UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13G

Information to be Included in Statements Filed

Pursuant to Rules 13d-1(b), (c) and (d) and Amendments

Thereto Filed Pursuant to Rule 13d-2(b)

Under the Securities Exchange Act of 1934

(Amendment No.                 )*

Cyberonics, Inc.

(Name of Issuer)

Common Stock, $0.01 Par Value

(Title of Class of Securities)

23251P102

(CUSIP Number)

December 31, 2006

(Date of Event Which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

x Rule 13d-1(b)

¨ Rule 13d-1(c)

¨ Rule 13d-1(d)

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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CUSIP No.     23251P102

1.	Names of Reporting Persons I.R.S. Identification No. of above persons (entities only)             Granahan Investment Management, Inc. 04-2856200
2.	Check the Appropriate Box if a Member of a Group* (a)  ¨ (b)  ¨
3.	SEC Use Only
4.	Citizenship or Place of Organization             Massachusetts

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH:	5.    Sole Voting Power         315,300
	6.    Shared Voting Power         0
	7.    Sole Dispositive Power         1,414,520
	8.    Shared Dispositive Power         0

9.	Aggregate Amount Beneficially Owned by Each Reporting Person             1,414,520
10.	Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*	¨
11.	Percent of Class Represented by Amount in Row 9             5.5%
12.	Type of Reporting Person*             IA

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Item 1(a). Name of Issuer:

Cyberonics, Inc.

Item 1(b). Address of Issuer’s Principal Executive Offices:

100 Cyberonics Blvd.

Houston, TX 77058

Item 2(a). Name of Person Filing:

Granahan Investment Management, Inc.

Item 2(b). Address of Principal Business Office or, if None, Residence:

275 Wyman Street, Suite 270

Waltham, MA 02154

Item 2(c). Citizenship:

Massachusetts

Item 2(d). Title of Class of Securities:

Common Stock

Item 2(e). CUSIP Number:

23251P102

Item 3. If This Statement is Filed Pursuant to Rule 13d-1(b), or 13d-2(b) or (c), Check Whether the Person Filing is a:

(a) ¨    Broker or dealer registered under Section 15 of the Exchange Act.

(b) ¨    Bank as defined in Section 3(a)(6) of the Exchange Act.

(c) ¨    Insurance company as defined in Section 3(a)(19) of the Exchange Act.

(d) ¨    Investment company registered under Section 8 of the Investment Company Act.

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(e) x    An investment adviser in accordance with Rule 13d-1(b)(1)(ii)(E).

(f) ¨    An employee benefit plan or endowment fund in accordance with Rule 13d-1(b)(1)(ii)(F).

(g) ¨    A parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G).

(h) ¨    A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act.

(i) ¨    A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act.

(j) ¨    Group, in accordance with Rule 13d-1(b)(1)(ii)(J).

If this statement is filed pursuant to Rule 13d-1(c), check this box.    ¨

Item 4. Ownership

Provide the following information regarding the aggregate number and percentage of the class of securities of the issuer identified in Item 1.

(a) Amount beneficially owned:    1,414,520

(b) Percent of class:    5.5%

(c) Number of shares as to which such person has:

(i) sole power to vote or to direct the vote:    315,300

(ii) shared power to vote or to direct the vote:    0

(iii) sole power to dispose or to direct the disposition of:    1,414,520

(iv) shared power to dispose or to direct the disposition of:    0

Item 5. Ownership of Five Percent or Less of a Class

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following    ¨.

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Item 6. Ownership of More than Five Percent on Behalf of Another Person

Not Applicable

Item 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company

Not Applicable

Item 8. Identification and Classification of Members of the Group

Not Applicable

Item 9. Notice of Dissolution of Group

Not Applicable

Item 10. Certification

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	GRANAHAN INVESTMENT MANAGEMENT, INC.
Date: April 2, 2007	By:	/S/    JOHN J. GRANAHAN
		John J. Granahan, President
		Name/Title

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