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Envista Holdings Corp (NVST)·Q2 2025 Earnings Summary

Executive Summary

  • Envista delivered solid Q2 performance: revenue $682.1M, core sales growth 5.6%, adjusted EBITDA $84.3M (12.4% margin), and adjusted EPS $0.26 .
  • Beat vs consensus: revenue $682.1M vs $640.3M consensus*; adjusted EPS $0.26 vs $0.229*; EBITDA mixed given definitional differences (company adjusted EBITDA $84.3M vs S&P “EBITDA” consensus* $83.1M; S&P “actual” shows $80.6M*) .
  • Full-year 2025 guidance raised: core sales growth to 3–4% (from 1–3%), adjusted EPS to $1.05–$1.15 (from $0.95–$1.05); adjusted EBITDA margin maintained at ~14% .
  • Call highlights: pricing contributed ~$9M; volume strength in brackets & wires, diagnostics, and implants; FX transaction losses a headwind; tariffs ~$4M in Q2 with $15–$20M expected in H2 to be offset by supply chain, cost, and price actions .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth: “All major businesses and geographies delivered positive growth, including Nobel Biocare in North America” .
  • Pricing and productivity: adjusted gross margin 54.4% (+20 bps y/y) despite FX headwinds; price up ~$9M, G&A down ~15% in H1; Spark unit cost down ~20% y/y .
  • Strategic progress: “We have now installed DEXIS CBCTs and DTX AI implant planning in all 1,000+ sites of one of the largest DSOs in America” .

What Went Wrong

  • FX headwinds: “Transactional FX losses brought a 240 bps headwind in the quarter” .
  • Tariffs: Q2 expense ~$4M; H2 tariff spend expected $15–$20M, though mitigation actions underway .
  • Buy-ahead distortion: ~$10M customer buy-ahead in Q2 ahead of price/tariff changes, expected to unwind in H2 .

Financial Results

Headline Comparisons (Prior Quarter, Prior Year, and Current)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$652.9 $616.9 $682.1
GAAP Diluted EPS ($)$0.01 $0.10 $0.16
Adjusted EPS ($)$0.24 $0.24 $0.26
Adjusted EBITDA ($USD Millions)$91.0 $79.0 $84.3
Adjusted EBITDA Margin (%)13.9% 12.8% 12.4%
Core Sales Growth (%)2.0% y/y 0.2% y/y 5.6% y/y

Consensus vs Actual (Q2 2025)

MetricConsensus*Actual
Revenue ($USD)$640,271,570*$682,100,000
Adjusted EPS ($)$0.22902*$0.26
EBITDA ($USD)$83,080,220*$84,300,000 (company adjusted) / $80,600,000* (S&P “actual”)

Values retrieved from S&P Global.*

Segment Breakdown (Q2 2025 vs Q2 2024)

SegmentSales Q2 2024 ($M)Sales Q2 2025 ($M)Adj. Operating Profit Q2 2024 ($M)Adj. Operating Profit Q2 2025 ($M)Adj. Op Margin Q2 2024Adj. Op Margin Q2 2025
Specialty Products & Technologies$415.1 $445.1 $37.9 $60.2 9.1% 13.5%
Equipment & Consumables$218.0 $237.0 $35.0 $41.5 16.1% 17.5%

KPIs

KPIQ2 2025Notes
Core Sales Growth (%)5.6% y/y FX -1.9 pts; acquisitions -0.2 pts
Adjusted Gross Margin (%)54.4% +20 bps y/y
Free Cash Flow ($M)$76.4 Operating cash flow $88.7
Share Repurchases4.8M shares; ~$82M $150M remaining authorization

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core Sales GrowthFY 20251% to 3% 3% to 4% Raised
Adjusted EBITDA MarginFY 2025~14% ~14% Maintained
Adjusted Diluted EPSFY 2025$0.95 to $1.05 $1.05 to $1.15 Raised
Adjusted Tax RateFY 2025~37% (original guide) ~33% (updated) Lowered
FX Impact (sales)FY 2025n/a~150 bps tailwind to reported sales; neutral to adjusted EBITDA Update
TariffsFY 2025n/aH2 tariff cost $15–$20M expected; offset via supply chain, costs, price Update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/Technology initiativesFocus on digital imaging (DEXIS), Spark margin improvements; diagnostics softness in Q1 Rolled out DTX Studio Clinic with additional AI features; full CBCT + AI implant planning deployment across 1,000+ DSO sites Accelerating digital adoption
Supply chain/local-for-localOperational improvements and EBS in late 2024; normalizing dealer inventories Announced new Suzhou manufacturing site; supply chain actions to offset tariffs; increased hedging to reduce FX transaction exposure Strengthening resilience
Tariffs/Macro2024 was a transition year; macro stable in Q1 Q2 tariff cost ~$4M; H2 $15–$20M expected; mitigated by supply chain, cost, modest price Manageable headwind
Product performanceSpark share gains and gross margin improvement in Q4 ; Q1 growth in Consumables, Spark Strong growth in brackets & wires (high-single digits), Spark (low double digits); diagnostics returned to growth (mid-single digits in NA) Broad-based improvement
Regional trendsQ4 and Q1 stabilized markets; dealer channel healthy Double-digit growth in LATAM, Indo-Pacific, MEA; China ortho down H1 ahead of VBP, improving trajectory into H2 Emerging markets strong; China mixed but improving
Regulatory/legal (China VBP)Implant VBP impacted 2024; preparing for ortho VBP China brackets & wires down ~50% y/y in Q1; modestly up Q2; expect flat Q3 and robust Q4 pending VBP timing Transition period; expected H2 normalization
R&D executionQ4 ongoing innovation; Q1 continued margin work H1 R&D +14%; several launches (Spark Retainers, BiteSync Class II, Implant Direct scanning) Increased investment and cadence

Management Commentary

  • “Adjusted EBITDA margin was 12.4%, up 240 basis points from '24, supported by good growth in G&A productivity and offset in part by transactional FX losses related to the softer dollar.” — CEO Paul Keel .
  • “We saw improved volume growth in several businesses, notably brackets and wires, diagnostics, and implants… price up $9 million year over year.” — CFO Eric Hammes .
  • “We have now installed DEXIS CBCTs and DTX AI implant planning in all 1,000+ sites of one of the largest DSOs in America.” — CEO Paul Keel .
  • “Our plan for Spark… remains unchanged. Second half 2025 is when we believe it’ll turn to profitability… unit costs down ~20% year over year.” — CFO Eric Hammes .

Q&A Highlights

  • Dental macro: Stable with “incrementally better” Q2 vs Q1; consumer confidence improving; growth broad-based across ortho, consumables, implants; diagnostics returned to growth .
  • China VBP: Ortho business down ~50% y/y in Q1; modestly up in Q2; expect flat Q3 and robust Q4 subject to VBP timing; local manufacturing indirectly helpful but not decisive in VBP criteria .
  • Tariffs & FX: Q2 tariffs ~$4M, H2 $15–$20M; transactional FX -240 bps margin headwind; increased hedging (EUR–USD, EUR–RMB) to reduce exposure .
  • Second-half phasing: Spark deferral yields ~$30M y/y revenue benefit in H2 (majority Q3); unwind ~$10M buy-ahead; margin guide implies ~200 bps better H2 with volume, price, productivity offsets .
  • Tax rate & buybacks: Adjusted tax rate down to ~33% from ~37% original guide; $100M repurchases YTD with metered pace expected in H2 .

Estimates Context

  • Revenue beat: $682.1M vs $640.3M consensus*; Adjusted EPS beat: $0.26 vs $0.229*; EBITDA definition-sensitive: company adjusted EBITDA $84.3M, S&P Global “EBITDA” consensus* $83.1M and “actual” $80.6M* .
  • Drivers of the beat: volume strength in high-margin consumables and brackets & wires (160 bps margin tailwind), improved pricing (130 bps), and absence of prior-year one-time costs (230 bps), partly offset by tariffs (-60 bps) and FX transaction losses (-240 bps) .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The quarter was a clean top-line and EPS beat with broad-based growth and improving margin mix; execution on pricing and G&A productivity is gaining traction .
  • Guidance raise (core +100 bps midpoint, EPS +$0.10) signals improving confidence; watch H2 phasing with Spark deferral ($30M y/y benefit, majority in Q3) and buy-ahead unwind ($10M) .
  • FX and tariff headwinds are being actively mitigated; increased hedging and supply chain actions should limit profit leakage in H2 (tariffs $15–$20M expected) .
  • China ortho VBP transition remains a near-term swing factor, but management expects stabilization into Q3 and robust growth in Q4 if timing aligns .
  • Spark’s path to profitability in H2 supports medium-term margin expansion; unit cost reductions and design-cycle improvements provide structural tailwinds .
  • Digital dentistry momentum (DEXIS CBCT + DTX AI deployment across >1,000 DSO sites) and emerging markets double-digit growth reinforce the growth narrative beyond macro stability .
  • Share repurchases ($82M in Q2; $150M capacity remaining) and lower adjusted tax rate (~33%) are incremental EPS levers; monitor cadence and tax planning progress .
Additional Sources Read:
- 8-K and Q2 press release: Envista Reports Second Quarter 2025 Results **[1757073_0001757073-25-000042_nvst-exhibit991x62725.htm:0]** **[1757073_20250731LA42007:0]** 
- Q1 2025 press release: Envista Reports First Quarter 2025 Results **[1757073_20250501LA78153:0]**
- Q4 2024 press release: Envista Reports Fourth Quarter 2024 Results **[1757073_20250205LA11691:0]**
- Q2 2025 earnings call transcript **[0001757073_2294057_0]**-**[0001757073_2294057_15]**
- Q2 2025 call scheduling press release **[1757073_20250709LA27391:0]**