Q1 2026 Envista Holdings Corp Earnings Call

May 6, 2026

Operator: Hello, my name is Melissa, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's Q1 2026 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press the star then 1 on your keypad. If you would like to withdraw your question, please press the star and then 2. I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations at Envista Holdings. Mr. Gustafson, you may begin your conference.

Operator: Hello, my name is Melissa, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's Q1 2026 Earnings Results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press the star then one on your keypad. If you would like to withdraw your question, please press the star and then two. I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations at Envista Holdings. Mr. Gustafson, you may begin your conference.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during that time, please press the star, the number 1 on your keypad.

Speaker #1: If you would like to withdraw your question, please press the star and the number 2. I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations at Envista Holdings.

Speaker #1: Mr. Gustafson, you may begin your conference.

Speaker #2: Good afternoon. Thanks for joining Envista's first quarter 2026 earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer.

Jim Gustafson: Good afternoon. Thanks for joining Envista's Q1 2026 earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer. Before we begin, I wanna point out that our earnings release, the slide presentation supplementing today's call, and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are available on the investor section of our website, www.envistaco.com. The audio portion of this call will be archived in the investor section of our website later today under the heading Events and Presentations. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. Supplemental materials describe additional factors that impacted our results.

Jim Gustafson: Good afternoon. Thanks for joining Envista's Q1 2026 Earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer. Before we begin, I wanna point out that our earnings release, the slide presentation supplementing today's call, and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are available on the investor section of our website, www.envistaco.com. The audio portion of this call will be archived in the investor section of our website later today under the heading Events and Presentations. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. Supplemental materials describe additional factors that impacted our results.

Speaker #2: Before we begin, I want to point out that our earnings release—the slide presentation supplementing today's call—and the reconciliations and other information required by SEC regulation G relating to any non-GAAP financial measures provided during the call are available on the Investor section of our website.

Speaker #2: www.invistaco.gov. The audio portion of this call will be archived in the Investor section of our website later today, under the heading "Events and Presentations." During the presentation, we will describe some of the more significant factors that impacted year-over-year performance.

Speaker #2: The supplemental materials describe additional factors that impacted our results. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the first quarter of 2026, and references to period-to-period increases and decreases in financial metrics are year-over-year.

Jim Gustafson: Unless otherwise noted, references in these remarks to company-specific financial metrics relate to Q1 2026, and references to period-to-period increases and decreases in financial metrics are year over year. During the call, we may describe certain products and solutions that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events and developments that we believe, anticipate, or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today.

Speaker #2: During the call, we may describe certain products and solutions that have applications submitted and pending certain regulatory approvals. Or are available only in certain markets.

Speaker #2: We will also make forward-looking statements within the meaning of the Federal Securities Laws, including statements regarding events and developments that we believe anticipate or may occur in the future.

Speaker #2: These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. And actual results may differ materially from any forward-looking statements that we make today.

Speaker #2: These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except as required by law.

Jim Gustafson: These forward-looking statements speak only as of the date they are made. We do not assume any obligation to update any forward-looking statements, except as required by law. With that, I'll turn the call over to Paul.

Speaker #2: With that, I'll turn the call over to Paul.

Speaker #3: Thanks, Jim. Good afternoon and welcome, everyone. On today's call, I'll kick us off with a summary of our Q1 performance. Eric will then take us through the numbers in more detail.

Paul Keel: Thanks, Jim. Good afternoon. Welcome, everyone. On today's call, I'll kick us off with a summary of our Q1 performance. Erick will then take us through the numbers in more detail, and I'll wrap things up with some closing thoughts before opening the Q&A. As an overarching statement on the quarter, Q1 was a good start to 2026 for Envista, extending the momentum we built across 2024 and 2025. As you will have seen in the various market surveys and peer results, the dental market is again showing its characteristic resilience despite continued high macro volatility. We're naturally keeping a close eye on how the situation in the Middle East evolves, but thus far, we've seen minimal impact to the global dental market.

Paul Keel: Thanks, Jim. Good afternoon. Welcome, everyone. On today's call, I'll kick us off with a summary of our Q1 performance. Eric will then take us through the numbers in more detail, and I'll wrap things up with some closing thoughts before opening the Q&A. As an overarching statement on the quarter, Q1 was a good start to 2026 for Envista, extending the momentum we built across 2024 and 2025. As you will have seen in the various market surveys and peer results, the dental market is again showing its characteristic resilience despite continued high macro volatility. We're naturally keeping a close eye on how the situation in the Middle East evolves, but thus far, we've seen minimal impact to the global dental market.

Speaker #3: And I'll wrap things up with some closing thoughts before opening the Q&A. As an overarching statement on the quarter, Q1 was a good start to 2026 for Invista.

Speaker #3: Extending momentum we built across 2024 and '25. As you will have seen in the various market surveys and peer results, the dental market is again showing its characteristic resilience.

Speaker #3: Despite continued high macro volatility, we're naturally keeping a close eye on how the situation in the Middle East evolves, but thus far we've seen minimal impact to the global dental market.

Speaker #3: Specific to Envista, we posted 9.5% core growth in Q1. And for the fourth straight quarter now, all of our major businesses delivered positive growth.

Paul Keel: Specific to Envista, we posted 9.5% core growth in Q1, and for the fourth straight quarter now, all of our major businesses delivered positive growth. Ortho, Consumables, and Diagnostics were all up double digits, and Implants was up mid-single digits, excluding China. As a reminder, this quarter did benefit from 4 additional billing days, which Eric will discuss in more detail. As we did across 2025, we reinvested a meaningful portion of our gains into continued future growth, as sales and marketing and R&D investments were both up double digits. We also completed an accretive tuck-in acquisition in our implant platform, of which I'll say more in just a moment. Our improved execution and operating discipline continued in Q1, helping to convert good top-line growth into even better adjusted EBITDA and EPS growth, up 25% and 50% respectively.

Paul Keel: Specific to Envista, we posted 9.5% core growth in Q1, and for the fourth straight quarter now, all of our major businesses delivered positive growth. Ortho, Consumables, and Diagnostics were all up double digits, and Implants was up mid-single digits, excluding China. As a reminder, this quarter did benefit from four additional billing days, which Eric will discuss in more detail. As we did across 2025, we reinvested a meaningful portion of our gains into continued future growth, as sales and marketing and R&D investments were both up double digits. We also completed an accretive tuck-in acquisition in our implant platform, of which I'll say more in just a moment. Our improved execution and operating discipline continued in Q1, helping to convert good top-line growth into even better adjusted EBITDA and EPS growth, up 25% and 50% respectively.

Speaker #3: Ortho consumables and diagnostics were all up double digits. And implants was up mid-single digits, excluding China. As a reminder, this quarter did benefit from four additional billing days, which Eric will discuss in more detail.

Speaker #3: As we did across 2025, we reinvested a meaningful portion of our gains into continued future growth. As sales and marketing and R&D investments were both up double digits.

Speaker #3: We also completed an accretive tuck-in acquisition in our implants platform, of which I'll say more in just a moment. Our improved execution and operating discipline continued in Q1.

Speaker #3: Helping to convert good top-line growth into even better adjusted EBITDA and EPS growth, up 25% and 50% respectively. This in turn gives us confidence in extending the share repurchase program that we initiated early last year.

Paul Keel: This, in turn, gives us confidence in extending the share repurchase program that we initiated early last year. Our board recently authorized an incremental $300 million addition to the program. Our continued momentum and strong start to the year give us confidence in reaffirming the 2026 guidance that we issued on our Q4 2025 call. Let's now turn to progress we made in the quarter in support of our three core priorities of growth, operations, and people. Starting with growth, we delivered strong, broad-based performance across the portfolio. As mentioned, Ortho, Consumables, Diagnostics, and Implants all delivered good growth. In terms of segment performance, Specialty Products and Technologies grew core revenue by more than 8%, while Equipment and Consumables was up nearly 12%. Geographically, North America and Europe both grew double digits.

Speaker #3: Our board recently authorized an incremental $300 million addition to the program. Finally, our continued momentum and strong start to the year give us confidence in reaffirming the 2026 guidance that we issued on our Q4 2025 call.

Speaker #3: Let's now turn to progress we made in the quarter in support of our three core priorities of growth, operations, and people. Starting with growth, we delivered strong broad-based performance across the portfolio.

Speaker #3: As mentioned, Ortho consumables, diagnostics, and implants all delivered good growth. In terms of segment performance, especially products and technologies, grew core revenue by more than 8%, while equipment and consumables was up nearly 12%.

Speaker #3: Geographically, North America and Europe both grew double digits. Developing markets grew high single digits, with some specific exceptions, like China due to VVP, and the Middle East due to the conflict.

Paul Keel: Developing markets grew high single digits, with some specific exceptions like China due to VBP and the Middle East due to the conflict. New products again played a central role in our success. I'll provide further detail on this on a later slide. Rounding out growth, volume contributed over 7 points in Q1, with price accounting for the remaining 2 plus percent. Turning to operations, we continue to see widespread benefits from our Envista Business System. Improving manufacturing productivity helped drive 100 basis points of gross margin expansion, and when combined with sustained G&A productivity, adjusted EBITDA margin expanded by 120 basis points. On a prior call, we noted a legacy intercompany loan that impacted our interest deductibility in the US. With that loan now resolved, our Q1 effective tax rate declined, contributing to the 50% year-on-year EPS growth that I mentioned earlier.

Paul Keel: Developing markets grew high single digits, with some specific exceptions like China due to VBP and the Middle East due to the conflict. New products again played a central role in our success. I'll provide further detail on this on a later slide. Rounding out growth, volume contributed over seven points in Q1, with price accounting for the remaining 2+. Turning to operations, we continue to see widespread benefits from our Envista Business System. Improving manufacturing productivity helped drive 100 basis points of gross margin expansion, and when combined with sustained G&A productivity, adjusted EBITDA margin expanded by 120 basis points. On a prior call, we noted a legacy intercompany loan that impacted our interest deductibility in the US. With that loan now resolved, our Q1 effective tax rate declined, contributing to the 50% year-on-year EPS growth that I mentioned earlier.

Speaker #3: New products again played a central role in our success, and I'll provide further detail on this on a later slide. Rounding out growth, volume contributed over 7 points in Q1, with price accounting for the remaining 2+%.

Speaker #3: Turning to operations, we continue to see widespread benefits from our Invista business system. Improving manufacturing productivity helped drive 100 basis points of gross margin expansion, and when combined with sustained G&A productivity, adjusted EBITDA margin expanded by 120 basis points.

Speaker #3: On a prior call, we noted a legacy intercompany loan that impacted our interest deductibility in the US. With that loan now resolved, our Q1 effective tax rate declined.

Speaker #3: Contributing to the 50% year-on-year EPS growth that I mentioned earlier. With respect to people, we remain focused on engagement, development, and community impact. Last quarter, we noted wide-ranging improvements in our 2025 employee survey.

Paul Keel: With respect to people, we remain focused on engagement, development, and community impact. Last quarter, we noted wide-ranging improvements in our 2025 employee survey. We built on this momentum in Q1 with further gains in colleague engagement. In addition to this, we launched an enterprise-wide talent development program last quarter with structured opportunities for career advancement and personal growth. We embraced our CIRCLe Values of continuous improvement by conducting 60 Kaizens across our company, and we extended our long-standing track record of investing in our communities by supporting close to 4,000 underserved patients through our charitable Envista Smile Project. Highlights in Q1 included a mission trip to Antigua and two events in partnership with USC's Herman Ostrow School of Dentistry, providing critical care to children and veterans through their mobile dental clinics.

Speaker #3: We built on this momentum in Q1, with further gains in colleague engagement. In addition to this, we launched an enterprise-wide talent development program last quarter, which structured opportunities for career advancement and personal growth.

Speaker #3: We embraced our circle value of continuous improvement by conducting 60 Kaizens across our company. And we extended our long-standing track record of investing in our communities by supporting close to 4,000 underserved patients through our charitable Invista Smile project.

Speaker #3: Highlights in Q1 included a mission chip to Antigua, and two events in partnership with USC's Astro School of Dentistry. Providing critical care to children and veterans through their mobile dental clinics.

Speaker #3: Coming back to the central role, that new product innovation is playing in our accelerating growth. Slide 6 covers three of several new product launches in Q1.

Paul Keel: Coming back to the central role that new product innovation is playing in our accelerating growth, slide 6 covers three of several new product launches in Q1. In our implants business, we introduced Nobel S series, which combines evidence-based designs and surface technologies with a common conical connection across all sizes of Nobel implants. This significantly reduces complexity for clinicians by improving inventory efficiency, planning, and chairside workflows. Early market response to launch has been encouraging, with over a quarter of orders coming from competitive conversion. In orthodontics, we achieved an important geographic milestone with the launch of Spark in Japan. We have long been a bracket and wire leader in this market, the Spark launch allows us to leverage our strong position to also win in Japan's attractive clear aligner segment.

Speaker #3: In our implants business, we introduced Nobel S-Series, which combines evidence-based designs and surface technologies with a common conical connection across all sizes of Nobel implants.

Speaker #3: The significantly reduces complexity for clinicians by improving inventory efficiency, planning, and chairside workflows. Early market response to launch has been encouraging, with over a quarter of orders coming from competitive conversion.

Speaker #3: In orthodontics, we achieved an important geographic milestone with the launch of Spark in Japan. We have long been a bracket and wire leader in this market, and the Spark launch allows us to leverage our strong position to also win in Japan's attractive clear aligner segment.

Speaker #3: Spark has captured share markets, and we expect to do the same in Japan. Dexis continued its streak of market-leading innovations with the release of DTX Studio Clinic with enhanced AI.

Paul Keel: Spark has captured share every year and in most geographic markets, and we expect to do the same in Japan. DEXIS continued its streak of market-leading innovations with the release of DTX Studio Clinic with enhanced AI. The platform includes algorithmic image management, AI-driven diagnostics, automated treatment planning, and workflow enhancements. DTX Studio automatically generates a series of diagnostic insights from intraoral radiographs, including new tools such as colored tooth segmentation and diagnostic findings such as caries, bone loss, and root canals. Full-mouth AI detection and intelligent layout create a digital twin of a patient's anatomy in less than 5 seconds. DEXIS has the largest installed base of imaging systems on the market, with roughly 275,000 connected devices and workstations in operation. Collectively, this network processes over 500 million images annually.

Speaker #3: The platform includes algorithmic image management, AI-driven diagnostics, automated treatment planning, and workflow enhancements. DTX Studio automatically generates a series of diagnostic insights from intraoral radiographs.

Speaker #3: Including new tools such as colored tooth segmentation and diagnostic findings such as caries, bone loss, and root canals. Full-mouth AI detection and intelligent layout create a digital twin of a patient's anatomy in less than five seconds.

Speaker #3: Dexis has the largest installed base of imaging systems on the market, with roughly 275,000 connected devices and workstations in operation. Collectively, this network processes over 500 million images annually.

Speaker #3: In processing this vast data set, Dexis's AI-powered digital ecosystem continually refines and advances the clinical benefits that we bring to customers. New product innovation has long been the lifeblood of Invista.

Paul Keel: In processing this vast data set, DEXIS' AI-powered digital ecosystem continually refines and advances the clinical benefits that we bring to customers. New product innovation has long been the lifeblood of Envista, this very much remains the case today. In addition to the progress we're making with respect to organic growth, we also completed a small but clinically important acquisition in the quarter. Versah is a pioneer in a novel implant preparation technique called osseodensification. In a traditional osteotomy, the bone is excavated in order to make room for the implant. With osseodensification, however, the bone is compacted and autografted, leading to improved osseointegration in certain clinical indications. This patent-protected solution offers a number of key benefits. For the clinician, Versah simplifies clinical workflows, as its universal kit can be used with most implant systems.

Speaker #3: And this very much remains the case today. In addition to the progress we're making with respect to organic growth, we also completed a small but clinically important acquisition in the quarter.

Speaker #3: Bursa is a pioneer in a novel implant preparation technique called osteodensification. In a traditional osteotomy, the bone is excavated in order to make room for the implant.

Speaker #3: With osteodensification, however, the bone is compacted and autografted, leading to improved osteointegration in certain clinical indications. This patent-protected solution offers a number of key benefits.

Speaker #3: For the clinician, Bursa simplifies clinical workflows, as its universal kit can be used with most implant systems. For the patient, the procedure supports more immediate implant placement, reducing chair time as well as the number of visits.

Paul Keel: For the patient, the procedure supports more immediate implant placement, reducing chair time as well as the number of visits. For Envista, Versah adds yet another clinically differentiated offering to our implant portfolio and a synergistic growth opportunity as the system integrates seamlessly into our existing clinical education and go-to-market strength. The acquisition is expected to be accretive to Envista in terms of growth, margin, EPS, and valuation multiple. Summarizing Q1 before turning it over to Eric, we furthered the good momentum we built across 2025 and posted a solid start to 2026. There continues to be no shortage of exogenous factors demanding attention, but specific to what we can control, we're encouraged by our progress. With that, I'll ask Eric to walk us through the financials in more detail.

Speaker #3: And for Invista, Bursa adds yet another clinically differentiated offering to our implant portfolio. And a synergistic growth opportunity as the system integrates seamlessly into our existing clinical education and go-to-market strength.

Speaker #3: The acquisition is expected to be a creative to Invista in terms of growth, multiple. Summarizing Q1 before turning it over to Eric, we furthered the good momentum we built across 2025 and posted a solid start to 2026.

Speaker #3: There continues to be no shortage of exogenous factors demanding attention, but specific to what we can control, we're encouraged by our progress. With that, I'll ask Eric to walk us through the financials in more detail.

Speaker #3: Thanks, Paul. In the first quarter, we delivered sales of $706 million. Core sales in the quarter increased 9.5%, and FX added a bit over 400 basis points.

Eric Hammes: Thanks, Paul. In Q1, we delivered sales of $706 million. Core sales in the quarter increased 9.5%, FX added a bit over 400 basis points. Our Q1 growth benefited from additional calendar days and the Spark deferral benefit. Excluding these effects, core growth was around 4%, in line with our expectations. As Paul mentioned, this was another strong quarter of growth for Envista, with positive growth in both segments and particular strength in developed markets. Q1 adjusted gross margin was 55.8%, an increase of 100 basis points versus the prior year. Volume, price, productivity, and FX all contributed to the year-on-year improvement in gross margins. Our adjusted EBITDA increased by 25% year on year, with margins for the quarter of 14%, increasing 120 basis points versus prior year.

Speaker #3: Our Q1 growth benefited from additional calendar days, and the Spark deferral benefit. Excluding these effects, core growth was around 4% in line with our expectations.

Speaker #3: As Paul mentioned, this was another strong quarter of growth for Invista, with positive growth in both segments and particular strength in developed markets. Q1 adjusted gross margin was 55.8%, an increase of 100 basis points versus the prior year.

Speaker #3: Volume, price, productivity, and FX all contributed to the year-on-year improvement in gross margins. Our adjusted EBITDA increased by 25% year-on-year, with margins for the quarter of 14%, increasing 120 basis points versus prior year.

Speaker #3: Profit margins were helped by the previously mentioned gains in gross margins, as well as continued strong G&A productivity, while investing in the business. Adjusted EPS in the quarter was $0.36, up $0.12 compared to the same quarter of last year.

Eric Hammes: Profit margins were helped by the previously mentioned gains in gross margins, as well as continued strong G&A productivity while investing in the business. Adjusted EPS in the quarter was $0.36, up $0.12 compared to the same quarter of last year. Our non-GAAP tax rate for the quarter was 26.1%, slightly better than our expectations. The actions we delivered and communicated throughout 2025 have contributed significantly to the beneficial trend in our non-GAAP tax rate, and we still expect the 2026 full year rate to be around 28%. Rounding out slide 8, our Q1 free cash flow was -$16 million. The Q1 is historically our lowest cash flow quarter for the year, and we continue to expect our free cash conversion for 2026 to be approximately 100% of adjusted net income.

Speaker #3: Our non-gap tax rate for the quarter was 26.1%, expectations. The actions we delivered and communicated throughout 2025 have contributed significantly to the beneficial trend in our non-gap tax rate and we still expect the 2026 full year rate to be around 28%.

Speaker #3: Rounding out slide 8, our Q1 free cash flow was negative 16 million. The first quarter is historically our lowest cash flow quarter for the year, and we continue to expect our free cash conversion for 2026 to be approximately 100% of adjusted net income.

Speaker #3: Now let's turn to two bridges to help break down our year-on-year results beginning with sales. Core revenues grew 9.5% in the quarter with positive growth in all major businesses.

Eric Hammes: Now let's turn to 2 bridges to help break down our year-on-year results, beginning with sales. Core revenues grew 9.5% in the quarter, with positive growth in all major businesses. As outlined previously in our 2026 guidance assumptions, Q1 had 4 additional billing days compared to last year. Given the makeup of our businesses, the estimated impact was $28 million or 4.5% growth, consistent with what we outlined in the Q4 call. We expect a similar negative impact year over year from 4 fewer billing days in Q4 2026. The weaker US dollar year over year contributed about $26 million in revenues. Underlying unit volume and price delivered another $22 million in growth, reflecting another strong performance for Envista. Spark deferral tailwinds contributed $9 million of year-on-year growth.

Speaker #3: As outlined previously in our 2026 guidance assumptions, Q1 had four additional billing days compared to last year. Given the makeup of our businesses, the estimated impact was $28 million, or 4.5% growth, consistent with what we outlined in the Q4 call.

Speaker #3: We expect a similar negative impact year over year from four fewer billing days in Q4 2026. The weaker U.S. dollar year over year contributed about $26 million in revenues.

Speaker #3: Underlying unit volume and price delivered another 22 million dollars in growth, reflecting another strong performance for Invista. Spark deferral tailwinds contributed 9 million dollars of year-on-year growth.

Speaker #3: And finally, we had a minor benefit from acquisitions completed over the past year, all three of which support a more competitive implants business. Turning to the adjusted EBITDA bridge on slide 10, we're now showing both the dollar and margin rate change year over year.

Eric Hammes: Finally, we had a minor benefit from acquisitions completed over the past year, all three of which support a more competitive implants business. Turning to the adjusted EBITDA bridge on Slide 10, we are now showing both the dollar and margin rate change year over year. This is consistent with the primary financial metrics that we laid out in our March 2025 Capital Markets Day and the specific focus that we have placed on growing our profit dollars. I will walk through the adjusted EBITDA dollar growth, where we were up $20 million or 25% year on year. Volume and mix combined for a $27 million improvement, reflecting the strong gross margins across our business portfolio. Price contributed another $11 million. Foreign exchange rates contributed $7 million. This was driven by the transactional FX losses in Q1 2025.

Speaker #3: This is consistent with the primary financial metrics that we laid out in our March 2025 Capital Markets Day, and the specific focus that we've placed on growing our profit dollars.

Speaker #3: I'll walk through the adjusted EBITDA dollar growth, where we were up 20 million dollars or 25% year on year. Volume and mix combined for a 27 million dollar improvement, reflecting the strong gross margins across our business portfolio.

Speaker #3: Price contributed another 11 million dollars. Foreign exchange rates contributed 7 million dollars. This was driven by the transactional FX losses in the first quarter of 2025.

Speaker #3: As we outlined last year, we're now hedging our balance sheet which is aimed at minimizing quarter-to-quarter volatility due to exchange rates. Productivity was a small tailwind in the quarter, as we continue to drive both factory and G&A productivity, offsetting inflationary impacts.

Eric Hammes: As we outlined last year, we're now hedging our balance sheet, which is aimed at minimizing quarter-to-quarter volatility due to exchange rates. Productivity was a small tailwind in the quarter as we continue to drive both factory and G&A productivity, offsetting inflationary impacts. Year-on-year tariff costs increased $11 million in the quarter, with a gross tariff cost similar to recent quarters and consistent with the guidance assumptions we outlined for 2026. As mentioned throughout 2025, we offset our gross tariff costs through supply chain, G&A, and pricing actions. We expect quarterly tariff costs to be similar going forward in 2026, with the new global tariffs effectively replacing the prior IEEPA tariffs. Finally, supported by our strong growth and productivity, we continue to invest in sales, marketing, and R&D to drive future growth.

Speaker #3: Year-on-year tariff costs increased $11 million in the quarter, with a gross tariff cost similar to recent quarters and consistent with the guidance assumptions we outlined for 2026.

Speaker #3: As mentioned throughout 2025, we offset our gross tariff costs through supply chain, G&A, and pricing actions. We expect quarterly tariff costs to be similar going forward in 2026, with new global tariffs effectively replacing the prior IEPA tariffs.

Speaker #3: Finally, supported by our strong growth and productivity, we continue to invest in sales, marketing, and R&D to drive future growth. All in, our margins in the quarter were 14%, up 120 basis points year over year.

Eric Hammes: All in, our margins in the quarter were 14%, up 120 basis points year over year. Turning to segment performance, revenue in Specialty Products & Technologies grew more than 14% year on year, with core sales up 8.4%. In our orthodontics business, Spark was up double digits even after adjusting for the net deferral change, and brackets and wires also grew double digits. While the increased billing days in the quarter did benefit both orthodontic categories, the underlying growth remains strong as we continue to strengthen our competitive position globally. 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.

Speaker #3: Turning to segment performance, revenue and specialty products, and technology grew more than 14% year on year, with core sales up 8.4%. In our orthodontics business, Spark was up double digits, even after adjusting for the net deferral change, and Brackets and Wires also grew double digits.

Speaker #3: While the increased billing days in the quarter did benefit both orthodontic categories, the underlying growth remained strong, as we continue to strengthen our competitive position globally.

Speaker #3: 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 VVP process.

Speaker #3: In Q1, specialty products and technologies posted adjusted operating profit growth of 10 million year on year, up 18%, with a 40 basis point improvement in margin rate.

Eric Hammes: In Q1, Specialty Products & Technologies posted adjusted operating profit growth of $10 million year on year, up 18%, with a 40 basis point improvement in margin rate. Both businesses had positive price capture. We continue to see factory improvements in orthodontics, which allowed for increased investment in commercial and R&D. Moving to our Equipment & Consumables segment, core sales in the quarter increased 11.5% versus prior year, with double-digit growth in both consumables and diagnostics. Our consumables business continues to deliver well across the portfolio in both Kerr and Metrex, while diagnostics was particularly strong in developed markets, posting its fourth straight quarter of positive growth. Adjusted operating profits increased 33% over last year, with operating margins up nearly 300 basis points, driven by strong pricing and volume benefits, offsetting investment in sales, marketing, and R&D.

Speaker #3: Both businesses had positive price capture and we continue to see factory improvements in orthodontics, which allowed for increased investment in commercial and R&D. Moving to our equipment and consumables segment, core sales in the quarter increased 11.5% versus prior year, with double digit growth in both consumables and diagnostics.

Speaker #3: Our consumables business continues to deliver well across the portfolio, in both cur and metrics. While diagnostics was particularly strong in developed markets, posting its fourth straight quarter of positive growth.

Speaker #3: Adjusted operating profits increased 33% over last year, with operating margins up nearly 300 basis points, driven by strong pricing and volume benefits, offsetting investment in sales marketing and R&D.

Speaker #3: This segment also benefited disproportionately from the year-over-year FX tailwinds that I mentioned previously. Now I'll turn to cash flows and our balance sheet. Q1 free cash flow was negative 16 million, a reduction of about 11 million from the first quarter of last year, primarily driven by an increase in CapEx as we invest in new manufacturing facilities in China, Finland, to support our growth objectives.

Eric Hammes: This segment also benefited disproportionately from the year-over-year FX tailwinds that I mentioned previously. I'll turn to cash flows and our balance sheet. Q1 free cash flow was -$16 million, a reduction of about $11 million from Q1 of last year, primarily driven by an increase in CapEx as we invest in new manufacturing facilities in China and Finland to support our growth objectives. Our balance sheet remains strong and stable, with net debt to adjusted EBITDA of less than 1x. Our balance sheet continues to provide a strong flexibility during periods of macroeconomic uncertainty. In Q1, we purchased approximately 1.6 million shares of our stock.

Speaker #3: Our balance sheet remained strong and stable, with net debt to adjusted EBITDA of less than one times. Our balance sheet continues to provide a strong flexibility during periods of macroeconomic uncertainty.

Speaker #3: In Q1, we purchased approximately 1.6 million shares of our stock. At the end of the quarter, we had 41 million dollars of remaining capacity in our stock repurchase program.

Eric Hammes: At the end of the quarter, we had $41 million of remaining capacity in our stock repurchase program. As announced today, our board recently authorized an incremental $300 million in repurchases through the end of 2029. Assuming an even deployment of capital per year, this would allow for investment of approximately one-third of our annual free cash flow to repurchases, leaving capacity to invest in organic growth and M&A. As Paul mentioned previously, we are reaffirming our 2026 guidance range of 2% to 4% core growth, 7% to 13% adjusted EBITDA growth, EPS of $1.35 to $1.45, and approximately 100% free cash flow conversion. With that, I'll turn the call back over to Paul.

Speaker #3: As announced today, our board recently authorized an incremental 300 million dollars in repurchases, through the end of 2029. Assuming an even deployment of capital per year, this would allow for investment of approximately one-third of our annual free cash flow to repurchases, leaving capacity to invest in organic growth and M&A.

Speaker #3: As Paul mentioned previously, we are reaffirming our 2026 guidance range, of 2 to 4 percent core growth, 7 to 13 percent adjusted EBITDA growth, EPS of $1.35 to $1.45, and approximately 100% free cash flow conversion.

Speaker #3: With that, I'll turn the call back over to Paul.

Speaker #2: Thanks, Eric. A few closing thoughts on the quarter before we open it up for your questions. The global dental market continued to demonstrate its characteristic resilience in Q1, even in the context of ongoing macro uncertainty.

Paul Keel: Thanks, Erick. A few closing thoughts on the quarter before we open it up for your questions. The global dental market continued to demonstrate its characteristic resilience in Q1, even in the context of ongoing macro uncertainty. Specific to Envista, we again delivered balanced growth across our portfolio, with strong performance in both reporting segments and most geographies. Our improved execution helped convert 10% core revenue growth into 25% adjusted EBITDA and 50% EPS growth, while also allowing us to invest in both organic and inorganic growth priorities. Behind this progress, our board has authorized an incremental $300 million for share repurchases. While heightened macro volatility brings additional challenge, our continued momentum and strong start to the year give us confidence to reaffirm our full year 2026 guidance.

Speaker #2: Specific to Invista, we again delivered balanced growth across our portfolio, with strong performance in both reporting segments and most geographies. Our improved execution helped convert 10% core revenue growth into 25% adjusted EBITDA and 50% EPS growth.

Speaker #2: While also allowing us to invest in both organic and inorganic growth priorities. Behind this progress, our board has authorized an incremental 300 million dollars per share repurchases.

Speaker #2: While heightened macro volatility brings additional challenge, our continued momentum and strong start to the year give us confidence to reaffirm our full-year 2026 guidance.

Speaker #2: Finally, and most importantly, a close by noting that everything Eric and I shared today is made possible by the skill, effort, and commitment of our global Invista team.

Paul Keel: Finally, and most importantly, I'll close by noting that everything Eric and I shared today is made possible by the skill, effort, and commitment of our global Envista team. We recognize and appreciate all you do in the service of our stakeholders. Similarly, we're grateful for the support we receive from our customers, partners, and shareholders. That completes our prepared remarks for today. We'll now open it up for Q&A.

Speaker #2: We recognize and appreciate all you do in the service of our stakeholders. Similarly, we're grateful for the support we receive from our customers, partners, and shareholders.

Speaker #2: And that completes our prepared remarks for today. We'll now open it up for Q&A.

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touchtone phone.

Melissa: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Elizabeth with Evercore ISI. Please go ahead.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Elizabeth with Evercore ISI. Please go ahead.

Speaker #3: You'll hear a prompt at your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the 2.

Speaker #3: If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Elizabeth with Evercore ISI.

Speaker #3: Please go ahead.

Speaker #4: Hi guys, good afternoon, and thanks for the question. Congrats on another great quarter. I mean, it’s really helped sort of extend some of the momentum that you built for ’25.

Elizabeth Anderson: Hi, guys. Good afternoon, thanks for the question. Congrats on another great quarter. I mean, this really helps sort of extend some of the momentum that you built from 25. Maybe, from a high level first, like, what is it that's sort of like clicking nicely for Envista? Then sort of what areas do you sort of view as having been more difficult to get traction in?

Speaker #4: Maybe from a high level first, what is it that sort of clicking nicely for Invista and then sort of what areas do you sort of view as having been more difficult to get traction in?

Paul Keel: I'll take that one. Thanks for kicking us off, Elizabeth. As we talked about on previous calls, you know, Eric and I came to Envista about 2 years ago now, having been in and around dental for a good portion of our careers. We already knew that dental was an attractive industry and that Envista was well-positioned within it. For a variety of reasons, neither the performance of the market nor the business were consistently reflecting those advantages. The plan that we laid out this time last year at the capital markets event centered on improved execution in 3 principal areas, those being growth, operations, and people, with the thought that they would help bring our performance better in line with the company's potential.

Speaker #5: I'll take that one. Thanks for kicking us off, Elizabeth. As we talked about on previous calls, Eric and I came to Invista about two years ago now, having been in and around dental for a good portion of our careers.

Speaker #5: So we already knew that dental was an attractive industry and that Invista was well positioned within it. But for a variety of reasons, neither the performance of the market nor the business were consistently reflecting those advantages.

Speaker #5: So the plan that we laid out this time last year at the capital markets event centered on improved execution in three principal areas. Those being growth, operations, and people, with the thought that they would help bring our performance better in line with the company's potential.

Speaker #5: So now looking back, assessing our progress in that regard, 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.

Paul Keel: Now looking back, assessing our progress in that regard and, you know, 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. We saw that in the Q1 results as well as 6 quarters now of generally broad-based growth and market share gains. Looking at it operationally, Envista has always been a pretty strong business in this regard, in large part because of our continuous improvement focus that comes through the Envista Business System. During COVID and the turbulence that followed it, though, you know, in all candor, our focus did slip a bit, and that resulted in compression on the gross margin line, as well as some overspending in G&A.

Speaker #5: We saw that in the Q1 results, as well as six quarters now, of generally broad-based growth and market share gains. Looking at it operationally, Envista has always been a pretty strong business in this regard.

Speaker #5: In large part because of our continuous improvement focus that comes through the Invista business system. During COVID and the turbulence that followed it, though, in all candor, our focus did slip a bit and that resulted in compression on the gross margin line.

Speaker #5: As well as some overspending in G&A. So we trimmed overhead last year by about 35 million dollars. That has helped speed decision-making and it's also improved earnings leverage, as we just shared.

Paul Keel: We trimmed overhead last year by $35 million. That has helped speed decision-making, and it's also improved earnings leverage, as we just shared. Now we're starting to get similar traction on the manufacturing front, with 100 basis points of COGS reduction in the quarter. We're really excited about the momentum that we're building on the people front. There were a few openings, as you know, in the management team when I joined, that afforded the opportunity to bring in additional dental market expertise from outside the company to supplement the strong team that was already in place when I arrived. The combination of the two has gelled nicely, you see that in a lot of the metrics we shared on the call.

Speaker #5: And now we're starting to get similar traction on the manufacturing front, with the 100 basis points of COGS reduction in the quarter. And then we're really excited about the momentum that we're building on the people front.

Speaker #5: There were a few openings, as you know, in the management team when I joined and that afforded the opportunity to bring in additional dental market expertise from outside the company to supplement the strong team that was already in place when I arrived.

Speaker #5: And so the combination of the two has gelled nicely and you see that in a lot of the metrics we shared on the call.

Speaker #5: Collaboration is up, internal promotions are up, engagement is up. All of this is, I think, healthy and helpful. Now in terms of the second half of your question, areas that have been less helpful, of course, we'd have to start with macro uncertainty.

Paul Keel: Collaboration is up, internal promotions are up, engagement is up. All of this is, I think, healthy and helpful. Now in terms of the second half of your question, areas that have been less helpful, you know, of course, we'd have to start with macro uncertainty, and in particular, the impact that has on our customers and patients. If we look back across the last 24 months or so, several of the kind of key market indicators for dental that many of us watched, you know, things like interest rates, unemployment, and consumer confidence, all of those were beginning to trend favorably across the back H2 of 2024. Of course, in Q1 of last year, we had tariffs, which caused an unexpected disturbance to that upward trend. Dental showed its resilience.

Speaker #5: And in particular, the impact that has on our customers and patients. If we look back across the last 24 months or so, several of the kind of key market indicators for dental that many of us watched, things like interest rates and unemployment and consumer confidence, all of those were beginning to trend favorably across the back half of '24.

Speaker #5: Then, of course, in Q1 of last year, we had tariffs, which caused an unexpected disturbance to that upward trend. Dental showed its resilience; conditions again started firming up in the back half of '25.

Paul Keel: Conditions again started firming up in the back half of 2025, then we had the Gulf event heating up in Q1 of this year. Now we're all trying to assess how that might impact conditions moving forward. As this audience knows well, dental has proven its resilience. You know, we saw solid evidence of that in Q1, both in our results and others. In addition to that, Envista, as we've shown, has a portfolio that's well-balanced by segment, by geography, by go-to-market model, so that is all helpful. I guess, kind of bringing it to a close, net-net, we're confident that the dental market will weather the current uncertainty, and that the continuous improvement you're seeing from Envista will continue. Thanks for the question.

Speaker #5: And then we had the Gulf events heating up in Q1 of this year. So now we're all trying to assess how that might impact conditions moving forward.

Speaker #5: But as this audience knows well, dental has proven its resilience we saw solid evidence of that in Q1, both in our results and others.

Speaker #5: In addition to that, Invista, as we've shown, has a portfolio that's well balanced by segment, by geography, by go-to-market model. So that is all helpful.

Speaker #5: And I guess, kind of bringing it to a close, net-net, we're confident that the dental market will weather the current uncertainty and that the continuous improvement you're seeing from Envista will continue.

Speaker #5: So thanks for the question.

Speaker #4: Yeah, that is helpful. And maybe as a follow-up, I know obviously we saw a solid very good performance this quarter and you pointed to the four extra days that changed in the back half of the year.

Elizabeth Anderson: Yeah, that is helpful. Maybe as a follow-up, like, you know, obviously we saw a solid, you know, very good performance this quarter, and you pointed to the 4 extra days that, you know, changed in the H2 of the year. Can you just talk about, is it really those sort of macro drivers that are causing you guys to not raise the guidance at this point for the outperformance? Is it just too early in the year? Obviously, you didn't do it Q1 last year either. I'm just trying to sort of calibrate your expectations in terms of how things are faring versus when you originally set the guide. Thanks.

Speaker #4: But can you just talk about, is it really those sort of macro drivers that are causing you guys to not raise the guidance at this point for the outperformance?

Speaker #4: Is it just too early in the year? Obviously, you didn't do it one Q last year either. So I'm just trying to sort of calibrate your expectations in terms of how things are faring versus when you originally set the guide.

Speaker #4: Thanks.

Speaker #5: Yeah, it's a fair question. As part of our regular process in preparing for these calls, we give very careful thought to full-year guidance. So we appreciate the spirit of your question.

Paul Keel: Yeah, it's a fair question. You know, as part of our regular process in preparing for these calls, we give very careful thought to full year guidance. We appreciate the spirit of your question. You know, on the plus side, we are seeing stable to slightly upward trends in the dental market. We just walked through the many things that are going in favorably for Envista specifically. Then we're building a, I think, a pretty good track record now of consistent performance. All of these do give us confidence in continued performance moving forward. As you suggested in your question, you know, you have to balance those with a recognition of the current macro climate.

Speaker #5: On the plus side, we are seeing stable to slightly upward trends in the dental market. We just walked through the many things that are going in favorably for Invista specifically.

Speaker #5: And then we're building I think a pretty good track record now of consistent performance. So all of these do give us confidence in continued performance moving forward.

Speaker #5: But as you suggested in your question, you have to balance those with a recognition of the current macro climate. The frequency and amplitude of the geopolitical shifts over just the past year and a half have to be taken into account.

Paul Keel: You know, the frequency and amplitude of the geopolitical shifts over just the past year and a half has to be taken into account. Since we don't give a confidence interval along with our guidance, you know, you need to capture that uncertainty in the guide. You know, that typically takes the form of a larger buffer, reflecting a less certain environment. Net-net, Elizabeth, I'd say we're encouraged by our progress and feel that reaffirming 2026 guidance is the most appropriate outlook to provide at this point.

Speaker #5: And since we don't give a confidence interval along with our guidance, you need to capture that uncertainty in the guide and I typically take the form of a larger buffer.

Speaker #5: Reflecting a less certain environment. So net-net, Elizabeth, I'd say we're encouraged by our progress and feel it reaffirming 2026 guidance is the most appropriate outlook to provide at this point.

Speaker #4: Great. Thanks so much.

Elizabeth Anderson: Great. Thanks so much.

Speaker #6: Thank you. Your next question comes from Michael with Lyrinc Partners. Please go ahead.

Operator: Thank you. Your next question comes from Michael with Leerink Partners. Please go ahead.

[Analyst] (Leerink Partners): Good evening, thanks for taking the question. Maybe just one quick first point of clarification. You mentioned the implant performance in China in terms of VBP. Can you just remind us what's embedded in guidance on VBP timing?

Speaker #7: Good evening and thanks for taking the question. Maybe just one quick first point of clarification. You mentioned the implant performance in China in terms of VBP.

Michael Cherny: Good evening, thanks for taking the question. Maybe just one quick first point of clarification. You mentioned the implant performance in China in terms of VBP. Can you just remind us what's embedded in guidance on VBP timing?

Speaker #7: Can you just remind us what's embedded in guidance on VBP timing?

Speaker #5: I'll let Eric get in on this one.

Paul Keel: I'll let Eric get in on this one.

Speaker #8: Yeah, so Michael, when we talked in the fourth quarter call, at that point in time, we were looking at ortho and implants. And effectively, a VBP process that would start for both of those in the Q2 and/or Q3 timeframe.

Eric Hammes: Yeah. Michael, when we talked in the Q4 call, at that point in time, we were looking at ortho and implants, and effectively a VBP process that would start for both of those in the Q2 and/or Q3 timeframe. We don't have certainty on either of those, right? We have modestly updated information. I would say at this point in time, our, you know, best estimate, and to your question, what's included in guidance is both of those VBPs starting the process in, you know, Q2 or Q3. That's maybe the first point. What we always remind, I think, our, you know, sell side analysts and investors on is, you know, we are relatively well prepared as we see the channel in both of those businesses.

Speaker #8: We don't have certainty on either of those, right? We have modestly updated information. But I would say at this point in time, our best estimate and to your question what's included in guidance is both of those VBPs starting the process in Q2 or Q3.

Speaker #8: So that's maybe the first point. And then what we always remind, I think, our sell-side analysts and investors on is we are relatively well prepared as we see the channel in both of those businesses.

Speaker #8: We've been going through that process now for 18 months particularly as we've seen some of the delays in VBP. But we will likely see a little bit of channel once the process begins that'll mean we'll have a slight compression of revenues in the short term.

Eric Hammes: We've been going through that process now for, you know, 18 months, particularly as we've seen some of the delays in VBP. We will likely see a little bit of channel, you know, once the process begins. That'll mean we'll have, you know, a slight compression of revenues in the short term, and then we'll see some, you know, some benefits as our businesses, particularly our good, strong global brands, are able to leverage, you know, the important impact of VBP, which is bringing more, you know, customers to the, to the market. You know, no change on the macro. I'd say in line with our guidance and, you know, we'll give you the best information we can as the, you know, market gives us the same.

Speaker #8: And then we'll see some benefits as our businesses particularly our good strong global brands are able to leverage the important impact of VBP, which is bringing more customers to the market.

Speaker #8: So, no change on the macro, I'd say, in line with our guidance. And we'll give you the best information we can as the market gives us the same.

[Analyst] (Leerink Partners): It's helpful, Eric. Then just if I could stay on implants, if you don't mind. Encouraging to see the mid-single digit growth in the quarter ex China. Can you give us a sense on what component of the growth came from new product launches? I know you mentioned the S Series, but in terms of the vitality index contribution from implants, any way to characterize where the growth shook out? Thank you.

Michael Cherny: It's helpful, Eric. Then just if I could stay on implants, if you don't mind. Encouraging to see the mid-single digit growth in the quarter ex China. Can you give us a sense on what component of the growth came from new product launches? I know you mentioned the S Series, but in terms of the vitality index contribution from implants, any way to characterize where the growth shook out? Thank you.

Speaker #7: It's helpful, Eric. And then just if I could stay on implants, if you don't mind encouraging to see the mid-single digit growth in the quarter ex-China.

Speaker #7: Can you give us a sense on what component of the growth came from new product launches? I know you mentioned the S series, but in terms of the vitality index contribution from implants, any way to characterize where the growth shook out?

Speaker #7: Thank you.

Speaker #8: Yeah, I could just talk to that one, Michael. So I think it was in my prepared remarks likely Paul's as well. So big picture the number to hinge on is we grew low single digits in core growth in implants in first quarter.

Eric Hammes: Yeah, I can just talk to that one, Michael. I think it was in my prepared remarks, likely Paul's as well. Big picture, the number to hinge on is. We grew low single digits in core growth in implants in Q1. Very different trend as we look at, you know, China versus developed markets. I'll just take those two. We were down, you know, strong double digits in China. That's a nod to what we just talked about in terms of the, you know, start of the VBP process, even though there's nothing, you know, formally confirmed in place. Nonetheless, the market is, you know, showing kind of the signals of that. Within that positive low single-digit growth, we were down significantly in China.

Speaker #8: Very different trend as we look at China versus developed markets. I'll just take those two we were down strong double digits in China that's a nod to what we just talked about in terms of the start of the VBP process even though there's nothing formally confirmed in place but nonetheless the market is showing kind of the signals of that.

Speaker #8: So within that positive low single digit growth, we were down significantly in China. We had strong mid-single digit to even high single digit growth in developed markets roughly equal when we look at Europe as well as the United States.

Eric Hammes: We had strong mid-single digit to even high single-digit growth in developed markets, roughly, you know, equal when we look at Europe as well as the United States. Paul mentioned in his, you know, pre-read remarks, Nobel S series. You know, we're seeing good early signals from that. I wouldn't say that at this point in time, new product launches are really significantly contributing to our, you know, implants growth overall. Most of what I think we've talked about in the past has been, you know, the return to growth based on the commercial investments we've put in, the same portfolio, if you will, that we've had, as well as investments into clinical. Then having also a strong portfolio around the entirety of implants.

Speaker #8: Paul mentioned in his pre-red remarks Nobel S series we're seeing good early signals from that. But I wouldn't say that at this point in time new product launches are really significantly contributing to our implants growth overall.

Speaker #8: Most of what I think we've talked about in the past has been the return to growth based on the commercial investments we've put in.

Speaker #8: The same portfolio if you will that we've had as well as investments into clinical. And then having also a strong portfolio around the entirety of implants.

Speaker #8: So we had a very strong growing regenerative biomaterials business this quarter. That's been pretty consistent over the past many quarters. We had good growth in our prosthetics Prosera business.

Eric Hammes: You know, we had a very strong growing regenerative biomaterials business this quarter. That's been pretty consistent over the past many quarters. We had good growth in our prosthetics, Procera business. We continue to have a strong, you know, growth rate, albeit, not a significant percent of the share of our business in the digital space. Good, you know, good performance coming from some early new product launches, but certainly more to come there.

Speaker #8: And we continue to have a strong growth rate albeit not a significant percent of the share of our business in the digital space. Good performance coming from some early new product launches but certainly more to come there.

Speaker #6: Hi, Michael. Do you have a follow-up? Thank you. All right. Your next question comes from Jeff with Bear. Please go ahead.

Jim Gustafson: Hi, Michael, do you have a follow-up?

Operator: Hi, Michael, do you have a follow-up?

[Analyst] (Leerink Partners): I'm all set. Thank you.

Michael Cherny: I'm all set. Thank you.

Operator: Thank you. All right, your next question comes from Jeff with Baird. Please go ahead.

Speaker #9: Hi. Good afternoon, guys. I love the first name basis here. We're all such good friends. Just wanted to ask a question follow-up question on that implants business.

Jeff Johnson: Hi. Good afternoon, guys. I love the first name basis here. We're all such good friends. Just wanted to ask a question, a follow-up question on that implants business. Eric, would we think most of the impact of the VBP prep in China is now done? Do we get another quarter or so of the same kind of headwind before we stabilize for a quarter or two and then maybe get some tailwinds a quarter or two after that? Just how to think about that. Just what are you hearing on ortho VBP? That's the one that's been harder to get any kind of updates on, it seems like over the last quarter or two. Thanks.

Speaker #9: Eric, would we think most of the impact of the VBP prep in China is now done? Do we get another quarter or so of the same kind of headwind before we stabilize for a quarter or two and then maybe get some tailwinds a quarter or two after that?

Speaker #9: Just how to think about that and just what are you hearing on ortho VBP? That's the one that's been harder to get any kind of updates on it seems like over the last quarter or two.

Speaker #9: Thanks.

Speaker #8: Yeah. So to your first question, Jeff, I would say that the significant decrease that I mentioned double digits decrease in Q1 we expect that to be the larger percent if you will of the year-on-year impact from VBP.

Eric Hammes: To your, you know, to your first question, Jeff, I would say, you know, the, the significant, you know, decrease that I mentioned, you know, double-digits decrease in Q1, we expect that to be, you know, the larger percent, if you will, of the year-on-year impact from VBP. That also presupposes that VBP doesn't get, you know, pushed out, delayed or changed. You know, there will be a little bit of a headwind from it in Q2. Again, as plans, you know, get updated or remain the same, you know, we expect to get more into the sort of the growth part of that. Importantly, though, with prices reduced and volume up. We don't have, you know, great better information on the ortho side.

Speaker #8: But that also presupposes that VBP doesn't get pushed out, delayed, or changed. There'll be a little bit of a headwind from it in second quarter and then again as plans get updated or remain the same we expect to get more into the sort of the growth part of that.

Speaker #8: Importantly though with prices reduced and volume up. And then we don't have great better information on the ortho side. Right now Q3 is what our planning assumption is.

Eric Hammes: Right now, Q3 is what our planning assumption is. That's effectively how we also went into the year. I think as Paul talked about in the Q4 call, you know, just be mindful that we've got, you know, an implants and an ortho business that's among, you know, dozens, if you will, of other med tech businesses that are also being considered in and around the, you know, the next 2 quarters. I think that's creating some level of complexity. Right now, our planning assumption is Q3 and, you know, we hope we get some consistency out of that.

Speaker #8: That's effectively how we also went into the year. But I think, as Paul talked about in the Q4 call, just be mindful that we've got an implants and an ortho business that's among dozens, if you will, of other med tech businesses that are also being considered in and around the next couple quarters.

Speaker #8: And I think that's creating some level of complexity. But right now our planning assumption is third quarter and we hope we get some consistency out of that.

Speaker #9: Yeah. Fair enough. And then just to follow up on pricing if I could. A two-parter I guess. One it's not you guys have taken some good price I think we've been surprised at especially some of the price inelasticity it seems like on the wires and bracket side especially.

Jeff Johnson: Yeah. Fair enough. Then just to follow up on pricing, if I could. A two-parter, I guess. One, you know, you guys have taken some good price. I think we've been surprised at, especially some of the price inelasticity, it seems like on the wires and brackets side, especially. One of your larger distribution peers talking the other day about maybe seeing some additional price increases from manufacturers going through, starting in Q2 of this year. Just how are you thinking about next round of potential price increases? I know you don't want to tip your hand on this call necessarily, just generally, was it a one and done last year? Do you feel like there might be still some room in this environment?

Speaker #9: One of your larger distribution peers talking the other day about maybe seeing some additional price increases for manufacturers going through starting in 2Q. Of this year just how are you thinking about next round of potential price increases?

Speaker #9: I know you don't want to tip your hand on this call necessarily but just generally was it a one-and-done last year? Do you feel like there might be still some room in this environment?

Speaker #9: And it looks like you have a new calculation for pricing for your 10Q. Can you just kind of help us understand what pricing under the old calculation might have looked like versus what it looks like now just so we can kind of understand in our models how we could really think about this apples to apples growth this quarter coming from volume versus price?

Jeff Johnson: It looks like you have a new calculation for pricing for your 10-Q. Can you just kinda help us understand, you know, what pricing under the old calculation might have looked like versus what it looks like now, just so we can kind of understand, you know, in our models how we could really think about this apples-to-apples growth this quarter coming from volume versus price, at least as we modeled it? Thanks.

Speaker #9: At least as we modeled it. Thanks.

Speaker #8: Yeah, Jeff. I'll take the pricing strategy part then I'll let Eric weigh in on any disclosures in the queue. Our pricing algorithm has been the same since Eric and I joined.

Paul Keel: Jeff, I'll take the pricing strategy part, then I'll let Eric weigh in on any disclosures in the Q. Our pricing algorithm has been the same since Eric and I joined. We've always thought of dental as a healthcare broadly, dental specifically, as less price elastic than, you know, the broader market. That's what's contributed to, you know, dental generally outgrowing the broader market, both in times of economic expansion and contraction. All of that got turned a little bit sideways in multiple categories during COVID, and I think Envista and our peers all lost sight a little bit of the importance of pricing from kind of the 2022 to 2023 period.

Speaker #8: We've always thought of dental as a healthcare broadly dental specifically as less price elastic than the broader market. That's what's contributed to dental generally outgrowing the broader market.

Speaker #8: Both in times of economic expansion and contraction. All of that got turned a little bit sideways in multiple categories during COVID. And I think in Vista and our peers all lost sight a little bit of the importance of pricing from kind of the '22 to '23 period.

Speaker #8: So, when Eric and I joined, we refocused in Vista on this important component, and it has both a strategic and an executional element to it.

Paul Keel: When Eric and I joined, we refocused Envista on this important component, and it has both a strategic and an executional element to it. Strategically, our focus always begins with our customers. You know, we want to help them capture greater value, you know, in their offerings, and then we try to get a portion of that. That's code for saying we try to limit our price increases below procedure price increases. You know, so that as customers continue to do well, we get a portion of that. Then executionally, you have to make price visible. You have to put it on the P&L. You have to put it in people's objectives. You have to show it on your dashboards.

Speaker #8: Strategically our focus is always begins with our customers. We want to help them capture greater value in their offerings and then we try to get a portion of that.

Speaker #8: So that's code for saying we try to limit our price increases below procedure price increases. So that as customers continue to do well we get a portion of that.

Speaker #8: And then executionally you have to make price visible. You have to put it on the P&L. You have to put it in people's objectives.

Speaker #8: You have to show it on your dashboards. Of course we have good capabilities in turning those targets into delivery through EVS. So we have focused Kaizens on the execution of the pricing strategy that I just articulated.

Paul Keel: Of course, we have good capabilities in turning those targets into delivery through EBS, so we have focused Kaizens on the execution of the pricing strategy that I just articulated. Moving forward, Jeff, all that will remain the same. You know, we got extra price last year because exogenous effects required it. I think customers understood that. Again, we'll have to see what happens with inflation here in response to the situation in the Middle East. If it require, you know, if we see inflation coming into the P&L, we'll have to take additional action on the pricing side. The strategy here, our high-level kind of algorithm, remains the same. Eric, you wanna talk about the Q?

Speaker #8: So moving forward, Jeff, all that will remain the same. We got extra price last year because exogenous effects required it. And I think customers understood that.

Speaker #8: We'll have to see what happens with inflation here. In response to the situation in the Middle East, and if it requires, if we see inflation coming into the P&L, we'll have to take additional action on the pricing side.

Speaker #8: But the strategy here are high-level kind of algorithm remains the same. Eric, you want to talk about the queue? Yeah. Thanks for the question, Jeff.

Eric Hammes: Thanks for the question, Jeff. Good digging. We didn't expect you to get there that fast. What we disclosed in our Q for everybody on the call is that our price methodology changed. I'd say changed slightly. We now calculate price by looking at current quarter price versus prior year full year. The headline really is that's just to reduce volatility. We calculate price internally the way almost every company does by looking at the SKU and the customer. Because we do that, we simply have a better base when we calculate it over the full year.

Speaker #8: Good digging. We didn't expect you to get there that fast, but so, what we disclosed in our queue for everybody on the call is that our price methodology changed—I'd say changed slightly.

Speaker #8: We now calculate price by looking at current quarter price versus prior year full year. And the headline really is that's just to reduce volatility.

Speaker #8: We calculate price internally the way almost every company does by looking at the skew and the customer and because we do that we simply have a better base when we calculate it over the full year.

Speaker #8: If we have regular, normal, predictable cycles of price increases, which are traditionally in roughly the first quarter timeframe, and we do that rhythmically over the years, there's no impact relative to this methodology and any other methodology.

Eric Hammes: If we have regular, you know, normal, predictable cycles of price increases, which are traditionally in roughly the Q1 timeframe, and we do that rhythmically over the years, there's no impact relative to this methodology and any other methodology. If we have any significant off-cycle price changes, you know, that's where you may start to see some effect. This quarter, it was very nominal. It was immaterial in terms of kind of prior method versus current. The headline is we're doing it for reasons of getting a better stable price growth metric, just given how we calculate at the customer and SKU level.

Speaker #8: If we have any significant off-cycle price changes that's where you may start to see some effect. This quarter it was very nominal. It was immaterial in terms of kind of prior method versus current.

Speaker #8: But the headline is we're doing it for reasons of getting a better stable price growth metric just given how we calculate it the customer and skew level.

Speaker #1: Thank you, Jeff. Do you have a follow-up?

Operator: Thank you, Jeff. Do you have a follow-up?

Speaker #9: I'm set. Thank you.

Jeff Johnson: I'm set. Thank you.

Speaker #1: Thank you. Your next question comes from Michael with Jefferies. Please go ahead.

Operator: Thank you. Your next question comes from Michael with Jefferies. Please go ahead.

Speaker #10: Good afternoon, and thanks for taking the question. I just wanted to ask about—I believe you briefly mentioned in your prepared commentary—some headwinds around the Middle East tension.

[Analyst] (Jefferies): Good afternoon, and thanks for taking the question. Just wanted to ask about, you know, I believe you briefly mentioned in your prepared commentary some headwinds around the Middle East tension. Just wanted to get a sense for what you're seeing in terms of input costs, freight costs around inflation and higher oil prices. You know, what's baked into the guide, if anything. If you do see increases in input costs, do you have methods or ways to offset those? Thank you.

Speaker #10: Just wanted to get a sense for what you're seeing in terms of input costs freight costs around inflation and higher oil prices. And what's baked into the guide if anything and if you do see increases in input costs do you have methods or ways to offset those?

Speaker #10: Thank you.

Speaker #8: Yeah. Thanks, Michael. I'll take that. So maybe just at the highest level before I get into the operations side two reinforcing points. Our direct business if you just look at it from a revenue perspective the Middle East is less than 1% of our total revenues.

Eric Hammes: Yeah. Thanks, Michael. I'll take that. Maybe just at the highest level before I get into the operations side, two reinforcing points. Our direct business, if you just look at it from a revenue perspective, the Middle East is less than 1% of our total revenues. If you look at it through the operational lens, we have, I'd call it nominal, very small amount of operations in the Middle East. That really has us primarily focusing on what we would consider kind of the core of your question, which is the second and third order impacts. That's code for, you know, what inflation may end up looking like. I'd just say a couple things on that. One, I would reflect back on, you know, last year's experience that we built through the kind of the whole tariff landscape.

Speaker #8: And if you look at it through the operational lens we have I'd call it nominal very small amount of operations in the Middle East.

Speaker #8: So that really has us primarily focusing on what we would consider kind of the core of your question which is the second and third order impacts that's code for what inflation may end up looking like.

Speaker #8: I'd just say a couple things on that. One, I would reflect back on last year's experience that we built through the kind of the whole tariff landscape.

Speaker #8: We learned a lot, right? We stood up task forces. We did scenario planning. We had teams that mobilized. So while I would wish not wish that on any company I would say we feel stronger as a company having gone through that because it's sort of now a different version of being able to understand your situation.

Eric Hammes: We learned a lot, right? We stood up task forces. We did scenario planning. We had teams that mobilized. You know, while I would not wish that on any company, I would say we feel stronger as a, you know, company having gone through that, because it's sort of now a different version of being able to understand your situation. We have task forces that are in place, have been in place since the beginning of the conflict, and we're focused basically on two areas. One is your question, which is fuel costs and logistics. Our supply chain overall is functioning well. The majority of our supply chain moves through ground transportation.

Speaker #8: We have task forces that are in place have been in place since the beginning of the conflict. And we're focused basically on two areas.

Speaker #8: One is your question which is fuel costs and logistics. Our supply chain overall is functioning well. The majority of our supply chain moves through ground transportation.

Speaker #8: We have like 5% of our total logistic costs and movement that's ocean and air. And that just simply means the disruption is very minimal.

Eric Hammes: We have, like, 5% of our total logistic costs and movement that's ocean and air, that just simply means the disruption is very minimal. We estimate, like, a mid-single digit million-dollar.

Speaker #8: We estimate like a mid-single digit million dollar type of risk from fuel increases and related surcharges. And to your kind of opening question we're working on mitigation to those we don't consider those significant in our guidance and we will mitigate.

Paul Keel: Type of risk from fuel increases and related surcharges. To your kind of opening question, we're working on mitigation to those. We don't consider those significant in our guidance, we will mitigate. We've also done some work on the second piece, which is the more complex piece. That's really just understanding how all of the, you know, oil and polypropylene and chemical feedstocks may create risk to an inflationary environment. I would just say, number one, we have it well understood. Secondly, you know, we have mitigation plans that are in place. Again, drawing from sort of the same, you know, kind of agility that we had to go through last year with tariffs, right?

Eric Hammes: Type of risk from fuel increases and related surcharges. To your kind of opening question, we're working on mitigation to those. We don't consider those significant in our guidance, we will mitigate. We've also done some work on the second piece, which is the more complex piece. That's really just understanding how all of the, you know, oil and polypropylene and chemical feedstocks may create risk to an inflationary environment. I would just say, number one, we have it well understood. Secondly, you know, we have mitigation plans that are in place. Again, drawing from sort of the same, you know, kind of agility that we had to go through last year with tariffs, right?

Speaker #8: Then we've also done some work on the second piece, which is the more complex piece that's really just understanding how all of the oil and polypropylene and chemical feedstocks may create risk to an inflationary environment.

Speaker #8: I would just say number one we have it well understood. And secondly we have mitigation plans that are in place again drawing from sort of the same kind of agility that we had to go through last year with tariffs, right?

Speaker #8: It's looking at your supply chains and making sure that you're shifting source of supply where possible. It's looking at your own cost structure internally and then it's using the lever of price if that should need to be the case.

Paul Keel: It's looking at your supply chains and making sure that you're shifting source of supply where possible. It's looking at your own cost structure internally, and then it's using the lever of price if that should need to be the case. I'd say at this point in time, we haven't made changes to the guidance, but we have contemplated what the risks are and what the mitigations are. Unless something goes, you know, significantly kind of off trend from where it's at, we feel we can mitigate.

Eric Hammes: It's looking at your supply chains and making sure that you're shifting source of supply where possible. It's looking at your own cost structure internally, and then it's using the lever of price if that should need to be the case. I'd say at this point in time, we haven't made changes to the guidance, but we have contemplated what the risks are and what the mitigations are. Unless something goes, you know, significantly kind of off trend from where it's at, we feel we can mitigate.

Speaker #8: So I'd say at this point in time we haven't made changes to the guidance but we have contemplated what the risks are and what the mitigation are and unless something goes significantly kind of off-trend from where it's at we feel we can mitigate.

Speaker #10: Great. Thank you, Eric. And just one other one on the Versa acquisition. I believe you mentioned the system can be used with a broad array of implant systems.

[Analyst] (Jefferies): Great. Thank you, Eric. Just one other one on the Versah acquisition. I believe you mentioned, you know, the system can be used with a broad array of implant systems. From a strategic standpoint, do you have plans to kinda close that off and only make it usable with Envista's implants, or will you keep it open? Thank you.

Speaker #10: From a strategic standpoint do you have plans to kind of close that off and only make it usable with Invista's implants or will you keep it open?

Speaker #10: Thank you.

Paul Keel: No, we'll keep it open. It currently, you know, it's a key attribute to clinicians is the versatility of the system. You know, again, we start from what's best for the clinician, so we'll keep it open.

Speaker #8: No. We'll keep it open. It currently that's a key attribute to clinicians is the versatility of the system. And again we start from what's best for the clinician.

Eric Hammes: No, we'll keep it open. It currently, you know, it's a key attribute to clinicians is the versatility of the system. You know, again, we start from what's best for the clinician, so we'll keep it open.

Speaker #8: So we'll keep it open.

Speaker #10: Great. Thank you.

[Analyst] (Jefferies): Great. Thank you.

Speaker #1: Thank you. Your next question comes from John. With Stifel, please go ahead.

Operator: Thank you. Your next question comes from Jon with Stifel. Please go ahead.

Speaker #11: Hey, guys. Good afternoon. Paul, you reviewed some new products that were recently introduced but I believe the amount that you plowed back into the business in terms of growth investments via the bridge if I'm reading that correctly really was sort of a step function higher.

Jon Block: Hey, guys. Good afternoon. Paul, you reviewed some new products, you know, that were recently introduced. I believe the amount that you plowed back into the business in terms of growth investments via the bridge, if I'm reading that correctly, you know, really was sort of a step function higher. It seems it was solidly higher than what the bridge suggested in Q4 2025 and Q3 2025. Maybe just talk about where the company is with the next wave of innovation. I don't know if you're gonna tell us, you know, where it's focused, but maybe the timeline for some of those initiatives would be helpful.

Speaker #11: It seems it was solidly higher than what the bridge suggested in Q4 '25 and Q3 '25. So maybe just talk about where the company is with the next wave of innovation.

Speaker #11: I don't know if you're going to tell us where it's focused, but maybe the timeline for some of those initiatives would be helpful.

Speaker #8: Yeah. Thanks for the question. John, so starting at the high level the way the model here works is get the top line growing good gross margins generate more gross margin dollars than you could reinvest.

Paul Keel: Yeah. Thanks for the question, Jon. Starting at the high level, you know, the way the model here works is, get the top line growing, good gross margins, generate more gross margin dollars than you could reinvest. Fund every accretive new product development and commercial program that you can, and you're still gonna have more drop to the bottom line until margins will continue to expand. That's a virtuous cycle because as you invest more in growth, you get more of that top line, you get more of the gross margin dollars and, you know, it's a beautiful thing. I think if you look back, I know you look very closely, you know, across the last eight quarters, you see that trend playing out. You're exactly right.

Speaker #8: But fund every accrete of new product development and commercial program that you can. And you're still going to have more drop to the bottom line and so margins will continue to expand.

Speaker #8: That's a virtuous cycle because as you invest more in growth you get more of that top line you get more of the gross margin dollars and it's a beautiful thing.

Speaker #8: And I think if you look back, I know you look very closely across the last eight quarters, you see that trend playing out. So you're exactly right.

Speaker #8: We did put more money into new product development and into front-end commercialization in Q1. Because we had more money to invest, and we think that those investments will generate continued strong growth.

Paul Keel: We did put more money into new product development and into front-end commercialization in Q1 because we had more money to invest, and we think that those investments will generate continued strong growth. Hopefully, we'll be having this conversation in future quarters as well.

Speaker #8: So hopefully we'll be having this conversation in future quarters as well.

Speaker #11: Okay. Fair enough. And maybe just as a second question a lot of focus on implants. I'll take it over to E&C and your performance has been very different than the industry in terms of well outperforming some of the other results.

Jon Block: Okay. Fair enough. Maybe just as a second question, a lot of focus on implants. I'll take it over to Equipment & Consumables. You know, your performance has been very different than the industry in terms of well outperforming some of the other results. Just how do we think about maybe the durability, and you're coming up on difficult comps. I'm just trying to maybe vet that a little bit as, you know, as you lap some of those numbers. Again, I don't think the consumable industry nor diagnostics is a high single digit, let alone low double digit grower. Just thoughts on how you're performing against industry, and then any shout out in terms of how we should think about it considering the comps going forward. Thanks.

Speaker #11: So just how do we think about maybe the durability and you're coming up on difficult comps and I'm just trying to maybe vet that a little bit as you lap some of those numbers and again I don't think the consumable industry nor diagnostics is a high single digit let alone low double digit grower.

Speaker #11: Just thoughts on how you're performing against industry and then any shout out in terms of how we should think about it considering the comps going forward.

Speaker #11: Thanks.

Speaker #8: Yeah. Let me take the two components of E&C in turn starting with the consumables piece. Yes, I think you're right. We over the past several quarters have clearly outgrown the consumables market.

Paul Keel: Yeah. Let me take the two components of E and C in turn, starting with the consumables piece. Yes, I think you're right. We over the past several quarters have clearly outgrown the consumables market. I think we benefit from a couple of things in that regard. The first is, remember, our Metrex business is part of our consumables, the antimicrobial infection prevention business. That has just done very well, has captured a lot of share, and has had a couple meaningful, high impact, new products. We talked about one in the last call. We have a hydrogen peroxide version of a surface disinfectant that's unique on the market. Customers really like it, that has really captured a lot of share.

Speaker #8: I think we benefit from a couple of things in that regard. The first is, remember our metrics business is part of our consumables, the antimicrobial infection prevention business.

Speaker #8: That has just done very well, has captured a lot of share, and has had a couple of meaningful, high-impact new products. We talked about one in the last call.

Speaker #8: We have a hydrogen peroxide version of a surface disinfectant that's unique on the market. Customers really like it and that has really captured a lot of share.

Paul Keel: Second thing, in consumables, you know, echoing a prior question, it's one of the categories that we have found tends to be less price elastic. You know, it's such a small portion of total clinical spend that, you know, a couple percentage increase in the cost of a consumable is a no percentage increase in the cost of a procedure. We probably benefit a little more from price in consumables. To the extent that we focus on that more than others in the market, that would explain a bit of that delta. Coming to diagnostics, we've also outgrown the market. I think we talk about that on every quarter. That's principally driven by 3 things, Jon.

Speaker #8: Second thing in consumables echoing a prior question it's one of the categories that we have found tends to be less price elastic. It's such a small portion of total clinical spend that a couple percentage increase in the cost of a consumable is a no percentage increase in the cost of a procedure.

Speaker #8: So we probably benefit a little more from price in consumables. And to the extent that we focus on that more than others in the market that would explain a bit of that delta.

Speaker #8: Coming to diagnostics we've also outgrown the market. I think we talk about that on every quarter. That's principally driven by three things, John. The first is the very strong install base and strong brand.

Paul Keel: The first is this very strong install base and strong brand of DEXIS. As that market starts to turn back positive, you know, what do we have? Three years of compression. We get more than our fair share because we have such a strong presence there. The second piece related to diagnostics is that has been a very strong new product generator for us. We had a couple of very big launches at the end of 2024, the new CBCT platform. Then, last year, of course, we had the very big IOS launch with Imprevo. That has made a big impact.

Speaker #8: Dexus. As that market starts to turn back positive what do we have three years of compression we get more than our fair share because we have such a strong presence there.

Speaker #8: The second piece related to diagnostics is that has been a very strong new product generator for us. We had a couple very big launches at the end of 2024 the new CBCT platform.

Speaker #8: And then last year, of course, we had the very big iOS launch with Imprevo. That has made a big impact. And then the third thing I would say in diagnostics—this is as much a market comment as it is a Dexus comment—is that software is really making an impact in diagnostics.

Paul Keel: The third thing I would say in diagnostics, this is as much a market comment as it is a Dexis comment, is software is really making an impact in diagnostics. You know, this used to be principally a hardware game, but now, differentiated software and the various AI-enabled solutions that, you know, I know you see when you walk through the booths at the trade show, that's really very exciting stuff. Because we have the largest installed base, we, I think, can have the biggest impact for customers on these sorts of digital add-ons. I think all of that is the reason that we're outgrowing the market in E&C, both on the consumable side and on the diagnostic side.

Speaker #8: This used to be principally a hardware game. But now differentiated software and the various AI-enabled solutions that I know you see when you walk through the booths at the trade show.

Speaker #8: That's really very exciting stuff. Because we have the largest install base I think and have the biggest impact for customers on these sorts of digital add-ons.

Speaker #8: And so I think all of that is the reason that we're outgrowing the market in E&C both on the consumable side and on the diagnostic side.

Speaker #11: All set. Thank you, guys.

Jon Block: All set. Thank you, guys.

Speaker #1: Thank you. Your next question comes from Aaron with Morgan Stanley. Please go ahead.

Operator: Thank you. Your next question comes from Erin with Morgan Stanley. Please go ahead.

Speaker #3: Great. Thank you. And good evening. So on capital deployment you did announce a buyback $300 million or buyback program. I guess I want to make sure none of that's embedded in guidance today that would offer incremental upside to EPS.

Erin Wright: Great. Thank you and good evening. On capital deployment, you did announce a buyback, $300 million or buyback program. I guess, you know, I wanna make sure none of that's embedded in guidance today that would offer incremental upside to EPS. How are you weighing just M&A versus buybacks? You had a small tuck-in. You know, are there a lot of attractive dinks and dunks out there in certain markets? Like, what are you looking at? What is the acquisition pipeline? I guess, how would you characterize it? Thanks.

Speaker #3: And then how are you weighing just M&A versus buybacks? You had a small tuck-in. Are there a lot of attractive dings and dunks out there in certain markets?

Speaker #3: What are you looking at? What is the acquisition pipeline? I guess, how would you characterize it? Thanks.

Paul Keel: Yeah, thanks, Erin, for the question. Let me start with the H1 with capital deployment, and I'll just reiterate our priorities. Our highest priority clearly remains organic growth. You know, as Jon asked about in the previous question, we've ramped both our commercial and new product investments over the past several quarters. We still see the highest risk-adjusted return on any marginal dollar to be a good organic program. That tops the list. We come onto the H2 of your question, our second priority being accretive M&A. We have done three small deals in the last year or so. Maybe I'll say just a bit more about each in 1 minute here.

Speaker #8: Yeah. Thanks, Aaron. For the question let me start with the first half with capital deployment and I'll just reiterate our priorities. Our highest priority clearly remains organic growth.

Speaker #8: As John asked about in the previous question, we've ramped both our commercial and new product investments over the past several quarters. And we still see the highest risk-adjusted return on any marginal dollar to be a good organic program.

Speaker #8: So that tops the list. We come on to the second half of your question. Our second priority being accretive M&A. We have done three small deals in the last year or so.

Speaker #8: Maybe I'll say just a bit more about each in a minute here. But all we're accretive in terms of purchase multiple and financial contribution.

Paul Keel: All were accretive in terms of purchase multiple and financial contribution, so we like those. Again, embedded in your question, our third priority is returning surplus cash to shareholders. You know, the incremental $300 million authorization that we announced today, we initiated Envista's first-ever repurchase program in Q1 of last year. Now specific to acquisitions, you know, of course, we have a very experienced M&A team, you know, over the last 25 years as Envista's been put together that had a big M&A component to it. We're well networked across the global dental space, and we continue to see a steady stream of opportunities across the portfolio. For us, we're remaining highly disciplined.

Speaker #8: So we like those. And then again, embedded in your question, our third priority is returning surplus cash to shareholders. The incremental $300 million authorization that we announced today, and then we initiated Envista's first ever repurchase program in Q1 of last year.

Speaker #8: To now specific to acquisitions of course, we have a very experienced M&A team over the last 25 years as Invista has been put together that had a big M&A component to it.

Speaker #8: And so we're well networked across the global dental space. And we continue to see a steady stream of opportunities across the portfolio. So for us, we're remaining highly disciplined.

Speaker #8: We're focused on those strategically aligned targets that offer the accretive economics that I just mentioned. So let me just kind of walk through the three deals we did.

Paul Keel: We're focused on those strategically aligned targets that offer the accretive economics that I just mentioned. Let me just kinda walk it through the three deals we did. We like bolt-on acquisitions in areas of existing strength. The Versah deal that we talked about previously is a great example of that. We're working to better balance our overall implants weighting by increasing our challenger penetration. One of the small deals we did last year nicely fits that description. A third area that we're spending time on is further strengthening our presence in targeted international markets. One of the small deals we did last year was in Turkey, and that's a good example of that third category.

Speaker #8: We like bolt-on acquisitions. In areas of existing strength, diverse deal that we talked about previously is a great example of that. We're working to better balance our overall implants weighting by increasing our challenger penetration one of the small deals we did last year nicely fits that description.

Speaker #8: And then a third area that we're spending time on is further strengthening our presence in targeted international markets. So one of the small deals we did last year was in Turkey.

Speaker #8: And that's a good example of that third category. In totality, we see plenty of additional runway for us on organically led value creation. But we do have a good M&A capability.

Paul Keel: You know, in totality, we see plenty of additional runway for us on organically led value creation. We do have a good M&A capability, and so we view acquisitions as a, you know, as a supplementary arrow in our quiver.

Speaker #8: And so we view acquisitions as a supplementary arrow in our quiver.

Speaker #3: Okay, great. And then on Spark and Ortho, can you talk a little bit about the strategy there—where it stands today with brackets and wires and Spark? What's the go-to-market strategy?

Erin Wright: Okay, great. Then on Spark and on ortho, just can you talk a little bit about kind of the strategy there, where it stands today, brackets and wires and Spark? What's the go-to-market strategy? How has it evolved? Any changes that you're seeing from a competitive landscape standpoint on that front? Thanks.

Speaker #3: How has it evolved? And any changes that you're seeing from a competitive landscape standpoint on that front? Thanks.

Speaker #8: Yeah. So with Ortho started the highest level it remains a highly under-penetrated category. Something like 5% of all clinically appropriate cases where the patient has the wherewithal to pay get treated in any given year.

Paul Keel: Yeah. With ortho, start at the highest level, it remains a highly under-penetrated category. You know, something like 5% of all clinically appropriate cases where the patient has the wherewithal to pay, get treated in any given year. You know, it's a hugely under-penetrated category. Kinda one click down, roughly three-quarters of all cases get treated with brackets and wires. About a quarter get treated with clear aligners. That mix has been largely stable over the past couple of years. You know, it moves a little bit quarter by quarter, but that mix is, you know, relatively stable. And our competitive advantage is that we're the only scaled player who has a, you know, a decent size offering in both.

Speaker #8: So it's a hugely under-penetrated category. Kind of one-click down roughly three-quarters of all cases get treated with brackets and wires about a quarter get treated with clear aligners.

Speaker #8: That mix has been largely stable over the past couple of years. It moves a little bit quarter by quarter. But that mix is relatively stable.

Speaker #8: And our competitive advantage is that we're the only scaled player who has a decent-sized offering in both. We're clearly the market leader on the traditional fixed orthodontic side.

Paul Keel: We're clearly the market leader on the traditional fixed orthodontic side and now serving orthodontists. We're, you know, a strong number two in the clear aligner segment. I'm, you know, having spent a lot of time in orthodontists' offices, you know, I know they value two things in particular from Ormco. The first is that we've been there for 60 years, been a market leader. The second is that we don't tell them how to treat. We know that they're the experts. We give them the tools, whether they be brackets and wires or clear aligners, to treat a particular patient in a particular case in the way that they know how.

Speaker #8: And now serving orthodontists, we're a strong number two in the clear aligner segment. And having spent a lot of time in orthodontist's office is I know they value two things in particular from Ormco.

Speaker #8: The first is that we've been there for 60 years, been a market leader. And the second is that we don't tell them how to treat.

Speaker #8: We know that they're the experts. We give them the tools whether they be brackets and wires or clear aligners to treat a particular patient in a particular case in the way that they know how.

Speaker #8: And I think that is why we continually outgrow the market and have captured share—certainly six straight years if not 20-something straight quarters.

Paul Keel: I think that is why we continually outgrow the market and, you know, have captured share certainly six straight years, if not twenty something straight quarters.

Speaker #3: Okay. Thank ank you.

Erin Wright: Okay. Thank you.

Speaker #1: Thank you. Your next question comes from Glenn with Barclays. Please go ahead.

Operator: Thank you. Your next question comes from Glenn with Barclays. Please go ahead.

Speaker #8: Oh, yeah. Thanks for taking my question. Hey Eric, I just had a quick sort of financial question. I was sort of hoping we could dig into that core growth number of 9.5%.

[Analyst] (Barclays): Oh, yeah. Thanks for taking my question. Hey, Eric, I just had a quick sort of financial question. I was sort of hoping we could dig into that core growth number of 9.5%. You know, looking back to last year, obviously you raised prices due to the tariffs. I'm trying to, you know, parse out how meaningful of an impact that was on a year-over-year basis. Sort of looking at the cadence of your guidance, I'm trying to figure out how big of a headwind that'll be in Q3 this year. Ultimately in Q4, you have that headwind as well as sort of the days issue that you're benefiting from this quarter. I just want to make sure I understand the cadence of Q2, Q3, and Q4 correctly. Thanks so much.

Glen Santangelo: Oh, yeah. Thanks for taking my question. Hey, Eric, I just had a quick sort of financial question. I was sort of hoping we could dig into that core growth number of 9.5%. You know, looking back to last year, obviously you raised prices due to the tariffs. I'm trying to, you know, parse out how meaningful of an impact that was on a year-over-year basis. Sort of looking at the cadence of your guidance, I'm trying to figure out how big of a headwind that'll be in Q3 this year. Ultimately in Q4, you have that headwind as well as sort of the days issue that you're benefiting from this quarter. I just want to make sure I understand the cadence of Q2, Q3, and Q4 correctly. Thanks so much.

Speaker #8: And looking back to last year, obviously, you raised prices due to the tariffs. I'm trying to parse out how meaningful of an impact that was on a year-over-year basis, because sort of looking at the cadence of your guidance, I'm trying to figure out how big of a headwind that'll be in Q3 this year. And then ultimately, in Q4, you have that headwind as well as sort of the days issue that you're benefiting from this quarter.

Speaker #8: So I just want to make sure I understand the cadence of Q2, Q3, and Q4 correctly. Thanks so much.

Speaker #5: Yeah. Perfect. Let me try to hit all that, Glenn. So maybe just to start off with the growth in Q1, if you just look at the bridge that we provided effectively, what we're telling you is 9.5% reported core growth.

Eric Hammes: Yeah, perfect. Let me try to hit all that, Glenn. Maybe just to start off with the growth in Q1, if you just look at the bridge that we provided, effectively what we're telling you is 9.5% reported core growth. Take the billing days out, take a little bit of the deferral gain out. Our quote, normalized growth was about 4%. That's just the piece on Q1. You know, I think coincidentally, if you were to look at our same breakdown of growth last year, our published core growth result, 6.5%, we also said it normalized to about 4%, and that was mostly with a little bit of distribution and channel in there and then Spark deferral.

Speaker #5: Take the billing days out. Take a little bit of the deferral gain out. Our "normalized" growth was about 4%. So that's just the piece on Q1.

Speaker #5: I think, coincidentally, if you were to look at our same breakdown of growth last year, our published core growth result—6.5—was also, when normalized, set to about 4.

Speaker #5: And that was mostly with a little bit of distribution and channel in there. And then Spark deferral. So I think that's maybe the first way just to think about the business is we're on this relatively close normalized 4% core growth.

Eric Hammes: I think that's maybe the first way just to think about the business is we're on this, you know, relatively close normalized 4% core growth. As you think about the cadence for the next couple quarters, I would say, you know, our guidance range 2% to 4% for the year is a good way to think about Q2 and Q3. The data that we effectively gave you on the 4.5% impact in Q1 relative to billing days is something you should be, you know, taking out of Q4, if you will. That means Q4 could be low to mid-single digit negative with the underlying business still performing well. If I caught it right on price, I mean, I wouldn't differentiate price in there.

Speaker #5: As you think about the cadence for the next couple of quarters, I would say our guidance range—2 to 4 percent for the year—is a good way to think about Q2 and Q3.

Speaker #5: And then the data that we effectively gave you on the 4.5% impact in Q1 relative to billing days is something you should be taking out of Q4, if you will.

Speaker #5: That means Q4 could be low to mid-single-digit negative, with the underlying business still performing well. And then if I caught it right on price, I mean, I wouldn't differentiate price in there.

Speaker #5: The prices that we put in place last year around mid-year, we're going to continue to see in our growth rate as we go through second quarter.

Eric Hammes: You know, the prices that we put in place last year around midyear, we're gonna continue to see in our growth rate as we go through Q2. What we've talked about, I think in our Q4 call, is that pricing would resume to be sort of more in the normal range x the impact of China.

Speaker #5: And then what we've talked about, I think in our Q4 call, is that pricing would resume to be sort of more in the normal range X the impact of China.

Speaker #8: Okay, I appreciate all that. And I guess only one of the reasons I was asking is because the way you worded the press release, you sort of suggested Q2 and Q3 should sort of be in that published range.

[Analyst] (Barclays): Okay. I appreciate all that. I guess only the, you know, one of the reasons I was asking, because the way you worded the press release, you sort of suggested Q2 and Q3 should sort of be in that published range. If you're anniversarying those price increases that you put in place in the middle of the year, wouldn't Q3 theoretically grow slower than Q2, all other things being equal?

Glen Santangelo: Okay. I appreciate all that. I guess only the, you know, one of the reasons I was asking, because the way you worded the press release, you sort of suggested Q2 and Q3 should sort of be in that published range. If you're anniversarying those price increases that you put in place in the middle of the year, wouldn't Q3 theoretically grow slower than Q2, all other things being equal?

Speaker #8: But if your anniversary and those price increases that you put in place in the middle of the year, wouldn't three Q theoretically grow slower than two Q all other things being equal?

Speaker #5: Yeah. I mean, all other things being equal, yes. But of course, we've got a business portfolio and a bunch of other dynamics. So think about it as being midpoint of our guidance range, within our guidance range, as the right instructive view of Q2 and Q3.

Eric Hammes: Yeah. I mean, all other things being equal, yes. Of course, we've got, you know, a business portfolio and a bunch of other dynamics. Think about it as being, you know, midpoint of our guidance range within our guidance range as the right instructive view of Q2 and Q3.

Speaker #8: Perfect. Thanks for all the details.

[Analyst] (Barclays): Perfect. Thanks for all the details.

Glen Santangelo: Perfect. Thanks for all the details.

Speaker #1: Thank you. Your next question comes from Jason with Piper Sandler. Please go ahead.

Operator: Thank you. Your next question comes from Jason with Piper Sandler. Please go ahead.

Speaker #6: Hey, guys. Apologies for any background noise—I'm at the airport here. But I wanted to ask first about Spark. I think it's been a little while since you updated us on where you stand with the percentage of your Ormco accounts that are currently using Spark.

Jason Bednar: Hey, guys. Apologies for any background noise. I'm at the airport here. Wanted to ask first on Spark. I think it's been a little while since you updated us on where you stand with the percentage of your Ormco accounts that are currently using Spark. Just any details you can provide there just so we can have a sense of, you know, kind of the runway in front of you.

Speaker #6: Just any details you can provide there, just so we can have a sense of the kind of runway in front of you.

Speaker #3: Oh, you're testing my memory here. Jason, on what those figures are—I don't have them to mind. But the general takeaway is that there's still quite a bit of runway left in terms of our core bracket and wire users.

Paul Keel: Oh, you're testing my memory here, Jason, on what those figures are. I don't have them to mind, but the general takeaway is that there's still quite a bit of runway left in terms of our core bracket and wire users converting across. That's true both in individual clinics. It's especially true in DSOs. You heard one of our, you know, our peers report, they do quite well with DSOs, and so we have a big opportunity there to gain share. The second thing I would say is that, you know, now Spark is a big enough business that it's no longer focused just on the core Ormco users as it was when we first started out, and now it's calling on all orthodontists.

Speaker #3: Converting across— that's true both in individual clinics, and it's especially true in DSOs. You heard one of our peers report they do quite well with DSOs.

Speaker #3: And so we have a big opportunity there to gain share. And then the second thing I would say is that now Spark is a big enough business that it's no longer focused just on the core Ormco users, as it was when we first started out.

Speaker #3: Now it's calling on all orthodontists, and although we had the leading market share in orthodontists—orthodontics, of course—we don't have 100% share.

Eric Hammes: Although we had a, you know, the leading market share in orthodontics, of course, we don't have 100% share. The takeaway would be plenty of room to run still in orthodontics.

Paul Keel: Although we had a, you know, the leading market share in orthodontics, of course, we don't have 100% share. The takeaway would be plenty of room to run still in orthodontics.

Speaker #3: So the takeaway would be plenty of room to run still in orthodontics.

Speaker #8: Okay. All right. Yeah. Fair enough. That's totally—I appreciate that. Now, Paul, I'll ask a bigger-picture follow-up. And look, you guys have navigated the last couple of years since you've been at Envista extremely, extremely well, taken some share, turned the business around—deserve a lot of credit.

Jason Bednar: Okay. All right. Yeah, fair enough. That's Totally appreciate that. Now, Paul, I'll ask a bigger picture follow-up. Look, you guys have navigated this the last couple of years since you've been at Envista extremely well, taken some share, turned the business around, deserve a lot of credit. Just maybe on a go-forward basis, trying to think about, you know, how do you still win with your pricing strategy? How do you think about your innovation and pricing strategy knowing that these secular headwinds in dental aren't going away? It seems like inflation and some of the things we're looking at with fuel are, you know, We're hearing more about driving to private label and lower priced equipment, lower priced consumables.

Speaker #8: Just maybe, on a go-forward basis, trying to think about how do you still win with your pricing strategy, or how do you think about your innovation and pricing strategy, knowing that these secular headwinds in dental aren't going away?

Speaker #8: It seems like inflation and some of the things we're looking at with fuel, or we're hearing more about, are driving a shift to private label and lower-priced equipment, lower-priced consumables.

Speaker #8: So I guess, how do you think about, again, wrapping this all together with your innovation and pricing strategy, how do you think about Envista going forward in that landscape?

Jason Bednar: I guess, how do you think about, again, wrapping this all together with your innovation and pricing strategy, how do you think about Envista going forward in that landscape?

Speaker #3: Yeah, I mean, that's what's great about dental. It's a global market. Unlike every other healthcare category on the planet, every single person is a potential patient.

Paul Keel: Yeah, I mean, that's what's great about dental. You know, it's a global market. Unlike every other healthcare category on the planet, every single person is a potential patient. There's no end to the opportunity in the category, and it has persistent excess demand over supply. That's just what propels dental as a category to outgrow the broader market, you know, essentially every single year. We're a beneficiary of that. You know, as you know, our strategy is mostly to take advantage of that rising tide to execute well and to try to bring our performance up in line with the potential that the market and this collection of businesses offers. You know, over time, Eric and I have been in dental now for 20 something years.

Speaker #3: So, there's no end to the opportunity in the category, and it has persistent excess demand over supply. So that's just what propels dental as a category to outgrow the broader market essentially every single year.

Speaker #3: So, we're a beneficiary of that. As you know, our strategy is mostly to take advantage of that rising tide, to execute well, and to try to bring our performance up in line with the potential that the market and this collection of businesses offers.

Speaker #3: Over time, Eric and I have been in dental now for 20-something years. If you take care of your customers, you take care of your colleagues, the rest pretty well takes care of itself over time.

Paul Keel: If you take care of your customers, you take care of your colleagues, you know, the rest pretty well takes care of itself over time.

Speaker #8: All right. Thanks so much.

Jason Bednar: All right. Thanks so much.

Speaker #1: Thank you. Your next question comes from Daniel with Citi. Please go ahead.

Operator: Thank you. Your next question comes from Daniel with Citi. Please go ahead.

Speaker #9: Hi, guys. Thanks for taking the question. I want to focus a little bit on EBITDA margin cadence for the remainder of the year. Obviously, a good result this quarter.

[Analyst] (Citi): Hi, guys. Thanks for taking the question. I want to focus a little bit on EBITDA margin cadence for the remainder of the year. Obviously a good result this quarter, even with that step up in growth in-investments. As we think about the remainder of the year, how are you looking to pace growth investments, particularly given the headwind you'll face from fewer selling days in Q4? I guess in tandem with that, how are you thinking about realizing productivity benefits for the remainder of the year across both the manufacturing productivity and G&A productivity? Thanks.

Daniel Grosslight: Hi, guys. Thanks for taking the question. I want to focus a little bit on EBITDA margin cadence for the remainder of the year. Obviously a good result this quarter, even with that step up in growth in-investments. As we think about the remainder of the year, how are you looking to pace growth investments, particularly given the headwind you'll face from fewer selling days in Q4? I guess in tandem with that, how are you thinking about realizing productivity benefits for the remainder of the year across both the manufacturing productivity and G&A productivity? Thanks.

Speaker #9: Even with that step up in growth investments, as we think about the remainder of the year, how are you looking to pace growth investments, particularly given the headwind you'll face from fewer selling days in Q4?

Speaker #9: And I guess, in tandem with that, how are you thinking about realizing productivity benefits for the remainder of the year across both the manufacturing productivity and G&A productivity?

Speaker #9: Thanks.

Speaker #8: Yeah, excellent. Hey Daniel, welcome to dental and Envista. Look forward to meeting you in the next couple of hours here. So, I think a couple of questions within there.

Eric Hammes: Yeah, excellent. Hey, Daniel, welcome to Dental and Envista. Look forward to meeting you in the next couple of hours here. I think a couple questions within there. The first one I would say on the growth investment piece, you know, you should think about our bridge that we provided this quarter and the significant, you know, margin impact from growth investments, which Paul well described as fueling our R&D and future growth, as primarily being investments that we put in the business in 2025. Q1 is really comping against a lower investment quarter last year. That just means that the, you know, the ramp, if you will, isn't as significant as we see things moving sequentially. I think that's one important point to consider.

Speaker #8: The first one I would say on the growth investment piece, you should think about our bridge that we provided this quarter and the significant margin impact from growth investments, which Paul well described as fueling our R&D and future growth.

Speaker #8: As primarily being investments that we put in the business in 2025, and Q1 is really comping against a lower investment quarter last year, that just means that the ramp, if you will, isn't as significant as we see things moving sequentially.

Speaker #8: So I think that's one important point to consider. To the point of your margin rate question, I would think about Q2 and Q3 being at a roughly similar margin rate to what we just printed in Q1.

Eric Hammes: To the point of your margin rate question, I would think about Q2 and Q3 being at a roughly similar margin rate than we just printed in Q1. Because we have better revenue dollars, a little bit of cyclicality in Q4, that's where we'll see slightly better, you know, margin rates that get us to the roughly midpoint of our 7% to 13% adjusted EBITDA growth. I think on the productivity, you know, side of the equation, I would just say our playbook and the contribution to margins is really pretty similar, right? We're gonna, you know, cadence our growth investments to be, you know, sort of in line with how we're gonna grow.

Speaker #8: And because we have better revenue dollars, a little bit of cyclicality in Q4, that's where we'll see slightly better margin rates that get us to the roughly midpoint of our 7 to 13 percent adjusted EBITDA growth.

Speaker #8: And then I think, on the productivity side of the equation, I would just say our playbook and the contribution to margins is really pretty similar, right?

Speaker #8: We're going to cadence our growth investments to be, sort of, in line with how we're going to grow. But we will continue to use G&A as we have in the past to be able to help create margin opportunities and fund sales, marketing, and R&D.

Eric Hammes: We will continue to use G&A as we have in the past to be able to help, you know, create margin opportunities and fund, you know, sales, marketing and R&D. Hopefully that gets you home. If you need more, you know, detail, we can get you offline.

Speaker #8: So hopefully that gets you home. If you need more detail, we can get you offline.

Speaker #9: Yep. Sounds good. Thanks, guys.

[Analyst] (Citi): Yep. Sounds good. Thanks, guys.

Daniel Grosslight: Yep. Sounds good. Thanks, guys.

Speaker #1: All right. Thank you so much, everyone. It is now time for the end of the meeting. There are no further questions that will be taken.

Operator: All right. Thank you so much, everyone. It is now time for the end of the meeting. There are no further questions that will be taken. I will move the call over to Paul Keel. Please go ahead.

Speaker #1: I will move the call over to Paul Keel. Please go ahead.

Speaker #8: All right. Hey, thanks, everybody, for tuning in and for the thoughtful questions. It really is a pleasure to work with a group of investors.

Paul Keel: All right. Hey, thanks everybody for tuning in and for the thoughtful questions. It really is a pleasure to work with a group of investors who know the market and the players so well. It leads for a very kind of rich and helpful discussion. I'll briefly underline just a couple of thoughts by way of wrap up on the quarter. First, Q1 was another solid step forward for Envista. We had double digit sales, adjusted EBITDA, and EPS growth. Secondly, our performance was broad-based. All our major businesses and most geographies posted strong performance. We had good contribution again from volume, price, and new products. Thirdly, we continue to focus on executing our value creation plan.

Speaker #8: The market and the players so well. It leads for a very kind of rich and helpful discussion. I'll briefly underline just a couple of thoughts by way of wrap-up on the quarter.

Speaker #8: First, Q1 was another solid step forward for Envista. We had double-digit sales, adjusted EBITDA, and EPS growth. Secondly, our performance was broad-based. All our major businesses and most geographies posted strong performance.

Speaker #8: And we had good contribution, again, from volume, price, and new products. Thirdly, we continued to focus on executing our value creation plan. And I think we have demonstrated ongoing progress on all three of our growth, operations, and people priorities.

Paul Keel: I think we have demonstrated ongoing progress on all three of our growth operations and people priorities. Then fourth, today we announced an incremental $300 million share repurchase authorization and reaffirmed our 2026 full year guidance. I think I'll leave it there for now. Have a good day and a great week, everyone.

Speaker #8: And then, fourth, today we announced an incremental $300 million share repurchase authorization, and reaffirmed our 2026 full-year guidance. So I think I'll leave it there for now.

Speaker #8: Have a good day and a great week, everyone.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.