All right. I think we're gonna get started here. Thanks everyone for joining us. Happy to have the LivaNova team here with us, CEO Vlad Makatsaria, and Senior Vice President of Corporate Development and IT, Matt Dodds. I think we've got a full list of Q&A today. I believe you can send in questions to the iPad that I may or may not check. So, with all that said, I think you know, we can get started and just go through a lot of the questions that we had. Maybe Vlad, first to start with you, you know, you've been in the role, I think, for four or five months or so at this point. I'm curious, you know, one, what your focus areas have been since you've joined the company. And then two, you know, over the past several months or so, you know, how your view on the existing portfolio, as well as what you see out in front, have evolved over that timeframe. Yeah. Well, David, first of all, good morning, everyone, and David, thank you for hosting us. Thank you everyone for joining and for your ongoing interest in LivaNova. Just maybe going to your question first, yeah, it's been six months. Of course, it's more importantly, it was the period of intense learning, getting to know people at LivaNova across the world, getting to know our customers, our investors, analysts that cover us, and kind of trying to get a holistic view on the company, and also getting advice from people in terms of how to move us forward. In terms of focus, it's been very clear, three things for me since the start, you know, one, and most important one is talent. I believe that any great organization starts with great talent. And really, on the talent front, there were a few things that I'm focusing on. You know, first of all, is getting to know folks across LivaNova. We have a lot of great talent within the company, and really accelerating their development, making sure that they feel that they're at their best has been really a big part of my focus. One of the example of acceleration is Franco Politi becoming President of our Cardiopulmonary business, and he spent most of his career with LivaNova. He's just an incredible leader who built great fellowship delivered incredible results, and it's great to see him at the helm of our Cardiopulmonary business. The second focus area was specifically on talent in the area of innovation, and this is one area that was very clear that we need to build best-in-class leadership organization, and I'm very pleased with our progress. If I look at the team today, at the leadership level of the innovation agenda, in my mind, in my view, it's one of the benchmark teams in the industry overall. We have Ahmet Tezel, who you know worked in various large organization. In fact, his previous role was the largest R&D role in the industry, so he's our Chief Innovation Officer. We have a new leader in Neuromod R&D, who also has tremendous experience across various technologies and disease states. We're in the final stages of selecting a lead R&D leader for Cardiopulmonary business, and then recently onboarded as well a new leader in business development and strategy. So if I look holistically at that team, it is a benchmark team, and I think it's kind of innovation is the oxygen of our future growth, and you know, we have incredible leaders to guide us there. And then the third piece is working on the culture and, you know, making sure that people are inspired to our purpose, aligned to the strategy that we're driving, and then engaged in execution. And like I said, the momentum feels right. There's a lot of great energy there, which now kind of need to take us to the organization to the next level. So talent was one big piece of my focus. The second one was execution or is execution. And because of tremendous work of our folks around the world, we delivered six quarters of double-digit growth. So my goal is to not mess this up and sustain strong growth momentum that the company had. And I would point out two levers on this one. First, it's just very great work that Steph Bolton and Franco Politi did on their respective businesses by really focusing the organizations, driving the kind of the integrated global business unit, governance, simplifying decision making, and so when you focus, you grow, and I think that was one big driver of improved execution. The second one is our ability to supply products to our customers, and specifically in Cardiopulmonary business, two things happened: one, I believe the market has grown faster in disposables than we originally planned. We originally talked about or estimated low double-digit growth in the market. If you kind of look at the last trends, I believe the growth is closer to mid-single digits. And then secondly, there were some capacity constraints with our competitors, which opened the door for us to gain market share. And so we continued to build that capacity and execute excellence in manufacturing as a key driver for sustaining growth momentum. And I'm gonna use the third one on execution as pricing. I think real focus on optimizing our pricing strategy has been a tremendous growth driver for us. So, execution was the second one, and then the third one is strategy, and I think that's more about what do we do today to build a better future, and a truly benchmark company in med tech. And we are working on the strategy, and that has three chapters. You know, first chapter is maximizing growth in the core, epilepsy and cardiopulmonary, with the goal of building sustainable above-market growth businesses. The second one is setting direction and adjacency space. In our case, it's difficult to treat depression and obstructive sleep apnea. And then finally, defining the next or creating the next chapter of growth for LivaNova that will define us for the next decade. And so that work is ongoing. We have a stellar team working on this, and I am really looking forward to sharing the strategy with you early next year. Maybe just on that last point, interested in sharing the strategy early with us next year. Does that sound like an analyst day, that we could be thinking about the three-year growth plan of the company or? Yeah. I think we would plan a number of engagements, concluding with an analyst day, yes, and we're finalizing the best time for it, but- Is it, is that? First half of next year. Is that, in your view, a three-year plan, a five-year plan, a several year—what do you think about that from a timeframe perspective? You know, these are our revenue goals, this is the market we expect to grow above it, this is our operating margin spend. What should we expect maybe at an early twenty twenty-five analyst day? We're looking for a plan until 2030. But this will have chapters that will be, like you said, a three-year chapter and then maybe a little of a more longer-term chapter. Okay. And from a metric perspective, is it EPS? Is it margin expansion? Is it revenue? Yeah. Is it above-market growth? How do you think about that? I said one aspiration, to be a truly benchmark med tech company. Mm-hmm. And, we're defining exactly what that means, but many of the things you just mentioned are part of that formula. Okay. And maybe you know, I guess on this point, we can just dive a little bit deeper on the broader growth of the portfolio and how you're thinking about the next several quarters, right? Mm-hmm. You've done, you know, pretty above-market growth in the past couple of years, past couple of quarters, past couple of years. On track maybe to do another double-digit year of growth this year. Depending on where, you know, growth this year shakes out, it necessarily wouldn't be crazy to assume there's deceleration to even high single digits, which probably is above the mid-single digits the company historically has seen. When you think about the growth drivers, we're gonna get into the VNS, you know, segment in a second. When you think about the growth drivers into twenty twenty-five, does it feel like high single is the right way to think about LivaNova, or is... you know, maybe it's still too early to tell? Yeah. And I really appreciate your question now, but also appreciate all the questions you had to me before and from your colleagues as well. And so one of the key questions I get is, how sustainable is your growth in the core? So I'm gonna take a swing at kind of trying to show an algorithm for our growth. So if you look at our cardiopulmonary and epilepsy businesses, yes, six quarters of double-digit growth. And I think the underlying drivers of this was the market growth, some tailwinds that we had in the market, but also some of the excellence in execution. If I look into the future, we kind of split the growth in several dimensions, you know, starting with the market. So at this point, we're assuming that market growth will be somewhere around 5%. So let's use that as a starting point for the algorithm. For the total CP business or total- Both. LivaNova? Total LivaNova. Okay. You know, then let me take it to price. You know, historically, we've done really strong price improvements, but I think it's fair to assume moving forward that 2%-3% price increase is a manageable goal and something realistic moving forward. Then you start looking at kind of some of the market share opportunities we have, and in my mind, the biggest market share opportunity we have is in our cardiopulmonary disposable market. Mainly, this is oxygenator space. So if you look over the last few quarters, we estimate that we've gained, starting with a 30% market share and we're now at about 35, so still significant opportunity to grow share. If you assume one point of share growth in that market, that adds another point of growth to the total enterprise on top line. Then last major growth driver, over the past few quarters, but also moving forward, is the upgrade of heart and lung machines to Essenz, which is our new generation machine. Think about this as, like, two, two important things before I kind of tell the number, but, apples to apples configuration, there's a 30% price premium on Essenz. However, if you look at what the customers are asking for, they're asking for more premium configuration, and then that way the price premium is significantly higher on the new heart and lung machine. Then if you look at our total sales of heart and lung machines this year, 40% of our sales will be coming from Essenz. Every 20-point improvement gives us two points of growth on the top line for the enterprise. In other words, if we're gonna grow from 40% mix to 60% next year, to 80% in 2026, and then to 100% in 2027, each of those years we will add additional two points of growth to the enterprise. So you look at all the cylinders for growth, and some of them may fire better, some of them may fire worse. But ultimately, I think assuming you know mid to high single-digit growth is a very realistic scenario. And like I said, if all the cylinders fire, then obviously better. Is the every twenty points of Mm-hmm ... share, whatever, of sales for Essenz of mix, right, Yeah ... coming from Essenz, on an annual basis, two points of growth. Is that two points of growth beyond the five points of market growth, or is that- That's correct. Okay. That's beyond price that I named 2%-3%, and beyond market growth, so that's on top. Okay, so, so CP plus VNS or epilepsy, VNS market growth, neuromod market growth, 5%. You add on two to three points of price, you're getting to seven to eight. Maybe you have a point of price, a point of share gain for cardiopulm, and then the two points of mix shift gets you from five plus two, plus one, plus one. There is one offset when you want to go into VNS. Yes, sir, go ahead. For VNS, it's new patients and replacements. For new patients and overall market growth, we think 5%'s a good number for what the market is growing for epilepsy surgery. Yet we think we can stay at that rate, mid-single digits. 70% of the implants in the U.S. are replacement, and the replacement cycle is gonna be impacted a bit by what we saw in 2018, 2019, 2020 with COVID, and so we think that the replacement unit growth, can take price out, will be flattish in 2025 and 2026, so that's probably the one offset to a lot of the positive variables you put together, overall for the VNS business in the U.S. Okay. We still expect good growth outside the U.S., but the majority of the business is in the U.S. So if VNS, I think in the U.S. is 33% of total sales, 70% of that is the replacements. Is total VNS growth in 2025, 2026 in the 5% range, or is it... Which assumes flat, f- Yeah ... flat replacement, and then therefore, you have above-market growth in the de novo implants, so you get to 5% for total VNS growth? Correct. And don't forget the price. When Vlad mentioned the 2-3% for the entity, we've generally said that for epilepsy, it's 1-2% in the U.S., so that adds a little bit to the overall unit volume. 1%-2% price tailwind? Yes, and that's consistent. That's not. Across both de novo and replacements VNS? Yes. Okay. Okay, that makes sense. So, okay, so, with the offset of VNS, is that a point of offset, or is that just accounted for in this, "Hey, the market's five, we've got X amount of points in price, X amount of points in CP, and then neutral impact essentially from VNS? Right. So the markets, like to Vlad's point, both Cardiopulmonary and Epilepsy, mid-single-digit growth. Mm-hmm. The same. And then when you do the puts and takes of each piece, the w- Mm ... the one we're saying is that could be a slight drag- Right ... to the overalls. A drag down to the 5%, though? Yes. Right. Okay. Okay, makes sense. Okay, so maybe we'll just stick on VNS then. The reimbursement update that we heard about- Mm-hmm ...... A couple weeks ago, I think that was actually published yesterday, the recommendation. So, from a high level, can you walk us through what the opportunity is there? Yeah. Essentially what it said, and where the implications could be for either share gain, pricing uplift? Is it just de novo versus replacements? How should we think about all these positive, VNS- Yeah ... updates, reimbursement? That's a great question, and a very important milestone for us. And so if I step back a little bit and just from the patient point of view, you know, roughly the procedure penetration of interventional procedures on patients with drug-resistant epilepsy is – depends how you look at the kind of patient population, but it's roughly 5%. So one of the big drivers for growth in this market is improved procedure penetration, and one of the barriers to the procedure penetration is, has been reimbursement. So a group of companies have been working with CMS on improving that landscape. And in August, the advisory group that is kind of advising CMS on various technologies recommended to upgrade reimbursement to level six reimbursement, which means roughly taking it from thirty to-... mid-forties in terms of thousand, in terms of reimbursement for procedures. And our epilepsy neuromodulation business would be positively impacted in that way, in terms of procedures. So the biggest driver, what would happen if this is approved, is that we believe the number of procedures is going to increase. And the reason for that is what I said before, hospitals today, providers lose money on VNS procedures. And this would then kind of mitigate that economic barrier to driving procedure penetration. Now, if you look historically in terms of how, you know, after the advisory committee advises on a decision, is decision supported or not by CMS, the success rate is roughly 38%. We looked at the last five years. So the success rate is about 38%. Thirty-eight percent? Yeah. Okay. I guess thinking about a better uplift, right, in the reimbursement side, I want to say, if you look at reimbursement today for what RNS DBS is at, it's obviously much higher than what you have. And for that reason, you know, VNS or, sorry, DBS RNS devices are priced at a higher premium, I believe, to where VNS is today. So from a pricing perspective, outside of whether or not there is the opportunity to gain incremental share from DBS or market expansion, is there an opportunity to drive some kind of pricing leverage- Yeah. in the VNS segment? And then the second part is just, is this updated reimbursement specifically just for de novo implants, or does it also cover replacements? So it's de novo implants, that's number one. Look, what we... Like I said in the beginning, we have a very solid pricing strategy, I believe, and I think our approach is gonna continue to kind of look at the pricing increase into 2%-3% case. I think the biggest opportunity we have with this is volume increase- Mm-hmm. And really making sure that more patients benefit from this procedure. And like I said, one of the biggest feedbacks I get from epileptologists and when I talk to them is, "You know, help us with reimbursement," because there's a lot of clinical motivation to perform the procedure, but there's also a lot of economic demotivation from the providers to do that. So I think that is gonna mitigate that barrier. Also for epilepsy surgery, everything else except VNS, so whether it's resection, ablation, RNS, DBS, they're inpatient, so they're under the DRG system. So the devices are more, but the costs are a lot higher. When you're inpatient, you've got much longer time in the OR, you've got recovery. This decision is the hospital outpatient, and that's where VNS, most of our procedures occur. So we think generally, a lot of epilepsy surgeries lose money for hospitals, for Medicare patients, so this would only really swing our reimbursement. But to the, you know, the comments about RNS, DBS, you know, we don't think they're money-making procedures for the hospitals in a lot of cases either. You said most of the procedures for VNS are done in the outpatient setting? Do you have a sense for the- Ninety percent. 90%. And then for DBS versus RNS are also 90% of those procedures in outpatient setting? They're all inpatient. All inpatient. They're all inpatient. They're pretty invasive surgeries, and the same thing with ablation and resection. Okay. When you think about the potential again, for pricing leverage, and we'll just go specifically on the de novo segment and not considering obviously the replacement cycle. The 2%-3% broad upside potential you have for reimbursement across the portfolio, does the like for like kind of replacement system for VNS in the U.S. become more or less than that? You know, do you have the more or less than 2%-3% pricing uplift potential with the de novo implants? Or maybe the answer to that would be yes, and therefore, the total blended, when you think about replacements, is more than 2%-3%. Yeah, I think there is a potential there, but like if you think about where the biggest opportunity is, I would still go to volume. Okay. Okay, so we've got five minutes left. We jumped around a lot of the questions here, and the biggest one that I did want to ask outside of the first two is on the Italian litigation. You know, that's still an overhang, obviously, for the stock. We've had a bit of an update, I guess prior to and during the second quarter. The biggest question we've gotten from investors so far is the implications to what happens to the P&L. Mm-hmm ... when, if there is a payout associated with that litigation. Obviously, there's interest income that's coming in so far. So just curious on what your high-level views are on the maybe dollar impact or the EPS and impact would be if that were to be paid out. Sure. So if you look at it, right now, you know, the Supreme Court is looking at, you know, the case is who and how much, right? And on the how much side, that's the damages side. The appellate court's decision was EUR 454 million. So the simple way to look at it, and there's a lot of different ways this can go in terms of, you know. Again, we still think we have a good case. If we're liable, if we have to pay the damages all up front, right after a decision, and again, for the decision, we assume it's 2025, but we still have no visibility on when in 2025. If it's EUR 454 million, pay it all up front. The change in the earnings on the adjusted earnings would be around a run rate of $0.50, which I think is what you came up with in your note. We would obviously try to, if again that was the case, we would obviously try to stagger the payments, payment plans, things like that, which I think you also highlighted as an option. But worst case, all upfront, about a $0.50 earnings hit run rate. Run rate, okay. Yeah, for the sake of what we did with our numbers in 2025 and 2026, we assume that that number hits in Q3, right? So there's a payout, and it's staggered over four quarters. Do you have a sense for the payout potential of the timeline, meaning that, again, we assume it's gonna be paid out over four quarters? Is four quarters too short? Should it be two quarters? Should it be three years? Do you have a sense for what that timeline could kind of look like and whether or not there even is an option to maybe negotiate the four fifty-four down as well? Okay. Please. I was gonna say, at this point, we're not sure. We haven't had any of those discussions. Okay. Those discussions I'm assuming happen after- Yeah ... a decision is finalized, or can they occur prior to the ruling? Yeah, and David, I think what's important is to understand the range, and for us, the range starts with the fact that originally we won the case in the district court before it went to Court of Appeals. So let's say that's on one side of the range, and then we believe that the maximum in our case would be what the Court of Appeals awarded, and that's four fifty-four, so that's kind of the range, right? And then the second big dimension is it if it's somewhere on the range, is it one time, or is it over the period of time? And I think we're ready for every scenario. You know, but at this point, I think it's for me, it would be irresponsible to kind of- Yeah. You talked about the, you know, the investment, right, and the three or four pillars of the business and, you know, investing in a lot of opportunities. And, you know, this essentially is restricted cash, or a portion of it is restricted on the balance sheet. So, can you continue to invest, or how do you think about continuing to invest in those different segments while you have a decent chunk of the cash balance maybe becoming an outlier at some point? Yeah, I think if I step back to the chapters of growth what we talked about, we have a healthy epilepsy and CP business that I've talked about the growth opportunities there. The second piece is, I'm optimistic with our progress on DTD and OSA. We didn't get to talk about it, but I think that there is a really promising path on those technologies. And then ultimately, what are the growth opportunities we have? And we look at the SNIA lawsuit as a kind of a factor, not influencing strategy, it's gonna impact on how we execute the strategy. And we have a certain decision tree thinking about the future growth opportunities, but it's not gonna impact our core business decisions or even decisions potentially on OSA and DTD when we have clinical and reimbursement outcomes on those two portfolios. Okay. You provided a bit on the, you know, pieces to the revenue build for a longer-term outlook. When you strip out the benefit that you have next year from some reinvestment from the trial, you strip out potential impact from the, you know, SNIA litigation. What do you think a steady-state normalized operating margin or EPS growth profile looks like relative to that mid- to high single-digit revenue growth? Yeah. So we will guide exact numbers at the end of this year. The kind of the way we talk about it is growth sales faster than the market, and we talked about kind of mid to high single-digit growth rate on the top line, and then growth margins faster than sales, and do that in a sustainable manner. Grow margins faster than sales or EP... Well, this doesn't matter, EPS faster than sales. Yeah. EPS. Okay, well, I think with that, we are out of time. So thank you.