Executive Summary

Solid topline and margin beat with constructive guidance. Q3 revenue was $669.9M (+11.5% YoY; core +9.4%), adjusted EBITDA $97.1M (14.5% margin, +540 bps YoY), and adjusted EPS $0.32; GAAP EPS was $(0.18) due to a discrete tax charge from intercompany loan restructuring .
Versus S&P Global consensus, Envista beat on revenue by ~~$29M (~~+4.5%) and on adjusted/primary EPS by ~$0.04; EBITDA also exceeded consensus (see Estimates Context) *.
Guidance raised: FY25 core sales growth to ~4% (from 3–4%) and adjusted EPS to $1.10–$1.15 (from $1.05–$1.15); adjusted EBITDA margin held at ~14% .
Stock reaction catalysts: Spark aligners achieving profitability and continued share gains; two consecutive quarters of diagnostics growth; and a second 2025 guidance raise despite tariff headwinds .

What Went Well and What Went Wrong

What Went Well
- Broad-based growth with core sales +9.4% and adjusted EBITDA margin up >500 bps YoY; Spark aligners turned profitable with share gains, supported by product launches (Spark Junior, Stage RX, Dexis Imprevo iOS) .
- Diagnostics posted a second consecutive quarter of positive growth; management highlighted easing rate headwinds and improving DSO activity, alongside new imaging products .
- Elevated free cash flow ($67.9M) and continued capital return (2.1M shares repurchased for ~$41M); CFO reiterated non-GAAP tax rate trend improvement and near-zero net cash impact from the intercompany loan action .
What Went Wrong
- GAAP net loss $(30.3)M and GAAP EPS $(0.18) due to a discrete tax expense of ~$80.2M; underlying non-GAAP rate ~31.2% for the quarter .
- Tariffs were a larger headwind in Q3 (~$8–$9M; tracking ~$10M/quarter ahead), though management aims to offset on a full-year dollar basis .
- China visibility remains clouded with VBP dynamics (orthodontics underway, implant VBP 2.0 expected but not yet communicated); management anticipates typical destock/restock pattern when it arrives .

Financial Results

Overall results vs prior periods and consensus

Metric	Q3 2024	Q2 2025	Q3 2025 (Actual)	Q3 2025 Consensus*
Revenue ($M)	601.0	682.1	669.9	640.8*
Adjusted EPS ($)	0.12	0.26	0.32	0.276*
GAAP EPS ($)	0.05	0.16	(0.18)	—
Adjusted EBITDA ($M)	54.9	84.3	97.1	90.5*
Adjusted EBITDA Margin (%)	9.1%	12.4%	14.5%	—
Adjusted Gross Margin (%)	52.8%	54.4%	56.1%	—

Segment performance

Segment	Q3 2024 Sales ($M)	Q2 2025 Sales ($M)	Q3 2025 Sales ($M)	Adj. Op Margin Q3 2024	Adj. Op Margin Q2 2025	Adj. Op Margin Q3 2025
Specialty Products & Technologies	381.7	445.1	431.5	7.0%	13.5%	15.5%
Equipment & Consumables	219.3	237.0	238.4	20.0%	17.5%	20.1%

Key operating and cash metrics

Metric	Q3 2024	Q2 2025	Q3 2025
Operating Cash Flow ($M)	70.7	88.7	78.7
Free Cash Flow ($M)	63.3	76.4	67.9
Adjusted Net Income ($M)	21.1	43.7	53.7
Core Sales Growth (YoY)	—	5.6%	9.4%
Shares Repurchased ($M / shares)	—	~$82 / 4.8M	~$41 / 2.1M

Operational context and drivers

CFO cited Spark accounting deferrals as a tailwind in Q3 (EBITDA margin bridge +390 bps) and noted underlying core growth ~5–6% after normalizing for deferrals and Q2 dealer buy-ahead reversal; management emphasized Q3 absolute revenue/profit as a clean baseline going forward .
FX contributed ~$11M (~200 bps) to sales; productivity (G&A down >12% YTD) and price (~200+ bps) supported margin expansion; tariffs were a ~140 bps drag on margin .

Guidance Changes

Metric	Period	Previous Guidance (as of Q2)	Current Guidance (Q3)	Change
Core Sales Growth	FY 2025	3% to 4%	~4%	Raised (tightened to top)
Adjusted EBITDA Margin	FY 2025	~14%	~14%	Maintained
Adjusted Diluted EPS	FY 2025	$1.05–$1.15	$1.10–$1.15	Raised low end by $0.05

Note: Q1 guidance was 1%–3% core, ~14% adj. EBITDA margin, and $0.95–$1.05 EPS; raised in Q2 and again in Q3 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Spark aligners: profitability & growth	Improving margins; positive growth; investment continued	Spark turned profitable; shipped 1Mth case; approaching ~$300M revenue; aiming for fleet-average margins; high-teens growth pre-deferral	Improving
Diagnostics demand & rates	Softness in Diagnostics; macro rate headwinds	Second consecutive quarter of positive growth; new iOS (Dexis Imprevo) gaining traction; rates easing support	Improving
Implants trajectory	Nobel Biocare grew in NA; broad-based growth in Q2	Fourth straight quarter of growth; premium stronger; China VBP watch	Improving (with China caveat)
China VBP (ortho and implants 2.0)	Ortho VBP prep pressured Ortho in China (Q1)	Ortho VBP underway, implants VBP 2.0 expected but not communicated; typical destock/restock pattern expected; VBP 2.0 likely smaller than 1.0	Ongoing risk, managed
Tariffs	Not a focus in Q1/Q2 PRs	Q3 tariff cost ~$8–9M; planning for ~$10M/quarter run rate; on track to dollar-offset full-year	Manageable headwind
G&A/Productivity	EBS contributions; G&A productivity (Q1/Q2)	G&A down >12% YTD; reinvesting part into S&M/R&D	Improving
DSO traction	Noted DSO engagement (limited detail)	Double-digit imaging growth across top DSOs; broad strength in NA/EU; 1,000+ locations CBCT install at a top DSO	Improving

Management Commentary

“This was another strong quarter for Envista, with core growth, adjusted EBITDA, and adjusted EPS all ahead of expectations... and [Spark] turning to profitability” — Paul Keel, CEO .
“Adjusted EBITDA margin was 14.5%, up more than 500 basis points… supported by good growth and productivity” — CEO prepared remarks .
“We shipped our one millionth [Spark] case since launching in 2019… approaching $300 million in revenue… we reached [positive operating profit] in Q3” — CEO .
“Our non-GAAP tax rate for the quarter was 31.2%… a one-time GAAP charge related to… elimination of a significant intercompany loan… near-zero net cash impact” — CFO .
“We had about $8 to $9 million [tariffs] this quarter… use ~$10 million per quarter as a run rate… objective… to offset this on a dollar basis for the full year” — CFO .

Q&A Highlights

Spark trajectory: Management targets fleet-average Spark margins over time; growth remains above category, aided by product and integrated ortho portfolio; better relative performance with orthodontic specialists vs DSOs .
Tariffs: Q3 cost ~$8–9M; plan for ~$10M per quarter going forward; on track to offset on dollar basis in FY25; margin guide ~14% implies Q4 near that level .
China VBP: Ortho VBP progressing; implant VBP 2.0 expected but not formal; expect usual destock then restock pattern; 2.0 likely smaller than 1.0 in price and inventory impact; FY25 guide contemplates these effects .
Diagnostics/consumables/DSOs: Diagnostics turning positive with new iOS; consumables outperformed (infection prevention strength, insurance coverage) and DSO partnerships deepening across NA/EU .
Guidance framing: Second-half margins are a good baseline; 2026 to follow the capital markets “algorithm” (growth with operating leverage) with Spark, gross margin, and G&A productivity as levers .

Estimates Context

Q3 2025 vs S&P Global consensus: Revenue $669.9M vs $640.8M*; Adjusted/Primary EPS $0.32 vs $0.276*; EBITDA $97.1M company-reported (S&P “actual” EBITDA 94.0M vs 90.5M* consensus) *.

Metric	Q3 2025 Consensus*	Q3 2025 Actual
Revenue ($M)	640.8*	669.9
Primary/Adjusted EPS ($)	0.276*	0.32
EBITDA ($M)	90.5*	97.1 (company adj. EBITDA)

Values retrieved from S&P Global*.
Implications: The revenue/EPS beat was driven by broad-based growth, Spark profitability, price/mix, and productivity; EBITDA outperformance reflects adjusted gross margin expansion (56.1%) and G&A productivity, partially offset by tariffs .

Key Takeaways for Investors

Quality beat with expanding margins: adj. gross margin 56.1% and adj. EBITDA margin 14.5% provide a higher baseline into Q4/FY26, despite tariff headwinds .
Guidance credible and conservative: raised core growth to ~4% and EPS to $1.10–$1.15 while holding margin at ~14%, implying continued discipline and reinvestment .
Spark inflection supports multiple expansion: profitability achieved, sustained outgrowth, and path to fleet-average margins de-risk the orthodontics portfolio narrative .
Diagnostics recovery levered to rates and DSOs: two quarters of growth and strong DSO wins position imaging for cyclical tailwinds as rates ease .
China VBP watch: Expect typical destock/restock cadence; management expects smaller impact vs prior VBP; FY25 guide embeds anticipated effects .
Near-term trading: Beat/raise setup with improving quality of earnings and Spark milestone are positive catalysts; tariffs remain a watch item but are being offset .
Medium-term thesis: Execution on EBS-driven productivity, Spark scalability, and diagnostic/implant innovation underpin the Capital Markets Day framework of growth with operating leverage .

Appendix: Additional Data Points

GAAP net loss $(30.3)M; GAAP tax expense $80.2M related to intercompany loan restructuring; near-zero net cash impact .
Free cash flow $67.9M; OCF $78.7M; YTD FCF $139.2M; FCF conversion ~100% YTD .
Balance sheet: Cash $1,133.9M; Long-term debt $1,445.4M; net debt/adj. EBITDA ~1x per CFO .
Segment details: SP&T core +10.6% YoY; E&C core +7.3% YoY in Q3; SP&T adj. op margin +850 bps YoY on Spark profitability .

Citations:

Q3 2025 8-K/Press Release, results, segments, non-GAAP reconciliations, cash flow, guidance: .
Press release version of Q3 materials: .
Q2 2025 press release for prior-quarter comparisons and prior guidance: .
Q1 2025 press release context and guidance baseline: .
Earnings call transcript for themes, drivers, and Q&A specifics: .
Estimates from S&P Global for consensus comparisons: Revenue/EPS/EBITDA consensus and “actual” values shown with asterisks*. Values retrieved from S&P Global*.

Envista Holdings Corp (NVST)·Q3 2025 Earnings Summary