Joe Federico

Joe Federico asked about the sustainability of the impressive specialty growth, particularly the global double-digit implant sales, inquiring if the segment should be viewed as a high-single-digit growth profile going forward and requesting specific color on U.S. implant performance.

Answer

Stanley Bergman, Chairman of the Board and CEO, highlighted strong performance in Europe, especially Germany, where Henry Schein is the number one provider by units. He noted the success of value implant lines (S.I.N., Biotech, Modentist, BioHorizons value line) and described the overall implant market as stable, leaning positively, though the U.S. market is less robust than other regions. Ronald N. South, Senior Vice President and CFO, added that outside-U.S. growth was stronger, attributing it to good management execution. He stated that while specialty markets are assumed to grow 5-8%, U.S. market growth is currently less than 5%, expressing optimism for 2026 with the launch of the S.I.N. Value Implant in the U.S.

Joe Federico asked about the sustainability of the impressive specialty growth, particularly global double-digit implant sales, and if the segment should be viewed as high single-digit growth going forward, along with specific color on U.S. implant performance.

Answer

Stanley Bergman, Chairman of the Board and CEO, highlighted strong European business, especially Germany, and the success of value lines. Ronald N. South, Senior Vice President and CFO, noted better growth outside the U.S. and stated their assumption for specialty markets is 5%-8% growth, though the U.S. market is currently less than 5%.

Joe Federico, on for Jon Block, asked for more detail on the EBITDA dynamics in the second-half guidance, specifically the step-down from the first half, and inquired about the specific drivers of the Q2 OpEx beat.

Answer

CFO Michael Monahan explained the second-half EBITDA step-down is a result of tariff headwinds, increased R&D spend, and gross margin pressure from a product mix skewed towards lower-priced refurbished units. He attributed the Q2 OpEx savings to disciplined ROI-focused spending in Sales & Marketing and lower G&A costs, which also benefited from bad debt recoveries. He projected S&M dollar spend to remain near Q2 levels for the rest of the year.