Envista Q4 Earnings Call Highlights

Core Insights - Envista reported broad-based growth in Q4 2025, with core sales increasing by 10.8% and full-year sales reaching $2.7 billion, reflecting a 6.5% increase year-over-year [4][6][5] - The company emphasized its Value Creation Plan, focusing on growth, operations, and people, with medium-term financial objectives of 2%-4% core growth, 4%-7% EBITDA growth, and 7%-10% EPS growth [3][4] - Management highlighted significant cost reductions, with G&A spending down by over $35 million in 2025, and a $250 million share repurchase program initiated [1][4] Financial Performance - Full-year adjusted EBITDA margin improved to 13.7%, a 190 basis point increase from 2024, while adjusted EPS rose to $1.19, up $0.46 year-over-year [14] - Free cash flow for 2025 was reported at $231 million, with a conversion rate of 114% [14] - Q4 sales were reported at $751 million, with foreign exchange contributing nearly 400 basis points to growth [8][10] Growth Drivers - All business segments delivered positive growth, with notable contributions from new product introductions and increased clinical training, resulting in nearly $100 million in revenue from products launched in the last year [2][4] - The company trained 30% more customers in 2025, which contributed to accelerating growth [2] - New product launches included major introductions in Spark and diagnostics, with plans for further launches in 2026 [7][4] Market Outlook - For 2026, Envista guided core sales growth of 2%-4%, adjusted EBITDA growth of 7%-13%, and adjusted EPS between $1.35 and $1.45 [18] - Management expects the dental market to remain stable with potential for modest improvement, while also noting calendar effects that may impact quarterly growth [19] - The company anticipates a $30 million headwind from tariffs in 2026, with strategies in place to offset this through pricing and cost reductions [20] Segment Performance - Specialty Products & Technologies saw revenue growth of nearly 16% year-over-year, with core sales up 10.9% [16] - Equipment and Consumables reported core sales growth of 10.7%, with diagnostics achieving double-digit growth globally [17] - Adjusted operating margins in Specialty Products & Technologies improved significantly, while Equipment and Consumables faced margin declines due to investments for future growth [16][17]