Good day, ladies and gentlemen, welcome to the LivaNova PLC Q2 of 2023 earnings conference call. My name is Emily, I'll be coordinating your call today. After the presentation, you will have the opportunity to ask a question by pressing Start, followed by the 1 on your telephone keypads. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Matthew Dodds, LivaNova's Senior Vice President of Corporate Development and IT. Please go ahead, sir. Thank you, Emily, and welcome to our conference call and webcast discussing LivaNova's financial results for the Q2 of 2023. Joining me on today's call are Bill Kozy, our Chair of the Board of Directors and Interim Chief Executive Officer, Alex Shvartsburg, our Chief Financial Officer, Stephanie Bolton, President of Global Epilepsy, and Briana Gotlin, Director of Investor Relations. Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statement. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including, but not limited to sales results, which will all be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool. You can find the presentation and press release in the investor section of our website under News, Events, and Presentations at investor.livanova.com. With that, I will now turn the call over to Bill. Thank you, Matt. Thank you everyone for joining us. Welcome to LivaNova's conference call for the Q2 of 2023. Before discussing results for the quarter, I'd like to recount some first-hand observations, introduce Stephanie Bolton, and provide a brief update on the CEO search. Since taking on the role of interim CEO in April, I've been firmly focused on our patients, performance, and execution. I've engaged with many of our global customers and colleagues. That ongoing customer focus, commitment to quarterly results, and shaping our 2024 strategic plan will remain as top priorities. In May, we named Stephanie Bolton as LivaNova's President of Global Epilepsy. The assignment of global responsibility for this key business aligns well with our commitments to leveraging an integrated worldwide business strategy with a continued focus on local execution. Steph has a 12-year record of achievement at LivaNova. She started as a territory manager before taking on leadership roles in epilepsy and cardiopulmonary. Most recently, Steph served as President of International, where she led both businesses to commercial success. We're excited to have Steph's commitment to company performance and passion for helping epilepsy patients. Steph, we look forward to your participation in the Q&A. Allow me to provide a brief update on the CEO search. The board and I are currently in the process of reviewing our first slate of potential candidates. Our process of slate review, interview selection, and board assessment remains on track. We're committed to selecting the right individual to lead our team. For the remainder of the call, I will discuss our Q2 results and then turn to our strategic portfolio initiatives. After my comments, Alex will provide additional details on our results and updates to 2023 guidance. I'll wrap up with closing remarks before moving on to Q&A. In the quarter, we achieved 16% revenue growth, marked by strength in the cardiopulmonary and neuromodulation businesses across all regions. We were encouraged by the continued strong performance in the Rest of World and Europe regions, and we're particularly pleased with the U.S. commercial execution, which drove strong double-digit revenue growth and helped improve profitability in the quarter. Turning to segment results. For the cardiopulmonary segment, revenue was $151 million in the quarter, an increase of 21% versus the Q2 of 2022. Oxygenator revenue grew in the mid-teens, led by the U.S., driven by higher demand and steady supply chain execution. Heart-lung machine revenue increased more than 30%, primarily driven by S5 placements in the Rest of World region and initial Essenz installations in Europe and the U.S. The commercial rollout of Essenz is progressing. We're encouraged by early customer feedback. Following the clearance of our blood gas monitoring software integration later in the year, we still anticipate increased contribution. We now expect cardiopulmonary revenue to grow 11%-13% for the full year 2023. Our revised forecast incorporates the strong first half performance in oxygenators and HLMs. As previously stated, we continue to expect a ramp in Essenz revenue through the second half of the year, with much of that coming after our next wave of software launches. Alex will comment on some underlying factors that impacted the Q2 results in cardiopulmonary. Epilepsy revenue increased 14% versus the Q2 of 2022, with strength across all three regions, including growth in both new and replacement implants on a year-over-year and sequential basis. U.S. epilepsy revenue increased 15% year-over-year, driven by higher total implants, realized price, and favorable product mix. Notably, we achieved 838 new patient implants in the quarter, representing 13% growth versus the prior year, and achieved 1,947 replacements, representing 8% growth versus the prior year. Epilepsy revenue in Europe grew 10% versus prior year, led by the Nordics and the U.K. The rest of world region achieved 15% growth, led by Turkey and China. For the full year 2023, we now expect global epilepsy revenue to grow 6%-8%. Our revised forecast incorporates the strong first half performance in replacement implants. Alex will comment on some underlying factors that impacted the strong Q2 result in epilepsy. ACS revenue was $9 million in the quarter, an increase of about 1% versus the Q2 of 2022, reflecting growth in cardiac case volumes and partially offset by respiratory case declines and product mix. For 2023, we now expect ACS to be flat year-over-year. Turning now to the strategic portfolio initiatives. DTD revenue for the Q2 was $1 million. For 2023, we now anticipate DTD revenue of approximately $6 million-$8 million, primarily from the RECOVER study. The RECOVER study continues to advance. Enrollment for the unipolar cohort of the study has been completed, and we await the results of the 12-month follow-up. As a reminder, we randomized the 500th unipolar patient into the trial in March and subsequently completed all implants in May. Upon receipt of the 12-month follow-up data for the 500 unipolar patients in June of 2024, we will conduct a final analysis and expect a publication of the study results by late 2024. The bipolar cohort is similar to the unipolar cohort in that the randomized controlled study is designed with frequent interim analyses that will assess if predictive probability of success or futility was reached, or if the study should continue enrolling. In June, the interim analysis for the 150th patient in the bipolar cohort was completed. This milestone was achieved faster than previously communicated, and we were pleased with the success we had in refocusing our recruitment efforts from unipolar to bipolar patients. Moving to OSA, the OSPREY trial continues to progress, as of earlier this month, all 25 study sites are actively recruiting patients. In heart failure, the closeout of the ANTHEM clinical study is progressing as expected. We fully defined most of the accelerated costs in 2023, the majority of which occurred in the first half of the year. We continue to expect the overall R&D spend related to heart failure this year to be approximately $24 million. With that, I will turn the call over to Alex. Thanks, Bill. During my portion of the call, I'll share a brief recap of the Q2 results and provide commentary on 2023 guidance. Turning to results, revenue in the quarter was $294 million, an increase of 16% versus 2022. In the quarter and first half, we observed favorable comparisons. Growth was impacted by pricing programs implemented in the second half of 2022, higher than expected U.S. epilepsy replacements, and tailwinds from oxygenator share gains due to competitor supply chain challenges. We cannot expect the revenue growth in the second half of 2023 will reflect the growth experience in the first half of the year. Foreign exchange in the quarter had an unfavorable year-over-year impact of approximately $2 million or 1% of revenue. Adjusted gross margin as a percent of net revenue was 72%, compared to 69% in the Q2 of 2022. Adjusted gross margin was impacted by favorable realized price, higher volume, which drove positive fixed overhead absorption, as well as lower inbound freight costs, which offset component cost inflation. Adjusted R&D expense in the Q2 was $48 million, compared to $42 million in the Q2 of 2022. R&D as a percent of net revenue was 16%, in line with the Q2 of 2022. The year-over-year increase on a dollar basis was driven by continued investment in our strategic portfolio initiatives and costs associated with closing out the ANTHEM trial. Adjusted SG&A expense for the Q2 was $113 million, compared to $101 million in the Q2 of 2022. SG&A, as a percent of net revenue, was 39%, down from 40% in the Q2 of 2022. The year-over-year increase on a dollar basis was driven by higher sales and marketing expenses. These include Essenz launch expenses and variable costs, such as freight and commissions, associated with increased revenues. Adjusted operating income was $49 million, compared to $33 million in the Q2 of last year. Adjusted operating income margin was 17%, compared to 13% in the Q2 of 2022. Adjusted operating income was driven by improved gross margins and operating expense leverage. Adjusted effective tax rate in the quarter was 10% versus 5% in the Q2 of 2022. The higher tax rate is primarily attributable to changes in geographic mix. Adjusted diluted earnings per share was $0.78, compared to $0.53 in the Q2 of 2022. Our cash balance at June 30th was $223 million, up from $214 million at year-end 2022. Total debt at June 30th was $587 million, up from $542 million at year-end 2022. The increase in total debt was driven by delayed draw, $50 million on the Term Loan A facility that we put in place in July of 2022. Net debt, including restricted cash at June 30th, was $101 million. Adjusted free cash flow for the quarter was -$10 million, up from -$14 million in the prior year period. As a reminder, LivaNova pays its short-term incentive bonuses in the Q2. The year-over-year improvement was driven by operating income, offset by higher HLM inventories. Capital investments were $13 million in the first half, compared to $11 million in the first half of 2022. Turning to our revised 2023 guidance. As Bill mentioned, based on our performance during the first half, we're increasing our full year 2023 guidance. We now expect 2023 revenue growth on a constant currency basis between 8% and 10%, and continue to assume approximately a 1% tailwind from exchange rates. We now expect adjusted diluted earnings per share in the range of $2.55 and $2.75, with adjusted diluted weighted average shares outstanding to be 54 million for the full year. Adjusted free cash flow is now expected to be in the range of $85 million-$105 million. In summary, I'm encouraged by the first half execution contributing to financial performance. Continued emphasis on new patient acquisition in epilepsy, maintaining our cardiopulmonary market position, as well as price and expense discipline, are key factors to delivering margin expansion. With these factors in mind, we remain positioned to drive modest operating leverage by year-end. With that, I'll turn the call back over to Bill. Hey, thank you, Alex. As a company, we've demonstrated progress across the portfolio through the first half of 2023, and are well positioned to deliver on our full year guidance, pipeline commitments, and operating leverage by year-end. This would not be possible without the hard work and commitment of our employees across the globe. I'll certainly take this moment to thank them for their continued focus on our patients, performance, and execution. These three areas underpin our dedication to serving patients worldwide, focus on long-term innovation, and shareholder value creation. With that, Emily, we are now ready to open the call for questions. Thank you. If you have a question at this time, please press the star, then the number 1 key on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star followed by 2. As we enter the Q&A session, please limit yourself to 1 question and 1 follow-up, and then return to the queue if you have additional follow-ups. We will just take a brief pause to assemble our Q&A roster. Our first question comes from the line of Rick Wise with Stifel. Rick, your line is now open. Thank you. Good morning, Bill. Good morning, Rick. Just starting off, maybe. Good morning to you. It nice to see the quarter, and your comments are very clear about some of the factors, favorable comps, price, and the better than expected replacement. I'm hoping you can dig into the latter two a little bit. Can you give us a sense of the price benefit in the Q2 growth? Is that fully done now? Is there any benefit likely or possible or included in the second half? At the same time, as part of this, maybe you could talk about the, or Stephanie could talk about the better-than-expected replacement volumes and what created that, and why wouldn't we assume that continues into the second half? Sure. Let me take the front end, Rick, and I will then pass to Steph on the end-of-service volumes. As you well know, it's a pretty complex analysis and recognition of these underlying factors, but for sure, price, end-of-service revenues, and oxygenators as kind of a cluster of products, as best we can tell, clearly contributed somewhere in the 6% or so range. That's in about 6%. We recognize that our oxygenator competitors, who we anticipated coming back to the market in the Q2, did not happen. We do know for sure that they're right now shipping product. Having just been with a customer here in London on Monday, I know for a fact that they are shipping product. That's one factor we got our eye on. Alex mentioned that most of the price activity was kicked off in the third quarter of last year, so we started to get some of those benefits in third and fourth quarter of last year, so we don't see a big carryover there. Now, if I could, Steph, may I ask you to comment on Rick's question, related to end-of-service revenues? Sure. Rick, it's good to hear you. We continue to believe that we're seeing an increased benefit from the programs that we've had in place. Those programs have really been driving to help physicians identify end-of-service devices and ensure that all important continuity of care for patients. Moreover, sort of casting our mind back, we entered the market in 2017 with SenTiva. SenTiva includes a key feature called Scheduled Programming. That enables patients to reach an optimal therapy quicker. In fact, we see patients reaching an optimal therapy in 6 months versus 12 months. That in itself drives a higher replacement rate. As a continuation to that, we are starting to see the first wave of replacements from those patients who were initially treated with SenTiva. If I come to your second part of your question, which is, why do we potentially see that slowing in the second half of the year? We're continuing to monitor this, and we're continuing to monitor the impact of SenTiva on our end-of-service rate. The current forecast that we have is based on our latest data, which takes into consideration our revised expectations. I'll probably have a better answer for you as we move through the coming quarters. In fact, you can come back to me in Q1 next year. Thank you. Thank you. As a follow-up and sort of on Bill, in the same kind of sense, the epilepsy business, I'm sorry, the neuromod business did very well. Maybe talk about growth, NPI growth, a mix of NPI versus replacement, and just what's happening on the sales side that's driving that, again, particularly thinking about looking ahead from Q2 trends. Yeah, very good question. Steph has spent the bulk of her time since starting in this new role on that, so I'm gonna push it, Steph. Would you mind? Sure. Sure. Rick, we're really pleased about the results we've seen this quarter, as I know are the epilepsy team. Our focus is firmly on NPI, and the team are working tirelessly with our physician base to identify the right patient at the right point of their treatment journey and creating that all-important urgency to treat. My focus has been on implementing clear operating mechanisms, focusing not just what we're doing, but how we're doing it, and being consistent and disciplined about it. That's what will set us up for the future. An example of this is the clear commitment to collaboration that we have between our sales organization and our case management group. Another clear contributing factor to our Q2 results were fewer surgeries being rescheduled at the end of the quarter due to those improved workflows that we've put in place between our case management group and also our providers as well. Then just quickly, Rick Wise, Bill Kozy gave the NPI and EOS numbers this quarter. It's 30/70, NPI to EOS, which is pretty consistent with the most recent quarters. Gotcha. Thanks, Matt. Hey, Rick, thank you. Our next question comes from the line of Matt Taylor with Jefferies. Matt, please go ahead. Your line is now open. Hi, thanks for taking the question. Congrats on a good quarter. I wanted to ask you. Hey, thank you. Maybe a little bit about the other side of the house, and talk a little bit about the CP trends. I guess what I was curious about was you did call out, you know, some of these contributions from the Essenz launch in the rest of world and Europe, getting some initial orders there. I was hoping you could help us think a little bit more about the funnel there and how that could ramp, and just give us some more color on how the launch has gone so far, and what to expect in some of the coming quarters? Sure. We're in commercial launch mode. As you know, all Essenz activity is focused on Europe or the US. There is no Essenz efforts going on outside those areas. So all the revenues, what you heard about earlier, rest of world, were S5, and they were quite healthy, too. Our pipeline is building. When I use the term commercial launch, remember that we are creating many, many evaluations. Nobody will purchase an Essenz until they have personally tried it in their cardiac surgical suite. We have a nice load of those activities underway right now. We have a number of activities in major institutions, both in the EU and in the US. We are quick to recognize that the software upgrades that are continuing to roll out are important to many of our bigger customers. The reason I keep mentioning the bigger customers, okay, remember that they won't buy one or two machines. Their cardiac care facilities tend to be much larger. We've got evaluations going on right now in some institutions that could buy as many as 10 to 12 in a single purchase order. That's gonna take some time, and they're gonna wanna test the upgrades. We did get some, you know, some nice signals, if you would, from the efforts that we made in the quarter. The 30% HLM growth overall encouraged us, and though Essenz was a small part of that, in the U.S., we actually had a modest decline in S5. It was Essenz that perked us up in the, in the US, and we also had some good penetration into Europe, very early stage. There's no question that we expect the fourth quarter to be the more critical quarter in terms of the ramp starting to take off. Our forecasting, as well as our production alignment, are really teed up for that window of 4Q and leading into 2024. Got it. Thanks for clarifying that. Let me just ask one follow-up. I just wanted to know, is there anything to call out in the quarter that was a discrete benefit? I think last quarter you called out some, you know, minor inventory stocking benefit, and I know, you know, some of your competitors have had some supply issues. Is there anything that you would call out that helped this quarter? Yeah. The call out, you know, we didn't get it explicit, but there's three things that we noted. I mean, Hey, let me tell you, do I wish we were a 16% growth company? Yes, of course I do. We know that we had this year-on-year favorability of price, which started in the third quarter of last year. We know that we had end of service, and end of service epilepsy sales that were much better than anticipated, and the oxygenator volume continued to really support cardiopulmonary. Those three things, collectively... By the way, this math is not perfect. We do the best we can within a complex PNL to identify that. Think about those three things being somewhere around 6% impact on the quarter. Know that the price will not carry out until the second half of the year. Steph, very, very direct on the EOS, we got our eyes on that. We got a pleasant surprise this quarter. We've got to watch that for a couple quarters, see what happens there. Oxygenators, our competitors are back, and their product is hitting the dock. Matt, I just want to clarify something. We'll continue to see price carry forward into the second half of the year, but it's the comparative relative to when we started to implement our pricing programs, which were in Q3 of last year, so we're getting the favorable comp in the first half. Got it. Great. Thanks for all that clarity. I appreciate it. Congrats again. Okay, thanks. Our next question comes from Michael Polark with Wolfe Research. Michael, please go ahead. Your line is now open. Hi, good morning. Thank you. I have one on epilepsy and then one for Bill, big picture. On epilepsy in the U.S. NPI, 838, can you remind us what was that number in, like,Q2 2019? I just, I'm interested in where we are relative to pre-COVID baseline. The strategic question on epilepsy is, over the last nine months, you had mentioned, you know, some key changes to, obviously, leadership and the sales team, some of which were described as involuntary. As you sit here today and look at execution and team in the field, is it heads down, block and tackle, and you're pleased with the team currently, or what do you anticipate more changes over the next, say, 6 to 12 months, Stephanie, as you kind of settled in your new role? Let's switch the first one, and let me make sure I got the question right. You're interested in 2 Q19 NPI placements? Correct. In, yeah, U.S. Steph, by chance, do we have to do we have that in the room, or...? I'm not sure. I don't have it. Do you think you're above or below or in line with pre-COVID baseline? I guess that's the question. You know what? We're just let us promise to get back to you. I'll hook up with Brianna when we're done, and we will get you an answer to that question. Let me, let me commit to that. Is that okay? Because we just don't have that number here in front of us. Okay. Just to give you some other context real quick, though, trying to get a view on things. Remember that 22 NPIs, year-on-year to 21 were down 6%. We're encouraged by what we've seen thus far in the first half of the year. Steph, anything else to add or? I think, Michael, I'd like to address some of your other points as well about some of the talent that we've brought into the organization. I'd also like to talk a little bit about the culture that I've seen coming in. A culture of a hugely passionate and committed team. You'll excuse me for the early days of this. I started in this role on 12th of May. It will always be etched on my brain. I've spent over half my professional life working with this amazing therapy and advancing the adoption of it. This is a wonderful opportunity for me. I have to say, the team that I'm now leading, have been incredibly welcoming and the culture is one of wanting to win, wanting to execute and do as well as they can, and we are for sure benefiting from some of those talent upgrades that we've seen in the recent months and year. Helpful. The bigger picture one for you, Bill, is just as you've gotten closer to the business in this new role, what surprised you most in this first kind of 90 days? In terms of surprises, I guess there's a pleasant surprise here. We had the opportunity to take advantage of a couple of tailwinds. You know, every once in a while, you get a tailwind, and the important thing for the organization is to see that tailwind coming and to react. One of my favorites, to your good question, is the way our plant in Mirandola, Italy, is running flat out, making every oxygenator that they possibly can. Remember that these are going into cardiac surgical suites, and this product is instrumental to people's health and lives being saved. That's been one nice surprise. I've been equally impressed with the effort of Steph's team and the discipline that is now starting to be displayed, and this is how we approach our physicians. This is also how we collaborate with physician-patient complexity, which is a hard thing for in the revenue production of this product. Those two things right now are probably at the top of the list. I really did want to. I thank you for the question because we certainly wanted the chance to recognize our Mirandola team because you talk about heads down, you'd have to see this to see the effort that they've made 6, 7, 8 months running now to get that type of. Remember, you guys know CP well. It's a 5% grower. They've done well. I give them all credit for seeing the tailwind and taking advantage. Thank you. Thank you. Our next question comes from Adam Maeder with Piper Sandler. Adam, please go ahead. Your line is now open. Hi, good morning, everyone. Thank you for taking the questions, and congrats on the nice quarter. Hey, thanks. A couple from me. Wanted to start on the adjusted EPS guidance. You know, obviously a big beat here in Q2. You took up the full year EPS guide by $0.05, I believe. Maybe just kind of reconcile that for us and talk about the key considerations or puts and takes, and then I have a follow-up. Thanks. I think we feel really good about the 1st half, but it ultimately comes down to the revenue component. You know, we overachieved for the 1st half. We do expect, you know, volumes to be impacted in the 2nd half, particularly on the cardiopulmonary side with the oxygenator business, as we expect the competitors to come back into the market. We saw the, you know, significant improvement in gross margin in the 2nd quarter, 1st half. But we expect to, you know, we're not going to enjoy the same level of benefit that we had in the 1st half. I think that, you know, as we look at the investments that we have to make to drive productivity and, you know, as well as improve some of our innovation on the core business, we're going to make those investments in the second half. That will have a bit of an impact on our expenses as well. You know, we've largely de-risked the year, and that's why we feel good about where we're guiding. Okay, appreciate the color there, Alex. thank you for that. For the follow-up, wanted to ask about the RECOVER trial specifically the bipolar cohort, you guys had 150 patients randomized, I believe, in mid-June. you know, talk about pace of enrollment going forward. When should we start to see interim looks there? Then maybe level set expectations for the street. you know, should we expect this cohort to run to the full 500 patients, or do you think we can potentially transition to registry earlier? Thanks for taking the questions. Hey, sure, Adam, it's Matt. For bipolar, the interim looks obviously started earlier at 150. Part of that is we assumed that the average follow-up would be a little longer when we got there. Also, as you've seen from all the prior data, you know, the bipolar group generally performs a bit better than unipolar. We're expecting there's only about a third of the patients are bipolar, two thirds are unipolar. We do expect it will enroll slower. Our current estimate is about 25 a quarter. The interim looks this time are gonna occur more around the lines of quarterly. As you know, Bill told you earlier, same as unipolar, it's either gonna be stop early transition to the kind of the prospective of reimbursement or futility or keep going. you know, no different there. I would say overall, our working assumption is the full $500. that will if you look at the $25 a quarter, will take a while. but as you can see from the public paper, you know, that's been published in the past, you know, there are estimates on when the trial potentially could complete. Thanks, Matt. That's helpful. Our next question comes from Mike Matson with Needham Co. Mike, please go ahead. Your line is now open. Yeah, thanks. Just a couple more on Essenz. I guess I was wondering what you're seeing with regard to the Essenz customers, either, you know, ones who are just trialing it or actually purchased it? You know, how many of those are kind of upgrades from the S5 versus older units? In other words, do you think this is driving, you know, earlier upgrades than what you would have seen in the past? Well, we had commented, I think, in the last call that we had over 7,000 machines that were out there that were over 10 years old. So there's been, you know, an admitted focus on our part to get back into those accounts. By the way, no surprise, all of those accounts have some degree of interest. As I mentioned a little bit earlier, in rest of world, they're more interested in S5, and the availability of Essenz is just not there right now. We've got our first, kind of replacement focus on the EU and the US. The sales force goes through, just like I mentioned, pretty extensive trial period. We don't have any customers who aren't gonna try this on any less than 4 or 5 patients before they'll give us a thumbs up on going forward. That's where we're at right now in many, many accounts in both geographies. Got it. I know, I believe Essenz is priced at a premium to the S5. Is this going to be kind of immediately accretive to gross margin, or is it, you know, I know sometimes with these new product launches, especially with something as complicated as this, you know, the volumes, the production volumes kind of have to ramp up before you start to, you know, end up with a better gross margin on it than your older product? Yeah, yeah, good question. I think Alex is gonna remember this question 'cause I've asked him many times, but let me have him go ahead. The gross margin currently on Essenz is comparable to the S5. As we scale the volumes and really start to impact absorption and component cost, the gross margin will improve. The cost base is higher relative to the premium we're charging for Essenz. As we start to ramp the Essenz volume relative to the oxygenator mix, it should have a positive impact on the overall mix of our gross margin profile for the company. Got it. Thank you. Our next question comes from Matt Miksic with Barclays. Please go ahead. Your line is now open. Hey, thanks, and congrats on a really strong quarter here. Thanks. A couple of follow-up questions, one on epilepsy. You're very welcome, Bill. One on just kind of margin and investments going forward. On epilepsy, just to understand the programs that were put in place that sort of drove this identification of under serviced patients, you know, it sounds like that was part of the positives here in the Q2. Just maybe some sense of how long that continues to sort of drive those through. Then on NPIs, just sounds like that the efforts you put in place there to lift that number. have not yet to sort of show a meaningful impact, you know, some impact, but, you know, is that a fair statement? If so, when do we sort of see that, a more significant lift, if that's what's to come? As I mentioned, I have one follow-up. Steph, please. Yeah. Thanks, Matt, for the question. If we look specifically at the programs that we've had in place and have been building on since I would say the back end of last year. We have the battery life follow-up program that we're working through, and we also have the physician portal that we've rolled out to allow our customers to get a full end-to-end view, a full cohort, if you like, of their implanted patient database. We'll continue to see that ramp up throughout this year and obviously as we move into the future. It's early days, and I'm looking forward to coming back with some more specifics of what that uplift looks like. At the moment, what the feedback that we get from our customers is that this is very much appreciated. When I look forward to NPI is all about how we do this in terms of the discipline and the rigor that we have in our operating mechanism. I've seen this already start to read out, you know, the daily, the weekly, the monthly, will all lead to the quarterly. That really is what we're spending our efforts on, is establishing that operating mechanism and ensuring that we start to see that lead through future quarters. Terrific. Thanks. Maybe on sort of leverage and sort of investment, reinvestment, if there is to be reinvestment, or drop through of the $24 million from the heart failure study. I think you talked about modest leverage by year-end. If maybe you could highlight what some of the puts and takes there are in gross margin and OpEx, and how you're thinking currently about that, the roll-off of that clinical program and where that spend goes, the reinvestment or just to further leverage. Thanks. Thanks for your question, Matt. We did target modest leverage for the year. I mean, when we started this year, we said we're gonna deliver modest leverage to our PNL. That remains the goal. Now, given the better performance that we're seeing in the first half and how we're projecting the rest of the year, we're taking the opportunity to make some incremental investments in our core business to strengthen our manufacturing capabilities, as well as our IT capabilities. We're also looking at reinvigorating the innovation programs within epilepsy as well as cardiopulmonary. Those are some of the incremental investments where we're taking the opportunity to put back in the business to drive future growth and value creation, not coming off our goal to deliver modest leverage. Your follow-up question on the heart failure program, as I said before, we have about $24 million of investment planned for this year. About 70% of that occurred in the first half of the year. We're still on track with the closeout of the program, feel good about where we are at this point. We will address that heart failure 2024 question as we work through our strat plan and budget. More to come on that over the next couple quarters. We've got two things to do. Number one, we got to figure what do we have to still maintain in 2024, specifically to support heart failure. You know, these things are quite never done, and we want to make sure we've got both eyes on that as we plan 2024. Then we want to take a look at the programs that Alex was mentioning and the timing of benefit to those as we move into the year. Trust me, the heart failure topic is on our planning and budget agenda, and we will not miss it in the next couple quarters, and to be more definitive to your question. Thanks so much. Hey, thanks. Our next question comes from Anthony Petrone with Mizuho Group. Anthony, please go ahead. Your line is now open. Thanks. Congrats on the quarter here, not 2 operational, and then 1 on the RECOVER trial. Thank you. Just checking on, cardiopulmonary. You're welcome, Bill. Just on the 7,000 machines, 10 years or older, just curious how many of those have actually turned over to Essenz, you know, what the economics are around an upgrade as opposed to a new sale? When you think about your competitors being out of the market here for a few quarters, how much share and new sites has LivaNova gained? Then I'll have one on epilepsy. Thanks. Let me take the share question first. We're trying to chase that down. We, the answer is, we don't know exactly how much share we have gained because a lot of these orders that we're getting are substitute orders. An account gets them from somebody else, they don't get them, we go back in with another order. It's quite clear from a market that even with the hospital upturn, a market that was historically growing at 1%, is right now a little more favorable than that. That market's probably at 2. We don't have a hard estimate on the share gain. I would probably say it's somewhere in the 2% range of share gain, but I got to tell you that 1-3, with 2 is the midpoint. There's no external data on oxygenators or the disposables, the tubing sets. We can't really give you a hard fact on that one. We just know what we're making and moving out the door. Alex, you had a. Yeah. Jump in. Just to clarify the install base, Anthony. 7,000 units out there, we believe that about, 40% of those units are, over a sort of the 10-year useful life, cycle. That's kind of the immediate focus. That's what we're going after. Operational on epilepsy, mix right now, 30% NPI, 70% end of stage replacement patients. Where do you think that mix can go over the next two years? Let's say NPIs get to, I don't know, 50% mix. Can epilepsy be a sustainable, low double-digit grower? Let me ask Steph to come, I'd like to open up first. We are doing a significant amount of strategic planning work for the 2024 to 2026 business plan on that topic. Let me just throw a couple of big questions at you. You've heard these before, number one, we've got to understand more deeply. There's 22,000 or more DRE patients coming in every year. Only 8,000 of those people are getting treated. There's some really heavy lifting being done by Steph and her team to say, "What is going on here? How can it be that these people aren't getting treated?" She's leading a team to really address that. Within that exercise, I'm gonna suggest, Steph, please comment. Therein lies the answer to this question. Right now, today, I don't have a view yet on where that can go. I think a very good question, we're probably a little too early for us to guesstimate or estimate even today. Jump in here, please. Yeah. Anthony, I think it's a really good question and one I'm asking the team during our strategic planning process at the moment as we look towards the future. The one thing that we do know about this patient population is that when we think about drug-resistant epilepsy, it continues to be 30% of this population. When we look at the treated incidence pool every year, we are not getting close to treating that incidence on a yearly basis, let alone the overarching prevalence within the market. That's where we're sharpening our pencils, is to understand how we can ensure that more patients come through the right pathway to access the right treatment. We are absolutely one of those treatment options. It's probably a long-winded answer to your question, but it's a well-timed question, and these are the things that we're challenging ourselves currently during our strategic planning process. Let me add just a little color, Steph, if you want to... So you know, some of the work that's going on. Number one, Steph and team are heavily engaged with multiple key opinion leaders that are out there. These are both epileptologists and surgeons. These are some of the people that I'm spending time with, too. Number two, she has a kind of reenergized department in the area of reimbursement and healthcare economics, and a team is in place now to deeply analyze how those factors. We are taking a multifactorial kind of assignment here and really trying to break it down as we move to strat plan. It would be, obviously, our hope that within that broad base of work, we're gonna find additional insights that take us up the higher performance path. Not today, though. Okay. That's very helpful. I'll hop back in. Thank you. Sure. Thanks. Our next question comes from David Rescott with Baird. Please go ahead, David. Your line is now open. Hi. Thanks for taking the questions, and congrats on the strong quarter. Thanks. first on epilepsy and just diving a little bit more into some of the prior questions. you know, I think broadly across Medtech, we've kind of heard about maybe some of these elevated, you know, inpatient hospital admission levels and maybe the benefits for epilepsy are a little bit further downstream, but you've also made some of the changes or investments on the Salesforce side. I'm wondering, you know, if you'd be able to maybe parse out at least what the relative, you know, contribution in the quarter or the first half of the year at least have been, maybe from that broader kind of market recovery or backlog versus the Salesforce investments? I guess, just based on that response, you know, if it is maybe more Salesforce driven, you know, is that something that does or potentially could accelerate in Q3 and into the back half of the year? I think, David, if we could take that in 2 parts. I'll let Matt answer in regards to utilization. I'll answer first in terms of Salesforce execution. Something that we've spoken about at length in the past is our go-to-market territories. I'd like to make a few comments about that, if I may. We have overall 19 designated go-to-market territories, and we see the performance of that group in line with our base business. However, we have 4 open territories. Part of my job, I think, coming into this, is to dig into this, to look at the strategy. 15 fully staffed go-to-market territories. We see an outperformance both in the quarter and also in H1. We continue to be committed to that strategy, and we're also going to be having 2 more operational territories in Q3. I think we can for sure say that our strategy around working with our customer base, with this current sort of direction of travel is the right one. Matt, can I hand to you for the overarching? Sure. For, you know, epilepsy surgery, a couple of things I'd say. You know, we track now the EMU capacity. In the Q2, it was about 85%. That was similar to what we told you in the first quarter, and that was up from the fourth quarter. There's a six-month lag, so that's encouraging, but it didn't improve from the last quarter. Then I'd say in terms of overall neurosurgeries, which is where we primarily have our implants, I'd say anecdotally, slightly better, but nothing stood out as being like a, you know, a meaningful change in capacity or, you know, OR scheduling in the quarter. Okay. Thank you, David. Okay, great. Our next question comes from Michael Polark with Wolfe Research. Michael, please go ahead. Your line is now open. Thank you for taking the follow-up. Can we get an update on Italy, please? Any change to timing about from the European Court of Justice and expectations for, say, mid-next year, for the Supreme Court to weigh in? Here's the latest at what we've got. While the timing of the decisions by ECJ and then subsequently, remember, that goes back to the Italian Supreme Court, that it's just, it's uncertain. We don't have specific information to share. We do not anticipate, nor should we anticipate any final decision until at least 2024. We're still carrying the cash burn. I think to finish off the question, it's on SNIA, it's about $15 million-$20 million a year. That's all inclusive legal fees and cost of guarantee. We have our eyes on it. We continually pay attention. Our general counsel is highly focused on this particular activity, and all we can offer you right now is that obviously, we're going to keep you informed. Thank you. Yeah, thanks. Our next question is a follow-up from Anthony Petrone with Mizuho Group. Anthony, please go ahead. Your line is open. Thanks. Appreciate that. Just had a follow-up on RECOVER, just as it relates to unipolar and the duration of treatment effect, and just looking to sort of clarify a few points there. Obviously, we have a 12-month endpoint on improvement in moderate scores, but when you look at the enrollment cycle, it dates back to 2020, 2021. In theory, there are patients in there that, you know, have, you know, been on treatment 24 months, you know, potentially longer than that. What has been the overall dropout of the study? When we look at just the average treatment duration of the patients enrolled today, you know, where does it sit? Where will it sit, you know, come March 2024 next year, ahead of the final readout? Thank you very much. Sure, Anthony. If you just look at, you know, the overall numbers, the dropout rate, you know, the published paper, you know, we showed scenarios between a 20% dropout, 10% dropout. We've said in the past, nothing's changed. You know, we're well below the 20. You know, nothing to read into there in terms of, you know, any issue with dropouts. In terms of% completion, you know, that number, it's really based on. I'd look at it as scores. You know, you look at the number of patients that have been implanted, each one gets 10 scores. It's a matter of, you know, what% of scores we have. As you can imagine, since we're now in the, you know, the final follow-up, that% has gotten quite high. You know, there, you know, we still-- we're blinded and won't see the data until May of 2024, but in terms of overall scoring, we're pretty far along. I think, you know, to your point, full data set in May of 2024, we'll analyze everything. There's 13 total endpoints. Timing response is the primary. Yeah. Our next question is a follow-up from David Rescott with Baird. David, please go ahead. Your line is open. Hey again. I think my follow-up question might have got cut off, so I'll ask it again. Just, you know, on kind of the bigger picture, you know, when you think about the overall portfolio, you know, and CP and neuromod kind of have these durable growth drivers here, newer market opportunities, you know, with OSA, DTD longer term, and then, you know, there are some segments that are, you know, a little bit profit dilutive. I guess, you know, kind of thinking about this near and longer term view and how you think the portfolio of the company shapes up over time, I mean, how do you think about prioritizing maybe those investments, at least relative to these, you know, three or four different kind of potential drivers or shifts within the portfolio overall? Thank you. Sure, let me take a shot at that. The, as you said, the SPIs we're fully committed to, they're fully funded, and, you know, with the, with the open understanding that heart failure is stopped, DTD and OSA continue to go forward. What Alex mentioned, and it's worth, maybe restating, is that we know that we want to create some iterative and, impactful innovation within the core product portfolio of both CP and epilepsy. We are starting to build out that, capability on both sides. You might recall at the last meeting, I had mentioned, let's take epilepsy as an example. We talked about a two-day technology strategy and planning meeting to be held in Houston. Steph and her team and several of the senior managers were there, the purpose of that was to start to further develop kind of with that core product, innovation portfolio for the epilepsy business. We've got that activity going on in the strat planning process across the company. That's being backed up by the modest investment that Alex mentioned so that we can get that work started in 2023. That's where our head is. In terms of a fundamental strategy to ensure, number one, high customer acceptance, improved and better products, that's where we'll continue to go, that's on both sides. That's on CP. That's on epilepsy. Those are all the questions we have time for today, so I'll turn the call back to Bill Kozy for closing remarks. Hey, thank you, everyone, for joining today's call. On behalf of the entire team, we really appreciate your support and interest in LivaNova, and we'll look forward to speaking more. Thanks. Thank you, everyone, for joining us today. This concludes our call. You may now disconnect your lines.