Q2 2026 Dentsply Sirona Inc Earnings Call

August 6, 2026

Operator: Good day. Thank you for standing by. Welcome to Dentsply Sirona's Q2 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Wade Moody, investor relations. Please go ahead.

Speaker #1: question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone. You'll then hear an automated message advising your hand is please press *11 again.

Speaker #1: Moody, investor relations. Please go ahead.

Speaker #1: Moody, investor relations. Please go ahead. conference is being recorded. Thank you, operator, and good afternoon,

Wade Moody: Thank you, operator, and good afternoon, everyone. Welcome to the Dentsply Sirona Q2 2026 earnings call. Joining me for today's call are Dan Scavilla, President and Chief Executive Officer, and John Fortson, Executive Vice President and Chief Financial Officer. I'd like to remind you that an earnings press release and slide presentation related to the call are available on the investors section of our website at www.dentsplysirona.com. Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we may make certain forward-looking statements that reflect our current views about future performance and financial results. We base these statements on certain assumptions and expectations on future events that are subject to risks and uncertainties.

Speaker #2: everyone. Welcome to the DENTSPLY SIRONA second quarter, 2026 earnings call. Joining me for today's call are Dan Scavilla, president and chief executive officer, and John Fortsen, executive vice president and chief financial officer.

Speaker #2: I'd like to remind you that an earnings press release and slide presentation related to the call are available on the investor section of our website at www.dentsplysirona.com.

Speaker #2: Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we may make certain forward-looking statements that reflect our current views about future performance and financial results.

Speaker #2: We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recently filed Form 10-K and any updated information in subsequent Form 10-Q or other SEC filings list some of the most important risk factors that could cause actual results to differ from our predictions.

Wade Moody: Our most recently filed Form 10-K, and any updated information in subsequent Form 10-Q or other SEC filings list some of the most important risk factors that could cause actual results to differ from our predictions. On today's call, our remarks will be based on non-GAAP financial results. We believe that non-GAAP financial measures offer investors valuable additional insights into our business's financial performance, enable the comparison of financial results between periods where certain items may vary independently of business performance, and enhance transparency regarding key metrics utilized by management in operating our business. Please refer to our press release for the reconciliation between GAAP and non-GAAP results. Comparisons provided are to the prior year quarter, unless otherwise noted. A webcast replay of today's call will be available on the investors section of the company's website following the call.

Speaker #2: On today's call, our remarks will be based on non-GAAP financial results. We believe that non-GAAP financial measures offer investors valuable additional insights into our business's financial performance and enable the comparison of financial results between periods where certain items may vary independently of business performance and enhance transparency regarding key metrics utilized by management and operating our business.

Speaker #2: Please refer to our press release for the reconciliation between GAAP and non-GAAP results. Comparisons provided are to the prior year quarter unless otherwise noted.

Speaker #2: A webcast replay of today's call will be available on the investor section of the company's website following the call. And with that, I will now turn the call over to Dan.

Wade Moody: With that, I will now turn the call over to Dan.

Speaker #3: Thanks, Wade, and good afternoon, everyone.

Dan Scavilla: Thanks, Wade, good afternoon, everyone. Before we discuss the quarter, I would like to welcome John Fortson to his first earnings call as Executive Vice President and Chief Financial Officer of DENTSPLY SIRONA. John joined us on 20 July, and we are excited to have him on board. He is a proven finance and business leader who has worked closely with CEOs and boards through periods of transformation, strengthening operations, allocating capital with discipline, and creating long-term shareholder value. Having served both as a public company CFO and CEO, his experience is well aligned both with where DENTSPLY SIRONA is today and where we are headed in the future. I am glad he is on our team. I would also like to thank Michael Pomeroy for his leadership as interim CFO. I sincerely appreciate his contributions. With that, I will turn the call over to John to review our Q2 2026 financial results.

Speaker #2: Before we discuss the quarter, I'd like to welcome John Fortsen to his first earnings call as executive vice president and chief financial officer

Speaker #1: DENTSPLY SIRONA Inc. John joined us on July 20th , and we're excited to have him on board . He is a proven finance and business leader who has worked closely with CEOs and boards through periods of transformation , strengthening operations , allocating capital with discipline , and creating long term shareholder value Having served both as a public company , CFO and CEO , his experience is well aligned , both with where Dentsply Sirona is today and where we're headed in the future .

Speaker #1: I'm glad he's on our team . I'd also like to thank Mike Pomeroy for his leadership as interim CFO . I sincerely appreciate his contributions With that , I'll turn the call over to John to review our second quarter 2020 financial results

Speaker #2: Thanks , Dan , and good afternoon , everyone . First off , I'd like to say it's a privilege to join Dentsply Sirona , having followed the company for many years .

John Fortson: Thanks, Dan, good afternoon, everyone. First off, I would like to say it is a privilege to join DENTSPLY SIRONA. Having followed the company for many years, I am familiar with the strength of its portfolio and energized by the opportunity to help restore the business to its full potential. What ultimately drew me here was the clear commitment from the board and the leadership team to execute the discipline turnaround. There is a strong focus on operational excellence and long-term value creation. Although I have only been with the company for a few weeks, I am hitting the ground running and ready to execute the Return to Growth action plan with the team. Let us move to Q2 results on slide four. Our Q2 2026 revenue was $898 million, representing a decrease of 4.1% as reported, or 6.3% on a constant currency basis.

Speaker #2: I am familiar with the strength of its portfolio and energized by the opportunity to help restore the business to its full potential . What ultimately drew me here was the clear commitment from the board and the leadership team to execute a disciplined turnaround .

Speaker #2: There is a strong focus on operational excellence and long term value creation . Although I've only been with the company for a few weeks , I'm hitting the ground running and ready to execute the return to growth action plan with the team Let's move to Q2 results on slide four .

Speaker #2: Our second quarter 2020 revenue was $898 million , representing a decrease of 4.1% . As reported , or 6.3% on a constant currency basis Adjusting for the impact from Bite and the planned dealer inventory reduction of approximately $8 million in the quarter , revenue declined 3.6% on a constant currency basis , adjusted EBITDA margins were approximately flat year over year , with the benefit from $44 million in tariff refunds , offset by a decline in gross profit driven by lower volumes , sales mix and incremental tariff impacts .

John Fortson: Adjusting for the impact from Byte and the planned dealer inventory reduction of approximately $8 million in the quarter, revenue declined 3.6% on a constant currency basis. Adjusted EBITDA margins were approximately flat year-over-year, with the benefit from $44 million in tariff refunds offset by a decline in gross profit driven by lower volumes, sales mix, and incremental tariff impacts. OpEx was up $12 million year-over-year, including a FX headwind of approximately $8 million. A decrease in G&A was offset by investments made into sales, marketing, and R&D as was planned in support of the Return to Growth action plan. Adjusted EPS in the Q2 was flat versus last year at $0.52. The tariff refunds translated into a $+0.17 per share impact. Operating cash flow in the quarter was $99 million compared to $48 million in the prior year Q.

Speaker #2: OpEx was up $12 million year over year , including a FX headwind of approximately $8 million . A decrease in G and A was offset by investments made into sales , marketing and R&D .

Speaker #2: As was planned in support of the return to growth Action Plan . Adjusted EPS in the second quarter was flat versus last year at $0.52 .

Speaker #2: The tariff refunds translated into a positive $0.17 per share impact . Operating cash flow in the quarter was $99 million , compared to $48 million in the prior year quarter .

Speaker #2: The year over year increase is primarily attributable to the receipt of the tariff refunds . In addition to improvements in working capital with better management of accounts payable and inventory , we continue to remain diligent on improving our working capital .

John Fortson: The year over year increase is primarily attributable to the receipt of the tariff refunds, in addition to improvements in working capital with better management of accounts payable and inventory. We continue to remain diligent on improving our working capital. This will be a key focus area of mine going forward. In Q2, we opportunistically repurchased 1.3 million shares at an average price below $10 per share. This represents the first time Dentsply Sirona has repurchased shares since Q3 of 2024. We finished the quarter with cash and cash equivalents of $239 million, and our Q2 net debt to EBITDA ratio was 3.2 times, consistent with where we ended Q1 of this year. We continue to prioritize debt reduction. Now let us turn to Q2 segment performance on slide five. Starting with the CTS segment, sales were $239 million, an as-reported decline of 1.5%.

Speaker #2: This will be a key focus area of mine going forward In the second quarter , we opportunistically repurchased 1.3 million shares at an average price below $10 per share This represents the first time Dentsply Sirona has repurchased shares since the third quarter of 2020 .

Speaker #2: For we finished the quarter with cash and cash equivalents of $239 million , and our Q2 net debt to EBITDA ratio was 3.2 times consistent with where we ended Q1 of this year .

Speaker #2: We continue to prioritize debt reduction Now let us turn to Q2 segment performance on slide five . Starting with the CTS segment , sales were $239 million .

Speaker #2: And as reported , decline of 1.5% . Equipment and instruments revenue was $137 million . Flat year over year with declines in treatment centers This was partially offset by growth in imaging equipment , particularly in EMEA , where we saw increased demand for our orthopox line of imaging products .

John Fortson: Equipment and instruments revenue was $137 million, flat year over year, with declines in treatment centers. This was partially offset by growth in imaging equipment, particularly in EMEA, where we saw increased demand for our Orthophos line of imaging products. CAD/CAM revenue was $102 million, down mid-single digits, driven by lower volumes in the Americas and unfavorable price mix in EMEA, partially offset by double-digit growth in APAC. EMEA saw a slight softening of demand for select areas of capital equipment as providers deferred some investment decisions due to uncertainties from the Middle East conflict. Turning to EDS, which includes endo, resto, and preventative products, sales of $376 million declined 2.7% as reported, primarily driven by lower volumes in the Americas and EMEA.

Speaker #2: CAD Cam revenue was $102 million , down mid-single digits , driven by lower volumes in the Americas and unfavorable price mix in Aemia partially offset by double digit growth in APAC .

Speaker #2: EMEA saw a slight softening of demand for select areas of capital equipment as providers deferred some investment decisions due to uncertainties from the Middle East conflict Turning to EDS , which includes endo , resto and preventive products , sales of $376 million declined 2.7% as reported , primarily driven by lower volumes in the Americas and Emia .

Speaker #2: As we shared in Q1 , the impact of inventory changes for our Eds . Products held by our distributor partners in the EMEA region had a negative impact on results .

John Fortson: As we shared in Q1, the impact of inventory changes for our EDS products held by our distributor partners in the EMEA region had a negative impact on results. We saw a sequential improvement in Q2 as we obtained greater visibility into the dynamics within various markets and distributors across the region. Overall, sell out in the region was in the low single digits, consistent with expectations for dental consumables. The sell in is lower year over year as certain distributors reduced their inventory levels. We do not believe this reduction in wholesale inventory is a demand-driven trend. Moving to OIS, revenue of $197 million declined 13.2% as reported. When adjusting for the year over year impact from Byte, OIS declined 5.7% as reported, consistent with last quarter. IPS revenue of $157 million declined mid-single digits, driven by lower volumes of premium implants in the Americas and APAC.

Speaker #2: We saw a sequential improvement in Q2 as we obtained greater visibility into the dynamics within various markets and distributors across the region . Overall sellout in the region was in the low single digits , consistent with expectations for dental consumables .

Speaker #2: The sell in is lower year over year as certain distributors reduced their inventory levels . We do not believe this reduction in wholesale inventory is a demand driven trend .

Speaker #2: Moving to OIS revenue of $197 million declined 13.2% as reported when adjusting for the year over year impact from bite , OIS declined 5.7% as reported , consistent with last quarter .

Speaker #2: IPS revenue of 157 million declined mid-single digits , driven by lower volumes of premium implants in the Americas and APAC . EMEA implants grew mid-single digits as reported , led by improved performance for Miss our value implant brand for ortho .

John Fortson: EMEA implants grew mid-single digits as reported, led by improved performance for MIS, our value implant brand. For Ortho, SureSmile revenue of $40 million declined double digits, primarily attributable to the Americas region. Wrapping up with Wellspect HealthCare, revenue of $86 million increased 7.1% as reported, driven by the continued strength of new product sales and execution by the business, partially offset by lower inventory levels in the US market. Now let's move to slide six to discuss our outlook for 2026. We are maintaining our 2026 outlook for net sales of $3.5 billion to $3.6 billion, an adjusted EPS in the range of $1.40 to $1.50. This EPS range excludes the benefit from tariff refunds and impact of incremental tariffs. Our decision to maintain our outlook is based on expectations as of today, including our current expectation regarding tariffs and trade policies.

Speaker #2: Suresmile revenue of 40 million declined double digits , primarily attributable to the Americas region . Wrapping up with Well-specced Healthcare revenue of 86 million increased 7.1% as reported , driven by the continued strength of new product sales and execution by the business , partially offset by lower inventory levels in the US market Now let's move to slide six to discuss our outlook for 2026 .

Speaker #2: We are maintaining our 2026 outlook for net sales of $3.5 billion to $3.6 billion , and adjusted EPS in the range of $1.40 to $1.50 .

Speaker #2: This EPS range excludes the benefit from tariff refunds and impact of incremental tariffs . Our decision to maintain our outlook is based on expectations .

Speaker #2: As of today , including our current expectation regarding tariffs and trade policies Looking to the third quarter of 2026 , we expect revenue to decline sequentially due to normal seasonality as we continue to execute our growth priorities , we also expect Q3 earnings to be below Q2 2026 levels , excluding the 17 cent benefit from tariff refunds , we remain committed to investing in our sales force , clinical education programs and R&D with the benefit of these investments expected to become increasingly visible beginning in Q4 With that , I will turn the call back to Dan

John Fortson: Looking to Q3 2026, we expect revenue to decline sequentially due to normal seasonality. As we continue to execute our Return to Growth priorities, we also expect Q3 earnings to be below Q2 2026 levels, excluding the $0.17 benefit from tariff refunds. We remain committed to investing in our sales force, clinical education programs, and R&D, with the benefit of these investments expected to become increasingly visible beginning in Q4. With that, I will turn the call back to Dan.

Speaker #1: Thanks , John As we wrap up the second quarter since beginning our 24 month return to growth action plan , our priorities haven't changed .

Dan Scavilla: Thanks, John. As we wrap up Q2 since beginning our 24-month Return to Growth action plan, our priorities haven't changed. We're focused on putting customers at the center of every decision, improving execution, investing where we see the greatest opportunity for long-term growth, and strengthening the financial foundation of the company. We're making progress, but this is still a turnaround. Some parts of the business are improving faster than others, and there's still a lot of work ahead. As John mentioned, we expect more of the improvement weighted towards Q4, given investment timing and macroeconomic conditions. What gives me confidence is that we're beginning to see evidence that the work we're doing is gaining traction. Everything starts with the customer. Over the last six months, we've been rebuilding how we engage with our customers.

Speaker #1: We're focused on putting customers at the center of every decision , improving execution , investing , where we see the greatest opportunity for long term growth and strengthening the financial foundation of the company .

Speaker #1: We're making progress , but this is still a turnaround . Some parts of the business are improving faster than others , and there's still a lot of work ahead .

Speaker #1: As John mentioned, we expect more of the improvement to be weighted toward the fourth quarter, given investment timing and macroeconomic conditions. What gives me confidence is that we're beginning to see evidence that the work we're doing is gaining traction. Everything starts with the customer. Over the last six months, we've been rebuilding how we engage with our customers.

Speaker #1: We're investing in clinical education , strengthening our commercial organization , expanding customer access to our dealer network , and making it easier to do business with DENTSPLY SIRONA Inc. .

Dan Scavilla: We're investing in clinical education, strengthening our commercial organization, expanding customer access through our dealer network, and making it easier to do business with Dentsply Sirona. In Q2, clinical education was at the forefront. We brought together more than 1,000 clinicians at our Global Implant Summit, hosted endo KOLs at our 2026 Endodontic Forum, and convened leading experts across restorative and multidisciplinary dentistry to help shape the next generation of clinical solutions. These opportunities enable us to learn directly from clinicians, strengthen relationships, and ensure our innovation pipeline reflects what customers need most. At the same time, we're investing in our own commercial capabilities. Every US implant sales rep recently completed the most comprehensive implant certification program we've ever delivered. Our most experienced team members told us they've learned more in those four days than they had in years.

Speaker #1: In the second quarter , clinical education was at the forefront . We brought together more than 1000 clinicians at our global Implant Summit hosted Indo colleagues at our 2026 Endodontic Forum and convened leading experts across restorative and multidisciplinary dentistry to help shape the next generation of clinical solutions These opportunities enable us to learn directly from clinicians , strengthen relationships , and ensure our innovation pipeline reflects what customers need most At the same time , we're investing in our own commercial capabilities Every U.S.

Speaker #1: sales implant excuse me , every U.S. implant sales rep recently completed the most comprehensive implant certification program we've ever delivered . Our most experienced team members told us they've learned more in those four days than they had in years .

Speaker #1: This initiative is not only encouraging , but also just the start of ongoing investment in education . We're also seeing momentum internationally in APAC , we're expanding education programs , advancing implant sales training and seeing continued adoption of our connected technology solutions , including double digit growth in billing systems .

Dan Scavilla: This initiative is not only encouraging, but also just the start of an ongoing investment in education. We're also seeing momentum internationally. In APAC, we're expanding education programs, advancing implant sales training, and seeing continued adoption of our connected technology solutions, including double-digit growth in milling systems. On the digital side, DS Core continues to gain traction. During the quarter, four European DSO groups began to implement the platform, reinforcing the value of an integrated digital workflow that connects diagnosis, treatment planning, and clinical execution. We've also continued to strengthen our US distribution footprint by growing our dealer network. During the quarter, we announced the expansion of our partnership with Atlanta Dental and Nashville Dental, and we advanced our long-standing relationship with Medline Sinclair in Canada. These partnerships are important building blocks for sustainable commercial growth, extending our reach and giving more customers access to our connected technology portfolio.

Speaker #1: On the digital side , DDS core continues to gain traction during the quarter for European DSO , groups began to implement the platform , reinforcing the value of an integrated digital workflow that connects diagnosis , treatment , planning , and clinical execution .

Speaker #1: We've also continued to strengthen our U.S. distribution footprint by growing our dealer network During the quarter , we announced the expansion of our partnership with Atlanta Dental and Nashville Dental , and we advanced our long standing relationship with Medline Sinclair in Canada .

Speaker #1: These partners partnerships are important building blocks for sustainable commercial growth , extending our reach and giving more customers access to our connected technology portfolio While speck continues to perform exceptionally well , the business delivered another strong quarter , supported by new product launches , geographic expansion and continued adoption of our newest products .

Dan Scavilla: Wellspect continues to perform exceptionally well. The business delivered another strong quarter, supported by new product launches, geographic expansion, and continued adoption of our newest products. That's a good example of what consistent execution looks like. We intend to apply those same principles across the areas of the company. We also established a small group, a strategic advisory board, to provide guidance on Wellspect's long-term priorities, innovation, and growth opportunities. Execution also means improving how we operate internally. We're simplifying the organization, enforcing accountability, standardizing processes, embedding lean operating principles and AI to eliminate routine work and accelerate decision-making so our teams can spend more time serving customers and bring innovation to market faster. Financial discipline remains equally important. We're improving cash generation, strengthening the balance sheet, and continuing to deploy capital in a disciplined way.

Speaker #1: That's a good example of what consistent execution looks like, and we intend to apply those same principles across the areas of the company.

Speaker #1: We're also established a small group of strategic Advisory Board to provide guidance on well spec , long term priorities , innovation and growth opportunities .

Speaker #1: Execution also means improving how we operate internally . We're simplifying the organization , enforcing accountability , standardizing processes , embedding lean operating principles in AI to eliminate routine work and accelerate decision making .

Speaker #1: So our teams can spend more time serving customers and bring innovation to market faster . Financial discipline remains equally important . Improving cash generation , strengthening the balance sheet and continuing to to deploy capital in a disciplined way As John previously mentioned , we repurchased 1.3 million shares for approximately $12 million using a portion of the tariff refund proceeds consistent with the capital allocation framework we introduced earlier this year .

Dan Scavilla: As John previously mentioned, we repurchased 1.3 million shares for approximately $12 million using a portion of the tariff refund proceeds, consistent with the capital allocation framework we introduced earlier this year. We continue balancing investments in innovation, commercial capabilities, and shareholder returns to support long-term value creation. Six months into the Return to Growth action plan, I believe we're going deeper, moving faster, taking bolder steps to improve our business. We're recalibrating customer relationships. We're strengthening our commercial organization. We're expanding access to our products. We're simplifying the company. We're creating a stronger financial foundation. The path won't be linear. We're seeing encouraging signs that our actions are beginning to translate into improved execution and stronger customer engagement. Thank you to our employees around the world for their continued hard work and dedication to our customers.

Speaker #1: We continue balancing investments in innovation , commercial capabilities and shareholder returns to support long term value creation . Six months into the return to Growth action plan , I believe we're going deeper , moving faster , taking bolder steps to improve our business .

Speaker #1: We're recalibrating customer relationships . We're strengthening our commercial organization . We're spending access to our products . We're simplifying the company , and we're creating a stronger financial foundation .

Speaker #1: The path won't be linear , but we're seeing encouraging signs that our actions are beginning to translate into improved execution and stronger customer engagement .

Speaker #1: Thank you to our employees around the world for their continued hard work and our customers . I continue to believe the potential for Densify Sirona has never been greater , and we have at our fingertips everything we need to achieve our plan .

Dan Scavilla: I continue to believe the potential for DENTSPLY SIRONA has never been greater. We have at our fingertips everything we need to achieve our plan. With that, let me turn the call over to the operator so we can start the Q&A session. Thank you.

Speaker #1: With that , let me turn the call over to the operator so we can start the Q&A session . Thank you

Speaker #3: Thank you . As mentioned at this time , we'll conduct a question and answer session . As a reminder to ask a question , you'll need to press star one one on your telephone and wait for your name to be announced .

Operator: Thank you. As mentioned, at this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press *11 on your telephone and wait for your name to be announced. Please limit to one question and, if you wish, a follow-up. To withdraw your question, please press *11 again. Please stand by while we compile our Q&A roster. Your first question comes on the line of Elizabeth Anderson with Evercore ISI. Your line is now open

Speaker #3: Please limit to one question , and wish , a follow up to withdraw your question , please press star one one again . Please stand by while we compile our Q&A roster Your first question comes to the line of Elizabeth Anderson with Evercore .

Speaker #3: ISI . Your line is now open

Speaker #4: Hi , guys . Good afternoon and thanks so much for the question . I guess my first question is , you know , John , maybe you could talk a little bit about , you know , why Y X-ray was sort of the right next step on your career and also , you know , do you guys now think you have the full team in place to go forward with what you need to do to help get the company on the right footing ?

Elizabeth Anderson: Hi, guys. Good afternoon, thanks so much for the question. I guess my first question is, John, maybe you could talk a little bit about why XRAY was sort of the right next step on your career. Also, do you guys now think you have the full team in place to just go forward with what you need to do to help get the company on the right footing? Can you also, maybe as my follow-up, just talk through how you kind of see the drivers that increase the EPS from Q3 to Q4 like you were just laying out, John. Thank you very much.

Speaker #4: And can you also maybe as my follow up , just talk through like how you kind of see the drivers that increase the EPS from three Q to four Q , like you were just laying out .

Speaker #4: John , thank you very much .

Speaker #2: Sure . I'll start . Dan can talk a little bit about the team , but , you know , I followed this company for a long time .

John Fortson: Sure. No, I'll start. Dan can talk a little bit about the team, but I've followed this company for a long time. I've been in the Carolinas really for 15 plus years and have followed the story. I really feel like the board and the current leadership team under Dan are ready to do what needs to be done to take this company to the next level. Right? I feel, having studied for a number of months, the Return to Growth action plan and in conversations with Dan and the other leaders, I feel like they have the right plan at the right time, and I'm pretty excited about being here. Look at the prioritizations. They're pretty straightforward. We return to growth, we maximize profitability, and we maximize cash generation. I think we have the opportunity to do all three.

Speaker #2: I've been in the Carolinas really for 15 plus years . And have followed this story . And I , I really feel like the board and the current leadership team under Dan are ready to do what needs to be done to , to take this company to the next level .

Speaker #2: Right . I feel having studied for a number of months , the return to growth action plan and in conversations with Dan and the other leaders , I feel like they have the right plan at the right time .

Speaker #2: And I'm pretty excited about being here . You know , I look at the Prioritizations , they're pretty straightforward . We return to growth , we maximize profitability , and we maximize cash generation .

Speaker #2: And I think we have the opportunity to do all three.

Speaker #1: Thanks . And I'll answer the rest of that Elizabeth , we have a great executive committee . My direct reports , if you look through it , a vast amount of that was rebuilt and those that remained were really strong base to go from .

Dan Scavilla: Thanks. I'll answer the rest of that, Elizabeth. We have a great executive committee. My direct reports, if you look through it, a vast amount of that was rebuilt, and those that remained were a really strong base to go from. I feel very bullish about that team. The rate of engagement we have around the world when it comes to our directors up as well continues to impress me. To answer the question, yeah, we have who we need to make the changes that we need to make. I feel very strong about that.

Speaker #1: So I feel very bullish about that team . The rate of engagement we have around the world when it comes to our directors up as well , continues to impress me .

Speaker #1: And so the answer to the question , yeah , we have who we need to make the changes that we need to make .

Speaker #1: I feel very strong about that . As far as the progression and heaviness , perhaps of the fourth quarter , given the turnaround and very similar to what we may have spoken to in the past , a lot of that really banks on the fact of when you're reorganizing the company and you have some of the timing of when those structural changes take place , you'll see it bear more in the fourth quarter than you would previous .

Dan Scavilla: As far as the progression and heaviness, perhaps of Q4, given the turnaround and very similar to what we may have spoken to in the past, a lot of that really banks on the fact of when you're reorganizing the company and you have some of the timing of when those structural changes take place. You'll see it bear more in Q4 than you would previous as we go do that. In addition, if you remember, we've added a lot of the dealers in Q1 or Q2. I always mention it's about nine months before you really produce there to sell capital. You're bringing them on board, training them, getting their reps out there, building a pipeline, and closing.

Speaker #1: As we go do that , in addition , if you remember , we've added a lot of the dealers in the first quarter or second , and I always mention it's about nine months before you really produce there to sell capital .

Speaker #1: And so you're bringing them on board , training them , getting their reps out there , building a pipeline and closing . And so while we are positive and seeing positive results of who we brought on , I think that will be heavier in the fourth quarter than perhaps what we've seen in the first or second .

Dan Scavilla: While we are positive and seeing positive results of who we brought on, I think that will be heavier in Q4 than perhaps what we've seen in Q1 or Q2.

Speaker #4: Super helpful. Thank you. Welcome, John.

Elizabeth Anderson: Super helpful. Thank you. Welcome, John.

Speaker #2: Thank you .

John Fortson: Thank you.

Speaker #3: Thank you . Your next question come to the line of Allen Lutz with Bank of America . Your line is now open .

Operator: Thank you. Your next question comes to the line of Allen Lutz with Bank of America. Your line is now open.

Speaker #5: Good afternoon , and thanks for taking the question . Really a follow up on my question from last quarter around the return to growth action plan here .

Allen Lutz: Good afternoon, and thanks for taking the question. Really a follow-up on my question from last quarter around the Return to Growth action plan here. Dan, you talked about a lot of the same things that you talked about last quarter, some new distribution partners which you executed against in the quarter. You gave the example on investing in ClinEd and R&D continues to trend up nicely. Would love to get a sense in terms of where you're most excited. You sort of answered it a little bit with the last question around maybe some of the contributions from dealers coming in in Q4, but would love to get a sense of the parts of the Return to Growth action plan as you go through it now you're six months in.

Speaker #5: Dan, you talked about a lot of the same things that you discussed last quarter. There were some new distribution partners, which you executed against in the quarter.

Speaker #5: You know , you gave the example on investing in clinical education and R&D continues to trend up nicely . You know , we'd love to get a sense in terms of where you're most excited , you sort of answered it a little bit with the last question around maybe some of the contributions from dealers coming in in the fourth quarter , but we'd love to get a sense of the parts of the return to action plan as you go through it .

Speaker #5: And now you're six months in. Would love to get a sense of where you're most excited, and what do you think? The first part of that is—?

Allen Lutz: Would love to get a sense where you're most excited and what do you think the first part of that is to hit the P&L? Thanks.

Speaker #5: To hit the PNL ? Thanks .

Speaker #1: Thanks , Ellen . I appreciate that question . Honestly , what I'm most excited about is the level of engagement we have with our dentists and seeing that accelerate at different levels of the company .

Dan Scavilla: Thanks, Allen. I appreciate that question. Honestly, what I'm most excited about is the level of engagement we have with our dentists and seeing that accelerate at different levels of the company. I want to say it's a re-engagement and the feedback that I've been getting from different folks that how happy they are with the dentists themselves coming back on the ClinEd programs or the interaction with executives or even some of the events that we have held or attended. They see our recommitment into that, I've been getting a lot of good feedback from them, which is encouraging to me because as we say and have said, it's all about the customer first. If we're going to turn this around, it's about supporting the customer first and foremost and then earning the right to grow and take share from there. That excites me.

Speaker #1: I want to say it's a reengagement , and the feedback that I've been getting from different folks that how happy they are with the dentists themselves coming back on the clinical education programs or the interaction with executives or even some of the events that we have held or attended .

Speaker #1: They see our recommitment into that . And I've been getting a lot of good feedback from them , which is encouraging to me because , as we say and have said , it's all about the customer first .

Speaker #1: And if we're going to turn this around , it's about supporting the customer first and foremost , and then earning the right to grow and take share from there .

Speaker #1: And so that excites me , honestly , with John joining the team and really filling out an already strong executive council that I have , that second thing that's exciting to me , and you're right , I love the partnership expansion in the US with the dealers , and I think that's still yet to prove out more in the second half of the year .

Dan Scavilla: Honestly, with John joining the team and really filling out an already strong executive council that I have, that's second thing that's exciting to me. You're right, I love the partnership expansion in the US with the dealers, I think that's still yet to prove out more in H2 of the year. All three of those rank up for me.

Speaker #1: But all three of those rank up for me

Speaker #5: Great . Thank you .

Allen Lutz: Great. Thank you.

Speaker #3: Thank you. Your next question comes from the line of Michael Cherny with Leerink Partners. Your line is now open.

Operator: Thank you. Your next question comes to the line of Michael Cherny with Leerink Partners. Your line is now open.

Speaker #6: Thanks for taking the question . This is Dylan Finlay on for Mike . Just wanted to start briefly on the tariff refund . Just a clarification point .

Dylan Findlay: Thanks for taking the question. This is Dylan Findlay on for Mike. Just wanted to start briefly on the tariff refund. Just a clarification point. Was that refund assumption embedded in the initial guide? Does the maintenance of the guide account for the contribution of that refund? Secondly here, if you could just broadly comment on your quarterly run rate into COGS. What you're seeing today with the 122s and now the 301s, where do you see your quarterly spend on tariffs from here?

Dylan Finley: Thanks for taking the question. This is Dylan Findlay on for Mike. Just wanted to start briefly on the tariff refund. Just a clarification point. Was that refund assumption embedded in the initial guide? Does the maintenance of the guide account for the contribution of that refund? Secondly here, if you could just broadly comment on your quarterly run rate into COGS. What you're seeing today with the 122s and now the 301s, where do you see your quarterly spend on tariffs from here?

Speaker #6: Was that refund assumption embedded in the initial guide ? And does the maintenance of the guide account for the contribution of that refund ?

Speaker #6: And then secondly here , if you could just broadly comment on your quarterly run rate into Cogs , what you're seeing today with the 122 and now the 300 ones , you know , where do you see your quarterly spend on tariffs from here

Speaker #1: So , Dylan , I'll answer that . So the first thing is we did not build a refund into our initial guidance . That was something that we decided not to do because it was uncertain when it would occur or what it would be .

Dan Scavilla: Dylan, I'll answer that. The first thing is, we did not build a refund into our initial guidance. That was something that we decided not to do because it was uncertain when it would occur or what it would be. That's an addition. As we maintain our base guidance, as John called out, we're saying we're not changing that. Certainly in addition, we would layer in some semblance of the tariff that we were calling out earlier in that section. It's something totally unrelated to the operations of the business and done. We do not disclose the rate of tariffs per quarter, that would be something I'll refrain from answering.

Speaker #1: And so that's in addition , as we maintain our base guidance , as John called out , we're saying we're not changing that .

Speaker #1: And certainly , in addition , we would layer in some semblance of the tariff that that we're calling out earlier in that section .

Speaker #1: So it's something totally unrelated to the operations of the business. And, done. We do not disclose the rate of tariffs per quarter.

Speaker #1: So that would be something I'll refrain from answering .

Speaker #6: Very helpful . Thank you . And then as a brief follow up here , you know , you guys showed some nice gross margin improvement .

Dylan Findlay: Very helpful. Thank you. As a brief follow-up here. You guys showed some nice gross margin improvement, if I'm just looking and backing out the tariffs. On SG&A, in the past, you talked about reduction in targeted annual savings. Any updated thoughts on the magnitude of that and timing of when we should see some improvement in SG&A? Thanks.

Dylan Finley: Very helpful. Thank you. As a brief follow-up here. You guys showed some nice gross margin improvement, if I'm just looking and backing out the tariffs. On SG&A, in the past, you talked about reduction in targeted annual savings. Any updated thoughts on the magnitude of that and timing of when we should see some improvement in SG&A? Thanks.

Speaker #6: If I'm just looking backing up the tariffs . But on a in the past you talked about , you know , reduction in targeted annual savings .

Speaker #6: You know , any updated thoughts on the magnitude of that and timing of when we should see some improvement in S G and a thanks .

Speaker #1: Yeah . So it's a little bit of a couple of things . It's sort of a put and take here . We're reorganizing a lot of our company , whether it be through headcount or indirect spending , but I'm also redeploying that into increasing the field , increasing clinical education , increasing rep education and accelerating innovation .

Dan Scavilla: Yeah. It's a little bit, Dylan, of a couple of things. It's sort of a put and take here. We're reorganizing a lot of our company, whether it be through headcount or indirect spending, I'm also redeploying that into increasing the field, increasing clinical education, increasing rep education, and accelerating innovation. It's not an anticipated drop through to the bottom line so much as a repositioning for long-term growth that's occurring.

Speaker #1: And so, it's not an anticipated drop through to the bottom line so much as a repositioning for long-term growth that's occurring.

Speaker #6: Great . Thank you

Dylan Findlay: Great. Thank you.

Dylan Finley: Great. Thank you.

Dan Scavilla: Kathy, do we have Vik on the line?

Speaker #1: Do we .

Speaker #7: Have Vic on the line .

Speaker #3: Pardon me . Yes . Vic Chopra with BMO . Your line is now open

Operator: Pardon me. Yes. Vik Chopra with BMO, your line is now open.

Speaker #8: Hi Dan and John . It's Anton on for Vic . Thanks for taking our questions . Maybe first I'll start on the commercial US commercial expansion .

[Analyst] (BMO): Hi, Dan and John. It's Anton on for Vic. Thanks for taking our questions. Maybe first I'll start on the US commercial expansion. Dan, you've repeatedly emphasized the US business recovery as your top priority and have been taking clear steps in building out the US commercial team with senior leadership and competitive hires. I'd be curious to hear where we stand in the US commercial team build-out. Do you have all the people you need, or are there more seats to fill? Does the guide contemplate accelerating productivity from these hires throughout the year, or is that more of a 2027 phenomenon?

Speaker #8: Dan , you've repeatedly emphasized that the US business recovery is your top priority and have been taking clear steps in building out the US commercial team with senior leadership and competitive hires .

Speaker #8: I'd be curious to hear where we stand in the US commercial team . Build out . Do you have all the people you need or are there more to fill , and does the guide contemplate accelerating productivity from these hires throughout the year , or is that more of a 2027 phenomenon ?

Speaker #1: Yeah , thanks , Anton . First , I would say I'll probably never have as many people as I need because there's no answer to that .

Dan Scavilla: Yeah. Thanks, Anton. First I would say I'll probably never have as many people as I need because there's no answer to that. I want to have as many reps in the field representing us as we can. That said, what we did do in Q1 was make a significant verticalization of our commercial organization under the team, and they did a great job. Those folks that lead those verticals are dental experts with a lot of competitive experience, as you referred to, and it's there. We are, again, retraining the reps that we have, recertifying them, and then to your point, expanding them both from new hires and competitive hires. I really do think those efficiencies, while they will continue sequentially through the quarters as you get through Q2 to Q3 to Q4, I think are going to be more impactful into next year.

Speaker #1: I won't as many reps in the field representing us as we can . That said , what we did do in the first quarter was make a significant verticalization of our commercial organization under the team , and they did a great job .

Speaker #1: And those folks that lead those verticals are dental experts with a lot of competitive experience . As you referred to . And it's their we are , again , retraining the reps that we have , recertifying them .

Speaker #1: And then to your point , expanding them both from new hires and competitive hires , I really do think those efficiencies , while they will continue sequentially through the quarters as you get through Q2 to Q3 to Q4 , I think are going to be more impactful into next year because a lot of that training , a lot of that clinical , clinical education , and then just getting everybody into those moves that they need to do into the field , I think will be more of a next year impact .

Dan Scavilla: A lot of that training, a lot of that clinical education, and then just getting everybody into those moves that they need to do into the field, I think will be more of a next year impact. I'm happy with the progress being made with that team.

Speaker #1: But I'm happy with the progress being made with that team

Speaker #8: That's that's really great to hear . And maybe one more follow up on on China last night , one of your peers shared some updated perspectives on the China environment and timing .

[Analyst] (BMO): That's really great to hear. Maybe one more follow-up on China. Last night, one of your peers shared some updated perspectives on the China environment and VBP timing. I'd be curious to get your perspective here as well. What's your latest thinking on China VBP 2.0 in 2026, and how do we think about the impact for Dentsply?

Speaker #8: I'd be curious to get your perspectives here as well . What's your latest thinking on China 2.0 and 2026 , and how do we think about the impact for Dentsply ?

Speaker #1: Yeah , again , great question . You know , it moves as you know , it's been delayed . It's been cast out there .

Dan Scavilla: Yeah. Again, great question. It moves, as you know. It's been delayed. It's been cast out there. I'm probably going to line up with the timing. I know that it was pushed off several months from China that way. We don't have a significant impact baked into that for this year, nor do I expect one. China's an area of significant long-term growth for us right now, and it's one that we're keeping our eye on of how best to approach. At this point, I would tell you that it's smaller and that we have our eyes on how to make that bigger over time. The VBP is simply just one step along the way for us to really get into that market.

Speaker #1: So I'm probably going to line up with the timing . I know that it was pushed off several months from China that way .

Speaker #1: We don't have a significant impact baked into that for this year . Nor do I expect one . China is an area of significant long term growth for us right now , and it's one that we're keeping our eye on of how best to approach .

Speaker #1: But at this point , I would tell you that it's smaller and we have our eyes on how to make that bigger over time .

Speaker #1: And the VBR is simply just one step along the way for us to really get into that market.

Speaker #8: Thank you so much again

[Analyst] (BMO): Thanks so much again.

Speaker #3: Thank you Your next question comes from the line of John Block with Stiefel . Your line is now open .

Operator: Thank you. Your next question comes to the line of Jonathan Block with Stifel. Your line is now open.

Speaker #9: Hey everyone . Joe Federico on for John . Thanks for taking the question . Maybe just to to zoom in on implants a little bit , is there any further detail you can provide on the performance in the quarter ?

Joe Federico: Hey, everyone. Joe Federico on for John. Thanks for taking the question. Maybe just to zoom in on implants a little bit, is there any further detail you can provide on the performance in the quarter? I think you said EMEA was mid-single digits led by value, but maybe any other color between value and premium. How did the US perform? Just how do you view the market growth there in the quarter and then in Q3 to date? Thanks.

Speaker #9: I think you said EMEA was mid-single digits, led by value, but maybe any other color between value and premium? How did the US perform?

Speaker #9: And then just, how do you view the market growth there in the quarter, and then in Q3 to date? Thanks.

Speaker #1: Yeah. We tend not to break it down by products or things like that in a lot of detail. What I would tell you is that our value products in EMEA had a very strong quarter.

Dan Scavilla: Yeah. We tend not to break it down by products or things like that in a lot of detail. What I would tell you is that our value products in EMEA had a very strong quarter. There's a lot of cadence there that we're doing. In the US, simply part of the turnaround, we lag behind that. We have incredible products. As I just said, we've recertified our team to give them more education to go out and worry about workflow and dentist needs, as opposed to just selling a single product. It's still a continued investment in our turnaround plan, focused primarily on the US. Still investing, obviously, in EMEA and Asia Pacific. I would say that when you look at the competitors, we're lagging behind, and we need to change that. We've got the right products. We have the right approach.

Speaker #1: There's a lot of cadence there that we're doing , you know , in the US , simply part of the turnaround . We lagged behind that .

Speaker #1: We have incredible products . As I just said , we've recertified our team to give them more education to go out and worry about workflow and dentist needs as opposed to just selling a single product .

Speaker #1: And so it's still a continued investment in our turnaround plan , focused primarily on the US still obviously in EMEA and Asia PAC .

Speaker #1: But I would say that when you look at the competitors , we're lagging behind and we need to change that . We've got the right products , we have the right approach .

Speaker #1: We have to execute and get up to market and beyond

Dan Scavilla: We have to execute and get up to market and beyond.

Speaker #9: Thank you

Joe Federico: Thank you.

Speaker #3: Thank you . Your next question comes on line of Michael Zarcone with Jefferies . Your line is now open .

Operator: Thank you. Your next question comes to the line of Michael Sarcone with Jefferies. Your line is now open.

Speaker #10: Hey . Good afternoon and thanks for taking the questions . Two for me , I guess . Can you just give us an update on or elaborate more on capital equipment demand ?

Michael Sarcone: Hey, good afternoon, and thanks for taking the questions. Two from me. I guess, can you just give us an update on or elaborate more on capital equipment demand? I think you mentioned some uncertainties in Europe related to Mideast tensions, and maybe give us kind of an around the world view. Just second, I'll throw it out there now is, Dan, you talked about the sales force ramping. How are you thinking about growth in implants as we look to 2027? Thanks.

Speaker #10: I think you mentioned some uncertainties in Europe related to Mideast tensions , but maybe give us kind of an around the world view .

Speaker #10: And then just second , I'll throw it out here . Now is Dan , you talked about , you know , the sales force ramping , how are you thinking about growth in implants as we look to 2027 ?

Speaker #10: Thanks

Dan Scavilla: Hey. What we're saying with us in the capital itself, and as you know, it's seasonal. In EMEA, because we are one of the leaders in dental, the rural regions are a little bit bigger for us than perhaps our competitors, and we are seeing delays that have occurred there. We're not going to call it out. We're not going to call it down at this point. Our eyes are on it. It's an unknown ability when that resolves or when they'll pick up. That really was just it, is we're just seeing some delays in there because of the uncertainty of that situation. Do we think that that can clear through in Q3 or Q4? We hope so for the sake of the people there, eyes on it for that one. That's really kind of the thing that's going there.

Speaker #1: So what we're saying with us in the capital itself , and as you know , it's seasonal in EMEA because we are one of the leaders in dental , the more regions are a little bit bigger for us and perhaps our competitors .

Speaker #1: And we are seeing delays that have occurred there . We're not going to call it out . We're not going to call it down at this point .

Speaker #1: Our eyes are on it . It's an unknown ability . When that resolves or when they'll pick up . But that really was just it is we're just seeing some delays in there because of the uncertainty of that situation .

Speaker #1: Do we think that that can clear through in Q 3 or 4 ? We hope so . For the sake of the people there .

Speaker #1: But eyes on it for that one. That's really kind of the thing that's going there on the sales force itself and the productivity and the lift that would occur for implants into 2027.

Dan Scavilla: On the sales force itself and the productivity and the lift that would occur for implants into 2027, I'm going to refrain for now. We got to go focus on this year and the turnaround to finish that. We'll be giving guidance more as we get into the early part of next year along those lines.

Speaker #1: I'm going to refrain for now . We got to go focus on this year and the turnaround to finish that . And we'll be giving guidance more as we get into the early part of next year .

Speaker #1: Along those lines .

Speaker #10: Got it . Thanks , Dan

Michael Sarcone: Got it. Thanks, Dan.

Speaker #3: Thank you Your next question comes to the line of Lily Lozada with JP Morgan . Your line is now open .

Operator: Thank you. Your next question comes to the line of Lily Lozada with JPMorgan. Your line is now open.

Speaker #11: Great . for taking the question . Following up on the prior question about implants , when I look at the results across the segments , the one area that was really softer this quarter was OIS .

Lily Lozada: Great. Thanks so much for taking the question. Following up on the prior question about implants. When I look at the results across the segments, the one area that was really softer this quarter was OIS. I'm hoping you can unpack that a little bit. To what extent was that a function of headwinds from a weaker consumer environment, given the price point and more elective nature of the procedures, or was there something else at play?

Speaker #11: So I'm hoping you can unpack that a little bit. To what extent was that a function of headwinds from a weaker consumer environment, given the price point and the more elective nature of the procedures?

Speaker #11: Or was there something else at play

Speaker #1: Yeah , thanks . I appreciate that . You know what I think is a couple of things with OIS in particular , I to us remember you have that bite impact that's occurring .

Dan Scavilla: Yeah. Thanks, Lily. I appreciate that. What I think is a couple of things with OIS in particular. To us, remember, you have that Byte impact that's occurring, and John called out the impact of that. We still carry that through of a significant part. That's really it. I think what we have seen, particularly on SureSmile, is more of a US impact, and I think it's more about us, again, looking at the turnaround as we enter back to orthodontists and we hire that sales force. We modernize our software and go. The Byte removal is still something carrying. I think that SureSmile US is that next one that's out there. The rest of it I was happy with. I think that's really in OIS, the two main impacts.

Speaker #1: And John called out the impact of that . We still carry that through of a significant part . That's really it . I think what we have seen , particularly on Short Smile , is more of a US impact .

Speaker #1: And I think it's more about us . Again , looking at the turnaround as we enter back into orthodontics , and we hire that sales force , we modernize our software and go , so , you know , the bite removal is still something carrying .

Speaker #1: I think that short smile us is that next one that's out there . The rest of it I was happy with . I think that's really in in OIS .

Speaker #1: The two main impacts

Speaker #11: Great . That's helpful And then I just want to make sure I'm understanding some of the comments you made on macro . It sounded like you did see some pockets of lower demand due to the macro environment .

Lily Lozada: Great. That's helpful. I just want to make sure I'm understanding some of the comments you all made on macro. It sounded like you did see some pockets of lower demand due to the macro environment. I think the messaging prior was that the ebbs and flows in the market don't really impact Dentsply so much, just given all of the operational improvement that you're making. I just want to make sure I get the message clear on that. What's the latest that you're hearing on macro, and how much does that impact you in 2026? Thanks so much.

Speaker #11: I think the messaging prior was that the ebbs and flows in the market don't really impact much , just given all of the operational improvement that you're making .

Speaker #11: So I just want to make sure I get the message clear on that . What's the latest that you're hearing on macro , and how much does that impact you in 2026 ?

Speaker #11: Thanks so much .

Speaker #1: It's a great question . Let me let me expand on that to just for clarity . So thanks for pulling it out in the past , and I'll stick to this .

Dan Scavilla: It's a great question, Lily. Let me expand on that too, just for clarity, thanks for pulling it out. In the past, I'll stick to this, I've said that we shouldn't count on a market up or down to drive our growth. We have many things we have to do ourselves, whether the market's up or down, we have to improve and grow. That was the latter part of your question. I'll stick with that. When I was calling out the macroeconomics, it really is about keeping our eye in the Middle East and the tensions and the reports out there, not just because it's somewhat disruptive to us from a procedure or capital. It's also the increased freight. We have to date seen impacts, we have absorbed those impacts. I anticipate that to settle down and go back to a normal rate.

Speaker #1: I've said that we shouldn't count on a market up or down to drive our growth . We have many things we have to do ourselves .

Speaker #1: And whether the market's up or down , we have to improve and grow . So that was the latter part of your question .

Speaker #1: I'll stick with that . When I was calling out the macro economics , it really is about keeping our eye in the Middle East and the tensions in the war that's out there , not just because it's somewhat disruptive to us from a procedure or capital .

Speaker #1: It's also the increased freight we have to date seen impacts , and we have absorbed those impacts . I anticipate that to settle down and go back to a normal rate .

Speaker #1: And so I have not backed off the return to growth investments in Salesforce or Innovation . And my point is , if those pressures remain high , there's a point in the future that I may choose not to absorb them .

Dan Scavilla: I have not backed off the Return to Growth investments in sales force, ClinEd, or innovation. My point is, if those pressures remain high, there's a point in the future that I may choose not to absorb them and adjust accordingly on the bottom line. I don't see it yet. I'm just dropping it as a hint. That's really what I meant by that statement.

Speaker #1: And adjust accordingly. On the bottom line, I don't see it yet. I'm just dropping it as a hint. That's really what I meant by that statement.

Lily Lozada: Great. Very helpful. Thank you.

Speaker #11: Very helpful . Thank you

Speaker #3: Thank you . Your next question comes to a line of Jeff Johnson with R.W. Baird . Your line is now open .

Operator: Thank you. Your next question comes to the line of Jeff Johnson with RW Baird. Your line is now open.

Speaker #12: Thank you . Good afternoon guys . Dan , I wanted to start in ETF . If I could . You pointed to volume declines both EMEA and in the Americas .

Jeff Johnson: Thank you. Good afternoon, guys. Dan, I wanted to start in EDS, if I could. You pointed to volume declines both EMEA and in the Americas. Any way you can qualitatively help us understand which of those might have been better or worse, I guess, how to play one off the other, number one, and distributor changes in Europe, maybe the answer is that was the worst side of my question. Just any clarity there, number one. Number two, I think in the past you've been pretty clear you don't think you have room at this point to increase price on the EDS side. We've kind of picked up maybe in our channel conversations with some of your smaller and other dealers in the US that you did push some price here recently on the consumable side. Any truth to that?

Speaker #12: You know , any way you can qualitatively help us understand which of those might have been , you know , better or worse , I guess , how to play one off the other .

Speaker #12: Number one. And distributor changes in Europe — maybe the answer is, that was the worst side of my question, but just any clarity there?

Speaker #12: Number one . And number two , you know , I think in the past you've been pretty clear . You don't think you have room at this point to increase price on the EDS side , we've kind of picked up maybe in our channel conversations with some of your smaller and other dealers in the US that you did push some price here recently on the consumable side , any truth to that ?

Speaker #12: And did that have any impact in the quarter or in your go forward thinking

Jeff Johnson: Would that have any impact in the quarter or in your go forward thinking?

Speaker #1: Yeah , you got Jeff . So let me kind of get after the first one . So in EDS in particular , most of the pressure remains in Europe .

Dan Scavilla: Yeah. You got it, Jeff. Let me kind of get after the first one. In EDS in particular, most of the pressure remains in Europe. I'll tell you, we've actually seen some of our bigger dealers make significant orders in the Q2 that were positive and double-digit growth. There are four other dealers, actually, most of them are private equity owned. We're seeing them take historic inventory levels from about 12 or more weeks down to possibly 8 weeks. When we talk to them, that's what we're seeing. We don't know if it's a factor of them coming into private equity or not, but that's really what we've been talking about, is we're seeing this sell-through occur. We feel positive as to those activities that are occurring.

Speaker #1: And I'll tell you, we've actually seen some of our bigger dealers make significant orders in the second quarter that were positive, with double-digit growth.

Speaker #1: There are four other dealers , actually , most of them are private equity owned . And we're seeing them take historic inventory levels from about 12 or more weeks down to possibly eight weeks .

Speaker #1: When we talk to them , that's what we're seeing . We don't know if it's a factor of them coming in to private equity or not , but that's really what we've been talking about , is we're seeing the sell through occur .

Speaker #1: We feel positive as to those activities that are occurring . It is multiple dealers , not one . I think , in Europe .

Dan Scavilla: It is multiple dealers, not one, I think, in Europe, that's the thing I do want to make sure folks understand. That is really kind of coming out into the restorative and endodontic side more than anything else. I think in the US, there are different things we need to do with our portfolio, our pricing, our positioning to be more competitive. I think, again, as we educate the team and refocus in endodontics in particular, but also pay attention to restorative, there's opportunity there. Some of our investment and accelerated investment in R&D is going to give us more opportunity to go provide that and capture it. That's really the flavor between those two areas. Pricing, there's always a price tweak here or there. We've not taken anything significant in pricing. I would tell you're hearing it through the channels.

Speaker #1: And that's the thing I do want to make sure folks understand . And that is really kind of coming out into the restorative and endodontic side more than anything else .

Speaker #1: I think in the U.S., there are different things we need to do with our portfolio, our pricing, and our positioning to be more competitive.

Speaker #1: And I think , again , as we educate the team and refocus and endodontics in particular , but also pay attention to restorative , there's opportunity there .

Speaker #1: Some of our investment in accelerated investment in R&D is going to give us more opportunity to go provide that and capture it . So that's really the flavor between those two areas .

Speaker #1: Pricing . You know , there's always a price tweak here . There . We've not taken anything significant in pricing . I would tell you , you're hearing it through the channels .

Speaker #1: We haven't implemented anything out there. It could very well be just cleaning up, price shifting, SKU, some level of mix that might be impacting that.

Dan Scavilla: We haven't implemented anything out there. It could very well be just cleaning up price, shifting SKUs, some level of mix that might be impacting that, but have really had no price increases since September of 2025.

Speaker #1: But really have really had no price or no price increase since September of 2025 .

Speaker #3: Okay . Thank you Your next question comes to the line of Kevin Caliendo with UBS . Your line is now open .

Operator: Okay, thank you. Your next question comes to the line of Kevin Caliendo with UBS. Your line is now open.

Speaker #2: Hey , guys . Thank you for taking my question . I just want to sort of understand what's embedded in the current guide from the market perspective .

Kevin Caliendo: Hey, guys. Thank you for taking my question. I just want to sort of understand what's embedded in the current guide from the market perspective. What do you expect the markets to do over the H2 of the year, and how do you feel you're going to do against that? Meaning, do you feel like you're going to be in line with the market, lose share, gain share against that? That's sort of my first question, just sort of what's the expectation for the handful of end markets that are most important to you? Then the comment about distributor inventories was interesting, just given the new distributor relationships that you have. Were you saying that broadly speaking, inventory levels are lower or on a same store basis? Because I was wondering if you sign a new distributor relationship, would you be putting some inventory to them as well?

Speaker #2: Like what do you expect the markets to do over the second half of the year ? And how do you feel you're going to do against that ?

Speaker #2: Meaning ? Do you feel like you're going to be with the lose share , gain share against that ? That's that's sort of my first question , just sort of what's the expectation for your , for the , the handful of end markets that are most important to you ?

Speaker #2: And then the comment about distributor inventories was interesting . Just given the new new distributor relationships that you have , were you saying that , broadly speaking , inventory levels are lower or on a same store basis ?

Speaker #2: Because I was wondering if you sign a new distributor relationship , would you be putting some inventory to them as well ? I'm just trying to understand what that meant or how to think about that .

Kevin Caliendo: I'm just trying to understand what that meant or how to think about that.

Speaker #1: Okay , well , let's start with that last one . We'll go backwards with that . So keep in mind when we're signing up the US dealers , they are for capital expansion .

Dan Scavilla: Well, let's start with that last one. We'll go backwards with that. Keep in mind, when we're signing up the US dealers, they are for capital expansion. We're not actually having them buy capital and hold it. We're actually working with them to move that differently. You wouldn't see a lift that way. My previous comment from the previous questions was focused on dealers for the EDS models that are out there. To your point, if we were to open up a new dealer there, they would buy inventory, we would see that. We have not done that. That's really what I'm thinking that way. Kevin, you had a first part of the question. I just need you to kind of go through it again, because I think it slipped my mind.

Speaker #1: And so we're not actually having them buy capital and hold it . We're actually working with them . You know to move that differently .

Speaker #1: So you wouldn't see a lift that way. My previous comment from the previous questions was focused on dealers for the editors' models that are out there.

Speaker #1: And to your point , if we were to open up a new dealer there , they would buy inventory , would see that .

Speaker #1: But we have not done that . That's really what I'm thinking that way . And Kevin , you had the first part of the question .

Speaker #1: I just need you to kind of go through it again , because I think I slipped my mind .

Speaker #2: I was just , I'm just wondering how to think about what you're expecting in terms of the overall market there .

Kevin Caliendo: I'm just wondering how to think about what you're expecting in terms of the overall market

Dan Scavilla: The market. Thank you

Speaker #1: Thank you .

Speaker #2: How do you think you're going to do relative to that ? What's embedded in the guidance ? Are you going to just be along with the markets or are you going to gain share , lose share ?

Kevin Caliendo: their growth and how you think you're going to do relative to that. What's embedded in the guidance? Are you going to just be along with the markets? Are you going to gain share, lose share? How should we think about it in the various segments?

Speaker #2: How should we think about it in the various segments, against what you're—what's embedded? Yeah.

Kevin Caliendo: Thanks

Kevin Caliendo: what's embedded? Yeah.

Speaker #1: So you guys , so a couple of things here . I think when you hear the reports out from competitors about the market stabilization , I agree with them .

Dan Scavilla: Yeah. A couple of things here. I think when you hear the reports out from competitors about the market stabilization, I agree with them. I think that that's there. We can all pick a number, but I'll pick one and say about 3% growth would be out there. However, what's embedded in our guidance is very different. We're calling out a turnaround, and we're trying to go from negative into flat into growth over time. That's not something we would achieve within the 12 months of 2026. Our guidance was really more about the execution of clinical programs, rep education, and going out the execution. What I had said in the past is I think we would have negative Q1, negative Q2. I'm thinking somewhat more favorable, not positive, but little more favorable or less loss in Q3.

Speaker #1: I think that that's there . We can all pick a number , but I'll pick one and say about 3% growth would be out there However , what's embedded in our guidance is very different .

Speaker #1: We're calling out a turnaround and we're trying to go from negative into flat into growth over time . That's not something we would achieve within the 12 months of 2026 .

Speaker #1: And so our guidance was really more about the execution of clinical programs . Rep education , and going out the execution . And what in the past is I think we would have negative Q1 negative Q2 .

Speaker #1: I'm thinking somewhat more favorable , not positive , but a little more favorable or less loss in Q3 . And I'm looking in the US to exit the year with a plus sign .

Dan Scavilla: I'm looking in the US to exit the year with a plus sign, and that's really where we're getting into. I think getting more into market and market dynamics for us will be more of a 2027 as we execute the Return to Growth plan.

Speaker #1: And that's really where we're getting into . I think getting more into market and market dynamics for us will be more of a 2027 as we execute the return to growth plan .

Speaker #2: That's super , super helpful . Thanks so much .

Kevin Caliendo: That's super helpful. Thanks so much.

Speaker #3: Thank you Your next question comes to the line of Steven Valiquette with Mizuho Securities . Your line is now open

Operator: Thank you. Your next question comes to the line of Steven Valiquette with Mizuho Securities. Your line is now open.

Speaker #13: Yeah . Hi . Thanks . Yeah , it's Steven Valiquette from Mizuho . You know , with some ongoing discussion this quarter among digital equipment manufacturers , customers seeing customers continue to move to lower price points on intraoral scanners , you heard more about some movement to leasing arrangements for digital equipment instead of straight product sales , at least from some manufacturers .

Steven Valiquette: Yeah. Hi. Thanks. Yeah, it's Steven Valiquette from Mizuho. With some ongoing discussion this quarter among digital equipment manufacturers, seeing customers continuing to move to lower price points on intraoral scanners, we heard more about some movement to leasing arrangements for digital equipment instead of straight product sales, at least from some manufacturers. I was just curious to get your updated thoughts on competitive landscape and IOS, but is there any inflection on leasing versus purchasing for higher priced items from your perspective? Also just remind us on your own philosophy on leasing options to practitioners for your own digital equipment offerings. Thanks.

Speaker #13: So I was just curious to get your updated thoughts on competitive landscape in iOS , but is there any inflection on leasing versus purchasing for higher priced items from your perspective ?

Speaker #13: And also , just remind us on your own philosophy on leasing options to practitioners for your own digital equipment offerings . Thanks .

Speaker #2: Okay .

Dan Scavilla: Okay. Great question, Steven. A couple of thoughts here. I think you always offer many options depending on the customer, if they want to buy it outright, if they want to do it over time, if they wish to do it through a lease. All of those are valid things that we're open to do and have been doing as well. I think you're right. There is a growth of lower cost intraoral scanners, and there's a quality that also gains with them over time. While I do think there's always room for premium in the future, you need to show the flexibility of how to get it into the customer's hands. Quite frankly, I think you also need to have the offerings at different levels depending on what the customer wants. It is something we're looking at.

Speaker #1: That's a great question , Steven . So a couple of thoughts here . I think you always offer many options depending on the customer .

Speaker #1: If they want to buy it outright , if they want to do it over time , if they wish to do it through all of those are valid things that we're open to do and have been doing as well .

Speaker #1: I think you're right , there is a growth of lower cost in oral scanners , and there's a quality that also gains with them all the time .

Speaker #1: And so, while I do think there's always room for premium in the future, you need to show the flexibility of how to get it into the customer's hands.

Speaker #1: And quite frankly , I think you also need to have the offerings at different levels depending on what the customer wants . It is something we're looking at .

Speaker #1: Those options are things that we have in place , and I think really , me , next gen scanners , we need to look at high end , mid end .

Dan Scavilla: Those options are things that we have in place, and I think really for me, next gen intraoral scanners, we need to look at high-end, mid, and also low. That's something that's in front of our innovation program.

Speaker #1: Also low . And that's something that's been part of our innovation program

Speaker #13: Okay. That's very helpful. Thanks.

Steven Valiquette: Okay. That's very helpful. Thanks.

Speaker #3: Thank you Your next question comes to the line of Aaron right with Morgan Stanley . Your line is now open .

Operator: Thank you. Your next question comes to the line of Erin Wright with Morgan Stanley. Your line is now open.

Erin Wright: A couple of kind of modeling questions. One, just on the organic constant currency top line growth. I think you gave total revenue growth, but did you give a true underlying kind of organic metric that you're anticipating, or what are you anticipating in terms of the second half there? Just remind us what's embedded from a currency perspective. Then on a tariff refund, I guess does the guidance then reflect share buybacks associated with the tariff refund or future buy, I just want to be clear in terms of what's embedded in terms of the EPS number and not, especially when it comes to share buybacks.

Speaker #14: A couple of kind of modeling questions . One , just on the organic constant currency , top line growth . I think you gave total revenue growth , but did you give a true underlying kind of organic metric that you're anticipating ?

Speaker #14: Or what are you anticipating in terms of the second half ? There ? And just remind us what's embedded from a currency perspective ?

Speaker #14: And then on the tariff refund , I guess , does the guidance then reflect share buybacks associated with the tariff refund or future ?

Speaker #14: I just want to be clear in terms of what's embedded in terms of the EPS number and not especially when it comes to share buybacks

Speaker #1: Yeah . So what we saw , Aaron , in the beginning of the year was a very strong FX rate that we said would taper down over the quarters .

Dan Scavilla: What we saw, Erin, in the beginning of the year was a very strong FX rate that we said would taper down over the quarters. That 3.5 to 3.6 for us is just what we expect to hit for this year. I don't really have the exact amounts that are broken out. We didn't provide anything between constant currency or as reported. We're just getting into those ranges, knowing the currencies that we anticipate for this year. The favorableness of Q1 would diminish in Q2, and we actually think neutralized or possibly even at the end of the year, kind of negative out. I would say that's not going to be a big driver for us along those lines with it.

Speaker #1: That 3.5 to 3.6 for us is just what we expect to hit for this year . I don't really have the exact amounts of the broken out .

Speaker #1: didn't provide anything between constant currency . As reported . We're just getting into those ranges . Knowing the currencies that we anticipate for this year .

Speaker #1: The favorableness of the first quarter would diminish in second , and we actually think neutralize or possibly even at the end of the year , kind of negative out .

Speaker #1: So I would say that's not going to be a big driver for us . Along those lines with it , again , the tariffs , we were calling out , the fact that we're not changing the base and we're just dropping the tariffs eventually out there for modeling purposes .

Dan Scavilla: Again, the tariffs, we were calling out the fact that we're not changing the base and we're just dropping the tariffs eventually out there for modeling purposes. That's really what we were trying to do, is just distinguish them out. We're obviously looking to not have that as a measure year-on-year because it's such an oddity. It's got to be off on the side when we talk about Q2 of next year.

Speaker #1: That's really what we're trying to do is just distinguish them out . We're obviously looking to not have that as a measure year on year , because it's such an oddity .

Speaker #1: It's got to be off on the side . When we talk about Q2 of next year

Speaker #14: Okay , thanks . And then you spoke about some of the distributor relationships . You inked a deal with Medline with their Sinclair offering in Canada .

Erin Wright: Okay, thanks. You spoke about some of the distributor relationships you inked a deal with Medline, with their Sinclair offering in Canada. I guess how is that relationship different or unique? Or how should we think about that opportunity? Then just overall, the North America distributor relationships, how are those progressing? Thanks.

Speaker #14: I guess . How is that relationship different or unique or how should we think about that opportunity ? And then just overall , the North America distributor relationships , how are those progressing ?

Speaker #14: Thanks .

Speaker #1: You got it . So , so in Canada , it's just great because again , it's Sinclair's a great business to get into .

Dan Scavilla: You got it. In Canada, it's just great because again, Sinclair's a great business to get into. We do a lot with them already. It's an expansion of what we have, but expansion on the capital side, which we did not have. They've already got the natural reach and feet on the street to actually get our products in front of more customers in a faster pace in Canada, which is a very strong market for us and actually been an area of growth that I think if it continues, we'll call out a bit more in future calls with it. I think on the US side, what I have seen in particular, without calling out names, are two of the new dealers that have grown double digits so far. Again, I'm a little cautious.

Speaker #1: We do a lot with them already . It's an expansion of what we have , but expansion on the capital side , which we did not have .

Speaker #1: And so they've already got the natural reach and feed on the street to actually get our products in front of more customers in a faster pace in Canada , which is a very strong market for us and actually been an area of growth that I think if it continues , we'll call out a bit more in future calls with it And I think on the US side , what I have seen in particular , without calling out names , are two of the new dealers that have grown double digits so far .

Speaker #1: But again , I'm a little cautious . I want to get through Q3 maybe start looking at that at Q4 , but for a few that I've added on , I'm really happy with what I'm seeing with their growth or smaller numbers , and don't drive the overall business , but the smaller numbers today and they will grow and become significant over time .

Dan Scavilla: I want to get through Q3, maybe start looking at that in Q4. For a few that I've added on, I'm really happy with what I'm seeing with their growth. They're smaller numbers and don't drive the overall business, but they're smaller numbers today, and they will grow and become significant over time. That's really what I'm looking at.

Speaker #1: And that's really what I'm looking at.

Speaker #14: Okay . Thank you .

Erin Wright: Thank you.

Speaker #3: Thank you . Your next question comes to the line of Daniel Grosslight with Citi . Your line is now open .

Operator: Thank you. Your next question comes on the line of Daniel Grosslight with Citi. Your line is now open.

Speaker #15: Hi guys . Thanks for taking the question on CTS in the Americas . I think we were down around ten ish percent , nearly 10% constant currency .

Daniel Grosslight: Hi, guys. Thanks for taking the question. On CTS, in the Americas, I think we were down around ten-ish percent, nearly 10% constant currency. Can you just help us understand whether this is primarily being driven by CapEx deferral, just given the macro environment, the rate environment? Are you seeing any kind of competitive displacement in CAD/CAM and imaging, particularly from lower ASP type of offerings? Thanks.

Speaker #15: Can you just help us understand whether this is primarily being driven by CapEx deferral ? Just given the macro environment , the rate environment , are you seeing any kind of competitive displacement in CAD Cam and imaging , particularly from lower ASP type of offerings ?

Speaker #15: Thanks .

Speaker #1: Yeah, you're welcome. We're not seeing a huge bleed out competitively at this point. We think it's a little more timing.

Dan Scavilla: Yeah, you're welcome. We're not seeing a huge bleed out competitively at this point. We think it's a little more timing. As you know, capital is always bumpy and lumpy. I think that's what we're going to attribute it to. To your point, it's mostly in the CAD/CAM area, like we called out. I would say at this point, I'm not seeing anything that would take me off task. I don't feel like we're at a competitive disadvantage with this. I think it's just a matter of closing out deals that are in the pipeline.

Speaker #1: As you know , capital is always bumpy . And and so I think that's what we're going to attribute it to . To your point , it's mostly in the CAD cam area .

Speaker #1: Like we call it out . But I would say at this point , I've not seen anything that would take me off task .

Speaker #1: I don't feel like we're at a competitive disadvantage with this . I think it's just a matter of closing out deals that are in the pipeline

Speaker #15: Got it . Okay . And just an accounting question on the on the tariff impact or the tariff benefit this quarter . I think I heard this , but I just want to double check that full $44 million hits the PNL .

Daniel Grosslight: Got it. Okay. Just an accounting question on the tariff impact or the tariff benefit this quarter. I think I heard this. I just want to double check that full $44 million hits the P&L. If I were to normalize for that, I would just subtract $44 million from gross profit and adjust to EBITDA, or is there some other dynamic I'm not accounting for there?

Speaker #15: So if I were to normalize for that , I would just subtract 44 million from from gross profit . And adjusted EBITDA . Or is there some other dynamic ?

Speaker #15: I'm not accounting for ? There .

Speaker #1: You are . You're exactly right .

Dan Scavilla: You are exactly right.

Speaker #15: Okay , great . Thank you

Daniel Grosslight: Okay, great. Thank you.

Speaker #3: Thank you Your next question comes the line of Michael Petoskey with Barrington Research . Your line is now open .

Operator: Thank you. Your next question comes to the line of Michael Petusky with Barrington Research. Your line is now open.

Michael Petusky: Hey, good evening. Dan, I guess, you sort of called out the formula for winning that Wellspect's doing, obviously that has something to do with new product launches and innovation in their space. You obviously come out of a space where innovation was a huge key to winning. I'm just curious, the R&D, the incremental R&D spend you guys are doing right now, what's the mandate? Is it taking big bigger swings? Is it hitting more singles? I guess just in terms of timeframe for impact, I mean, is there anything likely to actually impact the work you're doing now, impact in mid to late 2027 or was 2028, 2029, more the timeframe? Thanks.

Speaker #16: Good evening . Dan , I guess you know , you sort of called out , you know , the formula for winning that .

Speaker #16: Well , specs doing and obviously that has , you know , something to do with new product launches and innovation in their space .

Speaker #16: And you obviously can come out of , you know , a space where innovation was a huge key to winning . And I'm just curious , you know , the R&D , the incremental R&D spend , you guys are , doing right now , what's the what's the mandate Is it taking bigger swings ?

Speaker #16: Is it is it hitting more singles ? And I guess just in terms of time frame for impact , I mean , is there anything likely to actually impact , you know , the work you're doing now impact , you know , in mid to late 27 or 28 , 29 more the time frame .

Speaker #16: Thanks

Speaker #1: You got it . Michael . So with well spec to your point , we went back and the return to growth action plan .

Dan Scavilla: You got it, Michael. With Wellspect, to your point, we went back in the Return to Growth action plan, we've invested in them in several different ways to actually fuel the ability to get the products out and penetrate the markets. They're responding well. That to me is one of those ones where you can actually fund it by itself and allow it to grow. I look at it as a completely separate organization. We just consolidate down for reporting. The point is, they continue to perform and again, even their pipeline is rich for other products and going out that way. On the dental side, the innovation and the increase in innovation that we had done this year was really intended to accelerate things.

Speaker #1: And we've invested in them in several different ways to actually fuel the ability to get the products out and penetrate the markets and the responding well .

Speaker #1: And , you know , that to me is one of those ones where you can actually fund it by itself and allow it to grow .

Speaker #1: And so , you know , I look at it as completely separate organization . We just consolidate down for reporting . But the point is they continue to perform .

Speaker #1: And , you know , again , even their pipeline is rich for other products and going out that way on the dental side , the innovation and the increase in innovation that we had done this year was really intended to accelerate things .

Speaker #1: And so , as you know , DS core is a platform and putting more functionality into the digital dentistry flow , like implants on Core or ortho on core to examples , the incremental money should move those forward meaningfully .

Dan Scavilla: As you know, DS Core is a platform putting more functionality into the digital dentistry flow, like implants on Core or ortho on Core, two examples. The incremental money should move those forward meaningfully. Now I have to get FDA approval, I do think goal is to have it done in late 2027, but it's about when we file and get approval. Certainly in 2028 would be the thing. Had we not done that would've been further out by at least a year. They're main things that are out there. In addition, given the size and the importance of EDS, we've put more products and more functions therein. We're looking to make sure that that stays fresh and we remain a leader and we invest in it. That answer your question?

Speaker #1: Now, I have to get FDA approval. So, I do think the goal is to have it done in late 2027, but it's about when we file and get approval.

Speaker #1: It's certainly in 2028 would be the thing . And had we not done that , that would have been further out by at least a year .

Speaker #1: So their main things that are out there , in addition , given the size and the importance of EDS , we've put more products and more functions there In .

Speaker #1: And so we're looking to make sure that that stays fresh and we remain a leader . And we invest in it , now , to answer your question , it's a mixed bag of home runs and singles .

Dan Scavilla: It's a mixed bag of home runs and singles like you have to do with everything. It can't all be big risk or too small risk. It's a blend. It's also both organic and inorganic opportunities for us to look and exploit and grow faster. It really kind of depends on the products and the opportunities. It really is up and down between those.

Speaker #1: Like you have to do with everything . It can't all be big risk or too small risk . And so it's a blend .

Speaker #1: It's also both organic and inorganic opportunities for us to look and exploit and grow faster . So really kind of products and the opportunities .

Speaker #1: It really is up and down between those .

Speaker #16: Okay , great . Yeah . Can I just make one quick one in ? I think this is a quick one . You know , obviously historically outside of the US , Germany has always been a key market .

Michael Petusky: Okay, great. Could I just sneak one quick one in? I think this is a quick one. Obviously, historically, outside of the US, Germany's always been a key market. I don't think I've heard you talk about that tonight or possibly even last quarter. Can you just give an update on what you guys are seeing in Germany across the board? Thanks.

Speaker #16: And I don't think I've heard you talk about that tonight or possibly even last quarter . Can give an update on on what you guys are seeing in Germany .

Speaker #16: You know you know , across the board . Thanks .

Speaker #1: Yeah . No , I didn't call it out , but I would just tell you it's probably more my style than anything else .

Dan Scavilla: I didn't call it out, I would just tell you it's probably more my style than anything else. I've got nothing that I'm worried about with Germany. I was just focusing more, as you know, US is top priority, how we fund EMEA is out there. Make sure we get Asia Pacific to grow. You are correct. It's still one of our top markets. It's doing okay. It's not going to be driving a large amount of growth. I think it's moving around market pace right now. It really wasn't anything for me to call out with what we're trying to put out message-wise.

Speaker #1: I've got nothing that I'm worried about with Germany . I was just focusing more . As you know , us as top priority .

Speaker #1: How we fund EMEA is out there . And then , you know , make sure we get asiapac to grow . You are correct is still one of our top markets .

Speaker #1: It's doing okay . It's not going to be driving a large amount of growth . I think it's moving around market pace right now .

Speaker #1: But it really wasn't anything for me to call out with what we're trying to put out . Message wise

Speaker #16: Gotcha . Thank you

Michael Petusky: Gotcha. Thank you.

Speaker #3: Thank you . Your next question comes the line of Joseph Downing with PSC . Your line is now open

Operator: Thank you. Your next question comes on line of Joseph Downing with PSC. Your line is now open.

Speaker #17: Hey guys , thanks for taking the question on for Jason today . I'll keep it to one . But Dan , when you look at the segment breakdown , it looks pretty different depending on .

Joseph Downing: Hey, guys. Thanks for taking the question. I'm for Jason today. I'll keep it to one. Dan, when you look at the segment breakdown, it looks pretty different depending on the geography this quarter. You have CTS down high singles in the Americas, but up double digits in APAC, while OIS fell in the Americas and was held closer to flat in EMEA. Just curious, how do you run one Return to Growth playbook when each unit's soft point sits in a different geography? Which of these regions within each segment gets first dibs on resources here? Just trying to think of how you're thinking about that. Thanks.

Speaker #17: The geography this quarter, you have CTS down high single digits in the Americas, but up double digits in APAC, while OIS fell in the Americas and was held closer to flat in EMEA.

Speaker #17: Just curious , how do you run one return to growth playbook when each unit sore point sits in a different geography and then which of these regions within each segment gets kind of first dibs on resources here ?

Speaker #17: Just trying to think of how you're thinking about that . Thanks .

Speaker #1: Yeah , it's a fantastic question . Thanks for asking it . So listen , everything matters but U.S. is top priority . Returning to growth .

Dan Scavilla: Yeah, it's a fantastic question. Thanks for asking it. Listen, everything matters, but US is top priority returning to growth. We've made that clear. In that, getting implants and CTS up on its feet through the dealer expansions or the education we've spoken about is critical while maintaining the lead in EDS. That US itself is fairly focused in and going. When it comes into EMEA, in that leadership team, we've made sure they are funded, but again, they don't need as much of a Return to Growth plan. That's really about addressing the EDS dealer inventories and driving through. I think they're in good shape. Again, very different will be Asia-Pac and how you get into China, how you continue to expand in Australia and Japan.

Speaker #1: We've made that clear . And in that , you know , getting implants and CTS up on its feet through the dealer expansions with the education we've spoken about is critical .

Speaker #1: While maintaining the lead in EVs . And so that US itself is fairly focused in and going when it comes into EMEA , in that leadership team , we've made sure they are funded , but again , they don't need as much of a return to growth plan that's really about addressing the editors dealer inventories and driving through .

Speaker #1: I think they're in good shape. And again, Asia-Pac will be very different, and how you get into China, how you continue to expand in Australia and Japan.

Speaker #1: So the good news is they all fit into a same model of customer first innovative products . By listening to the customer clinical education investments and strong reps that do workflow that applies globally .

Dan Scavilla: The good news is they all fit into a same model of customer first, innovative products by listening to the customer, clinical education investments, and strong reps that do workflow. That applies globally, you just put it at different points along where they are in their maturity curves.

Speaker #1: And then you just put it at different points along where they are in their maturity curves

Speaker #17: Great . Thanks so much

Joseph Downing: Great. Thanks so much.

Speaker #3: Thank you . Your next question comes to the line of County Kim with Morningstar . Your line is now open .

Operator: Thank you. Your next question comes on line of Keonhee Kim with Morningstar. Your line is now open.

Keonhee Kim: Hey, great. Thanks for taking the question. Hey, Dan, I recall you kind of highlighting investing behind education, especially in implantology as one of the main sources for Return to Growth. I guess as you said today, and when assessing the ROI on that front, how do you feel on that? Then do you feel like the long-term picture has improved or stayed neutral? Any thoughts there would be helpful.

Speaker #15: Great . Thanks for taking the question . Hey , Dan , I recall you kind of highlighting investing behind education , especially in Implantology , as one of the main sources for return to growth .

Speaker #15: I guess kind of as you said today , you know , and when assessing the ROI on that front , how do you feel on that ?

Speaker #15: And then do you feel like the long term picture has improved or stayed neutralized ? Any thoughts that would be helpful ?

Speaker #1: Yeah , you got it . So the thing with clinical education is it's long term investment . What I mean by that is spend it this year and you might see in Q4 some uptake .

Dan Scavilla: Yeah, you got it. The thing with clinical education is it's a long-term investment. What I mean by that is you spend it this year, you might see in Q4 some uptake, but it's really about getting the cadence throughout the multiple years by gaining users who are aware of your products and use them continuously. You can run through it, but it's really a main driver of all the competition. It's really something that really works well within this market, and it's really about making sure the generalists, specialists, the referrals all work together and are educated. That money I know is well spent. I have seen what happens when you trim it down, getting it back on track and then getting it above market is key that way. I would say that I'm pretty happy with where we are with that.

Speaker #1: But it's really about establishing a cadence throughout multiple years by gaining users who are aware of your products and use them continuously.

Speaker #1: And so you can run through it . But , but it's really a main driver of all the competition . It's really something that really works well within this market .

Speaker #1: And it's really about making sure the generalist specialists or referrals all work together and are educated . So that money I know is well spent .

Speaker #1: I have seen what happens when you trim it down . And so , you know , getting it back on track and then getting it above market is key .

Speaker #1: That way I would say that I'm pretty happy with where we are with that one thing as well . With the Q3 in particular .

Dan Scavilla: One thing as well with Q3 in particular, and we talked about where that was going, there'll be a bolus of investment occurring there without the revenue coming up to that. That will come in later quarters. You're going to see the Return to Growth plan not pay attention, and quite frankly, care about quarterly outcomes. It's about spending the money at the right time for sustained long-term growth.

Speaker #1: And we talk about where that was going . There will be a bolus of investment occurring there without the revenue coming up to that .

Speaker #1: That will come in later quarters . So , you know , you're going to see the return to health plan , not pay attention .

Speaker #1: And quite frankly , care about quarterly outcomes . It's about spending the money , the right time for sustained long term growth

Speaker #15: Great . That's helpful . And then just one more . I wanted to double click on the CTS . Your CTS and APAC has now had two quarters of sequential improvements .

Keonhee Kim: Great. That's helpful. Then just one more. I wanted to double-click on the CTS. CTS in APAC has now had kind of two quarters of sequential improvements. I'm curious if there's anything specific going on in the region that we're not seeing in other categories within the region. If there are any one-timers or big inventory stocking, or do you feel like the market condition has kind of, I guess, improved a little bit in the next or since the beginning of the year? Thanks.

Speaker #15: And I'm curious if there's anything specific going on in the region that we're not seeing in other categories within the region . Is there any like one timers or big inventory stocking , or do you feel like the market condition has kind of , I guess , improved a little bit in the next or since the beginning of the year ?

Speaker #15: Thanks .

Speaker #1: I want to make sure I heard you , you were talking about APAC . Is that what your question was

Dan Scavilla: I want to make sure I heard you. You were talking about APAC, is that what your question was?

Speaker #15: Yes . Especially

Keonhee Kim: Yeah, CTS especially in APAC.

Dan Scavilla: With CTS? Yeah. It's really about a program that we put in place. I'm not going to explain the program here, but it's really an execution we did in two of the key markets that's working very well. We designed it in, honestly, Q4 of last year. Began executing it, as you just kind of called out, in Q1, and we're seeing very positive uptake with what it is we're doing there. It is applicable throughout the world, but we're actually trying it right now within certain markets in Asia Pacific.

Speaker #1: Yeah . You know , it's really about a program that we put in place . I'm not going to explain the program here , but it's really an execution We did in two of the key markets .

Speaker #1: That's working very well . We designed it in honestly , the fourth quarter of last year began executing it as you just kind of called out in Q1 .

Speaker #1: And we're seeing very positive uptake with what it is we're doing there. And it is applicable throughout the world, but we're actually trying it right now within certain markets in Asia.

Speaker #1: PAC .

Speaker #15: Great , thanks

Keonhee Kim: Great. Thanks.

Operator: Thank you. This concludes the question and answer session. Thank you for your participation in today's conference. This concludes the program, you may now disconnect.

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