NVST

As the Q2 earnings season comes to a close, it's time to take stock of this quarter's best and worst performers in the dental equipment & technology industry, including Envista (NYSE:NVST) and its peers. The dental equipment and technology industry encompasses companies that manufacture orthodontic products, dental implants, imaging systems, and digital tools for dental professionals. These companies benefit from recurring revenue streams tied to consumables, ongoing maintenance, and growing demand for aesthetic and restorative dentistry. However, high R&D costs, significant capital investment requirements, and reliance on discretionary spending make them vulnerable to economic cycles. Over the next few years, tailwinds for the sector include innovation in digital workflows, such as 3D printing and AI-driven diagnostics, which enhance the efficiency and precision of dental care. However, headwinds include economic uncertainty, which could reduce patient spending on elective procedures, regulatory challenges, and potential pricing pressures from consolidated dental service organizations (DSOs). The 4 dental equipment & technology stocks we track reported a strong Q2. As a group, revenues beat analysts' consensus estimates by 1.4% while next quarter's revenue guidance was 1.3% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.7% since the latest earnings results. Uniting more than 30 trusted brands including Nobel Biocare, Ormco, and DEXIS under one corporate umbrella, Envista Holdings (NYSE:NVST) is a global dental products company that provides equipment, consumables, and specialized technologies for dental professionals. Envista reported revenues of $730.5 million, up 7.1% year on year. This print exceeded analysts' expectations by 2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' full-year EPS guidance estimates and a beat of analysts' EPS estimates. "We built on our fast start in Q1 with continued good performance in Q2," said Paul Keel, CEO. Envista scored the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street's published projections, leaving some wishing for even better results (analysts' consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 18.2% since reporting and currently trades at $23.43. Is now the time to buy Envista? Access our full analysis of the earnings results here, it's free. With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ:HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities. Henry Schein reported revenues of $3.46 billion, up 6.7% year on year, outperforming analysts' expectations by 2.6%. The business had a strong quarter with a solid beat of analysts' organic revenue estimates and a beat of analysts' EPS estimates. Henry Schein pulled off the biggest analyst estimate beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.8% since reporting. It currently trades at $84.97. Is now the time to buy Henry Schein? Access our full analysis of the earnings results here, it's free. Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ:ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments. Align Technology reported revenues of $1.06 billion, up 4.3% year on year, in line with analysts' expectations. It was a mixed quarter as it posted a beat of analysts' EPS estimates but revenue guidance for next quarter slightly missing analysts' expectations. Align Technology delivered the weakest performance against analyst estimates of the whole group. As expected, the stock is down 20.1% since the results and currently trades at $143.87. Read our full analysis of Align Technology's results here. With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ:XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide. Dentsply Sirona reported revenues of $898 million, down 4.1% year on year. This print topped analysts' expectations by 0.6%. Overall, it was a strong quarter as it also recorded a beat of analysts' EPS estimates and a solid beat of analysts' full-year EPS guidance estimates. Dentsply Sirona had the slowest revenue growth in the group. The stock is down 30.6% since reporting and currently trades at $9.14. Read our full, actionable report on Dentsply Sirona here, it's free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market's biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market's primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market's dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

DENTSPLY SIRONA Inc. XRAY topped second-quarter 2026 earnings and revenue expectations while keeping its full-year outlook intact. The results showed better cash generation and selected margin gains, but they did not mark a broad recovery in dental demand. The post-earnings question is whether those improvements can outweigh falling sales, tariff pressure and continued weakness in equipment, orthodontics and implants. Wellspect Healthcare remained the clearest growth offset. Adjusted earnings of 52 cents per share beat the Zacks Consensus Estimate of 36 cents by 44.4%. Revenues of $898 million topped the consensus estimate by 1.6%. That beat came despite revenues falling 4.1% year over year as reported and 6.3% at constant currency. Weakness across three dental segments and the absence of Byte kept the quarter from signaling a broad sales recovery. DENTSPLY SIRONA Inc. revenue-quarterly | DENTSPLY SIRONA Inc. Quote Wellspect Healthcare revenues rose 7.1% to $86 million, supported by new product launches. Connected Technology Solutions fell 1.5%, Essential Dental Solutions declined 2.7% and Orthodontic and Implant Solutions dropped 13.2%. The wider dental market is mixed. Align Technology, Inc. ALGN reported 8.2% growth in second-quarter clear-aligner revenues, but its Imaging Systems and computer-aided design and manufacturing services revenues fell 10.8%. Envista Holdings Corporation NVST reported 5.0% core sales growth, showing that industry demand is uneven rather than uniformly weak. Adjusted gross margin improved 50 basis points to 56.4%, while adjusted EBITDA margin increased 20 basis points to 21.3%. Tariff refunds helped both measures. Adjusted operating margin, however, contracted 240 basis points to 15.8%. Lower volumes, unfavorable mix, tariff costs and higher selling, general and administrative expenses and increased research and development spending continued to limit operating leverage. Second-quarter free cash flow increased to $55 million from $16 million a year earlier. First-half operating cash flow rose to $139 million from $55 million, aided by tariff refunds and better management of inventory and accounts payable. Cash and cash equivalents stood at $239 million at June 30, down from $326 million at Dec. 31, 2025. The net debt-to-EBITDA ratio was 3.2, keeping balance-sheet flexibility and debt reduction important to the turnaround. DENTSPLY SIRONA Inc. cash-from-operations-quarterly | DENTSPLY SIRONA Inc. Quote Dentsply Sirona maintained its 2026 net sales outlook of $3.5 billion to $3.6 billion and adjusted earnings guidance of $1.40-$1.50 per share. Benefits from tariff refunds are excluded from the adjusted earnings outlook. Maintaining guidance gives investors a clear second-half benchmark. A more durable recovery still depends on better equipment demand, stabilization in SureSmile and implants and improved conversion from the company’s expanded dealer network and commercial investments. The quarter supports a measured view rather than a clean turnaround call. Better cash flow and some margin improvement are constructive, but sales contraction, tariffs and execution risk remain meaningful. XRAY currently carries a Zacks Rank #3 (Hold), with a Value Score of A, Growth Score of B, Momentum Score of F and VGM Score of B. The Value Score of A, Growth Score of B and VGM Score of B point to relatively favorable value, growth and blended characteristics, while the Momentum Score of F signals weak near-term momentum. Combined with a Hold rank, the setup remains balanced. While Envista Holdings sports a Zacks Rank #1 (Strong Buy), Align Technology carries a Zacks Rank of 3.You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report Align Technology, Inc. (ALGN) : Free Stock Analysis Report Envista Holdings Corporation (NVST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Envista (NVST). Shares have added about 0.8% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Envista due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Envista Holdings Corporation reported adjusted earnings per share of 41 cents in the second quarter of 2026, up 57.7% year over year. The bottom line surpassed the Zacks Consensus Estimate by 24.24%. The adjustments include non-cash charges related to the amortization of acquisition-related and other intangible assets, restructuring costs and asset impairments, fair-value adjustment of acquisition-related inventory and tariff refunds, among others. The company’s GAAP earnings were 33 cents compared with the year-ago quarter’s earnings of 16 cents per share. NVST’s Revenues Revenues totaled $730.5 million in the reported quarter, up 7.1% year over year. The metric topped the Zacks Consensus Estimate by 2.17%. Segment-wise, Specialty Products & Technologies sales totaled $471 million, up 5.8% year over year. Revenues from Equipment & Consumables rose 9.5% year over year to $259.5 million in the quarter under review. NVST’s Operational Update The gross profit in the reported quarter climbed 10% year over year to $407 million. The gross margin expanded 149 basis points (bps) to 55.7% despite cost of sales increasing 3.6%. Selling, general and administrative expenses were up 0.3% year over year to $296.3 million. Research and development expenses rose 7.4% year over year to $30.4 million. The operating profit of $80.3 million jumped 73.4% year over year. The operating margin expanded 420 bps to 11%. NVST’s Financial Update Envista ended the second quarter of 2026 with cash and cash equivalents of $1.13 billion compared with $1.08 billion as of Apr. 3. Long-term debt in the second quarter was $1.44 billion compared with $1.43 billion at the end of first quarter. Cumulative net cash provided by operating activities as of July 3, 2026 was $115.9 million compared with $89 million a year ago. Envista’s 2026 Guidance For 2026, the company expects core sales growth between 3.5% and 4.5% (previously, 2%-4%). The Zacks Consensus Estimate projects 2026 sales to be $2.88 billion, representing 6% growth over 2025. Adjusted EBITDA growth is projected in the range of 11%-14%, previously 7%-13%. Adjusted diluted earnings per share are projected between $1.50 and $1.55 (earlier, $1.35 to $1.45). The consensus mark for the metric stands at $1.53. Free cash flow conversion is expected to be approximately 100%. In the past month, investors have witnessed a upward trend in estimates review. At this time, Envista has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a grade of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Envista has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Envista belongs to the Zacks Medical - Products industry. Another stock from the same industry, Neogen (NEOG), has gained 3% over the past month. More than a month has passed since the company reported results for the quarter ended May 2026. Neogen reported revenues of $225.3 million in the last reported quarter, representing a year-over-year change of -0.1%. EPS of $0.09 for the same period compares with $0.05 a year ago. For the current quarter, Neogen is expected to post earnings of $0.05 per share, indicating a change of +25% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.4% over the last 30 days. Neogen has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Envista Holdings Corporation (NVST) : Free Stock Analysis Report Neogen Corporation (NEOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Medtronic plc MDT reported first-quarter fiscal 2027 adjusted earnings per share (EPS) of $1.45 per share, which rose 15.1% year over year and topped the Zacks Consensus Estimate by 4.32%. The metric excludes certain one-time adjustments, including amortization of intangible assets, restructuring and associated costs, as well as acquisition and divestiture-related items. On a GAAP basis, EPS came in at $1.14, up from 81 cents a year earlier. Revenues rose 13.7% year over year to $9.76 billion and beat the consensus mark by 3.02%. The quarter included an extra fiscal week, which benefited organic growth by approximately $570 million. Following the announcement today, MDT shares rose nearly 5% in pre-market trading. Cardiovascular revenues totaled $3.93 billion in the first quarter of fiscal 2027, up 19.5% year over year on a reported basis and 18.9% organically. Within this, Electrophysiology Therapies revenues rose 29.1%, while Interventional Cardiology Therapies revenue were up 6.5% organically. CardioVascular Surgery and Peripheral Vascular Health revenues advanced 8.1% and 11% respectively, on an organic basis. Neuroscience revenues came in at $2.68 billion, up 10.3% reported and 9.3% organically. Cranial & Spinal Technologies led the portfolio with 12.9% organic growth. Specialty Therapies revenues increased 7.4% organically, while Neuromodulation posted 3.3% organic growth. Medtronic PLC price-consensus-eps-surprise-chart | Medtronic PLC Quote Medical Surgical revenues were $2.28 billion, up 10% year over year and 10.2% organically. Surgical & Endoscopy revenues increased 9% organically, while Acute Care & Monitoring revenues rose 14.2% organically. Diabetes revenues jumped 16.9% to $843 million, with organic growth of 14.9%. U.S. revenues rose 16.1% to $4.91 billion, with organic growth of 15.8%. U.S. Cardiovascular was particularly strong, increasing 25.3%, as Electrophysiology Therapies revenues climbed 41.2%. International revenues advanced 11.4% to $4.85 billion and grew 11.6% organically. International Diabetes recorded 16.8% organic growth, while Cardiovascular increased 13.7%, highlighting strength across major overseas businesses. The gross margin in the reported quarter remained flat year over year at 65% despite a 13.8% increase in the cost of products sold, excluding amortization of intangible assets, to $3.42 billion. Research and development expenses rose 6.2% year over year to $771 million. Selling, general and administrative expenses increased 14% to $3.20 billion. The adjusted operating margin expanded 10 basis points year over year to 23.7%. Medtronic raised its fiscal 2027 organic revenue growth outlook to 7.25%-7.75% from the prior 6.75%-7.25% range. The company also lifted adjusted EPS guidance to $5.94-$6.00 from the prior $5.90-$6.00 outlook. The guidance incorporates an estimated neutral to 1% accretive foreign currency impact based on recent exchange rates. Medtronic also highlighted recent acquisitions of Scientia Vascular and SPR Therapeutics and continued investment in growth platforms. The Zacks Consensus Estimate projects fiscal 2027 revenues of $38.64 billion, up 6.3% from the fiscal 2026 levels, while EPS is expected to rise 7.4% to $5.94. Medtronic delivered better-than-expected earnings and revenues in the first quarter of 2027. Cardiovascular remained the key growth engine, with strong performances in Cardiac Rhythm Management and Cardiac Ablation Solutions. Neuroscience, Medical Surgical and Diabetes also delivered healthy organic growth. Management cited strong operating performance, continued innovation investments, portfolio development and commercial execution in supporting the improved 2026 outlook. During the quarter, Medtronic completed the acquisitions of Scientia Vascular and SPR Therapeutics. The company announced an expanded CE Mark indication for the Affera Mapping and Ablation System and Sphere-9 Catheter for treating ventricular arrhythmias. MDT also received FDA clearance for its next-generation Touch Surgery Aide computing platform. Medtronic stated that it has entered into a strategic partnership with Cornerstone Robotics to broaden access to robotic-assisted surgery and also announced a strategic investment in Pi-Cardia, strengthening its portfolio development efforts. Medtronic currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are Globus Medical GMED, Envista NVST and Teleflex TFX. Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here. GMED has an earnings yield of 6% compared to the industry’s negative 1.3% yield. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 27.9%. Envista, carrying a Zacks Rank #2 (Buy) at present, posted second-quarter 2026 adjusted earnings of 41 cents per share, exceeding the Zacks Consensus Estimate by 24.2%. Revenues of $730.5 million topped the Zacks Consensus Estimate by 2.2%. NVST has an estimated long-term earnings growth rate of 13.8% compared with the industry’s 10.8% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 19.4%. Teleflex, carrying a Zacks Rank #2 at present, posted a second-quarter 2026 adjusted EPS of $1.76, exceeding the Zacks Consensus Estimate by 37.5%. Revenues of $570.3 million outperformed the Zacks Consensus Estimate by 1.9%. TFX has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 12.9% growth. The company’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Medtronic PLC (MDT) : Free Stock Analysis Report Teleflex Incorporated (TFX) : Free Stock Analysis Report Globus Medical, Inc. (GMED) : Free Stock Analysis Report Envista Holdings Corporation (NVST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Over the past six months, Envista’s shares (currently trading at $27.36) have posted a disappointing 7.6% loss, well below the S&P 500’s 10.5% gain. This may have investors wondering how to approach the situation. Is there a buying opportunity in Envista, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free. Even though the stock has become cheaper, we’re cautious about Envista. Here are three reasons why NVST doesn’t excite us, plus one stock we’d rather own. A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Envista’s sales grew at a tepid 3.4% compounded annual growth rate over the last five years. This was below our standard for the healthcare sector. Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions. Sadly for Envista, its EPS declined by 7% annually over the last five years while its revenue grew by 3.4%. This tells us the company became less profitable on a per-share basis as it expanded. Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). Envista’s five-year average ROIC was negative 2.7%, meaning management lost money while trying to expand the business. Its returns were among the worst in the healthcare sector. We see the value of companies making people healthier, but in the case of Envista, we’re out. Following the recent decline, the stock trades at 17.3× forward P/E (or $27.36 per share). At this valuation, there’s a lot of good news priced in - we think there are better opportunities elsewhere. We’d suggest looking at a dominant aerospace business that has perfected its M&A strategy. ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Envista’s second quarter results were shaped by balanced growth across all major geographies and a continued focus on operational execution. Management pointed to resilient demand for dental care, especially in consumables and diagnostics, as a stabilizing influence despite macroeconomic uncertainty. CEO Paul Keel highlighted that new product launches in endodontics and orthodontics supported share gains, while margin expansion was driven by manufacturing productivity and cost control initiatives. The quarter also benefited from robust free cash flow conversion and ongoing progress in both reporting segments. Is now the time to buy NVST? Find out in our full research report (it’s free). Revenue: $730.5 million vs analyst estimates of $716.3 million (7.1% year-on-year growth, 2% beat) Adjusted EPS: $0.41 vs analyst estimates of $0.34 (22.1% beat) Adjusted EBITDA: $107.7 million vs analyst estimates of $97.02 million (14.7% margin, 11% beat) Management raised its full-year Adjusted EPS guidance to $1.53 at the midpoint, a 8.9% increase Operating Margin: 11%, up from 6.8% in the same quarter last year Market Capitalization: $4.58 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jonathan Block (Stifel): Asked if E&C segment growth was market-driven or due to company-specific share gains. CEO Paul Keel highlighted new product launches and share gains as primary factors. Elizabeth Anderson (Evercore): Inquired about implant performance outside China and future product cadence. Keel emphasized balanced growth across geographies and upcoming new abutment launches. Jeffrey Johnson (Baird): Asked about relative performance in Premium versus Challenger implant categories and future M&A strategy. Keel noted Challenger’s recent outperformance and a focus on targeted, accretive acquisitions. Lilia-Celine Lozada (JPMorgan): Questioned the rationale behind moderating growth guidance for the year. CFO Eric Hammes cited billing day effects and normalization post-Spark deferral as key factors. Kevin Caliendo (UBS): Sought clarity on China VBP’s long-term impact on volume and growth. Keel explained that short-term volume gains are likely, but longer-term growth will depend on sustained market investments and execution. In the coming quarters, the StockStory team will watch (1) the execution of China’s VBP reforms and their effect on Envista’s market share and volume recovery, (2) progress of recently launched products in driving consumables and implant share gains, and (3) the stabilization of margins amid continued investments in R&D and commercial initiatives. The upcoming Investor Day will also serve as a key signpost for strategy updates and long-term priorities. Envista currently trades at $28.62, in line with $28.63 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Envista Holdings Corporation NVST is showing a sharper earnings recovery after a solid second quarter, with stronger profitability and raised 2026 guidance strengthening the near-term case. The offset is valuation. NVST now trades above its five-year median forward earnings multiple, leaving less room for execution setbacks even as operating momentum improves. Adjusted earnings were 41 cents per share in the second quarter of 2026, up 57.7% year over year. Operating profit rose 73.4% to $80.3 million, while the operating margin expanded 420 basis points to 11%. The Zacks Consensus Estimate calls for 2026 earnings of $1.53 per share, up from $1.19 in 2025. Management also raised adjusted earnings guidance to $1.50-$1.55 and adjusted EBITDA growth guidance to 11%-14%, reinforcing expectations for a meaningful profit recovery. Image Source: Zacks Investment Research NVST trades at 18.0X forward 12-month earnings, above its five-year median of 17.5X and the Zacks sub-industry’s 16.2X. That premium suggests investors are already assigning value to the improving earnings trajectory. The picture is not uniformly expensive. NVST’s multiple remains below the Zacks Medical sector’s 20.5X and the S&P 500’s 20.7X. Still, with the stock above its own historical median, further upside may depend more heavily on sustained execution. Image Source: Zacks Investment Research Second-quarter core sales increased 5%. Equipment & Consumables core sales rose 8.5%, supported by high-single-digit growth in consumables and diagnostics, while Spark grew at a double-digit rate and implants advanced at a low-single-digit pace. New products and the Versah acquisition add more growth avenues. Align Technology, Inc. ALGN reported an 8.2% year-over-year increase in second-quarter 2026 clear aligner revenues, showing continued activity in a category where Spark competes. DENTSPLY SIRONA Inc. XRAY, another diversified dental-products company, reported $898 million in second-quarter 2026 net sales and reiterated its 2026 outlook. China pricing remains a major uncertainty. Management expects the orthodontic volume-based procurement program to produce a large price reduction, while the second implant program could reduce prices by about 10%-15%. Tariff costs increased about $5 million year over year in the second quarter and are expected to remain at similar quarterly levels in the second half. Brackets and wires also declined at a high-single-digit rate, highlighting uneven performance across the portfolio. The investment case has improved, but the above-median valuation raises the bar for continued earnings delivery. Investors weighing the stock now have stronger operating trends on one side and policy, tariff and product-execution risks on the other. NVST currently carries a Zacks Rank #1 (Strong Buy). It also has a Value Score of B, Momentum Score of B and VGM Score of B, all favorable readings when paired with a top Zacks Rank. Its Growth Score of D is the main counterweight, reflecting a less favorable growth profile despite the current earnings rebound. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Envista Holdings Corporation (NVST) : Free Stock Analysis Report Align Technology, Inc. (ALGN) : Free Stock Analysis Report DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 5 p.m. ET Vice President of Investor Relations - Jim Gustafson President and Chief Executive Officer - Paul Keel Executive Vice President and Chief Financial Officer - Eric Hammes Operator: Hello. My name is Chloe, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's Second Quarter 2026 Earnings Results Conference Call. [Operator Instructions] I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations of Envista Holdings. Mr. Gustafson, you may begin your conference. Jim Gustafson: Good afternoon. Thanks for joining Envista's Second Quarter 2026 Earnings Call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer; and Eric Hammes, our Chief Financial Officer. Before I begin, I want to point out that our earnings release, the slide presentation supplementing today's call and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are available on the Investors section of our website, www.envistaco.com. The audio portion of this call will be archived in the Investors section of our website later today under the heading Events and Presentations. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted our results. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the second quarter of 2026, and references to period-to-period increases and decreases in financial metrics are year-over-year. During the call, we may describe certain products and solutions that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events and developments that we believe, anticipate or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law. With that, I'll turn the call over to Paul. Paul Keel: Thank you, Jim. Good afternoon, and welcome, everyone. On today's call, I'll kick us off with a summary of our Q2 performance. Eric will then take us through the numbers in more detail, and I'll wrap things up with some closing thoughts before opening it up for Q&A. In the second quarter, we continued our momentum in executing on our growth and operational plans, delivering a strong first half to the year with core growth of just over 7%. The dental market continued to show its characteristic resilience as patient demand for dental care remained stable despite macro pressures. For the second quarter, Envista posted a 5% core growth, delivering balanced growth across both reporting segments and all major geographies. Spark once again grew double digits. Consumables and diagnostics were up high single digits, and implants in total ortho were up low single digits. Our continued growth and focus on operational excellence led to another quarter of both gross and EBITDA margin expansion, up 70 and 230 basis points, respectively, a strong top line converted to even stronger earnings growth, with adjusted EBITDA up 28% and EPS growing 58%. We also had strong free cash flow conversion in the quarter, coming in at 158%. Alongside this, we purchased 2.4 million additional shares in Q2. And rounding out Slide 4, based on our strong first half performance and continued momentum, we're raising our full year guidance. Our updated 2026 expectations are now for core growth to grow 3.5% to 4.5%, adjusted EBITDA to grow 11% to 14% and adjusted EPS of $1.50 to $1.55. Let's now turn to progress we made in the quarter in support of our 3 core priorities of growth, operations and people. Starting with growth, we delivered continued broad-based performance across the portfolio with balanced contributions coming from both reporting segments, all major geographies and volume and price. In terms of segment performance, core growth in Equipment & Consumables was 8.5% as both diagnostics and consumables were up high single digits. Core growth in Specialty Products & Technologies was up over 3%, with Spark again growing double digits but brackets and wires down high single digits, impacted by a strong prior year comp that benefited from customers buying ahead of announced tariff and price activity. Implants grew low single digits, in line with the market. Geographically, North America, Europe, APAC and Latin America all grew nicely, with new products continuing to play an important role, and I'll provide further detail on this in just a moment. Turning to operations. We continue to see widespread benefits from our Envista Business System. Improving manufacturing productivity helped drive our gross margin expansion; and when combined with sustained G&A productivity, adjusted EBITDA margin expanded by 230 basis points. We further reduced our effective tax rate in Q2, contributing to the very strong EPS growth that I mentioned earlier. And with respect to people, we continue to advance our high-performing continuous improvement culture through numerous customer, employee and charitable events around the world. I had the good fortune to participate in several of these, including an Envista Smile Project mission to the Dominican Republic, where we treated approximately 1,500 patients, continuing to live our long-standing purpose of partnering with clinicians around the world to improve patients' lives. Now coming back to the central role that new product innovation is playing in our growth, Slide 6 touches on 3 of the new product launches we had during the quarter. We covered some implants and diagnostics new products on the Q1 call, so we'll focus on consumables and ortho today. We had 2 important launches in our consumables business, 1 in endodontics and 1 in general dentistry. ZenSeal Pro is an all-in-one bioceramic endodontic sealer. The product category is used in most root canal procedures, which is the largest segment within the $1 billion-plus endodontic category. This solution is used to close gaps between filling material and the canal wall, and this particular product is novel in 2 respects. First, the flowable bioceramic formulation creates an alkaline environment that helps block bacterial formation, a central objective of the procedure. Second, the product is delivered through specially engineered tips that improve access in complex anatomies while also reducing material waste by roughly 1/3, resulting in improvements in both clinical efficacy as well as efficiency. DemiPro is a lightweight cordless curing light. Curing lights are broadly used across many restorative dental procedures. This solution is ergonomically designed to reduce fatigue while also improving access by way of a 360-degree rotatable tip. Our consumables business has been consistently gaining share across the last several quarters, and we expect these 2 innovations to further build on that momentum. In our orthodontics business, we've spoken a fair bit about how we've been leveraging our digital capabilities to consistently take share in clear aligners. Ormco Digital Bonding, or ODB, uses much of the same technology but on the brackets and wires side. When we first launched this platform in 2023, we did so with our market-leading Damon Ultima System. In Q2 of this year, we expanded coverage of ODB to all of our bracket systems, further solidifying our position as the only scaled player in the market offering complete solutions in both aligners and fixed orthodontics. New product innovation has long been a hallmark of Envista, having created numerous important categories in dentistry across the years such as dental implants, passive self-ligating brackets and digital treatment planning. Over the last 2 years, we've materially ramped investments in new product development and commercialization. It's exciting to see the positive impact that these investments are making for all our stakeholders, customers, colleagues, our communities and our shareholders. Having provided an overview of the quarter, I'll now turn the call over to Eric to walk us through the numbers in more detail. Eric Hammes: Thanks, Paul. In the second quarter, we delivered sales of $731 million. Core sales in the quarter increased 5%, with FX and recent acquisitions combining to add an additional 200 basis points. As Paul noted, we delivered positive growth in both reporting segments with well-balanced performance across our businesses and geographies and strong contribution from both volume and price. Q2 adjusted gross margin was 55.1%, an increase of 70 basis points versus the prior year. Volume, price, productivity and FX all contributed to the year-on-year improvement. We continued to increase investments in sales and marketing as well as R&D in the quarter. At the same time, adjusted EBITDA increased by 28% year-over-year with margins for the quarter of 14.7%, up 230 basis points year-on-year. As we've talked about on previous calls, the healthy gross margins of our business enable our ability to invest for the future while delivering profitable growth. Working further down the table, adjusted EPS in the quarter was $0.41, growing 58% compared to the same quarter of last year. Our non-GAAP tax rate was 25% in Q2, better than the expectations we had entering the year. We've executed on a number of important initiatives over the past many quarters to reduce our tax rate, which are reflected in our year-to-date results. We now expect the 2026 full year rate to be around 26%, about 2 points lower than our initial guidance for the year and significantly below prior year. Rounding out Slide 7. Q2 free cash flow was $105 million, a $29 million increase over the second quarter of last year. This increase was driven by improved profitability as well as the $13 million recovery related to IEEPA tariffs paid in 2025. We continue to expect free cash conversion for 2026 to be approximately 100% of adjusted net income. As noted in our Q2 release, while the IEEPA tariff refunds do benefit free cash flow, they're excluded from Q2 adjusted earnings as the refunds are not part of regular operations. Now let's turn to 2 bridges to help break down our year-on-year results, beginning with sales. Core revenue grew 5% in the quarter, and total revenues grew just over 7%. Increased sales volume was the largest single contributor, driving $17 million of the sales increase and reflecting a return on our investments over the past 2 years. Net pricing added $12 million, balanced well across our businesses and geographies. The weaker U.S. dollar year-over-year contributed about $11 million. Note, on a sequential basis, foreign exchange rates have recently stabilized. Spark deferral tailwinds contributed $5 million of year-on-year growth. This is the final quarter that we expect any meaningful impact from the Spark deferral changes made back in mid-2024. And finally, acquisitions completed over the past year contributed $4 million in sales. Our acquisition of Versah, the osseodensification technology we discussed last quarter, represents the largest driver of acquisition-related growth. Slide 9 shows the components of the $24 million year-on-year increase in adjusted EBITDA. Price contributed $12 million. Foreign exchange rates also contributed $12 million. This reflects a small benefit from translation and a larger impact from reduced year-on-year transactional FX losses. As you'll recall, in mid-2025, we began hedging our balance sheet to reduce the net impact from quarter-to-quarter exchange rate changes. Volume and mix combined for an $11 million improvement, reflecting the strong gross margins across our portfolio. Net productivity delivered a $5 million benefit, with EBS and other initiatives more than offsetting input cost inflation. Q2 tariff costs were similar to recent quarters, with an increase of $5 million versus Q2 of 2025. As we've communicated over the past year, we continue to more than offset growth tariff costs through supply chain, G&A and pricing actions. We expect quarterly tariff costs to be similar in the second half, with recently announced Section 301 levies effectively replacing the prior tariffs. Finally, as Paul mentioned, we continue to invest in sales, marketing and R&D to drive future growth, an amount of $11 million in Q2. All in, our adjusted EBITDA margin in the quarter was 14.7%, up 230 basis points over last year. Turning to segment performance. Revenue in Specialty Products & Technology grew nearly 6% year-on-year with core sales up 3.1%. In orthodontics, Spark again delivered double-digit growth or high single digits after adjusting for the net deferral change, while brackets and wires was down high single digits against Q2 2025 comparable noted previously. Implant core growth was up low single digits, consistent with recent quarters and well balanced across geographic markets. In Q2, Specialty Products & Technologies posted adjusted operating profit growth of $9 million year-on-year, up 15%, with a 120 basis point improvement in margin rate. Both businesses had positive price capture. Moving to Equipment & Consumables. Core sales in the quarter increased 8.5% versus prior year with high single-digit growth in both consumables and diagnostics. Our consumables business continues to deliver well across the portfolio, driven both by innovation and good price performance, while diagnostics was particularly strong in North America, posting yet another quarter of above-market growth. Here again, growth was broad-based across the business as consistent innovation in equipment and software is combined with growth in services to meet customer needs for comprehensive solutions. Adjusted operating profits increased 25% year-on-year, with operating margins up 250 basis points, driven by strong pricing and volume benefits as well as the FX tailwind that I mentioned previously. Now I'll turn to cash flow and our balance sheet. Q2 free cash flow was $105 million, an increase of about $29 million from the second quarter of last year, primarily as a result of improved profitability. This, in turn, resulted in strong free cash flow conversion of 158%, including $14 million of invested CapEx during the quarter. Our balance sheet remains strong and stable with net debt to adjusted EBITDA of 0.7x. Our balance sheet continues to provide welcome flexibility as macroeconomic uncertainty remains high. In Q2, we continued to return cash to shareholders as we purchased approximately 2.4 million shares of our stock at an average price of $24 per share. As Paul mentioned previously, we are both raising and narrowing our guidance ranges. Our new guidance for the full year 2026 is 3.5% to 4.5% core growth, 11% to 14% adjusted EBITDA growth, adjusted EPS of $1.50 to $1.55 and free cash flow conversion of approximately 100%. Let me provide a couple of details underlying this guidance. You'll notice that we expect second half revenue growth to be lower than the first half. This reflects the calendar impact that we discussed on the Q1 call, where our first quarter had 4 extra selling days over Q1 2025 and Q4 will have 4 fewer. As a result, we expect Q4 core growth to be flat to slightly down. Absent the billing day effect, we expect Q4 core growth to be in line with our full year guidance range. Excluding China VBP, we expect price capture to remain strong in the second half. With respect to China VBP, our revised guidance assumes both VBP 1 for ortho and VBP 2 for implants to take place in the second half. The process is now underway for both ortho and implants. As for the earnings cadence, we expect EBITDA growth across both Q3 and Q4 to be roughly in line with sales growth for each quarter. As noted previously, we expect our full year tax rate to be approximately 26% of adjusted pretax income. Overall, we performed well in the first half of the year, and our continued momentum gives us confidence that we expect to drive solid top line growth in 2026 and even faster profit growth. With that, I'll turn the call back over to Paul. Paul Keel: Thank you, Eric. Now before I wrap up our prepared remarks, I'll note that we recently announced an Investor Day coming up in about 6 weeks on Thursday, September 17. The event will include an update on our progress executing the value creation plan that we laid out in March of 2025 as well as some insights into innovation priorities for our 4 main businesses. We will provide an opportunity for you to hear from several members of our leadership team, including Eric and myself, and details can be found on our investor website. We hope you'll be able to join us. A few closing thoughts on the quarter before we open it up for your questions. The global dental market continues to demonstrate its characteristic resilience even in the context of ongoing macro uncertainty. Specific to Envista, we again delivered balanced growth across our portfolio, with strong performance in both reporting segments and all major geographies. Our improved execution helped convert 5% core revenue growth into 28% adjusted EBITDA and 58% EPS growth while also allowing us to continue investing for the future. Behind strong first half performance and continued momentum, we're raising our full year outlook for core sales growth, adjusted EBITDA and adjusted EPS. And finally and most importantly, I'll close by recognizing the skill, effort and commitment of the global Envista team. Well done, everyone. That completes our prepared remarks for today. We'll now open it up for your questions. Operator: [Operator Instructions] Our first question comes from the line of Jon Block from Stifel. Jonathan Block: I'll start with maybe the E&C segment. This was Envista's fifth straight quarter of high single-digit, low double-digit growth for E&C. It's certainly a step-up from the past performance for this segment. So Paul or Eric, I'm just curious if you could speak to, is this faster growth driven by a market upturn? Or is it more specific to Envista factors like share gains, new products, et cetera? Paul Keel: Jon, thanks for the question. I'll start it off, and I'm sure Eric will jump in with whatever I miss. To start, you're absolutely right. Our E&C segment is delivering consistently faster growth. And I think I would point to at least 3 contributors that are supporting the trend. First, with respect to the market, we are benefiting from some tailwinds in these businesses. As consumable products support procedures that are typically covered by insurance, this segment tends to be better insulated from macro volatility. And so on a relative basis, it outperforms. And since we have a strong position in consumables, we benefit along with that. A little bit different with respect to diagnostics. After the post-COVID downturn, that market was in contraction for a couple of years and has now returned to growth. As we're a leader in this category, we benefit from that rising tide. Now on top of the underlying market support, we're also clearly gaining share in both consumables and diagnostics, and that has been the case now for several quarters. We estimate that the markets grew sort of mid-single digits in the first half. And as you noted in your question, our business has been growing more like high single-digit to low double-digit rates. Now there's, of course, a number of commercial and operational initiatives that underpin this, but I would again underline new product activity as a particular contributor. Maybe thirdly, I'd also note that the broader benefit we get from having a well-balanced portfolio. Macro uncertainty, of course, has a bigger impact on more elective categories like implants, and we feel that. But for us, the impact is offset by our similarly strong positions in less sensitive categories like surgical loops, restoratives, infection prevention and the like. And we expect that as consumer confidence rebuilds, particularly here in the U.S., that we'll benefit from our commensurately strong positions in ortho and implants. So both of those businesses are growing for us at or above market rates, but as conditions improve from a market perspective, we expect to get a helpful sort of incremental tailwind. I should probably also note that a similar diversification plays out geographically. On a relative basis, the North American market is a bit softer today, and so we experienced that. But we also have good positions in Europe, APAC and Latin America, and these markets are currently healthier on a relative basis. So just as we expect consumer confidence to improve, helping implants and ortho, we expect the North American dental market to rebound as it always has, and we'll benefit from that. So let me pause there to see if Eric has anything more to add, but we appreciate the question. We understandably get a lot of interest in our ortho and implants businesses due to their size and strategic importance, but consumables and diagnostics are also central to our broader portfolio strength. So it's important that we underline their continued progress. Eric, anything more to add? Eric Hammes: No, nothing more. I think that's comprehensive. It was a great quarter for E&C. Jonathan Block: Yes, certainly was comprehensive. I'll try to ask maybe a quicker or tighter second one. For VBP 1 and VBP 2, I just want to think about this at a really high level for '26 headwind and maybe '27 tailwind. In other words, if the timing holds for 2H, I understand that's probably a big if, but if that timing holds, at a high level, is this a dilutive event for both ortho and implants specific to '26 and an accretive event, or call it, tailwind in '27? Just at a high level, any way to size that or think about that? Paul Keel: Let's tag team this one. First, I'll just start with what the new news is on VBP, and then Eric can have specific thoughts on how that will play out moving forward. So first, again, the new news, we have heard now that both the ortho 1.0 and implants 2.0 processes are underway. We expect them to complete in the second half. You'll remember on the Q1 call, there was still uncertainty around that. As Eric noted in his prepared comments, we have incorporated that new news into our updated guidance. On previous calls, we've talked about VBP, and on balance, it has been a positive for Envista. In the first VBP for implants, we did see a material price decrease. It was around 45-ish percent. And gross margins also compressed as a consequence, but volumes more than doubled. So net-net, total gross margin dollars increased and our market position improved. So now as we look forward to the 2 VBPs here in the second half, they're similar but a little bit different. Starting with orthodontics, this is VBP 1. So we think we'll have a similar price compression as what we saw in VBP 1 for implants, and then we expect market share gains. The way these things work is that the large market share players going in, if you're willing to accept the price concessions, you tend to get even stronger position coming out. With respect to implants, though, it's a little bit different. Because this is a VBP 2, the price compression will be much smaller. We're expecting around 10% to 15%. So let me pause there and see if Eric has thoughts on how that plays out across the second half and into '27. Eric Hammes: Yes. I think a couple of points, Jon, at a high level on the growth. So in the first half -- it's probably easier to go by quarters, but let's just take it by half to make it a little simpler. We were down in China year-over-year. More of that compression came in Q1 and less so in Q2. With what Paul mentioned, with the expected VBP timing, which is roughly the same in our sort of calculus for ortho and for implants, we expect China to grow moderately in the second half with slightly better growth in the fourth quarter. And I think the main reason for that last piece is really twofold. So one would be we have had a well-prepared channel, so we've talked, I think, in the last many quarters about the fact that we've kept our channel as small and lean and tight as possible. That just means that it can respond a little bit more quickly post VBP. And then the second piece, I think, is really important that as a strong global player and the #1 brand in these markets, we do expect to get share from that. And likewise, if our supply chain is healthy, we expect that our volumes will rebound as well. So down slightly in the first half, growing in the second half. And then because we're likely facing slightly easier comps in the first half of next year, we would expect to see some growth as well in the business. Operator: Our next question comes from the line of Elizabeth Anderson from Evercore. Elizabeth Anderson: I was wondering if you could talk a little bit more about the implant performance. Obviously, maybe -- and focusing outside of China since you just did such a good job on that. But how are you seeing that? Is that mostly a macro phenomenon? And can you sort of remind us about sort of how you're thinking about like new product cadence and sort of the commercial execution and sort of how to think about this besides just sort of the tough comps in the back half of the year, but like more broadly into '27 and beyond? Paul Keel: Sure. I'll take that, Elizabeth. Thanks for the question. I would say our implants outperformance in Q2 has been very similar to recent quarters, balanced performance by geography and pretty balanced across the 2 main categories of Challenger and Premium. I'd also remind the audience that, for us, implants is much more than just the screw. We also have a very strong position in regenerative biomaterials, and we have a very good digital workflow business. Those latter 2 categories tend to be accretive to overall implants growth. You'll remember in 2024, we made an important sizable investment into restarting the new product engine in implants. We talked a lot about the gestation period for those programs, and they are now just starting to come to market. We had the S series launch in Q1. That's off to a very good start, running ahead of our launch plan. And about 1/4 of the sales for that program are coming from competitive conversion. We feel good about that. We have another important launch in the abutment category. It's currently available in Europe, and we hope that will launch in the second half of '26 here in North America, provided regulatory approvals are gained. And then, of course, we talked about the Versah acquisition on the Q1 call. You can probably think about that as outsourced R&D. In that case, we bought a product that had already been developed and had gained registration in many markets. And our strategy has been to commercialize it globally through our very strong worldwide presence. That one is also off to a good start, running ahead of the acquisition plan. So I think for implants, very consistent performance, and we expect additional sort of returns on those investments that we've made. Operator: Our next question is from Jeff Johnson from Baird. Jeffrey Johnson: Paul, maybe if I could follow up on your implant comments there because you have been getting that strong biomaterials growth and some of the other non-screw part of the business, I guess, I'd call it, how do you think your performance is shaping up on the Premium side and on the Challenger side relative to market these last few quarters? And then you've done a couple of acquisitions, small acquisitions, Versah being one, as you just mentioned, a couple of other small ones. It seems like you're building some muscle there, really good balance sheet, good cash flow here. Talk to me maybe about your M&A strategy going forward and what would be some boxes you would have to check on, growth accretion, earnings dilution, risk, things like that. Paul Keel: Let's see, a lot in the question. Let me start with kind of the balance of the implants outperformance. I'll start geographically. For us, our largest businesses are in the U.S. and -- or North America and in Europe. I would say they're growing at market rates. We already touched on China and the impact that VBP had for us there. I would say we're stronger in China as a consequence of VBP than we were previous to that. We're working hard now to try to increase our developing markets implants business. So maybe that's a spin through the world from the -- through a geographic lens. In terms of the categories, for us, the 2 businesses grow about the same. Challenger outpaced Premium last quarter, consistent with the market trend. The Challenger category outgrew Premium. And we under-index, as you know, in Challenger. So we'd like to have a bigger Challenger business, and right now, our primary focus is to do that organically. We have 2 good brands. We have Implant Direct and we have Alpha-Bio Tec, investing in both the same sorts of growth levers that we talk about for Premium. So activity on both the commercial and the new product front. And then to the third part of your question, we do have good M&A capabilities at Envista, and implant is a category we look at. We did 3 acquisitions over the past 18 months. All of them were in that implant platform. All of them were small, but I think they are representative of the types of deals we'd like to do, strategically aligned and financially accretive deals where we are the logical owner, where we can cause the business to perform better than the previous owners. So that's what we're trying to do in implants. Jeffrey Johnson: Appreciate that. Maybe one quick follow-up for Eric, if I could, just to clarify. I think you talked, Eric, in your prepared remarks about EBITDA growing in line with core revenue growth in the back half of this year. Just remind me or any high-level details maybe, one, did I hear that correctly; and two, why EBITDA won't grow faster than revenue in the back half? Eric Hammes: Yes. For starters, Jeff, you got it correctly. I think the first sort of element to the equation here is what we expect for core growth in the second half. We talked -- I think we've talked actually all year long about the fact that we would have slower core growth in the back half, primarily because of our billing day effect, which will be minus 4 days year-on-year in fourth quarter. And that just simply means that, on an adjusted basis, we'll be growing within the guidance range, so nothing significantly different with the business as a trend. But the billing day phenomenon is going to slow our revenues, and that's specific to fourth quarter. That also is part of the reason why we're going to have slower adjusted EBITDA growth. My prepared comments basically said we expect adjusted EBITDA growth to be roughly in line with what our revenue performance will be. So that makes it kind of low single-digit growth year-on-year. Part of that is also just how we're thinking about investing in the business as we look specifically at the back half of the year and the success, I'd say, of the totality of the year. So we expect R&D to be up high single digits year-over-year in the second half, relatively consistent with how we've invested in the business year-to-date. And we expect sales and marketing to be up, call it, mid-single digits year-over-year, again, reasonably consistent with what we've invested year-to-date, so first half but just on a slightly lower revenue growth basis. Operator: Your next question is from Allen Lutz from Bank of America. Allen Lutz: One for either Paul or Eric. You talked about 3% volume growth and 2% pricing growth in the quarter. How should we think about how that evolves over the course of the rest of the year? And I guess, as we think about exiting 2026, how do you think about the contributions from volume and price growth at that portfolio level heading into 2027? Eric Hammes: Yes, I can start with that one, Allen. So I think first off, I would just say half to date, this year-to-date, we have had a very good mix through our lens of price performance and volume performance. I think the quarter was actually a very clean view of that. You mentioned it, about 2 points from price, about 3 points from volume. And of course, that's certainly an equation that we would love to continue to take forward. I won't repeat what I just mentioned on the back half relative to billing days, but that particular effect will impact our volume in the second half, specifically the fourth quarter. But if we normalize that, we would expect it to be growing in line with our normalized volume year-to-date and consistent with our guidance range. And then there are 2 pieces, I think, that are relevant in the kind of price equation for us globally. We expect price growth in the second half to be consistent with how we grew price in the first half ex China. That's all of our businesses around the world, developed and developing markets. But we expect China to be down roughly an equal amount, and that's really just the VBP implementation that Paul talked about, significant price down in ortho. We expect volumes to be up. And then implant price down to be slightly, we expect volumes to be up there, but it will play out on the price line for roughly a neutral price for Envista in the second half. I think it is important to understand that outside of China, however, we've got price growth which is coming on the back of price increases that we implemented last year and then targeted price increases by portfolio and geography this year. Operator: Our next question is from Lily Lozada from JPMorgan. Lilia-Celine Lozada: Great. Hoping you can talk about your guidance ethos and how you're thinking about the rest of the year. You've done mid-single-digit underlying growth a few quarters in a row now, and guidance implies a slight step-down over the back half of the year, even ex selling days on a true organic basis. So is that just conservatism? Or are there other dynamics to be keeping in mind for the back half of 2026? And then I have a follow-up. Eric Hammes: Yes. So I think maybe the big number as we look at it is 4% to 5% billing day impact in Q4. If we adjust for that, our guidance assumes we're growing roughly in line with how we grew year-to-date on a normalized basis. When we say normalized year-to-date, that includes really one significant factor. That is the Spark deferral benefit that we've had year-to-date. And then, of course, we have the opposite beneficial impact on billing days. So squiggly line, approximately 4% year-to-date, and that's reasonably in line with what we're expecting in the back half of the year. So we see our growth being actually pretty consistent half 1 to half 2. Lilia-Celine Lozada: Got it. That's helpful. And then just on EPS, you're raising guidance by almost double the beat. So what gives you confidence in that? And what's better in the second half than The Street was forecasting? Eric Hammes: Yes. I think there's really 2 pieces outside of growth, which I think we've just talked through. We will have obviously a very solid growth year. We continue to see very good profit leverage. That's thanks to our volume benefits. That's thanks to our price equation. We've also had very good productivity in the first half and I think particularly in second quarter. We expect basically our fundamentals continue to deliver in the second half in that same range. And then we talked about a tax rate benefit. Most of this is really just carryforward of the strategies that we executed last year and then what we're seeing in terms of U.S. income performance, which is really helping to absorb that interest rate deduction penalty that we've had in the past. So our rate guidance, if you didn't catch it, is 26%. It's 2 points less than what we expected entering the year. It's reasonably consistent with where we are on a year-to-date basis. And I think really importantly, we see that as a good, sustainable, predictable rate going forward. We know that we've implemented a lot of strategies in addition to just better business performance that's making that tax rate sustainable. Operator: Our next question is from Brandon Vazquez from William Collier (sic) [ William Blair ]. Brandon Vazquez: I want to start with kind of wrapping up a couple of questions that have been asked already and just ask a little more clearly. Like are you able to quantify some of the moving pieces in the back half or at least like shore us up on what is an underlying growth rate in the second half of the year? Is it in the low single-digit range? Because what we're trying to figure out is, essentially, what is the jumping rate or what's the exit rate on an underlying basis into 2027. So like what is the growth when you normalize for things like selling days, deferrals, VBP? There's just a bunch of moving pieces, so curious if you can talk about that a little bit. Eric Hammes: Yes. So I think at a high level, when you do the normalization, it would be about 3.5% core growth in the second half. That same math, Spark deferral and billing days was about 4% in the first half. So I think big picture, it's a very similar underlying growth rate first half to second half. Just as a reminder, we will not have any more effect from our Spark deferral benefit. I think we've telegraphed as we've gone throughout entering this year through the first couple of quarters that we basically lapped that final piece, which is about $5 million in the quarter itself. And then I think if you get really to the pieces of the business, there's not a lot of significant moving parts, Brandon, underneath that. We will have slightly better growth, as mentioned I think earlier in the call, from China. That's a slight accretive benefit. We'll have slightly less price benefit. We talked about that as we entered the year just based on sort of the roll-off of what we see from tariff-related price actions last year into this year. But you put, I think, everything sort of in the basket. And it will be a very consistent underlying first half, second half performance as we see it, 3.5%, call it, core growth. Operator: Our next question is from Kevin Caliendo from UBS. Kevin Caliendo: Just getting back to China really quick to understand the meaningful price down in ortho, down 10%, 15% in implants. You're still expecting growth. I'm guessing that's based on just a huge amount of pent-up demand ahead of or waiting for VBP. And if that's the case, how should we think about China into '27? Like how much of that carries forward? Will China be a growth tailwind in '27 or a headwind? I'm just trying to figure out the sizing of this sort of bolus that you're expecting to get in volumes in the second half and how that runs through going forward. Paul Keel: Yes, Kevin, I'll take that one. Thanks for the question. Maybe 3 components will help clarify it. So first, yes, we do expect an acceleration of growth. That comes from 3 things. The first is, as Eric mentioned, we've been keeping the channel tight. Product in channel, of course, gets revalued when the price changes, and so it's neither helpful to us nor our channel partners for that revaluation. So we keep that tight. It will expand back to more normal levels post VBP, so you get a short-term effect from that. The second effect you get is related to market shares. The way that VBP works is there's 2 bidding processes, 1 for the setting the procedure price and the second for the supplies price. The clinicians give a forecast. The hospitals give a forecast of the volume demand for each of the players. And so the larger market share players going in tend to get more coming out, and you get growth from that. And then the third piece, which was very evident with implants, was the underlying patient demand. When you reduce the procedure price, demand by patients went way up. Now specific to ortho VBP 1, I think you'll see less of a patient impact to volume. And that's for 2 reasons. It's still unclear if procedure price will be changed on ortho, so we'll have to see whether that happens. And then the second, all things equal, it's easier to expand supply for implants than it is for ortho. Ortho is an 18-month to 24-month procedure. And it's more difficult to train a clinician to do orthodontics than it is to do implants, particularly in fixed wire orthodontics, which is still the largest category in China. So hopefully, that unpacks for you a little bit where the growth will come in the second half. Moving forward, we're -- continue to be long on China. It's currently the second biggest dental market in the world. We expect it to become the largest at some point. And so in the same way that we are continually making investments in other big dental markets, U.S., Germany, Japan are good examples, we're investing long term in China. A good example of that is the new Suzhou plant that we announced about this time last year. Envista has been doing this now for 130-something years. So we're pretty comfortable navigating short-term uncertainty to support longer-term growth, and China lines up well against that long-term strategy. Kevin Caliendo: That's helpful. Really helpful. Can I ask a quick accounting follow-up? Because I'm... Paul Keel: If you ask it of Eric, yes. Kevin Caliendo: You had an $11 million revenue good guy from FX and -- on the revenue side. But on the bridge for the EBITDA, it was a $12 million good guy. Is that just the delta there hedges unwinding or something like that? I'm just trying to understand how that works. Eric Hammes: Yes, Kevin. If you go back to last year, so the answer to your question really lies in our prior year comp. Last year, in the first half, we did not have an active hedging program for our balance sheet. And the dollar was weakening pretty substantially, if you might recall, from late 2024 through first half 2025. We had losses last year against that weakening U.S. dollar for balance sheet revaluation. Starting third quarter of last year, we started hedging our balance sheet. And so you're not -- we're not seeing -- you're not seeing any intra-quarter significant losses or gains because we're hedging appropriately. And so the better profit impact, which is, I think, the core of your question, is just coming from not having that prior year Q2 loss. Operator: Our next question is from Jason Bednar from Piper Sandler. Jason Bednar: I wanted to come back quick first on the pricing discussion. Eric, could you maybe unpack the volume versus price contribution within consumables? I'm assuming there isn't a ton of pricing that you're capturing in that high single-digit growth in diagnostics, but correct me if I'm wrong. And then in SP&T, you referenced capturing price there. Can you talk about the regional or portfolio variations in price capture for implants? Eric Hammes: Yes. So let me just catch the first one. I think it was a comment really on E&C price capture. So we did get better price capture, just call it, above average, 100 basis points or so above the Envista average of almost 2% in E&C. We tend to get more in consumables. We see it as a less elastic market, and we also have extremely strong brands. But we did also get price capture in our diagnostics business. That also means that our volume growth, as Paul laid out, the 8% growth in E&C was very solid. So I think we're seeing good performance on multiple fronts there. Obviously, that means we got less price capture in SP&T. We're very select in terms of the portfolios that we're looking at there for price, and then it's sensitive as well to geographies. So hopefully, that gives you a little bit of a dip down, Jason. Jason Bednar: Yes, it does. That's helpful. I wanted to come back also then maybe to follow up on the VBP discussion. We have the analog here for ortho on how volumes may respond to price declines. We don't really have a good analog here for VBP 2 in implants. I guess, what are you -- sorry if I missed it. But what are you assuming with respect to the volume growth response in VBP 2? Assuming we do have a 10% to 15% decline in price like you're expecting, what do you expect in volumes in response to that? Paul Keel: Yes, Jason, let me take that one. So first, we're not sure we'll see the same volume effect from ortho VBP 1 as we saw from implants VBP 1. As we mentioned on a previous call, it's not as easy to expand supply on an orthodontic procedure as it is to implant. So we'll have to see how that plays out. We think the market share effect will be very similar, but the patient response, time will need to tell. With respect to VBP 2 on implants, we think that the volume growth there will come from additional market share gain. We think the patient demand response will be muted, one, because the price isn't going to change much; and two, because, there, we're also not sure that the procedure price will change. We think we'll get more share as a result of VBP because that's how that bidding process works, but the patient component of it for VBP 2 will be less pronounced. Jason Bednar: Okay. Paul, I mean, just real quick, net positive, net neutral on VBP 2 for implants? Or is it too early to say? Paul Keel: I think I'll hold on that one. I'm not sure. Eric, do you have a view on whether the 10% price increase will be net beneficial? Eric Hammes: I mean, our view is that we're now getting down sort of to this rate and range where it's less impactful, right? It's less impactful from a price and an economics perspective. I think there's also an open question as to whether or not that will, through procedure price, drive demand. But we also look to a lot of previous med tech VBPs. And I would say that the Chinese government has done a good job in getting it right, meaning getting this equation right of sort of the price down, volume up. And as a leader in terms of brand market global presence, we think it's going to bode well for us in terms of volume. Obviously, there's variability around that. And it comes down a lot to how we're prepared with customers and how we're prepared with channel and our own supply chain, and we feel strong about that. Operator: Our next question is from Michael Cherny from Leerink Partners. Michael Cherny: I think we've beaten a lot of these topics to death, so I'll ask kind of a big picture one. What should we expect at the Investor Day? And how are you thinking about positioning, obviously, either there or at various different conferences, the product portfolio and the R&D engine? Paul Keel: Yes, happy to take that one. It's been about 1.5 years since our last Investor Day, so it feels about like the right time to give you guys an update. In terms of the agenda, our current thinking is that I will kick things off with a deeper dive into the strategic and operational progress against the original plan, the value creation plan we unveiled in March of 2025. Eric will then do a similar kind of update but through a more financial lens, quantifying those sort of strategic levers I'll talk about. Then, we'll have each of the leaders of our 4 main businesses walk you guys through the main drivers that they're prioritizing. And then we expect to have an extended Q&A session. We're going to host this event and webcast it from our Procera facility, which is just outside of New York City. It's about an hour outside. We make custom prosthetics there. The presentation and supporting materials will be, of course, available on our website. And for those who are able to attend in person, we'll provide a tour of that facility. It's pretty interesting. And then we'll also showcase some of our higher-impact new products that have recently launched. So whether you're able to join us in person or online, we certainly hope you can make it on September 17. Operator: Our next question is from David Saxon from Needham. David Saxon: Maybe I'll just keep it to one given the time, so -- and higher level, too. So just when you're thinking about Envista's overall margin improvement potential, just curious where you see the most opportunity across SP&T and E&C. I think E&C has generally seen a higher op margin, but I'm not sure how significant you're thinking Spark could be longer term for SP&T. Paul Keel: Yes. Let me answer the question along 2 vectors: first, by reporting segment, as you asked; and then secondly, maybe a look across the P&L. Yes, you're correct that Spark remains a very important margin expansion lever. We've had, I don't know, how many consistent quarters of year-over-year unit cost reduction. We still see progress ahead of us. There's a multiyear improvement -- unit cost improvement plan that the teams put together in a very organized sequential way that they go about introducing that and then spreading it across the 3 factories we have. So plenty of work left to do there. We think a similar sort of opportunity is available to us in implants. The businesses are similar, implants and ortho. And seeing what is possible through our Spark experience has motivated us in other parts of the company. I would say, though, on the E&C side, there's still room to grow as well in our diagnostics business. As you know, that's a comprehensive solution. That's a hardware business, but it also has software and services. And the software and services parts right now are growing even more quickly than the hardware part, and they have better margins. So as those sides of that business grow, there's a natural margin expander that comes with it. If we look at it across the P&L, last year, we had a particular focus on G&A. We took out $35 million. I think that not only helped the economics of the business, but it also helped the speed and decision-making. We're continuing to work on G&A productivity, but the bigger opportunity for us is on the COGS line. We have a number of programs that we're working to drive increased COGS productivity. And the last 2 quarters, you've started to see that manifest itself in our gross margin line. We had gross margin expansion in both Q1 and Q2, and we're hopeful that there's more room to go there. That's kind of a thought on margins cut both by business and by line to the P&L. Operator: Our next question is Michael Sarcone from Jefferies. Michael Sarcone: Just a quick one on the model. Eric, any update on what you're expecting for the FX impact for the back half of the year on sales? Eric Hammes: Yes. I think it's a pretty straightforward perspective. So we do not expect FX, if you think about translation on revenues, to be material at all in the next 2 quarters. In fact, our model has got it almost dead flat, so call it 0% growth year-over-year in Q3 and Q4. And if you just look at how rates have moved sequentially in the last several months, a little bit of a weakening euro but a strengthening of a few of the other currencies. And effectively, if that environment doesn't change, we'll be in a near 0, if you will, foreign exchange impact, top line and bottom line. And we've largely worked through what we talked about, I think, midway through the Q&A, in terms of just these benefits that we had from losses last year, which were all in the first half. So you add all that up, and there should be a very nominal to near 0 impact unless rates move forward on the second half. Operator: There are no more questions at this time. I would now like to turn the conference back to Mr. Paul Keel. Paul Keel: Okay. Thanks, everyone. Let me just briefly underline a couple of thoughts by way of wrapping up the quarter. First, our second quarter results supported a strong first half performance for Envista. Compared to the first half of 2025, we delivered 7% core growth, 27% adjusted EBITDA growth and over 50% EPS growth. Secondly, our Q2 performance was once again broad-based, with both reporting segments and all major geographies posting strong results. Third, we continue to focus on executing our value creation plan with ongoing progress against all 3 of our priorities: growth, operations and people. And fourth, this performance gives us confidence to increase our full year 2026 guidance. We look forward to the upcoming Investor Day that we referenced in a previous question. Again, that's on September 17, where we'll take a longer look at our strategy and execution. I think that covers it for now. Have a great day, everyone, and a terrific week. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Envista, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Envista wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Envista (NVST) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Envista Holdings Corporation? Here are five stocks we like better. Strong second-quarter performance: Envista reported $731 million in sales, up just over 7% year over year, with 5% core growth. Adjusted EBITDA rose 28%, margin expanded to 14.7%, adjusted EPS increased 58% to $0.41, and free cash flow reached $105 million. Equipment and consumables led segment growth: The segment posted 8.5% core growth, while Specialty Products & Technologies grew 3.1%, supported by double-digit Spark clear-aligner growth. New products, share gains and implant investments are central to the company’s growth strategy. Full-year outlook raised: Envista now expects 2026 core sales growth of 3.5%–4.5%, adjusted EBITDA growth of 11%–14% and adjusted EPS of $1.50–$1.55. Management cautioned that China’s expected orthodontic and implant procurement programs could create pricing pressure in the second half. Envista (NYSE:NVST) reported second-quarter 2026 sales of $731 million, supported by 5% core revenue growth and contributions from foreign exchange and acquisitions that lifted total revenue growth to just over 7%. President and Chief Executive Officer Paul Keel said the company delivered balanced growth across its two reporting segments and major geographies, while the dental market remained resilient amid macroeconomic pressure. The company reported 7% core growth for the first half of 2026. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Adjusted EBITDA increased 28% year over year, while adjusted EBITDA margin expanded 230 basis points to 14.7%. Adjusted earnings per share rose 58% to $0.41. The company generated $105 million in free cash flow during the quarter, representing 158% conversion, and repurchased approximately 2.4 million shares at an average price of $24 per share. Equipment and Consumables posted 8.5% core sales growth, with high-single-digit growth in both consumables and diagnostics. Keel said consumables benefited from its relative insulation from macro volatility because its products support procedures that are typically covered by insurance. Diagnostics also benefited from a market recovery following a multiyear post-COVID contraction, he said. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Keel said Envista estimates the consumables and diagnostics markets grew at mid-single-digit rates during the first half, while the company’s businesses grew at high-single-digit to low-double-digit rates. He attributed the outperformance to share gains, commercial and operational initiatives, and new-product activity. Specialty Products & Technologies reported 3.1% core sales growth and nearly 6% total revenue growth. Spark clear aligners again delivered double-digit growth, or high-single-digit growth after accounting for changes in revenue deferrals. Implant core sales increased by low single digits, while brackets and wires declined by high single digits against a prior-year comparison that benefited from customer purchases ahead of tariff and pricing actions. → No Hangover: Revisiting Microsoft One Week After Earnings Adjusted operating profit in Specialty Products & Technologies increased $9 million, or 15%, and segment margin improved 120 basis points. Equipment and Consumables adjusted operating profit increased 25%, with operating margin rising 250 basis points, driven by pricing, volume and foreign-exchange benefits. During the quarter, Envista launched ZenSeal Pro, a bioceramic endodontic sealer used in root canal procedures, and Demi Pro, a lightweight cordless curing light for restorative procedures. Keel said the company expects the launches to build on recent consumables share gains. In orthodontics, Envista expanded Ormco Digital Bonding, or ODB, to all of its bracket systems. The digital platform was initially launched in 2023 with the Damon Ultima system. Keel said the expanded offering makes Envista the only scaled player offering complete solutions across both clear aligners and fixed orthodontics. The company also discussed ongoing implant investments. Keel said the S-series implant launch introduced in the first quarter was ahead of plan, with roughly one-quarter of sales coming from competitive conversions. An abutments product is available in Europe and could launch in North America during the second half, subject to regulatory approvals. The company’s Versah acquisition, which added osseodensification technology, is also performing ahead of its acquisition plan, according to Keel. Envista expects China’s volume-based procurement processes for orthodontics, or VBP1, and implants, or VBP2, to occur in the second half of 2026. Management incorporated that assumption into its revised outlook. Keel said Envista expects orthodontics VBP1 to result in price compression similar to the first implant VBP, which saw prices decline by roughly 45%, although he said the company expects share gains. For implant VBP2, Envista expects a smaller price decline of approximately 10% to 15%. Management expects China to grow moderately in the second half, with somewhat stronger growth in the fourth quarter. Chief Financial Officer Eric Hammes said the company has maintained a lean channel position and expects its global presence, supply chain and market position to support a post-VBP response. He said Envista was down year over year in China during the first half. Hammes also said the company expects approximately 3.5% core growth in the second half on a normalized basis. Reported fourth-quarter core growth is expected to be flat to slightly down because the quarter will have four fewer selling days than the prior-year period. Excluding the calendar effect, the company expects fourth-quarter core growth to align with its full-year guidance range. Envista raised and narrowed its 2026 guidance, now expecting: Core sales growth of 3.5% to 4.5%. Adjusted EBITDA growth of 11% to 14%. Adjusted EPS of $1.50 to $1.55. Free cash flow conversion of approximately 100% of adjusted net income. Hammes said the company expects foreign-exchange effects on both revenue and profit to be nominal to near zero in the second half, assuming currency rates remain near recent levels. He also said Envista now expects a full-year non-GAAP tax rate of about 26%, about two percentage points below its initial guidance. Looking ahead, Envista plans to hold an investor day on Sept. 17, where management said it will provide an update on the value-creation plan introduced in March 2025, financial progress and innovation priorities across its four main businesses. Envista Holdings Corporation is a global dental products company that develops, manufactures and markets a broad portfolio of dental consumables, equipment and technology solutions. Headquartered in Brea, California, Envista serves dental practitioners, specialists and laboratories in more than 150 countries. The company's offerings span implant, orthodontic, endodontic and restorative product lines as well as digital imaging systems and practice management software. Envista's product brands include Nobel Biocare for dental implants and restorative solutions, Ormco for orthodontic appliances and treatment systems, Kerr for restorative and endodontic materials, KaVo for dental imaging and handpieces, and Vista for surgical drills and instruments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Envista Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Core growth of 5% in Q2 was driven by balanced performance across all major geographies and reporting segments, reflecting the characteristic resilience of the dental market. The Equipment & Consumables (E&C) segment outperformed market rates due to strong demand for insurance-covered procedures and a recovery in the diagnostics market following a post-COVID downturn. Management attributed margin expansion to the Envista Business System (EBS), which improved manufacturing productivity and sustained G&A efficiency. New product innovation remains a primary growth lever, with recent launches in endodontics and orthodontics gaining market share and improving clinical efficacy. The Specialty Products & Technologies segment saw double-digit growth in Spark clear aligners, though brackets and wires faced a difficult prior-year comparison due to pre-tariff customer buying. Geographic diversification helped mitigate softer North American demand, with stronger performance in Europe, APAC, and Latin America providing a strategic offset. Management emphasized that the portfolio's balance between elective procedures (implants/ortho) and essential care (consumables) provides stability during periods of macro uncertainty. Full-year 2026 guidance was raised to 3.5% to 4.5% core growth, reflecting strong first-half momentum and confidence in continued execution. Second-half revenue growth is expected to be lower than the first half due to a calendar impact of four fewer selling days in Q4, which may result in flat to slightly down core growth for that specific quarter. The updated guidance incorporates the impact of China's Volume-Based Procurement (VBP) for both orthodontics and implants, which is now confirmed to proceed in the second half of 2026. Management expects the full-year effective tax rate to be approximately 26%, a 2-point reduction from initial guidance driven by successful tax strategies and improved U.S. income performance. Adjusted EBITDA growth in the second half is projected to align with sales growth as the company continues to invest high single digits in R&D and mid-single digits in sales and marketing. Free cash flow conversion reached 158% in Q2, aided by a $13 million recovery related to IEEPA tariffs paid in 2025. The company continues to offset tariff costs through supply chain efficiencies and pricing actions, with new Section 301 levies expected to replace prior tariffs in the second half. Envista repurchased 2.4 million shares in Q2 at an average price of $24, utilizing balance sheet flexibility to return capital to shareholders. The acquisition of Versah's osseodensification technology is performing ahead of the acquisition plan, serving as a successful example of the company's 'outsourced R&D' strategy. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is driven by a combination of market tailwinds in diagnostics and significant share gains through new product activity. The segment benefits from being less sensitive to macro volatility compared to elective implant procedures. Ortho VBP 1.0 is expected to see price compression similar to the initial implant VBP (around 45%), while implant VBP 2.0 price compression will be much smaller (10-15%). Management anticipates volume gains and market share increases will eventually offset price concessions, as seen in previous cycles. The focus remains on strategically aligned, financially accretive deals where Envista can act as the 'logical owner' to improve performance. Recent small acquisitions in the implant platform serve as the blueprint for future inorganic growth. EBITDA growth will track revenue growth in H2 due to the negative billing day impact in Q4 and sustained investments in R&D and commercial initiatives. Management is prioritizing long-term growth investments over short-term margin maximization during the back half of the year.

This article first appeared on GuruFocus. Revenue: Q2 sales reached $731 million, with core sales up 5% year-over-year. Adjusted Gross Margin: Expanded by 70 basis points to 55.1%. Adjusted EBITDA: Increased 28% year-over-year, with margins up 230 basis points to 14.7%. Adjusted EPS: Grew 58% to $0.41 per share. Free Cash Flow: Totaled $105 million in Q2, with a conversion rate of 158%. Segment Performance (Specialty Products & Technologies): Core sales grew 3.1%, with Spark growing double-digits and implants up low single-digits. Segment Performance (Equipment & Consumables): Core sales increased 8.5%, with both consumables and diagnostics up high single-digits. Share Repurchases: Purchased approximately 2.4 million shares at an average price of $24 per share. FY 2026 Guidance: Raised to 3.5%-4.5% core growth, 11%-14% adjusted EBITDA growth, and adjusted EPS of $1.50-$1.55. Warning! GuruFocus has detected 3 Warning Signs with ZIP. Is NVST fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Envista Holdings Corp (NYSE:NVST) delivered strong Q2 2026 results with 5% core growth, leading to a 28% increase in adjusted EBITDA and a 58% increase in adjusted EPS. The company raised its full-year 2026 guidance for core growth (3.5%-4.5%), adjusted EBITDA growth (11%-14%), and adjusted EPS ($1.50-$1.55) due to strong first-half performance. Growth was broad-based, with both reporting segments (Specialty Products & Technologies and Equipment & Consumables) and all major geographies (North America, Europe, APAC, Latin America) contributing positively. The Equipment & Consumables segment delivered strong 8.5% core growth, driven by high single-digit growth in both consumables and diagnostics, with the company gaining market share in these areas. The Spark clear aligner business continued its momentum with double-digit growth, and new product launches (Denseal Probe, DemiPro, ODB expansion) are expected to further drive share gains. Operational excellence initiatives led to significant margin expansion, with adjusted gross margin up 70 basis points and adjusted EBITDA margin up 230 basis points year-over-year. The company generated strong free cash flow of $105 million in Q2, with a conversion rate of 158%, and continues to return capital to shareholders through share repurchases. Management successfully reduced the effective tax rate to 25% in Q2 and now expects a full-year rate of ~26%, which is 2 points lower than initial guidance. The company's balance sheet remains strong with net debt to adjusted EBITDA of 0.7 times, providing flexibility for future investments and M&A. New product innovation is playing a central role in growth, with recent launches like the S-Series implant system and the Versa acquisition performing ahead of plan. The company expects a significant slowdown in Q4 2026 core growth to flat or slightly down due to a calendar impact of four fewer selling days, which will also temper adjusted EBITDA growth in the second half. The Brackets & Wires business experienced a high single-digit decline in Q2, impacted by a strong prior year comp that benefited from customers buying ahead of announced tariffs and price activity. The upcoming China Volume-Based Procurement (VBP) for orthodontics (VBP1) and implants (VBP2) is expected to create headwinds, with significant price compression anticipated in the second half of 2026. The company's implants business only grew low single-digits, which is in line with the market but reflects ongoing macro uncertainty impacting more elective dental procedures. Tariff costs increased by $5 million year-over-year in Q2, and while currently offset, the company expects similar tariff costs in the second half, with new Section 301 levies replacing prior tariffs. The company is increasing investments in sales, marketing, and R&D, which amounted to an $11 million headwind to adjusted EBITDA in Q2, and these investments are expected to continue in the second half. Foreign exchange rates are expected to have a near-zero impact on sales in the second half of 2026, removing a tailwind that contributed $11 million to Q2 revenue growth. The company's guidance implies a step-down in underlying growth in the second half of 2026 to approximately 3.5% core growth, even after normalizing for selling days and the Spark deferral benefit. The China VBP process is expected to result in a neutral price contribution for the company in the second half, as price declines in China offset strong price capture in other regions. The company faces uncertainty regarding the volume response to the China VBP price cuts, particularly for orthodontics, where it is more difficult to expand supply and train clinicians. Q: Can you explain the drivers behind the Equipment & Consumables (E&C) segment's fifth consecutive quarter of high single-digit to low double-digit growth? Is this market-driven or company-specific? A: Paul Keel (President and CEO) attributed the strong E&C performance to three factors: (1) market tailwinds, as consumables are less sensitive to macro volatility and the diagnostics market has returned to growth after a post-COVID downturn; (2) consistent share gains in both consumables and diagnostics, driven by new product innovation; and (3) the benefit of a well-balanced portfolio that offsets weakness in more elective categories like implants. He noted that while the North American market is softer, the company's strong positions in Europe, APAC, and Latin America provide diversification. Q: What are the expected financial impacts of the China Volume-Based Procurement (VBP) for orthodontics (VBP1) and implants (VBP2) in the second half of 2026 and into 2027? A: Paul Keel and Eric Hammes (CFO) detailed that both VBP processes are now underway and expected to complete in 2H26. For ortho VBP1, they expect significant price compression (similar to the ~45% seen in implants VBP1) but anticipate market share gains. For implants VBP2, price compression is expected to be much smaller (10-15%). Eric Hammes added that China is expected to grow moderately in the second half, with slightly better growth in Q4, and they expect continued growth in the first half of 2027 due to easier comps and share gains. Q: How should we think about the underlying growth rate in the second half of 2026, normalizing for selling days, Spark deferrals, and VBP impacts? A: Eric Hammes clarified that after normalizing for the Spark deferral benefit and the billing day impact (which will be a minus four-day headwind in Q4), the underlying core growth rate for the second half is approximately 3.5%. This is very consistent with the normalized ~4% growth seen in the first half, indicating a stable and consistent performance trajectory for the year. Q: Can you provide more detail on the implant business performance outside of China and the new product cadence? A: Paul Keel stated that implant performance in Q2 was consistent with recent quarters, with balanced growth across geographies and the Challenger and Premium categories. He highlighted that the S-Series launch in Q1 is running ahead of plan, with about a quarter of sales from competitive conversion. A new abutments product is launching in Europe, with a North American launch expected in 2H26 pending regulatory approval. The Versa acquisition is also off to a good start, running ahead of the acquisition plan. Q: What is the company's M&A strategy, and what boxes must potential deals check? A: Paul Keel explained that Envista has good M&A capabilities, particularly in the implant platform, where they completed three small acquisitions over the past 18 months. The strategy is to pursue deals that are strategically aligned and financially accretive, where Envista is the logical owner and can cause the business to perform better than previous owners. He emphasized a focus on organic growth in the Challenger category (Implant Direct and Alpha Biotech) while remaining open to opportunistic acquisitions. Q: Why is EBITDA growth expected to be in line with revenue growth in the back half of the year, rather than growing faster? A: Eric Hammes explained that the slower EBITDA growth is primarily due to the billing day effect, which will slow revenue growth in Q4. He also noted that the company will continue to invest in the business, with R&D expected to be up high single-digits and sales and marketing up mid-single-digits year-over-year in the second half, consistent with first-half investment levels. Q: How should we think about the volume and price contribution to growth for the rest of 2026 and into 2027? A: Eric Hammes stated that the first half had a good mix of ~2% price and ~3% volume growth. For the second half, price growth is expected to be consistent with the first half ex-China, but China VBP will create a roughly neutral price impact for the company overall. Volume growth will be impacted by the billing day effect in Q4, but normalized growth is expected to be in line with the guidance range. Q: What is driving the confidence in raising the full-year EPS guidance by almost double the beat? A: Eric Hammes attributed the confidence to two main factors: (1) continued strong profit leverage from volume, price, and productivity, which is expected to continue in the second half; and (2) a lower tax rate. The company now expects a full-year tax rate of ~26%, which is 2 points lower than initial guidance, driven by strategies executed last year and better U.S. income performance. He emphasized this rate is sustainable and predictable going forward. Q: What are the expectations for the volume response to the VBP2 price decline in implants? A: Paul Keel and Eric Hammes noted that the volume growth from VBP2 will primarily come from additional market share gains, as the patient demand response is expected to be muted due to the smaller price change and uncertainty around procedure price changes. They expressed confidence in the company's preparation with customers, channel partners, and supply chain, and noted that the Chinese government has historically done a good job balancing price-down and volume-up dynamics. Q: What should investors expect from the upcoming Investor Day on September 17? A: Paul Keel outlined the agenda: he will provide a strategic and operational progress update against the value creation plan, Eric Hammes will provide a financial quantification of the strategic levers, and leaders of the four main businesses will discuss their priorities. The event will be hosted at the Procera facility near New York City, with a facility tour and new product showcases for in-person attendees. For the complete transcript of the earnings call, please refer to the full earnings call transcript.