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    HSIC
    Earnings call· Dec 2025(Q4 FY25)

    HENRY SCHEIN Q4 FY25 earnings call HSIC

    Feb 24, 2026 Source

    Executive summary

    Henry Schein Q4 FY25 — Strong Sales Growth and Strategic Execution

    Henry Schein delivered robust Q4 FY25 results, marked by strong sales across all businesses, particularly global equipment and specialty products, exceeding prior guidance. The company is executing effectively on its BOLD+1 strategic plan, with high-growth, high-margin businesses approaching 50% of operating income. Management anticipates continued momentum, with earnings growth weighted towards the second half of FY26 due to value creation initiatives.

    Highlights

    5

    • Global sales grew 7.7% in Q4 FY25, reflecting the highest sales growth in 15 quarters.

    • Non-GAAP diluted EPS increased to $1.34 in Q4 FY25, up from $1.19 in Q4 FY24.

    • Global Dental Equipment sales hit a record, with U.S. Dental Equipment sales delivering double-digit growth.

    • Global Specialty Products Group sales grew 14.6% (11.1% in constant currency), driven by strong implant and biomaterial performance.

    • Cloud-based customers increased by more than 20% year-over-year, reaching over 11,000 Dentrix Ascend and Dentally subscribers.

    Concerns

    5

    • GAAP operating margin decreased by 10 basis points to 4.76% in Q4 FY25 compared to the prior year.

    • Non-GAAP effective tax rate increased to 22.7% in Q4 FY25 from 22% in Q4 FY24.

    • Lower comparative demand for respiratory products partially offset U.S. Medical business growth, continuing into Q1 FY26.

    • Intraoral scanners average selling prices continued to modestly decrease due to new market entrants.

    • Sales mix of premium and value implants resulted in a slightly lower gross margin compared to the prior year.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 Sales Growth
    3% to 5%
    high materiality
    High
    Full-year 2026 Non-GAAP Diluted EPS
    $5.23 to $5.37
    high materiality
    High
    Full-year 2026 Non-GAAP Effective Tax Rate
    approximately 24%
    medium materiality
    High
    Full-year 2026 Adjusted EBITDA Growth
    mid-single digits
    high materiality
    High
    Operating Income Improvement from Value Creation Initiatives
    over $125 million annual run rate
    high materiality
    High
    Non-GAAP Operating Income from High-Growth, High-Margin Businesses
    over 50% of total operating income
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Global Distribution & Value-Added Services
    Solid growth driven by continued momentum. U.S. Dental Merchandise growth included good volume. U.S. Dental Equipment led by double-digit traditional equipment growth. U.S. Medical Distribution saw strong growth in Home Solutions. International Dental Merchandise growth was strong across Southern and Eastern Europe, Germany, Brazil, and Canada. International Dental Equipment growth was broad-based across countries and categories. Value-Added Services growth was driven by International Business Solutions.
    U.S. Dental Merchandise sales growth: 3.6%U.S. Dental Equipment sales growth: 10.6%U.S. Medical Distribution sales growth: 4.9%International Dental Merchandise sales growth: 9.2%International Dental Merchandise sales growth (constant currency): 3.8%International Dental Equipment sales growth: 13.9%International Dental Equipment sales growth (constant currency): 7.5%Global Value-Added Services sales growth: 9.6%Global Value-Added Services sales growth (constant currency): 8.5%
    		—7.0%——
    Global Specialty Products Group
    Benefited from strong performance in implants and biomaterials, gaining share across most markets. Growth primarily from BioHorizonsCamlog (Germany), S.I.N. (Brazil), and Biotech Dental (France), each with double-digit growth. Sales mix of premium and value implants resulted in a lower gross margin compared to prior year. S.I.N. value implant system introduced in U.S. market in Q4 FY25. Endodontics and Orthodontics also performed well.
    Constant currency sales growth: 11.1%Value implants growth: double-digitPremium implants growth: mid-single-digit
    		—14.6%——
    Global Technology Group
    Performance driven by core practice management solutions. U.S. sales growth led by practice management software, particularly Dentrix Ascend. International sales growth driven by Dentally cloud-based software. Expanding customer base and product integration are driving growth in annual recurring SaaS subscription revenue and Transactional Services business.
    Constant currency sales growth: 7.6%Dentrix Ascend growth (U.S.): double-digitCloud-based customers increase: >20% YoYDentrix Ascend and Dentally subscribers: >11,000
    		—8.4%——

    Operational metrics

    9
    Non-GAAP Operating Margin
    7.42%relatively flat
    Q4 FY25

    Compared to prior year, despite slightly lower gross margins primarily due to product mix within Global Distribution and Global Specialty Products groups.

    Non-GAAP Effective Tax Rate
    22.7%vs 22% in Q4 FY24
    Q4 FY25

    Full-year non-GAAP effective tax rate was 23.7%.

    Foreign Currency Exchange Impact on Diluted EPS
    $0.02favorable
    Q4 FY25

    Favorable impact versus the prior year.

    Restructuring Expenses
    $23 million
    Q4 FY25

    Recorded during Q4 FY25 from the program announced in August 2024. Full-year restructuring expenses were approximately $105 million or $0.59 per diluted share.

    Stock Repurchases
    $200 million
    Q4 FY25

    At fiscal year-end, $780 million remained authorized and available for future stock repurchases.

    Acquisitions Contribution to Sales Growth
    0.9%
    Q4 FY25

    Contribution to total sales growth for the quarter.

    U.S. Dental Merchandise Sales Growth from Volume
    approximately half
    Q4 FY25

    Approximately half of the U.S. and medical distribution merchandise sales growth was driven by higher volume.

    Cloud-Based Customer Growth
    >20%YoY
    Q4 FY25

    Primarily from new accounts, contributing to the growth of Dentrix Ascend and Dentally subscribers.

    Dentrix Ascend and Dentally Subscribers
    >11,000
    Q4 FY25

    Represents the largest installed base in the world for these cloud-based practice management solutions.

    Industry KPIs

    3
    MetricValueDetails
    Utilization trendsmodest procedure growth
    Segment revenue operating income$3.4 billionUSD
    Adjusted EPS EBITDA leverage guidance$291 millionUSD

    Product announcements

    5
    ProductTypeDetails
    Vvardis' Curodont productlaunch
    CitoCBC system (CytoChip Inc.)launch
    Voice Notes (AI-powered documentation assistant)launch
    Image Verify (AI-powered quality assessment tool)launch
    New forms Webflowlaunch

    Deals & partnerships

    3
    Amazon Web ServicesIntegration of generative and agentic AI technology into Henry Schein One products.

    Partnership for generative and agentic AI integration with Henry Schein One, including tools like Voice Notes and Image Verify.

    CytoChip Inc.Exclusive distribution agreement for the CitoCBC system.

    Exclusive agreement for the distribution of CytoCBC, a cartridge-based complete blood count analyzer, in the U.S. Medical business.

    VvardisExclusive distribution agreement for Curodont product.

    Exclusive distribution agreement in the U.S. and U.K. for Vvardis' Curodont product, a solution for early-stage caries.

    Risks & headwinds

    4
    Lower demand for respiratory productsQ4 FY25, continuing into Q1 FY26

    partially offset U.S. Medical business growth

    Decreasing average selling prices for intraoral scannersQ4 FY25

    modestly decrease

    Mitigation: New market entrants are attracting new customers, advancing interest in digital impressions.

    Product mix impact on gross marginQ4 FY25

    slightly lower gross margins

    Mitigation: Value implants growing faster than premium implants, creating gross profit dollar growth.

    Tariff impactFY26

    not quantified

    Mitigation: Anticipate passing on any tariff increases to customers; good job in alternative sourcing from different countries.

    What to watch in Q1 FY26

    5

    Value Creation Initiatives Operating Income Improvement

    H1 FY26 / H2 FY26
    CurrentInvestments in H1 FY26
    TargetNet benefit for full year, more heavily weighted to H2 FY26

    Why it matters

    These initiatives are expected to deliver over $125 million in annual run rate operating income improvement by end of 2026, crucial for margin expansion.

    I do think that as we make investments in the first half of the year and continue to make some investments over the course of the year, that will be reflected in our results. But we've taken that into consideration with the guidance.

    Q&A highlights

    6

    How should the $125 million run rate operating income improvement be phased throughout 2026, and how much will flow through to the bottom line in 2027?

    The benefits from value creation initiatives will not be linear, with earnings growth more heavily weighted to the second half of 2026 due to investments in the first half. The exact flow-through to 2027 is yet to be determined, depending on ongoing investments and business conditions.

    “I do think that as we make investments in the first half of the year and continue to make some investments over the course of the year, that will be reflected in our results. But we've taken that into consideration with the guidance.”

    asked by Jeff Johnson · answered by Ronald South

    2 min read6 chapters

    Detailed Narrative

    01

    Leadership Transition and Strategic Vision

    Henry Schein announced Fred Lowery as the new CEO, effective next week, with Stanley Bergman continuing as Chairman. Lowery brings 20 years of experience from Thermo Fisher Scientific, focusing on scaling businesses through organic growth and acquisitions. The transition is expected to be smooth, with Lowery committed to building on Henry Schein's achievements and accelerating strategic implementation.

    02

    BOLD+1 Strategic Plan Progress

    The company is making substantial progress on its 2025-2027 BOLD+1 strategic plan. Non-GAAP operating income from high-growth, high-margin businesses is approaching 50% of total operating income, on track to exceed 50% by 2027. Implementation of value creation projects is underway, with a global e-commerce platform (henryschein.com) rolling out to U.S. Dental and Canadian customers in Q1 FY26, and U.S. Medical customers shortly thereafter.

    03

    U.S. Dental Market Dynamics and Equipment Sales

    U.S. Dental Merchandise sales growth reflected continued market share gains, with January sales showing good momentum into Q1 FY26. Patient traffic remains stable and leaning positively, supported by data from Henry Schein One e-claims activity indicating modest procedure growth. Global Dental Equipment sales hit a record, with U.S. Dental Equipment sales growing double-digits, driven by traditional equipment and supplier promotions. Digital equipment sales increased low single-digits, with good unit growth across imaging, mills, 3D printers, and intraoral scanners, despite modest ASP decreases.

    04

    Global Specialty Products Performance

    The Global Specialty Products Group saw strong performance, with sales growing 14.6% (11.1% constant currency). This was primarily driven by BioHorizonsCamlog in Germany, S.I.N. in Brazil, and Biotech Dental in France, all achieving double-digit growth. The S.I.N. value implant system was introduced into the U.S. market in Q4 FY25, expected to contribute to U.S. growth in FY26. Endodontics and Orthodontics businesses also showed stabilization and growth through expanded distribution.

    05

    Global Technology Group and AI Integration

    The Global Technology Group's performance was strong, with 8.4% sales growth (7.6% constant currency), driven by core practice management solutions. Cloud-based customers increased over 20% year-over-year, with over 11,000 Dentrix Ascend and Dentally subscribers. The company is integrating generative AI technology through a partnership with Amazon Web Services, launching tools like voice notes and Image Verify to enhance practice efficiency and reduce claims denials.

    06

    Value Creation Initiatives and Financial Outlook

    Henry Schein expects to deliver over $200 million in operating income improvement over the next few years from value creation initiatives, with an annual run rate of over $125 million by the end of 2026. These initiatives include gross profit optimization (pricing, corporate brand sales) and cost reduction through centralized support, process automation, AI tools, and leveraging scale for indirect procurement. Earnings growth in 2026 is expected to be more heavily weighted towards the second half⚖️ of the year due to the implementation schedule.

    AI-generated summary of the company’s earnings call. Not investment advice.