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    NVST
    Earnings call· Mar 2026(Q1 FY26)

    Envista Holdings Q1 FY26 earnings call NVST

    May 6, 2026 Source

    Executive summary

    Envista Q1 FY26 — Strong Start to Year with Broad-Based Growth and Reaffirmed Guidance

    Envista delivered a strong start to FY26, extending momentum from prior years with broad-based core revenue growth and significant adjusted EBITDA and EPS expansion. The company reaffirmed its full-year guidance, balancing strong operational execution and new product innovation with ongoing macro and geopolitical uncertainties. Strategic investments in growth and operational efficiency continue to drive performance, alongside an expanded share repurchase authorization.

    Highlights

    5

    • Core revenue grew 9.5% in Q1 FY26, with all major businesses delivering positive growth.

    • Adjusted EBITDA increased 25% year-over-year, with margins expanding 120 basis points to 14%.

    • Adjusted EPS was $0.36, up 50% compared to the prior year.

    • Gross margin expanded by 100 basis points due to volume, price, productivity, and FX.

    • Board authorized an incremental $300 million addition to the share repurchase program.

    Concerns

    4

    • Q1 free cash flow was negative $16 million, historically the lowest quarter for cash flow.

    • Implant core growth was low single digits, with strong double-digit declines in China due to VBP process anticipation.

    • Tariff costs increased $11 million in the quarter, expected to be similar going forward.

    • Macro uncertainty and geopolitical shifts, particularly in the Middle East, continue to demand attention.

    Guidance & targets

    5
    CategoryTargetConfidence
    Core Growth
    2% to 4%
    high materiality
    High
    Adjusted EBITDA Growth
    7% to 13%
    high materiality
    High
    Adjusted EPS
    $1.35 to $1.45
    high materiality
    High
    Free Cash Flow Conversion
    approximately 100%
    medium materiality
    High
    Non-GAAP Tax Rate
    around 28%
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Specialty Products & Technology
    Strong growth in orthodontics and developed markets for implants, offset by declines in China due to VBP anticipation. Benefited from positive price capture and factory improvements in orthodontics.
    Core sales growth: 8.4%Adjusted operating profit growth: 18%Adjusted operating margin improvement: 40 bpsSpark core growth: double digits (adjusted for net deferral change)Brackets & Wires growth: double digitsImplant core growth: low single digitsImplant core growth ex-China: mid-single digitsImplant core growth in China: down strong double digits
    		—14%—$10M
    Equipment & Consumables
    Strong performance in both consumables (Kerr and Metrex) and diagnostics, particularly in developed markets. Driven by strong pricing and volume benefits, offsetting investments in sales, marketing, and R&D. Benefited disproportionately from FX tailwind.
    Core sales growth: 11.5%Adjusted operating profit growth: 33%Operating margin up: 300 bpsConsumables growth: double digitsDiagnostics growth: double digits
    		————
    North America
    Strong performance.
    		—double digits——
    Europe
    Strong performance.
    		—double digits——
    Developing Markets
    With some specific exceptions like China due to VBP and the Middle East due to conflict.
    		—high single digits——

    Operational metrics

    32
    Core Growth
    9.5%
    Q1 FY26

    Company-wide core revenue growth.

    Normalized Core Growth
    4%
    Q1 FY26

    Core growth excluding the impact of additional billing days and Spark deferral benefit.

    Adjusted EBITDA Growth
    25%year-on-year
    Q1 FY26

    Company-wide adjusted EBITDA growth.

    Adjusted EPS Growth
    50%year-on-year
    Q1 FY26

    Company-wide adjusted EPS growth.

    Gross Margin Expansion
    100
    Q1 FY26

    Improvement driven by volume, price, productivity, and FX.

    Adjusted EBITDA Margin
    14%up 120 bps
    Q1 FY26

    Company-wide adjusted EBITDA margin.

    Adjusted EPS
    $0.36up $0.12
    Q1 FY26

    Company-wide adjusted earnings per share.

    Non-GAAP Tax Rate
    26.1%
    Q1 FY26

    Non-GAAP effective tax rate for the quarter.

    Sales
    $706 million
    Q1 FY26

    Total sales for the quarter.

    FX Impact on Sales
    $26 million
    Q1 FY26

    Contribution to revenues from weaker U.S. dollar year-over-year.

    Billing Days Impact on Sales
    $28 million4.5% growth
    Q1 FY26

    Estimated impact from additional calendar days in Q1.

    Volume Contribution to Growth
    7+
    Q1 FY26

    Contribution to core growth.

    Price Contribution to Growth
    2+
    Q1 FY26

    Contribution to core growth.

    Spark Deferral Tailwinds
    $9 million
    Q1 FY26

    Contribution to year-on-year growth.

    Adjusted EBITDA Dollar Growth
    $20 million25% year-on-year
    Q1 FY26

    Absolute dollar growth in adjusted EBITDA.

    Volume and Mix Impact on EBITDA
    $27 million
    Q1 FY26

    Improvement in adjusted EBITDA from volume and mix.

    Price Impact on EBITDA
    $11 million
    Q1 FY26

    Improvement in adjusted EBITDA from price.

    FX Impact on EBITDA
    $7 million
    Q1 FY26

    Contribution to adjusted EBITDA, driven by transactional FX losses in Q1 2025.

    Tariff Costs Increase
    $11 million
    Q1 FY26

    Increase in tariff costs year-on-year, with gross tariff cost similar to recent quarters.

    Share Repurchase Authorization
    $300 millionincremental
    through 2029

    Incremental authorization by the Board, allowing investment of approximately 1/3 of annual free cash flow to repurchases.

    Share Repurchase Remaining Capacity
    $41 million
    end of Q1 FY26

    Remaining capacity in the stock repurchase program at the end of the quarter.

    Net Debt to Adjusted EBITDA
    <1x
    Q1 FY26

    Balance sheet remains strong and stable.

    Capital Expenditure
    increased
    Q1 FY26

    Increase primarily driven by investment in new manufacturing facilities in China and Finland.

    R&D Investments
    double digitsup
    Q1 FY26

    Investments to drive future growth.

    Sales and Marketing Investments
    double digitsup
    Q1 FY26

    Investments to drive future growth.

    G&A Productivity
    sustained
    Q1 FY26

    Continued strong G&A productivity contributing to profit margins.

    Employee Engagement
    up
    Q1 FY26

    Further gains in colleague engagement built on momentum from 2025 employee survey.

    Kaizens conducted
    60
    Q1 FY26

    Continuous improvement initiatives across the company.

    Underserved Patients Supported
    4,000
    Q1 FY26

    Through the charitable Envista Smile project.

    Nobel S Series Competitive Conversions
    over 1/4
    early response

    Orders for the new Nobel S Series implant system coming from competitive conversions.

    DEXIS Installed Base
    ~275,000
    Q1 FY26

    Largest installed base of imaging systems on the market.

    DEXIS Images Processed Annually
    >500 million
    annually

    Processed by the DEXIS network of connected devices and workstations.

    Industry KPIs

    8
    MetricValueDetails
    Tariff impact$11 millionUSD
    System utilization>500 millionimages
    Pricing realized price2+%
    New product launch rampover 1/4%
    Procedure volume growth7+points
    FCF conversion leverage guidanceapproximately 100%%
    Installed base system placements~275,000devices
    Segment franchise organic growth8.4%%

    Product announcements

    3
    ProductTypeDetails
    Nobel S Serieslaunch
    Spark in Japanexpansion
    DTX Studio Clinic with enhanced AIupdate

    Deals & partnerships

    1
    VersahAcquisition of a pioneer in osseodensification, a novel implant preparation technique.

    Versah offers a patent-protected solution that compacts and autografts bone, leading to improved osteointegration. It simplifies clinical workflows with a universal kit usable with most implant systems and supports more immediate implant placement for patients. Integrates seamlessly into existing clinical education and go-to-market strength.

    Risks & headwinds

    3
    Macro Volatility / Geopolitical Shiftsongoing

    Mid-single-digit million dollar type of risk from fuel increases and related surcharges.

    Mitigation: Task forces in place focusing on fuel costs and logistics; supply chain adjustments, internal cost structure optimization, and pricing as a lever for broader inflationary risks.

    China VBP ProcessQ1 FY26 and Q2 FY26

    Implant sales in China down strong double digits in Q1 FY26 due to channel inventory reductions.

    Mitigation: Company is prepared for the VBP process for both ortho and implants (expected Q2/Q3 FY26); expects long-term benefits from increased market access despite short-term revenue compression.

    Tariff CostsFY26

    Increased $11 million in Q1 FY26; expected to be similar going forward.

    Mitigation: Offset through supply chain, G&A, and pricing actions; new global tariffs effectively replacing prior IEEPA tariffs.

    What to watch in Q2 FY26

    5

    China Implant Sales & VBP Process

    Q2 FY26
    Currentdown strong double digits in Q1
    TargetStabilization of channel inventory and start of VBP process

    Why it matters

    The VBP process will impact short-term revenue and long-term market dynamics in a key growth region.

    Implant core growth was up low single digits in the quarter as solid growth in developed markets was offset by declines in China as our channel partners are reducing inventories in preparation for an expected VBP process.

    Q&A highlights

    8

    What factors are contributing to Envista's positive momentum, and what areas remain challenging?

    Paul Keel attributed momentum to improved execution in growth (clinical education, customer support, new product development), operations (EBS, G&A productivity, gross margin expansion), and people (management team, collaboration). Challenges include macro uncertainty and geopolitical shifts, which impact guidance.

    “On the growth front, I'd say that the investments we're making in areas like clinical education and customer support and new product development are all beginning to bear fruit.”

    asked by Elizabeth Anderson · answered by Paul Keel

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 Performance Overview

    Envista reported a strong Q1 FY26, building on momentum from 2024 and 2025. The dental market demonstrated resilience despite macro volatility🌐, with minimal impact from the Middle East situation. The company achieved 9.5% core growth, with all major businesses showing positive growth, including double-digit increases in ortho consumables and diagnostics, and mid-single-digit growth in implants (excluding China).

    02

    Strategic Priorities and Execution

    The company continued to execute on its three core priorities: growth, operations, and people. Growth was driven by strong performance across the portfolio and new product innovation. Operationally, the Envista Business System improved manufacturing productivity, leading to 100 basis points of gross margin expansion and 120 basis points of adjusted EBITDA margin expansion. People-focused initiatives included improved employee engagement, a new talent development program, and community impact through the Envista Smile project.

    03

    New Product Innovation

    New products played a central role in accelerating growth. Key launches in Q1 included Nobel S Series in implants, which simplifies workflows and has seen strong early market response. In orthodontics, Spark was launched in Japan, leveraging the company's strong bracket and wire position. DEXIS released DTX Studio Clinic with enhanced AI, offering advanced diagnostics and workflow improvements, processing over 500 million images annually across its large installed base.

    04

    Versah Acquisition

    Envista completed a small, accretive tuck-in acquisition of Versah, a pioneer in osseodensification, a novel implant preparation technique. This patent-protected solution offers simplified clinical workflows for clinicians and supports more immediate implant placement for patients. The acquisition is expected to be accretive to Envista's growth, margin, EPS, and valuation multiple, integrating into existing clinical education and go-to-market strategies.

    05

    Capital Allocation and Financial Strength

    The company's improved execution translated into strong financial results, with adjusted EBITDA up 25% and EPS up 50%. This performance supported the board's authorization of an incremental $300 million for the share repurchase program. Envista maintains a strong balance sheet with net debt to adjusted EBITDA of less than 1x, providing flexibility amidst macroeconomic uncertainty🌐.

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