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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Note 15. Income Taxes Effective for the year ended December 31, 2025, LivaNova adopted ASU 2023-09 on a prospective basis, which resulted in certain additional disclosures presented below for 2025. (Loss) Income Before Income Tax and Income Tax Expense (Benefit) The following table presents the domestic and foreign components of (loss) income before income tax and income tax expense (benefit) (in thousands):
|  | 2025
(Loss) income before income tax: |  |
UK domestic |  | $ | 40,823 |
Foreign |  | (261,604) |
|  | $ | (220,781) |
Income tax expense (benefit): |  |
Current: |  |
UK domestic (national) |  | $ | 2,142 |
Foreign |  | 19,042 |
|  | 21,184 |
Deferred: |  |
UK domestic (national) |  | $ | 5,089 |
Foreign |  | (4,634) |
|  | 455 |
|  | $ | 21,639 |
The following table presents the U.S. and non-U.S. components of income (loss) before income tax and LivaNova’s income tax expense (benefit) (in thousands):
|  | 2024 |  | 2023
Income (loss) before income tax: |  |  |  |
UK and non-U.S. |  | $ | 86,886 |  |  | $ | 60,799 |
U.S. |  | 1,424 |  |  | (142,025) |
|  | $ | 88,310 |  |  | $ | (81,226) |
Income tax expense (benefit): |  |  |  |
Current: |  |  |  |
UK and non-U.S. |  | $ | 13,851 |  |  | $ | 10,954 |
U.S. |  | 4,412 |  |  | 4,598 |
|  | 18,263 |  |  | 15,552 |
Deferred: |  |  |  |
UK and non-U.S. |  | 5,987 |  |  | (114,428) |
U.S. |  | 808 |  |  | — |
|  | 6,795 |  |  | (114,428) |
|  | $ | 25,058 |  |  | $ | (98,876) |
Effective Income Tax Rate Reconciliation LivaNova PLC is resident in the UK for tax purposes. LivaNova’s subsidiaries conduct operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries, and the income tax rates imposed in the tax jurisdictions in which LivaNova’s subsidiaries conduct operations vary. As a result of the changes in the overall level of the Company’s income, the earnings mix in various jurisdictions, and the changes in tax laws, LivaNova’s consolidated effective income tax rate may vary from one reporting period to another. LivaNova is subject to income taxes as well as non-income-based taxes in the U.S., the UK, the EU, and various other jurisdictions. LivaNova continues to monitor the adoption of Pillar Two by the taxing jurisdictions in which it operates. The UK has enacted legislation providing for a minimum effective tax rate of 15% through a multinational top-up tax and a domestic top-up tax for accounting periods beginning on or after December 31, 2023. Since LivaNova does not have significant operations in jurisdictions with tax rates below 15%, the multinational top-up tax and domestic top-up taxes under Pillar Two do not have a material impact on the effective rate for 2025. LivaNova will continue to monitor legislative developments and related guidance in the UK and other jurisdictions that may impact LivaNova’s operations. LivaNova’s effective income tax rate was (9.8%) and 28.4% for the years ended December 31, 2025 and 2024, respectively. Compared with the year ended December 31, 2024, the change in the effective tax rate for 2025 was primarily attributable to year-over-year changes in income before income tax in countries with varying statutory tax rates; certain discrete tax items, including the SNIA environmental liability; and changes in valuation allowances. The following tables present a reconciliation of the statutory income tax rate to LivaNova’s effective income tax rate expressed as a percentage of income (loss) before income tax (in thousands, except for percentages):
|  | 2025
UK domestic statutory tax rate |  | $ | (55,195) |  |  | 25.00 | %
Foreign tax effect |  |  |  |
Italy |  |  |  |
SNIA Environmental Liability |  | 89,825 |  |  | (40.69) | %
Interest limitations |  | 3,125 |  |  | (1.42) | %
Other |  | 1,718 |  |  | (0.78) | %
U.S. |  |  |  |
Changes in valuation allowance |  | (26,036) |  |  | 11.79 | %
Foreign tax credit |  | 14,310 |  |  | (6.48) | %
Foreign tax rate differential |  | (2,922) |  |  | 1.32 | %
Other |  | 922 |  |  | (0.42) | %
Brazil |  |  |  |
Changes in valuation allowance |  | (3,709) |  |  | 1.68 | %
Other |  | 870 |  |  | (0.39) | %
Other foreign |  | (1,251) |  |  | 0.57 | %
Nontaxable or nondeductible items |  | (1,966) |  |  | 0.89 | %
Changes in valuation allowance |  | (1,584) |  |  | 0.72 | %
Changes in unrecognized tax benefits |  | (537) |  |  | 0.24 | %
Other items |  |  |  |
Compensation related |  | 3,539 |  |  | (1.60) | %
Other |  | 530 |  |  | (0.24) | %
Effective tax rate |  | $ | 21,639 |  |  | (9.80) | %
|  | 2024 |  | 2023
Statutory tax rate at UK Rate |  | 25.0 | % |  | 23.5 | %
Interest |  | 9.5 |  |  | — |
Deferred tax valuation allowance |  | (7.7) |  |  | 100.5 |
Research and development tax credits |  | (4.1) |  |  | 0.3 |
Subsidiary investments and impairments |  | 1.9 |  |  | (3.1) |
Foreign tax withholding and credits |  | 1.2 |  |  | — |
Foreign tax rate differential |  | 1.1 |  |  | 5.2 |
U.S. state and local tax expense, net of federal benefit |  | 0.9 |  |  | (3.5) |
Reserve for uncertain tax positions |  | 0.7 |  |  | — |
Disallowable professional fees |  | 0.6 |  |  | (2.6) |
Compensation related items |  | (0.4) |  |  | 1.4 |
Effect of changes in tax rate |  | — |  |  | 1.2 |
Other, net |  | (0.3) |  |  | (1.2) |
Effective tax rate |  | 28.4 | % |  | 121.7 | %
Income Taxes Paid The following table presents the domestic and foreign components of cash paid for income taxes, net (in thousands):
|  | 2025
UK domestic (national) |  | $ | 4,387 |
Foreign |  | 24,981 |
U.S. (federal $3,941, state $2,223) |  | 6,164 |
Germany |  | 4,657 |
Italy |  | 3,262 |
Belgium |  | 1,584 |
China |  | 1,508 |
Other |  | 7,806 |
|  | $ | 29,368 |
Deferred Income Tax Assets and Liabilities The following table presents the significant components of LivaNova’s deferred tax assets and liabilities (in thousands):
|  | December 31,
|  | 2025 |  | 2024
Deferred tax assets: |  |  |  |
Net operating loss carryforwards |  | $ | 115,511 |  |  | $ | 114,678 |
Interest expense carryforward |  | 84,759 |  |  | 93,072 |
Accruals and reserves |  | 34,295 |  |  | 31,284 |
Capitalized/Deferred R&D |  | 17,411 |  |  | 30,819 |
Tax credit carryforwards |  | 10,960 |  |  | 27,801 |
Deferred compensation |  | 15,918 |  |  | 15,428 |
Inventories |  | 7,702 |  |  | 10,698 |
Other |  | 1,904 |  |  | 1,012 |
Gross deferred tax assets |  | 288,460 |  |  | 324,792 |
Valuation allowance |  | (127,594) |  |  | (158,823) |
Net deferred tax assets |  | 160,866 |  |  | 165,969 |
Deferred tax liabilities: |  |  |  |
Property, equipment, and intangible assets |  | (57,479) |  |  | (58,350) |
Other |  | (1,994) |  |  | (6,679) |
Gross deferred tax liabilities: |  | (59,473) |  |  | (65,029) |
Net deferred tax assets |  | $ | 101,393 |  |  | $ | 100,940 |
Net deferred tax assets and liabilities, as reported on the consolidated balance sheets as: |  |  |  |
Net deferred tax assets |  | $ | 110,983 |  |  | $ | 111,855 |
Net deferred tax liabilities |  | (9,590) |  |  | (10,915) |
Net deferred tax assets |  | $ | 101,393 |  |  | $ | 100,940 |
The Company operates in multiple jurisdictions worldwide and assesses the recoverability of its deferred tax assets for each period and jurisdiction by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. Depending on operating results in the future, a release of the valuation allowance could occur within the next 12 months. The timing and amount of the valuation allowance release could vary based on the Company’s assessment of all available evidence. Any changes to the realizability of the deferred tax assets due to transactions and other events in 2026 will be accounted for during the quarter in which they occur. As of December 31, 2025 and 2024, LivaNova had valuation allowances against deferred tax assets of $127.6 million and $158.8 million, respectively. The decrease in valuation allowance primarily relates to the release of valuation allowances for expired tax credits and utilization of previously valued deferred tax assets. The following table presents a reconciliation of the beginning and ending balances of LivaNova’s deferred tax asset valuation allowances (in thousands):
|  | 2025 |  | 2024 |  | 2023
Balance at beginning of year |  | $ | 158,823 |  |  | $ | 182,464 |  |  | $ | 264,754 |
Additions |  | 89 |  |  | 99 |  |  | 38,278 |
Deductions |  | (31,318) |  |  | (23,740) |  |  | (120,568) |
Balance at end of year |  | $ | 127,594 |  |  | $ | 158,823 |  |  | $ | 182,464 |
The following table presents NOL and tax credit carryforwards as of December 31, 2025, which can be used to reduce LivaNova’s income tax payable in future years (in thousands):
Region |  | Gross Amount |  | Tax Benefit |  | Amount with No Expiration |  | Amount with Expiration |  | Carryforward Period
UK NOL |  | $ | 369,432 |  |  | $ | 92,358 |  |  | $ | 92,358 |  |  | $ | — |  |  | Unlimited
U.S. State NOL |  | 307,195 |  |  | 14,495 |  |  | 648 |  |  | 13,847 |  |  | 2026 | - | 2045
U.S. Federal NOL |  | 15,363 |  |  | 3,226 |  |  | — |  |  | 3,226 |  |  | 2028 | - | 2034
Other regions NOL |  | 18,716 |  |  | 5,432 |  |  | 5,353 |  |  | 79 |  |  | 2030 | - | 2040
U.S. State research & development tax credits |  | — |  |  | 7,473 |  |  | 1,565 |  |  | 5,908 |  |  | 2030 | - | 2044
U.S. tax credits |  | — |  |  | 2,322 |  |  | — |  |  | 2,322 |  |  | 2026 | - | 2044
Other non-U.S. tax credits |  | — |  |  | 1,164 |  |  | 208 |  |  | 956 |  |  | 2026 | - | 2034
|  | $ | 710,706 |  |  | $ | 126,470 |  |  | $ | 100,132 |  |  | $ | 26,338 |  |  |  |  |
No provision has been made for income taxes on undistributed earnings of foreign subsidiaries as of December 31, 2025 because it is LivaNova’s intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. In the event of the distribution of those earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, LivaNova may be liable for income taxes and withholding taxes. As of December 31, 2025, it was not practicable to determine the exact amount of the deferred tax liability related to those investments. Uncertain Income Tax Positions LivaNova operates in multiple jurisdictions with complex legal and tax regulatory environments, and the Company’s tax returns are periodically audited or subjected to review by tax authorities. LivaNova monitors tax law changes and the potential impact on its results of operations. Tax authorities may disagree with certain positions LivaNova has taken and assess additional taxes. LivaNova regularly assesses the likely outcomes of the Company’s tax positions in order to determine the appropriateness of its reserves for uncertain tax positions. However, there can be no assurance that LivaNova will accurately predict the outcome of these audits, and the actual outcome of an audit could have a material impact on LivaNova’s consolidated results of operations, cash flows, and financial position. The following table presents a reconciliation of LivaNova’s total gross unrecognized tax benefit (in thousands):
|  | 2025 |  | 2024 |  | 2023
Gross Balance at beginning of year |  | $ | 15,221 |  |  | $ | 5,406 |  |  | $ | 1,640 |
Tax positions related to prior years for settlement with tax authorities |  | (3,488) |  |  | (143) |  |  | 5,406 |
Additions for tax positions related to current year |  | 819 |  |  | 915 |  |  | — |
Impact of foreign currency exchange rates |  | 685 |  |  | (417) |  |  | 58 |
Additions for tax positions related to prior years |  | 143 |  |  | 9,460 |  |  | — |
Tax positions related to prior years for lapses of statute of limitations |  | — |  |  | — |  |  | (1,698) |
Gross Balance at end of year |  | $ | 13,380 |  |  | $ | 15,221 |  |  | $ | 5,406 |
The following table presents the components of LivaNova’s total gross unrecognized tax benefit (in thousands):
|  | December 31,
|  | 2025 |  | 2024 |  |
Recorded as liability |  | $ | 3,164 |  |  | $ | 1,073 |  |  |
Reduction to deferred tax assets - impacting effective tax rate |  | — |  |  | 4,786 |  |  |
Reduction to deferred tax assets with valuation allowance |  | 10,216 |  |  | 9,362 |  |  |
|  | $ | 13,380 |  |  | $ | 15,221 |  |  |
Accrued interest and penalties totaled $0.4 million, $0.1 million, and $0.7 million, as of December 31, 2025, 2024, and 2023, respectively, and were included in other long-term liabilities in LivaNova’s consolidated balance sheets. LivaNova records accrued interest and penalties related to unrecognized tax benefits in interest expense and foreign exchange and other income/(expense), respectively, in LivaNova’s consolidated statements of income (loss). The major jurisdictions where LivaNova is subject to income tax examinations as of December 31, 2025 were as follows:
Jurisdiction |  | Earliest Year Open |
Italy |  | 2020 |
Germany |  | 2020 |
Canada |  | 2020 |
England and Wales |  | 2021 |
U.S. - federal and state |  | 2022 |

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