development Expense R&D expenses consist of product design and development efforts, clinical study programs, and regulatory activities.
The decrease was primarily due to favorable fixed cost leverage. 38 Research and Development Expense R&D expenses consist of product design and development efforts, clinical study programs, and regulatory activities.
The Company manages these risks through regular operating and financing activities and, at certain times, derivative financial instruments. Foreign Currency Exchange Rate Risk Due to the global nature of LivaNova’s operations, the Company is exposed to FX fluctuations.
The Company manages these risks through regular operating and financing activities and derivative financial instruments. FX Risk Due to the global nature of LivaNova’s operations, the Company is exposed to FX fluctuations. LivaNova uses freestanding derivative forward contracts to offset exposure to the variability of the value associated with intercompany loans denominated in a foreign currency.
The following table presents segment income (1) (in thousands, except for percentages): % Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Cardiopulmonary $ 76,848 $ 26,407 $ 17,106 191.0 % 54.4 % Neuromodulation 195,309 153,384 172,775 27.3 % (11.2) % $ 272,157 $ 179,791 $ 189,881 51.4 % (5.3) % (1) For a reconciliation of segment income to consolidated income (loss) before tax, refer to “Note 17.
(2) “Other Revenue” includes revenue from the Company’s former ACS reportable segment, as well as rental and site services income not allocated to segments. 37 The following table presents segment income (1) (in thousands, except for percentages): % Change 2025 2024 2023 2025 vs 2024 2024 vs 2023 Cardiopulmonary $ 108,301 $ 76,848 $ 26,407 40.9 % 191.0 % Neuromodulation 215,474 195,309 153,384 10.3 % 27.3 % $ 323,775 $ 272,157 $ 179,791 19.0 % 51.4 % (1) For a reconciliation of segment income to consolidated (loss) income before income tax, refer to “Note 17.
Financing Arrangements” in the consolidated financial statements in this Report. 45 Cash Flows The following table presents net cash, cash equivalents, and restricted cash provided by (used in) operating, investing, and financing activities and the net increase in the balance of cash, cash equivalents, and restricted cash (in thousands): 2024 2023 2022 Operating activities $ 183,038 $ 74,914 $ 69,921 Investing activities (48,160) (40,331) (38,414) Financing activities 18,551 21,484 280,130 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (7,745) 6,187 (4,011) Net increase in cash, cash equivalents, and restricted cash $ 145,684 $ 62,254 $ 307,626 Operating Activities Cash provided by operating activities for the year ended December 31, 2024 increased $108.1 million, compared to the prior year, primarily due to (i) an increase in net income adjusted for non-cash items of $72.2 million, (ii) an increase in customer collections, (iii) reduced cash outflows for inventories, and (iv) a decrease in 3T Heater-Cooler litigation settlement payments of $36.2 million.
Cash Flows The following table presents net cash, cash equivalents, and restricted cash provided by (used in) operating, investing, and financing activities and the net (decrease) increase in the balance of cash, cash equivalents, and restricted cash (in thousands): 2025 2024 2023 Operating activities $ 254,340 $ 183,038 $ 74,914 Investing activities (72,912) (48,160) (40,331) Financing activities (285,660) 18,551 21,484 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 16,228 (7,745) 6,187 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (88,004) $ 145,684 $ 62,254 Operating Activities Cash provided by operating activities for the year ended December 31, 2025 increased $71.3 million, compared to the prior year, primarily due to higher sales and lower payments related to LivaNova’s 3T Heater-Cooler device litigation provision, restructuring activities, and interest expense, partially offset by an increase in cash outflows for inventories, income taxes, and professional services.
For additional information, please refer to “Note 15. Income Taxes” in LivaNova’s consolidated financial statements included in this Report. Legal and Other Contingencies Provisions for legal contingencies are recognized when the Company determines it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment.
Legal and Other Contingencies Provisions for legal contingencies are recognized when the Company determines it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Estimates are used in assessing the likelihood of a loss being incurred and when determining a reasonable estimate of the loss for each claim.
Investing Activities Cash used in investing activities during the year ended December 31, 2024 increased $7.8 million, compared to the prior year, primarily due to an increase in purchases of property, plant, and equipment of $12.1 million primarily related to purchases and development of internal-use software, partially offset by a decrease in purchases of equity investments of $5.4 million.
Investing Activities Cash used in investing activities for the year ended December 31, 2025 increased $24.8 million, compared to the prior year, primarily due to an increase in purchases of property, plant, and equipment of $33.9 million, principally related to purchases and development of internal-use software, partially offset by proceeds of $6.5 million from the sale of LivaNova’s investment in Ceribell, Inc. and proceeds of $7.2 million primarily from the sale of land to support manufacturing capacity expansion in other locations.
As of December 31, 2024, LivaNova’s total debt of $627.6 million was 47.5% of its total equity of $1,320.3 million. As of December 31, 2023, LivaNova’s total debt of $586.7 million was 45.9% of its total equity of $1,277.6 million.
As of December 31, 2025, LivaNova’s total debt of $376.7 million was 31.4% of its total equity of $1,200.0 million. As of December 31, 2024, LivaNova’s total debt of $627.6 million was 47.5% of its total equity of $1,320.3 million. During the year ended December 31, 2025, LivaNova repaid $280.9 million in long-term debt.
The increase in segment income was primarily due to an increase in net revenue, as described above, as well as a net decrease in R&D expense, primarily associated with the winding down of the Company’s heart failure program of $24.8 million.
The increase in segment income was primarily due to an increase in net revenue, as described above, as well as a net decrease in R&D expense primarily resulting from an $18.9 million reduction in costs associated with the Company’s DTD program, partially offset by an $11.2 million increase in R&D expense associated with the development of LivaNova’s aura6000 System for treating OSA.
Customer relationships consist of relationships with hospitals and surgeons in the countries where LivaNova operates.
Customer relationships consist of relationships with hospitals and surgeons in the countries where LivaNova operates. Indefinite-lived intangible assets other than goodwill are composed of IPR&D assets acquired in acquisitions.
The Company’s insurance coverage may be insufficient to cover all costs and expenses related to this cybersecurity incident or may be unavailable to cover all costs and expenses related to this cybersecurity incident. 37 Business Segments LivaNova identifies operating segments based on how it manages, evaluates, and internally reports its business activities to allocate resources, develop, and execute its strategy and assess performance.
Business Segments LivaNova identifies operating segments based on how it manages, evaluates, and internally reports its business activities to allocate resources, develop, and execute its strategy and assess performance. LivaNova has two reportable segments: Cardiopulmonary and Neuromodulation.
Description of the Business LivaNova PLC is a market-leading global medical technology company. The Company designs, develops, manufactures, markets, and sells products and therapies that are consistent with LivaNova’s mission to provide hope for patients and their families through medical technologies, delivering life-changing solutions in select neurological and cardiac conditions.
Description of the Business LivaNova PLC is a market-leading global medical technology company. The Company designs, develops, manufactures, markets, and sells products, therapies, and services that are consistent with LivaNova’s mission to “create ingenious medical solutions that ignite patient turnarounds.” LivaNova is a public limited company organized under the laws of England and Wales and is headquartered in London, England.
However, to date, the Company’s supply of raw materials and the production and distribution of finished products have not been materially affected. The Company continues to respond to such challenges, and while LivaNova has business continuity plans in place, the impact of the ongoing challenges the Company is navigating, along with their potential escalation, may adversely affect its business.
While LivaNova has business continuity plans in place, the impact of the ongoing challenges the Company is navigating, along with their potential escalation, may adversely affect its business. In addition, the impact that the imposition of tariffs and changes to global trade policies could have on the Company’s results of operations is uncertain.
SG&A expenses as a percentage of net revenue were 42.0% for the year ended December 31, 2024, a decrease of 2.9 percentage points compared to the year ended December 31, 2023.
Selling, General, and Administrative Expense SG&A expenses are comprised of sales, marketing, general, and administrative activities. SG&A expenses as a percentage of net revenue were 39.5% for the year ended December 31, 2025, representing a decrease of 1.1 percentage points compared to the year ended December 31, 2024.
LivaNova’s operating and working capital obligations primarily consist of liabilities arising from the normal course of business, including inventory supply contracts, the future settlement of derivative instruments, and future payments of operating leases, as well as contingent consideration arrangements resulting from acquisitions and obligations associated with legal and other accruals. 44 The following table presents selected financial information related to LivaNova’s liquidity (in thousands): December 31, 2024 2023 Available Short-term Liquidity Cash and cash equivalents $ 428,858 $ 266,504 Availability under the 2021 First Lien Credit Agreement 225,000 125,000 $ 653,858 $ 391,504 Working Capital Current assets $ 1,127,186 $ 988,158 Current liabilities 392,125 334,983 $ 735,061 $ 653,175 Debt Obligations Current portion of long-term debt $ 77,339 $ 17,484 Short-term unsecured borrowing arrangements 665 627 Current debt obligations 78,004 18,111 Long-term debt obligations 549,624 568,543 $ 627,628 $ 586,654 Debt and Capital LivaNova’s capital structure consists of debt and equity.
The following table presents selected financial information related to LivaNova’s liquidity (in thousands): December 31, 2025 2024 Available Short-term Liquidity Cash and cash equivalents $ 635,552 $ 428,858 Availability under the 2021 First Lien Credit Agreement 225,000 225,000 $ 860,552 $ 653,858 Working Capital Current assets $ 1,101,613 $ 1,127,186 Current liabilities 808,072 392,125 $ 293,541 $ 735,061 Debt Obligations Current portion of long-term debt $ 30,878 $ 77,339 Short-term unsecured borrowing arrangements 594 665 Current debt obligations 31,472 78,004 Long-term debt obligations 345,185 549,624 $ 376,657 $ 627,628 42 Debt and Capital LivaNova’s capital structure consists of debt and equity.
The fair value of contingent consideration is determined based on the consideration expected to be transferred based on estimated future cash flows of the acquired business, discounted to present value in accordance with accepted valuation methodologies. For additional information, please refer to “Note 8. Fair Value Measurements” in LivaNova’s consolidated financial statements included in this Report.
Contingent consideration liabilities are measured at fair value each reporting period, the determination of which requires significant judgments and estimates. The fair value of contingent consideration is determined based on the consideration expected to be transferred based on estimated future cash flows of the acquired business, discounted to present value in accordance with accepted valuation methodologies.
If interest rates associated with LivaNova’s variable-rate financing arrangements as of December 31, 2024 were to increase/(decrease) by 100 basis points, the effect on interest expense within LivaNova’s consolidated statements of income (loss) would be an increase/(decrease) of $3.2 million, respectively, offset by an increase/(decrease) in interest income from amounts held in variable-rate depository accounts.
As of December 31, 2025, a 100 basis point increase/(decrease) in the interest rates of LivaNova’s variable-rate depository accounts would increase/(decrease) interest income on the Company’s consolidated statements of income (loss) by $5.6 million.
Other operating expenses as a percentage of net revenue were 2.6% for the year ended December 31, 2024, a decrease of 0.7 percentage points compared to the year ended December 31, 2023.
Other Operating Expense Other operating expense consists of the provision for litigation involving LivaNova’s 3T Heater-Cooler device, the Saluggia site remediation provision, and restructuring expense. Other operating expense as a percentage of net revenue was 0.4% for the year ended December 31, 2025, a decrease of 2.2 percentage points compared to the year ended December 31, 2024.
Commitments and Contingencies” in LivaNova’s consolidated financial statements in this Report. LivaNova maintains insurance, including cyber insurance, which is subject to certain retentions and policy limitations that will likely limit the amount that the insurers may reimburse the Company.
LivaNova maintains insurance, including cyber insurance, which is subject to certain retentions and policy limitations that will likely limit the amount that the insurers may reimburse the Company. LivaNova has filed claims for insurance reimbursement of direct costs and business interruption losses and, as of December 31, 2025, the reimbursement process is substantially complete.
During 2024, LivaNova received $8.4 million, including $5.1 million in reimbursement of covered costs and $3.3 million in reimbursement of business interruption losses under the Company’s cyber insurance policy.
Through December 31, 2025, LivaNova has received $10.7 million of insurance reimbursements, including $6.8 million in reimbursement of direct costs and $3.9 million in reimbursement of business interruption losses. For the years ended December 31, 2025 and 2024, LivaNova received $1.7 million and $5.1 million, respectively, in reimbursement of direct costs.
The decrease was primarily due to a decrease in the amount recorded for the litigation provision related to LivaNova’s 3T Heater-Cooler device of $14.8 million and a decrease in the amount recorded for the Saluggia site decommissioning provision of $2.3 million.
The decrease was primarily due to a decrease in the amount recorded for the litigation provision related to LivaNova’s 3T Heater-Cooler device of $15.3 million, as well as a decrease in restructuring expense of $13.5 million. For additional information, refer to “Note 11. Commitments and Contingencies” and “Note 4. Restructuring” in the consolidated financial statements in this Report.
Estimates are used in assessing the likelihood of a loss being incurred and when determining a reasonable estimate of the loss for each claim. Final settlement 43 amounts may be materially different from the provision recorded. For additional information, please refer to “Note 11. Commitments and Contingencies” in LivaNova’s consolidated financial statements included in this Report.
Final settlement amounts may be materially different from the provision recorded. For additional information, refer to “Note 11. Commitments and Contingencies” in LivaNova’s consolidated financial statements included in this Report. Contingent Consideration Liabilities Contingent consideration liabilities result from acquisition agreements that include potential future payment of consideration that is contingent upon the achievement of performance milestones and/or sales-based earnouts.
Embedded and Capped Call Derivatives In June 2020 and March 2024, the Company issued the 2025 Notes and 2029 Notes, respectively, and entered into related capped call transactions. The 2025 Notes and 2029 Notes include embedded derivatives that are bifurcated from the 2025 Notes and 2029 Notes.
For additional information, refer to “Note 8. Fair Value Measurements” in LivaNova’s consolidated financial statements included in this Report. 41 Embedded and Capped Call Derivatives In March 2024, the Company issued the 2029 Notes and entered into related capped call transactions. The 2029 Notes include an embedded derivative that is bifurcated from the 2029 Notes.
The Company considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. LivaNova’s effective income tax rate was 28.4% and 121.7% for the years ended December 31, 2024 and 2023, respectively.
LivaNova’s effective income tax rate was (9.8%) and 28.4% for the years ended December 31, 2025 and 2024, respectively.
Cost of sales as a percentage of net revenue was 30.5% for the year ended December 31, 2024, a decrease of 2.6 percentage points compared to the year ended December 31, 2023.
Cost of sales as a percentage of net revenue was 32.3% for the year ended December 31, 2025, representing an increase of 0.4 percentage points compared to the year ended December 31, 2024. The increase was primarily due to unfavorable product mix, partially offset by a decrease in cost of sales from the winding down of the ACS segment.
Excluding Europe and the U.S., “Rest of World” includes all other countries where LivaNova operates. (2) “Other Revenue” includes revenue from the Company’s former ACS reportable segment, as discussed above, as well as rental and site services income not allocated to segments.
Excluding Europe and the U.S., “Rest of World” includes all other countries where LivaNova operates.
Promptly after detecting the issue, LivaNova began an investigation with assistance from external cybersecurity experts and coordinated with law enforcement. The Company implemented remediation measures to mitigate the impact of the incident. The Company also assessed the nature and scope of the affected data, analyzed its statutory notification obligations, and notified affected individuals and regulators as required by applicable law.
Cybersecurity Incident As previously disclosed, in November 2023, LivaNova detected a cybersecurity incident that resulted in a disruption of portions of the Company’s IT systems. As a result, the Company engaged external cybersecurity experts, coordinated with law enforcement, implemented remediation measures, and notified affected individuals and regulators as required by applicable law.
These data further support consideration of VNS Therapy for people who are not responding to ASMs and those unsuitable or unwilling to undergo surgery. Depression and Obstructive Sleep Apnea Discussions of Depression and Obstructive Sleep Apnea are incorporated by reference to the sections titled “Depression” and “Obstructive Sleep Apnea,” respectively, included within “Part I, Item 1.
DRE, DTD, and OSA Discussions of DRE, DTD, and OSA are incorporated by reference to the sections titled “DRE,” “DTD,” and “OSA,” respectively, included within “Part I, Item 1.
These decreases were partially offset by an increase in restructuring expense of $12.4 million resulting from the 2024 Restructuring Plan. For additional information, refer to “Note 4. Restructuring” and “Note 11. Commitments and Contingencies” in the consolidated financial statements in this Report.
As a result of the decision by the Italian Supreme Court, the Company recorded the SNIA environmental liability expense for the year ended December 31, 2025. For additional information, refer to “Note 11. Commitments and Contingencies” in the consolidated financial statements in this Report.
Financing Activities Cash provided by financing activities during the year ended December 31, 2024 decreased $2.9 million, compared to the prior year, primarily due to payment of the ALung contingent consideration arrangement of $13.8 million during the year ended December 31, 2024, partially offset by an increase in proceeds from net debt borrowings and repayments of $5.7 million.
Financing Activities Cash used in financing activities for the year ended December 31, 2025 increased $304.2 million, compared to the prior year, primarily resulting from repayments of long-term debt obligations in 2025, including an early repayment of $200 million on principal borrowings under the Term Facilities and the repayment in full of the 2025 Notes at maturity of $57.5 million.
On March 8, 2024, LivaNova and LivaNova USA entered into Incremental Facility Amendment No. 3, which provides for LivaNova USA to obtain revolving commitments in an aggregate principal amount of $225.0 million. For additional information, refer to “Note 9. Financing Arrangements” in the consolidated financial statements in this Report.
On January 8, 2026, LivaNova paid $97.7 million in an early repayment of the amount outstanding under the Term Facilities in full, along with accrued interest. For additional information on LivaNova’s debt obligations and Capped Call Transactions, refer to “Note 9. Financing Arrangements” and “Note 7. Derivatives and Risk Management” in the consolidated financial statements in this Report.
Removed
LivaNova is a public limited company organized under the laws of England and Wales and is headquartered in London, England.
Added
Furthermore, LivaNova continues to experience logistical, capacity, and labor constraints. However, to date, the Company’s supply of raw materials and the production and distribution of finished products have not been materially affected. The Company continues to respond to such challenges.
Removed
For further discussion on these macroeconomic pressures and potential implications, refer to “Item 1A. Risk Factors” of this Report. Cybersecurity Incident As previously disclosed, in November 2023, LivaNova detected a cybersecurity incident that resulted in a disruption of portions of the Company’s information technology systems.
Added
A significant number of LivaNova’s Cardiopulmonary products and component parts are sourced and produced outside of the U.S., including in Italy and Germany. Similarly, LivaNova manufactures its Neuromodulation products in the U.S., which are then often distributed internationally. For additional information, refer to “Item 1A. Risk Factors” in this Report.
Removed
LivaNova has filed claims for insurance reimbursement of covered costs and business interruption losses related to this incident and has submitted additional claims and supplemental requests for reimbursement as new costs have been incurred.
Added
For the years ended December 31, 2025 and 2024, LivaNova received $0.6 million and $3.3 million, respectively, in reimbursement of business interruption losses. LivaNova will submit additional claims for reimbursement if incremental costs 35 are incurred.
Removed
Prior to 2024, LivaNova operated through three segments: Cardiopulmonary, Neuromodulation, and ACS. During the first quarter of 2024, the Company reorganized its operating and reporting structure upon initiating the 2024 Restructuring Plan. This involved transitioning all ACS standalone cannulae and accessories, including ProtekDuo and transseptal (TandemHeart) cannulae, into its Cardiopulmonary segment.
Added
The Company’s insurance coverage may be insufficient to cover all costs and expenses related to this cybersecurity incident or may be unavailable to cover all costs and expenses related to this cybersecurity incident.
Removed
Operations for other ACS products, including LifeSPARC and Hemolung systems, were discontinued in 2024. For additional information, refer to “Note 4. Restructuring” in LivaNova’s consolidated financial statements in this Report. This restructuring, along with changes in how the Company’s CODM regularly reviews information, allocates resources, and assesses performance, resulted in modifications to LivaNova’s reportable segments.
Added
CPB is frequently utilized in various heart-related medical procedures and allows surgical teams to oxygenate and circulate a patient’s blood, providing the necessary conditions for the surgeon to operate on the heart. Medical procedures most commonly requiring CPB include traditional coronary artery bypass grafting and valve surgeries. LivaNova’s products enable CPB for neonatal, pediatric, and adult patients.
Removed
Specifically, LivaNova’s former ACS segment is now included in “Other,” excluding the ACS standalone cannulae and accessories business, which is now included in the Cardiopulmonary reportable segment. As a result, LivaNova now has two reportable segments: Cardiopulmonary and Neuromodulation. The segment financial information presented herein reflects these changes for all periods presented.
Added
Information on the Cardiopulmonary segment that could potentially impact LivaNova’s consolidated financial statements and related disclosures is incorporated by reference to “Note 11. Commitments and Contingencies: Product Liability Litigation” in the consolidated financial statements included in this Report.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required under 7A. has been incorporated by reference to the information contained in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Report under the section entitled “Market Risk.”
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required under 7A. has been incorporated by reference to the information contained in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Report under the sections entitled “FX Risk” and “Interest Rate Risk.”

Other LIVN 10-K year-over-year comparisons