Envista (NYSE:NVST) detailed broad-based growth in the fourth quarter of 2025 and outlined expectations for 2026 as management continues executing the company’s Value Creation Plan introduced at its Capital Markets Day last year. President and CEO Paul Keel and CFO Eric Hammes emphasized share gains across the portfolio, expanding profitability, and continued investment in new products and commercial capabilities, while also calling out several items that benefited reported growth in late 2025 but are not expected to recur at the same levels.
Value Creation Plan progress and 2025 operational actions
Keel framed results around three priorities—growth, operations, and people—supported by the company’s medium-term financial objectives of 2%–4% core growth, 4%–7% EBITDA growth, 7%–10% EPS growth, and free cash flow conversion of 100% or better.
Operationally, management highlighted cost and productivity initiatives. Keel said Envista reduced G&A spending by more than $35 million in 2025, about a 10% decline, while maintaining safety, quality, and customer service levels. He also said the company took actions in 2025 expected to result in roughly a four-point tax rate reduction in 2026. The company initiated a $250 million share repurchase program in early 2025 and returned more than $160 million to shareholders during the year.
On people and culture, Keel cited changes to the management team in mid-2024 and said employee engagement increased in 2025, with record participation in the employee survey. He added that more than half of management promotions went to existing employees in 2025, representing a “40-point increase” over 2024.
New products highlighted across key businesses
Keel said 2025 included launches across major businesses, pointing to “four major new product introductions” in Spark, new platforms in both premium and challenger implants, and consumables launches such as OptiBond 360, SimpliCore, and CaviCide HP. In diagnostics, he cited an entirely new intraoral scanning platform and new cloud and AI features for DTX Studio. Management said another wave of launches is planned for 2026.
Fourth-quarter results: strong growth, with notable non-recurring benefits
Hammes reported fourth-quarter sales of $751 million. Core sales increased 10.8% and foreign exchange added nearly 400 basis points. Reported growth totaled 15%, reflecting a $25 million FX tailwind and about $2 million from two small acquisitions.
Management repeatedly noted that fourth-quarter growth benefited from items not expected to recur over the long term. Hammes said growth was supported by Spark deferral and lower 2024 comparables, and that excluding some of these items, fourth-quarter core growth was “closer to the mid-single-digit range.” He also said tariff-related price increases boosted price performance: Envista generated about three points of price in the quarter, with tariff-related increases accounting for roughly two-thirds of that. Additionally, Hammes cited favorable comparisons tied to China and diagnostics performance in the prior-year quarter, estimating the prior-year comps added about three points to fourth-quarter 2025 core growth.
Profitability improved year-over-year despite a lower gross margin comparison. Adjusted gross margin was 55%, down 220 basis points due to a significant FX transaction benefit in the fourth quarter of 2024. Adjusted EBITDA margin was 14.8%, up 90 basis points, as volume, price, and productivity benefits were partially offset by investments and the prior-year FX impact. Adjusted EPS was $0.38, up $0.14 year-over-year.
Free cash flow in the quarter was $92 million, down slightly from the prior year due primarily to a working capital improvement in fourth-quarter 2024 and higher capital expenditures in fourth-quarter 2025.
Full-year 2025 performance: margin expansion and high free cash flow conversion
For 2025, Envista reported sales of $2.7 billion, with core sales up 6.5% versus 2024. Hammes said the company’s core growth was aided by the Spark deferral change and softer 2024 comparables, which together implied underlying core growth of around 4%—in line with Envista’s revised 2025 guidance and its medium-term objectives.
Adjusted EBITDA margin for the year was 13.7%, a 190 basis point improvement over 2024, driven by volume, price, and productivity. Adjusted EPS was $1.19, up $0.46 year-over-year, supported by improved operating profits, a reduced tax rate, and the share repurchase program that began in the first quarter of 2025. Free cash flow for the year was $231 million, with conversion of 114%.
Hammes said the balance sheet remained strong, with net debt to adjusted EBITDA of approximately 0.6x. He also said the company repurchased $166 million of shares in 2025—more than 9 million shares at an average price of around $18—making progress against the $250 million two-year authorization.
Segment and market commentary, plus 2026 guidance
In Specialty Products & Technologies, revenue grew nearly 16% year-over-year, with core sales up 10.9%. Hammes said Spark clear aligners grew high single digits before the additional benefit of the net deferral change. Brackets and wires grew double digits, aided by a low China comparable; excluding that, brackets and wires were up low single digits. Specialty Products & Technologies adjusted operating margin was 16.2%, up 470 basis points, driven by growth and the year-over-year impact of Spark profitability.
In Equipment and Consumables, core sales increased 10.7%, including high single-digit growth in consumables. Diagnostic core sales rose double digits globally, with high single-digit growth in North America. Management acknowledged diagnostics benefited from a soft prior-year comparison, but said the fourth quarter marked the third consecutive quarter of diagnostics growth, supported by commercial execution and new product introductions, alongside improving trends in North America in the second half of 2025. Segment adjusted operating margin declined 510 basis points, driven by continued investment for future growth and the prior-year FX transaction benefit.
For 2026, the company guided to:
- Core sales growth: 2%–4%
- Adjusted EBITDA growth: 7%–13%
- Adjusted EPS: $1.35–$1.45
- Free cash flow conversion: approximately 100%
Hammes said Envista expects the dental market to remain similar to 2025, with “continued stability” and potential for modest improvement. He also flagged calendar effects: four more selling days in the first quarter and four fewer in the fourth quarter versus 2025, which management expects to make first-quarter growth stronger and fourth-quarter growth slower.
On other assumptions, management said it expects a 1.5% revenue benefit from FX using December-ending rates, and about $15 million of remaining Spark deferral tailwind in the first half of 2026. The company expects pricing to moderate as it laps tariff-related price increases implemented in the second quarter of 2025, and it did not model material changes to tariffs in 2026 due to forecasting difficulty. Hammes said tariffs were about a $30 million headwind in 2025 and are expected to be around $40 million in 2026 due to annualization, with Envista expecting to offset tariffs currently in effect through pricing, cost reductions, and supply chain actions.
Management also discussed China as a key uncertainty, noting China represents about 7% of total sales and that volume-based procurement (VBP) timing can be difficult to forecast quarter-to-quarter. Keel said Envista’s guidance assumes a second-round implant VBP likely in the second quarter of 2026 and an initial orthodontics VBP in the second half.
In response to analyst questions, executives described potential guidance upsides including continued momentum, diagnostics market improvement if sustained, and further consumables strength, while also citing macro volatility and China timing as risks. Hammes said the company expects a non-GAAP tax rate of about 28% in 2026, reflecting improving U.S. profitability and the resolution of an intercompany loan discussed previously.
About Envista (NYSE:NVST)
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.
