DENTSPLY SIRONA Inc. (XRAY) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 revenue of $904M was slightly above S&P Global consensus, but adjusted EPS of $0.37 missed; GAAP EPS was ($2.14) on $263M after-tax non-cash impairments tied to tariffs and lower projected volumes in U.S. equipment, implants, and prosthetics . Revenue beat consensus by ~$6.3M while EPS missed by ~$0.08*.
Guidance cut: FY25 adjusted EPS reduced to ~$1.60 (from $1.80–$2.00), constant currency sales growth lowered to (-5%)–(-4%), while reported net sales maintained at $3.6–$3.7B .
Europe improved (+9.9% reported, +2.6% cc), but U.S. fell 22.2% (cc), reflecting weakness in Essential Dental, CAD/CAM, Imaging, and Implants; Wellspect grew across regions .
CEO launched a 24‑month Return‑to‑Growth plan with pillars spanning customer centricity, reigniting U.S. commercial execution, empowering people (including a Transformation Office to drive AI/automation), and evolving operations; CFO departed; multi-channel re-engagement with distributors underway .

What Went Well and What Went Wrong

What Went Well

Europe sales rose +9.9% reported (+2.6% cc), led by Connected Technology Solutions and labs; UK/France/Italy/Spain strong; Germany flat YoY .
Wellspect Healthcare delivered growth across all regions; in Europe +5.3% cc, ROW grew off a small base; segment adjusted operating income rose YoY .
Management action plan: “By sharpening our focus on our customers…reigniting growth in the U.S. business…empowering our people…and evolving our operations to drive innovation,” aiming for sustained, profitable growth over 24 months .

What Went Wrong

U.S. net sales declined 22.2% (cc), with weakness across Essential Dental, CAD/CAM, Imaging, and Implants; adjusted EPS fell 26.5% YoY to $0.37 .
Orthodontic & Implant Solutions declined 17.1% (cc) YoY; distributor inventories for CAD/CAM and imaging remain below historical averages; implants softness in U.S. and China (ahead of VBP phase 2) .
Adjusted free cash flow conversion dropped to 54% vs 97% prior year; operating cash flow declined to $79M from $141M YoY driven by unfavorable working capital .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$879	$936	$904
GAAP Diluted EPS ($)	$0.10	($0.22)	($2.14)
Adjusted EPS ($)	$0.43	$0.52	$0.37
Gross Margin (%)	53.0%	52.4%	48.8%
Adjusted Gross Margin (%)	56.3%	55.9%	52.6%
Adjusted EBITDA Margin (%)	19.0%	21.1%	18.4%

Q3 2025 vs S&P Global Consensus	Consensus Estimate	Actual	Surprise
Revenue ($USD)	$897.73M*	$904.00M	+$6.27M (+0.7%)
Adjusted EPS ($)	$0.449*	$0.37	-$0.079 (miss)

Values with asterisks (*) retrieved from S&P Global.

Segment Net Sales	Q3 2024 ($M)	Q3 2025 ($M)	Reported Change	Constant Currency Change
Connected Technology Solutions	$269	$259	(3.9%)	(7.0%)
Essential Dental Solutions	$369	$357	(3.4%)	(6.2%)
Orthodontic & Implant Solutions	$241	$205	(15.0%)	(17.1%)
Wellspect Healthcare	$72	$83	+15.6%	+9.3%
Total	$951	$904	(5.0%)	(8.0%)

Geography Net Sales	Q3 2024 ($M)	Q3 2025 ($M)	Reported Change	Constant Currency Change
United States	$374	$291	(22.2%)	(22.2%)
Europe	$347	$382	+9.9%	+2.6%
Rest of World	$230	$231	+0.3%	(0.9%)
Total	$951	$904	(5.0%)	(8.0%)

KPIs	Q3 2024	Q3 2025
Operating Cash Flow ($M)	$141	$79
Capital Expenditures ($M)	$43	$39
Adjusted Free Cash Flow Conversion (%)	97%	54%
Cash & Equivalents ($M, period-end)	—	$363

Non-GAAP reconciliation highlights (Q3): Adjusted EPS excludes $263M after-tax impairment, $41M amortization, $20M restructuring and other, and $176M income tax-related adjustment .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD)	FY 2025	$3.6–$3.7B	$3.6–$3.7B	Maintained
Constant Currency Sales Growth	FY 2025	(4%) – (2%)	(5%) – (4%)	Lowered
Adjusted EPS ($)	FY 2025	$1.80–$2.00	~$1.60	Lowered
Adjusted EBITDA Margin	FY 2025	>19% (raised in Q1)	Not updated Q3 PR/8-K	N/A
Dividend	FY 2025	Declared $0.16/share payable Oct 10	Paid $32M dividends in Q3; $96M YTD	Maintained payout cadence
Tariff Assumptions	FY 2025	~$25M 2025 impact; ~$80M annualized gross headwind updated in Q2	Outlook “reflects current state of tariffs and trade policy”	Reiterated context

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
AI/Technology initiatives	DS Core passed 42k–50k users; connected devices >50k; >100k lab orders/mo; added AI-powered 3D rendering; Primescan 2 upgrades	Established Transformation Office; enterprise AI/automation to improve speed, decision-making, analytics	Accelerating
Supply chain & ERP	ERP phases rolled out in U.S.; site consolidations (10 closed), SKU optimization underway	Continued SAP global ERP; operational efficiency focus to free capital	Ongoing
Tariffs/Macro	~$50M annualized (Q1); guidance embeds ~$0.10 EPS impact	Annualized headwind updated to ~$80M; ~$25M 2025 impact; impairments tied to tariffs	Worsened vs Q1
Product performance	Imaging growth; Wellspect mid-single-digit expected FY; CAD/CAM declines; implants challenges	U.S weakness across categories; OIS down 17.1% cc; Wellspect +9.3% cc	Mixed
Regional trends	Germany improving; Europe grew; U.S patient sentiment cautious	Europe +9.9% reported; U.S -22.2% cc; ROW flat	EU improving, U.S soft
Regulatory/Legal	German tax situation ongoing; uncertain timing & magnitude	No new update disclosed [—]	Ongoing
R&D execution	Innovation pipeline; DS World; cadence of cloud updates	Pulling forward “millions” into Q4; aiming toward 6–7% of sales over time; efficiency focus	Increased near-term spend
Distributor relationships	Dealer inventory dynamics; virtual sales scaling	Multi-channel approach; re-engaging with dealers (Shine, Patterson, others); broader reach	Strategic pivot

Management Commentary

“Third quarter results fell short of our expectations…we are taking decisive action…launch of our Return-to-Growth strategy” — Dan Scavilla, President & CEO .
Four pillars: Putting Customers at the Center; Reigniting the U.S. Business; Empowering People (Transformation Office, AI/automation); Evolving Operations to Fuel Innovation .
Capital allocation: “We plan on deleveraging the business through profitable growth…debt reduction, and shareholder returns” .
CFO transition: Matt Garth departed; interim oversight by Audit & Finance Committee Chair Leslie Varon; CFO search underway (Heidrick & Struggles) .
U.S. commercial reset: re-align teams, invest in clinical education, multi-channel dealer re-engagement, DSOs support, expand field resources .

Q&A Highlights

U.S. weakness: U.S sales down ~10% ex one-time items; drivers are structural approach, dealer relationships, DSOs; return-to-health plan to fix execution .
Growth cadence: Do not model immediate growth; expect sequential improvements in 2026 plan; conservative guidance approach (beat/raise over time) .
Capital allocation: Focus on deleveraging via EBITDA growth; retire debt; dividend under review with board; share repurchase opportunistic .
R&D: Pulling forward spend in Q4; long-term target ~6–7% of sales; ensure efficient allocation and risk mitigation before scaling .
Distributors: Moving to multi-channel; re-engaging with Shine/Patterson and new dealers; broader presence expected in 2026 .
CFO profile: Deep data/metrics orientation, enterprise leader, strong communicator; guidance philosophy conservative with intent to beat/raise .

Estimates Context

XRAY Q3 2025: Revenue beat by ~$6.3M; Adjusted EPS missed by ~$0.079 vs S&P Global consensus. Given U.S. demand softness and tariff impacts, Street models likely need lower EPS estimates and reflect a more gradual recovery path, while revenue expectations may be less impacted given European strength and Wellspect resilience . Consensus revenue estimate $897.73M*; consensus EPS $0.449*; actual revenue $904M, adjusted EPS $0.37 . Values retrieved from S&P Global.

Key Takeaways for Investors

The guidance cut (EPS to ~$1.60, cc sales to (-5%)–(-4%)) and U.S. weakness are the primary stock drivers; watch for milestones in U.S. commercial rebuild, dealer partnerships, and clinical education ramp .
Tariff headwinds (~$25M in 2025; ~$80M annualized gross) plus pricing/mitigation uncertainty warrant cautious EPS assumptions into 2026 .
Europe stabilization plus Wellspect growth provide partial offsets; segment mix and geography shifts will influence margins (adj. gross margin 52.6% in Q3) .
Non-GAAP adjustments (notably impairments) are sizable; focus on underlying adjusted profitability and cash conversion trajectory as transformation executes .
Near-term margin pressure likely as R&D and commercial investments are pulled forward; monitor for evidence that OpEx unlocks self-funding efficiencies in 2026 .
Balance sheet flexibility improved earlier in the year (hybrid bond); deleveraging path depends on sustained EBITDA growth and working capital normalization .
Catalysts: concrete dealer agreements, U.S. sales stabilization, DS Core/AI initiatives delivering measurable adoption/throughput, and 2026 targets at investor forums could reset expectations .

All data and statements above are sourced from the Q3 2025 press release and 8-K, Q3 earnings call transcript, and Q1–Q2 2025 releases/calls, with citations as noted.