Good day, ladies and gentlemen, and welcome to LivaNova Third Quarter 2025 Earnings Conference Call. If you'd like to register a question during today's event, please press star 1 on your telephone keypad. As a reminder, this conference call is being recorded and I'd like to introduce your host for today's conference, Ms. Briana Gotlin, LivaNova's Vice President of Investor Relations. Please go ahead. Thank you and welcome to our conference call and webcast discussing LivaNova's financial results for the third quarter of 2025. Joining me on today's call are Vladimir Makatsaria, our Chief Executive Officer and Member of the Board of Directors, Alex Shvartsburg, our Chief Financial Officer, Ahmet Tezel, our Chief Innovation Officer, and Zach Glazer, 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 revenue results which will be stated on a constant currency and organic 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'll turn the call over to Vlad. Thank you, Briana, and thank you, everyone, for joining us today. Welcome to LivaNova's conference call for the third quarter of 2025. In the quarter, LivaNova delivered 13% organic revenue growth versus the prior year, driven by continued momentum in the cardiopulmonary business and solid epilepsy performance across all regions. The ability to sustain strong organic growth, expand margins, and drive strong cash generation reflects the durable market leadership positions of our core businesses. The consistent results also speak to the strength of our execution and the productivity improvements we've embedded across the organization. These results also highlight LivaNova's unique ability to drive near-term performance while reinvesting in the core, advancing the obstructive sleep apnea program, and maintaining upside optionality in difficult to treat depression. Together, these actions are aligned with our strategic priorities and position LivaNova well for the future. We recently internally launched a new strategic framework alongside the unveiling of a refreshed logo and visual identity, which you may have noticed in today's earnings materials. This new strategic framework and branding reflect LivaNova's direction, momentum, and continued focus on growth and innovation. We look forward to discussing these strategic priorities, how we plan to build on our strong foundation, and how we will shape the future of LivaNova in more detail at our Investor Day next week on November 12th. Now turning to segment results for the cardiopulmonary segment, revenue was $203 million in the quarter, an increase of 16% versus the third quarter of 2024. Heart-lung machine revenue grew over 20% versus the prior year period, driven by a sequential acceleration in ESSENCE placements and sustained favorable price premiums. This includes a significant majority of ESSENCE placements in developed markets in the quarter. In August, we initiated the commercial launch of ESSENCE in China, which is our second largest HLM market after the U.S. We've received positive early feedback from hospitals and clinicians and we're pleased with the launch thus far. Given the length of the sales cycles for ESSENCE, we expect the rollout to be a more meaningful growth driver in 2026. Cardiopulmonary consumables revenue grew in the mid teens driven by market share gains, procedure growth and price. Strong demand for Oxygenator continues to outpace the market's ability to supply, while our manufacturing capacity expansion plans are progressing well and remain on track. Third party component supply is a limiting factor for even more rapid expansion. Our team remains focused on working with suppliers to meet the production needs. We now expect cardiopulmonary revenue to grow 12.5%-13.5 for the full year 2025, up from 12%-13 previously. This forecast assumes continued HLM growth and increased penetration in existing markets. We still expect ESSENCE to represent approximately 60% of annual HLM unit placements in 2025, up from 40% in 2024. This forecast also reflects robust market and share growth for consumables. Turning to epilepsy, revenue increased 6% versus the third quarter of 2024, with growth across all regions. Epilepsy revenue in the Europe and Rest of world regions increased a combined 12% versus the prior year period, while the US epilepsy revenue increased 5% year- over- year. These results reflect strong commercial execution globally. During the quarter we initiated commercial rollout activities to drive awareness of the core VNS data among the epilepsy clinical community worldwide. While we're still in the early stages of commercial activities, initial feedback from the clinical community is encouraging. Building clinical evidence is a key component of our strategy in epilepsy, and the core VNS data is expected to further strengthen our foundation and support future commercial and educational efforts. For the full year 2025, we now expect Epilepsy revenue growth of 5%-6 up from 4.5%-5.5 previously. This forecast incorporates mid single digit growth in the US and assumes the Europe and rest of world regions will grow a combined low double digits for the year. This is consistent with prior guidance, although at the higher end of respective ranges. We continue to see momentum in the global FLHC business across volume, price and mix. In summary, due to the strong growth we saw in the quarter and continued momentum across all growth drivers, we're raising our overall organic revenue growth outlook by 50 basis points to between 9.5% and 10.5%. We continue to make progress on the obstructive sleep apnea and difficult to treat depression programs and we look forward to providing updates at our Investor Day next week. With that, I'll turn the call over to Alex. Thanks, Vlad. During my portion of the call, I'll share a brief recap of the third quarter results and provide commentary on our updated full year 2025 guidance, which reflects strong performance year to date and improving business outlook. Turning to results, revenue in the quarter was $358 million, an increase of 11% on a constant currency basis and 13% on an organic basis versus the prior year. As a reminder, we took a $7 million provision for the Italian payback measure in the second quarter of 2024. Because of recent legislative developments, the company reduced its reserve for the payback matter by $3.8 million during the third quarter of 2025. Excluding these adjustments, organic growth was 11%. Foreign exchange in the quarter had a favorable year- over- year impact on revenue of approximately $5 million or 1%. Adjusted gross margin as a percent of net revenue was 69% generally in line with 70% in the third quarter of 2024. This year- over- year decrease was driven by unfavorable currency changes, product mix, incremental investments related to oxygenator capacity expansion and tariff impacts. This was partially offset by favorable pricing across segments and geographies. Adjusted SGA expense for the third quarter was $123 million compared to $112 million in the third quarter of 2024. SGA as a percent of net revenue was 34% generally in line with 35% in the third quarter of 2024. The year- over- year decline as a percent of net revenue was driven by fixed cost leverage. Adjusted R& D expense in the third quarter was $45 million compared to $47 million in the third quarter of 2024. R&D as a percent of net revenue was 13% down from 15% in the third quarter of 2024. The year- over- year decrease was driven by cost optimization of the DTD program as we pursue CMS coverage. Adjusted operating income was $80 million compared to $64 million in the third quarter of 2024. Adjusted operating income margin was 23% compared to 20% in the third quarter of 2024. This increase was primarily driven by higher revenue, fixed cost leverage and optimization of DTD program spend. Adjusted effective tax rate in the quarter was 22% principally in line with the third quarter of 2024. Adjusted diluted earnings per share was $1.11 compared to $0.90 in the third quarter of 2024. The increase was primarily driven by adjusted operating income growth. We continue to make progress in generating cash. Our cash balance at September 30th was $646 million, up from $429 million at year end 2024. This increase reflects improvements in operating cash flows and the release of $295 million of restricted cash following the SNEA litigation guarantee termination. Total debt at September 30th was $434 million compared to $628 million at year end 2024. The reduction in total debt was a result of the $200 million early repayment of the term facilities. Adjusted free cash flow in the first nine months of 2025 was $130 million, up from $101 million in the prior year period. The year- over- year increase was primarily driven by stronger operating results and disciplined working capital management. Capital spend in the first nine months of 2025 was $49 million compared to $37 million in the prior year period. The year- over- year increase was driven by IT investments and cardiopulmonary capacity expansion initiatives. Now turning to our updated 2025 guidance. As Vlad mentioned, based on performance to date, we're increasing full year 2025 revenue, adjusted earnings per share and adjusted free cash flow guidance. We now forecast 2025 revenue growth between 8.5%-9.5 on a constant currency basis and between 9.5%-10.5 on an organic basis. We continue to expect the impact of foreign currency to be a tailwind of approximately 1%. We continue to forecast a full year adjusted effective tax rate of approximately 23%, which represents an increase of 200 basis points versus 2024. To reflect stronger operational performance, we now project adjusted diluted earnings per share in the range of $3.80 to 3.90 with adjusted diluted weighted average shares outstanding to be approximately 55 million for the full year. This higher range is primarily driven by increased revenue expectations and productivity improvements. This $0.10 increase continues to reflect an investment in the ESSENCE printed circuit board conversion as we discussed last quarter, which is expected to increase cost of goods in the fourth quarter. As a reminder, the printed circuit board investment will support future advanced ESSENCE software updates. Adjusted free cash flow is now expected to be in the range of $160 to 180 million, which is $20 million higher compared to our prior guide due to higher net income expectations, working capital improvements as well as lower capital spend for the year. Capital expenditures are now expected to be approximately $80 million, down from $95 million previously due to the cadence of capital projects. I'd also like to call out that the guidance ranges shared today incorporate our best estimate of the potential impact of currently applicable tariffs. As previously discussed, we have a tariff mitigation plan in place that includes both a holistic assessment of our supply chain as well as potential pricing actions based on the assessment. LivaNova remains well positioned to manage the impact of tariffs. Consistent with our prior guidance, we estimate a tariff net impact of less than $5 million on adjusted operating income for the full year. The 2025 guidance range shared today fully incorporates the impact from currently applicable tariffs. We acknowledge this is a dynamic environment and we continue to monitor it closely. In summary, we had another quarter of strong performance marked by double digit organic revenue growth which drove 250 basis points of operating margin expansion. This translates into a 23% increase in adjusted diluted earnings per share and a 32% improvement in adjusted free cash flow. These results also underscore the impact of disciplined execution productivity across the organization. Our updated 2025 guidance reflects the strength of our businesses and continued investment in the core and innovation pipeline. With that, I'll turn the call back over to Vlad. Thank you, Alex. In closing, LivaNova delivered another quarter of strong performance, underscoring the durability of the core cardiopulmonary and epilepsy businesses as a strong foundation for the company. Our results this quarter also reflect disciplined execution, enhanced productivity and operational excellence. In the third quarter, we continued to expand margins and generate cash while still investing in innovation priorities. At the same time, we continue to leverage our neuromodulation expertise to progress the obstructive sleep apnea and difficult to treat depression programs. These initiatives represent significant opportunities to address large patient populations with unmet needs. They position LivaNova for expansion into additional attractive markets where we have a clear right to win and can drive durable long term growth with a strong team and clear strategic priorities. We are confident in our ability to sustain momentum and create lasting value for patients, customers and shareholders. We look forward to sharing our vision for the next chapter of LivaNova and the strategic priorities that will drive long term growth and value creation in greater detail at our Investor Day next week on November 12th. With that, we're ready to open the call for questions. Thank you. If you have a question at this time, please press the star then the number one key on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star two. As we enter the Q& A session, please limit yourself to one question and one follow up and then return to the queue. If you have any additional follow ups. First question comes from Michael Pollack with Wolfe Research. Your line is open. Please go ahead. Hey, good morning. Thank you. I'm going to start in the week on just the fourth quarter and what's implied there? If I do the simple math on EPS I'm getting $0.80 f lat year on year. It just looks extremely conservative relative to the performance year to date. It implies gross margin, operating margin down a lot sequentially year on year. Alex or Vladimir, hopefully you can walk us through a little more precisely like puts and takes in the fourth quarter. Anything that you're bracing for in this guide that the street might have been under considering. I heard about the PCBA conversion. Maybe that's a big piece of the answer. Could be tariffs as well. Any further context on the fourth quarter implied earnings outlook I would appreciate. I Mike, Alex, yeah, you're absolutely right. The printed circuit board investment that we're making is indeed happening in the fourth quarter. In my prepared remarks I refer to $0.10 impact. That's what the key driver is of kind of the soft MQ4. If you recall, we talked about the investment in PCBA as a platform for us to continue to drive strategic revenue in the future with software and service. That's, you know, it was a planned investment. We kind of foreshadowed it last quarter and it is indeed happening in Q4. Thank you. I'll have to follow up on oxygenators. Obviously the cardiopulmonary performance, impressive again on the consumable side. I heard two things, just good volumes, good share take, good price. I heard good progress on your internal capacity expansions, but I heard caution again on kind of third party component supply. Can you unpack for us a little more on the internal capacity investments? Remind us how much you're adding there and when these projects are expected to complete. On the third party supply, have things gotten tighter? Quarter- over-quarter? About the same. Quarter- over-quarter. What is the path from your perspective for that piece to relieve as you roll into 2026? Thank you so much. Thanks Mike for the question. It's indeed gaining share in oxygenators has been and will continue to be one of our key growth drivers. We have very strong momentum over the last 24 months in terms of share gains and that is supported by our ability to continue manufacturing, expanding our manufacturing. Last year, if you recall, we've increased our capacity by around 10%. This year again our capacity expansion is close to 15%. However, our actual output for the full year will be below 10% and that gap is driven by deficit in third party component supplies. We're working very closely with a group of our suppliers to make sure that we continue to improve that situation and do our best to close the year strong. Now for the next year we are actually adding another manufacturing line within LivaNova. It's been an ongoing investment and project that we have been driving. That will allow us to have a step change in our own manufacturing capacity. Obviously, we're working closely with all the suppliers to make sure that they continue to grow and expand their capacity as well. Thank you. We now turn to Adam Maeder with Piper Sandler. Your line is open. Please go ahead. Hi, good morning. Thank you for taking the questions and congrats on a nice quarter. Two for me. The first one is on the Q4 implied guidance. Mike just asked about bottom line, but maybe I'll ask about the top line. You know, I think the implied Q4 revenue growth suggests a growth deceleration and when I look at the prior year comp, it looks easier. So maybe just square that for us. Is it largely conservatism or are there some other considerations that we should be a ware of in the top line outlook for Q4? Thanks. Hi Adam. Look, our revenue guide for Q4 is prudent. The biggest item I would call out is the Q4 comps related to the HLM. Right. We had a really big quarter last year and so, you know, just kind of the compounding effect is causing this deceleration, if you will. Look, we're, you know, we're continuing to perform well and really pleased with, you know, with an 8% growth for Q4. I think we're, we're in pretty good shape. Okay. Appreciate the color there, Alex. Just for the second question, HLM Q3 I think marked your first quarter with ESSENCE in China. That's your second largest end market. It looks like we did see rest of world growth tick up a little bit. Can you just help us better understand the expectations for launch in the Chinese market? I heard more of an impact in 2026, but if you could just, you know, kind of flesh that out for u s a little bit more in terms of cadence or rollout and then just r emind us the current install base there and the opportunity for China, that would be helpful as well. Thank you. Yeah, so thank you for this question as well. We launched, we had a commercial launch in China in August. It is about six months before the kind of the internal target date. That is a really good sign for us from the Chinese market, both from the clinicians, but also from regulators. That means there is a high demand for this product. So far the feedback from the clinical and the hospital community has been very strong, very good on the launch. You know, the selling cycle on the equipment is relatively long obviously than the disposables. That is why I kind of made a comment that we, you know, we expect the majority of growth impacts starting in 2026. If you recall what we have always said, you know, we have. Last year 40% of our worldwide placements were ESSENCE. This year, 60% of all HLMs placed globally will be ESSENCE. Next year, 80% of all HLMs placed around the world will be ESSENCE. China will be the main contributor to that upside from 60%- 80. During the investor day next week, which I hope you can attend, we will unpack a little bit more the opportunity in China and specifically what we expect from launch. Thanks very much, Vlad. We now turn to Matt Taylor with Jefferies. Your line is open. Please go ahead. Hi, thanks for taking the question. Nice to see the neuro growth stabilizing here. I was wondering if you could just at a high level talk about trajectory into next year for that business given we will start to see some of the roll off of the COVID implant headwinds. You have these other helpers, including the new reimbursement for replacements and the DRE data. Could we see a pickup in that growth next year? Yep. Good morning Matt, and thank you for the question. I'll maybe compartmentalize a little bit. You know, there will be two occasions that we will share in more detail our longer term projections on epilepsy as well as expectations for 2026. November 12th is our investor day and then we will guide early in the year for 2026. A little bit of flavor on what we're starting to see in terms of results. I think two things. One is strong execution globally. We continue to just improve our level of commercial execution and that pays off with consistent results across the world. Number two, you know, we had core VNS study results out. That's the largest to date real world evidence study. We're starting to deploy the results of the study to the clinical community and starting to get very positive results. Maybe after I finish, I'll ask Ahmet to just say a few points about that. To your point on, you know, we're very pleased on the reimbursement improvements that is anticipated as of January 1 with a shift from Level 4 to Level 5 on the end of service u nits t hat obviously improves economic viability over the lifetime of VNS patients for the providers. That clearly is an important growth driver for us moving forward. We continue to work on market access and improve reimbursement also for the NPIs. Maybe Ahmet, if you can comment a little bit on core VNS. Sure. A s Vlad stated, this was the largest study to date with VNS with 800 patients. Because it was large, it allowed us to do subgroup analysis because we had large sample sizes and the outcomes kind of further validated the early and sustained reductions in seizure frequency across multiple seizure types, including the most severe and disabling seizures. For example, I'll just give you one data point. At 36 months, the analysis showed that the median seizure reduction was 80% for focal onset seizures. We are still, as Vlad stated, in the middle of rolling the data out, but we are getting very, very strong feedback from physicians about the strength of the data. Gotcha. Maybe I just ask one follow up I know you probably want to comment on the pipeline next week, but I did want to get an update on the process for depression. I think last quarter you said it could be about a year before we see a decision. Is it now, you know, six to nine months or is there anything new on timing or your confidence in getting coverage there? In terms of the process, yeah, you know, the fundamentals have not changed for us with regards to the timeline. We submitted our draft application. CMS has given us some questions. We view that as a positive part of the process. We answer their questions and then the government wants to shut down. Right now because of that, there's a pause. As soon as the government opens, we w ill g o back with the process and the next step is to do our formal application. Now from that point on, there is no strict timelines. As a reference, and it is just a reference, Medtronic just completed that renal denervation. For them the process took 11 months in total from the time of the formal application to having the reimbursement completed. We are also hoping that the process for us will be within that kind of time frame of one year. Nothing has really changed for us. The only thing is this kind of temporary pause with the government shutdown. Okay, great. Thank you very much. We now turn to Anthony Petrone with Mizuho. Your line is open. Please go ahead. Thanks. Congrats here on the quarter. Maybe one quick one on ESSENCE and then a high level question, just maybe a little bit on the contribution from the China launch in the quarter and how that product cycle in China, ESSENCE specifically, will sort of evolve here, you know, over the next 12 months. I have a quick high level follow up. Hey Anthony, in terms of China for the quarter, we actually saw some early indications of, you know, kind of positive reception. We had some orders come into Q3. I think there was kind of the mad rush ahead of the golden week to get these orders in by certain distributors and hospitals. You know, still early on in the game and as Vlad said, we're going to see most of the impact next year from that launch. Maybe just high level as we head into analyst day. When you think about, you know, managing the top line growth algorithm with just your priorities at EBITDA, obviously two new initiatives here, depression and sleep. Maybe just a little bit of a preview on how the company is prioritizing top line growth over EBITDA margin expansion in earnings. Congrats again. Look forward to seeing everyone next week. Thanks. Look, we do not want to preempt discussion today for Investor Day next week. We will connect the dots between our current execution and our financial ambitions for the long range plan. Again, kind of looking forward to sharing the details of our long term strategy and financial objectives next week on November 12. Anthony, I look forward to seeing you next week and thank you for taking the time to join us. Fair enough. Thank you. We now turn to David Rescott with Baird. Your line is open. Please go ahead. Great. Thanks for taking the questions and congrats on the quarter here. I want to follow up on some of the comments around this investment behind the Core VNS trial. You know, more curious about how internally you're expecting to gauge what the benefits of that can be and over what period. I know there's some elevated reimbursement on the end of service potentially being a benefit for new centers opening up or maybe new centers adopting this therapy. I'm not sure there's been an update on the NPI reimbursement. But you know, is this something that you'll see on the ground level as it relates to exploring new implants to just more centers onboarding therapy? How are you thinking about gauging kind of the success of what Core VNS has shown in the financials, I guess of the company? David, good morning and very important question. Thank you for asking it. Look, I think this is if you look at, you know, one third roughly of epilepsy population are resistant to drugs and then it takes 10- 15 years to get from the diagnosis of being a DRE patient to actually getting or seeking for treatment. And you know, if you look at the kind of across various clinical specialties, treatment of drug resistant epilepsy patient has one of the lowest penetrations and there are a number of barriers or if you flip it, drivers that will contribute to improvement of that penetration. You mentioned the two of them, one is reimbursement and making sure that hospitals also have financial economic benefit from those procedures. We made a major step on that in terms of level four to level five. Like I said, we're continuing to work on level six for the NPIs as well. The other kind of clinical strategic direction in the innovation area is how do we make sure that we continue to create products and procedures that are less invasive and more clinically effective. Ultimately that is the goal of innovation. Minimally invasive, more clinically effective. What VNS study shows is that with relatively less invasive procedures like VNS, we're starting to see really strong long term results. That is an important data point for the clinical community to drive penetration of the procedure. I'll turn it to Ahmet a little bit to talk more from a scientific point of view. Yeah. In terms of the investment, in terms of the data investment, investment is mostly done. From this point on, we're talking, you know, publications, advisory boards and things like that are not substantial investments from an investment standpoint. I'll add two comments to what Vlad said. One, the data show that the earlier you start VNS therapy, the better clinical outcomes are. I think that's an important learning of the study that we are going to ensure that our physician base understands. That could kind of accelerate a little bit of utilization because earlier is the better. As Vlad talked about it, we're investing a lot in simplifying the workflow. We also show with the core data that dosing and titration and getting that right is really, really important. Anything we can do to make the workflow easier and faster helps the end outcome. I think those will be two k ey points I will make earlier. Utilization of VNS is really important and impactful according to the core data and dosing and titration is really impactful. We are investing a lot in making that a lot easier for our physicians and patients. David, I'm going to keep promoting our investor day because I think it will be important to kind of take a look at a holistic strategy on how we continue to grow epilepsy. This is obviously an important leg of that strategy. I hope to see you there and we will unpack a little bit more in terms of our holistic approach to driving durable growth in the epilepsy business. Okay, that's helpful. Two, I guess kind of clarification questions on some prior comments. First, on the China rollout contribution in 2026. I heard you talk about the shift from the 60%- 80. Is China the way, the reason that you get to the 80% or is potentially China an upside to getting to 80%? And then on the oxygenator manufacturing capacity, heard that, you know, new manufacturing line next year, that will be a step change. I think you said on the impact. Just curious if you can qualify or quantify what your definition of step change is. And we'll see the team at the analyst day next week. Thank you. Yeah, I'll start maybe with the second one. We expect the new line to go live in the second half of the year. That's when we will start seeing acceleration beyond just ongoing improvements within the current network and the step change. We won't guide specifically to our exact capacity increase, but it will be beyond what we have done historically on an annual basis. That's the first one. On the first one, China is a big driver. Remember, there are two drivers on the growth of HLM. The first one is this kind of% improvement of placement penetration, call it during the year. We're going from 60%- 80 next year, and yes, China will be the major contributor to that upgrade. The second one, and if you look over the last few quarters and this is where the biggest upside came from in terms of our growth, you know, same in, in quarter three is with the fact that we are able to maintain very strong price premium on ESSENCE versus S5. And that ability to preserve price premium is actually a very strong indicator of, you know, value proposition of ESSENCE to the clinical community. And so one of our targets, and using your point, could that be an upside is to make sure that we continue to preserve price premium as we roll out ESSENCE across the world. Okay, thank you. We now turn to Mike Matson with Needham. Your line is open. Please go ahead. Yeah, thanks. So just a few on the Oxygenator business. Are there any signs of your competitors trying to expand their production? And then, you know, what's your confidence. That the demand remains as strong as it's been? P articularly the, I guess, procedural driven component of that If the growth were to If demand were to slow down, is there any, as you've added this capacity, would that pressure your margins or anything like that? Or is it easy enough to kind of turn it off if you see things slow down? Very good question. I'll start with the second part of it. The way we're building our additional capacities is in a very financially disciplined manner, so you know, fluctuations in the demand within a certain range are not going to impact negatively this type of investment. We won't see any negative pressure on the financials. On the first part of the question, we have now over the last two years seen the momentum of share gains, and we believe that we are now, we've gained share from low 30s to very high 30s now in terms of% share. In a very mature market like Oxygenator, you rarely see that. We attribute that not to a disruption in the market with competitors, but to the fact that we have not seen any investment and innovation or capacity increase from Medtronic and Terumo, and obviously from Getinge, we saw exit from this part of the segment of the market. We continue to gain share. Our first step is to continue gaining share through improved supply. The second step will be to launch new generation Oxygenator. We're going to talk about clinical value that it brings during the investor day. We see share gain. Oxygenator is not just a short term blip, but a long term strategy. We have, you know, execution plan behind that. To the market growth, look, we're learning more and more about what drives the procedure growth and it's multidimensional. P art of it is that we're just as a society getting older and getting more open heart surgeries. Number two is emerging markets where open heart procedure penetration is lower and has more runway for growth. Those markets are becoming bigger part of the pie a nd t hat kind of contributes positively to overall growth. Finally, we believe that there was a kind of lack of diagnosis during COVID, and that resulted in more advanced heart disease for patients after COVID. That part of the market growth will potentially go away. Finally, on the valve procedures, we see a more robust growth on valve procedures as kind of TAVR growth, kind of, you know, momentum is flattening. Mike, I would just add. Yeah. The fact that the market is continuing to be a very robust market. We were still operating in a backorder situation. The demand is outpacing the market's ability to supply. Right. We are building capacity to address, you know, the demand that we are seeing. As Vlad said, you know, we are going to do this in a financially disciplined manner. You know, we need to build this capacity also in light of the fact that we are going to ultimately start converting to our next generation oxygenator. There needs to be that transition point. Yeah, okay, that makes sense. Especially with the new, the new Oxygenator coming. Then just one quickly, on the HLM side with the piece, the PCBA. Upgrade, how involved are the sales reps? Going to be in terms of managing t hat with the customers? Is this something that could, you k now, potentially distract them from selling HLMs. Oxygenators in the fourth quarter? No, yeah, it's a good point. No, it's a service organization that will execute the upgrade and then there will be no disruption for sales organization. Okay, got it, thanks. We now turn to John McCauley with Stifel. Your line is open. Please go ahead. Hi, good morning. Just wanted to go back to the free cash flow we saw in the quarter. Conversion rates above 90% on a last 12 month basis, near $200 million in total. Just want to get a better sense. I know SNEA is still ongoing here, but is there anything that we can attribute maybe in the future to greater MA capacity or, or other in terms of investments in the business that you're getting with this stronger free cash flow generation on the overall strategy? John, thanks for your question. Look, we, you know, if you look at our cash position, very well positioned to address this near payment and I appreciate you calling out the fact that we're. Our cash generation has improved. Yeah, obviously it gives us, you know, putting SNEA behind this ultimately gives us the flexibility to deploy our capital against strategic initiatives and M and A is one of, one of those tools that we will look to. I think it's important for us to continue to focus on improving our cash generation. It's, you know, that is, that's the lifeline for any company to be successful is to drive cash flow. Great, that's helpful. A follow up on the epilepsy business. You talked a lot about the core VNS study so far and how that's contributing. Also just wanted to get a sense o f what's going on the ground in terms of the team's commercial presence, the rep CEC teams, just all these initiatives that you've put in place, how are they working to drive greater overall market penetration and just what inning do you think we are in in terms of seeing this number steadily increase? John, thanks. Look, the epilepsy business, really pleased with our performance in the quarter and year to date. The commercial teams have executed extremely well, particularly coming out of the field safety notice situation that we had in the quarter. We're starting to catch up in terms of deferred procedures that we saw and it's a multifaceted approach to driving penetration in the marketplace. As a market leader, you know, we're obviously focused on driving data generation, clinical evidence to support the therapy, you know, the health, economic reimbursement improvements are going to help us. This is, you know, it's part of our overall strategy to drive growth. Again, we keep, you know, pitching investor day, but we'll unpack a lot of that next week when we talk about our long, long range strategy. Great. Thanks for taking the questions. We now turn to Matt Miksic with Barclays. Your line is open. Please go ahead. Thanks so much for taking the questions. Thank you. Just put this on hold. Sorry folks. Congrats on the quarter and on the momentum here. I just wanted to follow up on one aspect of the sort of next, you know, call it next set of drivers indications which I'm sure you'll get into next week on DTD and OSA. You know, if you could sort of give a sense of where, you know, how those, what those investments look like. Two very different to me anyway opportunities and very different set of investments and, you know, different challenges facing each. You know, maybe if you were to think about the P& L and the profile of these, you know, when and how do we see say DTD phasing into your intermediate long term growth and at a high level, when and how do we see OSA potentially phasing into intermediate and long term growth? Understanding, of course you don't really want to get into everything now. Thanks. Yeah, I mean, Matt, thanks for the question. It's a really good lead into the investor day. I think we will spend the majority of our time talking about our plans to launch OSA and then our progress with depression. You know, both from the strategy point of view, the value proposition point of view, but also potential financial impact. All of this will be unpacked on November 12th. Okay, fair enough. Just maybe in this next quarter, understanding that you're already investing a fair amount of spend into these programs, you called out the sort of circuit board investment and some of the other businesses. You're ramping up PDA in the fourth quarter. Can you quantify what your, you know, if you're upticking up the investment in Q4 at all from current levels or maybe just a level check on sort of what the quarterly spend looks like and how that's progressing in advance of the bigger plan you'll unveil next week. Thanks. Hey Matt, thanks for your question. Look, Q4 is always, we always see an uptick in spend. It's our kind of the biggest quarter in terms of our OpEx, both SGA and R&D. That's all factored into the full year guide. Understood. No color, you know. Safe to say you're sort of maintaining spending levels in those two programs or, you know, no significant change from Q3- Q4. Is that fair, or do you see a step up that's not consistent with, as you point out, sort of the seasonal step up in OpEx? No, it's pretty consistent. There's no step up in investments and I think from trying to read into what you're alluding to, as Ahmet said, given the timelines for both DTD and OSA, there are no incremental investments in Q4 related to those programs. That's helpful. Thanks so much. Look forward to seeing you next week. Our final question today comes from David Roman with Goldman Sachs. Your line is open. Please go ahead. Hey, thanks. Good morning. This is Jamie on for David. I hate to belabor the 4Q guidance question, but as we think about last year, a similar dynamic unfolded. You provided Q4 guidance that many of us perceived as conservative given the year to date trends and all modeled ahead of your guidance. You ended up doing sort of exactly what you said you would do. That created a lot of volatility early in 2025. How do you consider these dynamics in constructing the outlook for 4Q? Jamie, thanks. Look, we guide, you know, to a specific set of numbers, you know, for obviously four years, one quarter remaining. You know, we're not expecting anyone to model, you know, in kind of ahead of the numbers that we're calling. I would just say, look, we're, you know, we're pleased with our results here today, and our guide reflects, you know, kind of the balance to go in, in Q4. I'd encourage you to, you know, to adjust your models accordingly. Okay, thank you. I know you'll get into 2026 more next week, but if we lay out some of the headwinds, which would be incremental interest expense from eventual payment of SNEA, annualization of tariffs, investment in OSA, against some of the tailwinds, the China ESSENCE launch, PCBA upgrade completion, capacity for oxygenators. How do the headwinds and tailwinds balance each other going into next year? Look, we're in the planning process at this stage and there's many puts and takes at this point in time. I can talk to as many headwinds as tailwinds. I would say, you know, we'll talk about our 2026 guidance in February. Okay, great. Look forward to next week. Thank you. This concludes our Q& A. I'll now hand back to Vladimir Makatsaria for any final remarks. Okay, thank you so much and thank you everyone for joining us on this call today. On behalf of all of us, we really appreciate your support and interest in LivaNova. I hope to see you at our Investor Day on November 12th. Thank you and have a great day. Ladies and gentlemen, this call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.