Envista Holdings Corporation

Hello, my name is Sergio, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation third quarter 2025 earnings results conference call. All lines have been placed on mute to prevent any background noise. After their speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press start, then number one on your keypad. If you would like to withdraw your question, please press the start and then number two. I will now turn the call over to Mr. Jeff Gustafson, Vice President of Investor Relations at Envista Holdings. Mr. Gustafson, you may begin your conference call.

Good afternoon. Thanks for joining Envista's third quarter 2025 earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer. Before we begin, I want to point out that our earnings release, the slide presentation supplementing today's call, and reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the investor section of our website, www.investico.com. The audio portion of this call will be archived in the investor section of our website later today under the heading Events and Presentations. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted our results. Unless otherwise noted, references to these remarks to company-specific financial metrics relate to the third quarter of 2025 and references to period-to-period increases and decreases in financial metrics are year-over-year. During the call, we may describe certain products and solutions that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events and developments that we believe, anticipate, or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except as required by law. With that, I'll turn the call over to Paul.

Thank you, Jim. Good afternoon and welcome, everyone. On today's call, I'll kick us off with some opening thoughts on our Q3 and year-to-date performance, as well as a brief strategic and operational update. Eric will then take us through the financials in more detail. I'll wrap things up with some closing thoughts, and then, as always, we'll open it up for your questions. Slide 4 summarizes three things. Q3 results, year-to-date performance, and another update to our full year 2025 guidance. Let's begin on the left with Q3 results. We posted another solid quarter, delivering strong revenue and earnings growth and good margin expansion. Core growth came in at 9%, aided by the expected SPARC deferral benefit. Excluding this, core growth in the quarter was around 5%, with all major businesses once again in positive territory. Adjusted EBITDA margin was 14.5%. up more than 500 basis points from Q3 of 24, supported by good growth and productivity. Adjusted EPS was $0.32, more than twice the Q3 24 result. Moving to year-to-date performance, core growth came in around 3% after normalizing for last year's changes in SPARC deferral and dealer inventory levels. Year-to-date adjusted EBITDA margin is around 13%, showing progress in Q3 over H1. Rounding out the column, through three quarters, we've delivered 82 cents of adjusted EPS, a 67% increase over the same period last year. Moving to the column on the right, given our good year-to-date performance and strong momentum, we are again raising our full year 2025 guidance. We now expect core revenue growth of approximately 4%, up from 3% to 4% previously, and adjusted EPS of $1.10 to $1.15 versus $1.05 to $1.15 previously. EBITDA margin guidance for the year is unchanged at approximately 14%. Let's now turn to progress we made in the quarter in support of our three core priorities of growth, operations, and people. Beginning with growth, on the left side of the chart, ours was well-balanced, between volume and price, and broad-based across the portfolio as ortho, consumables, diagnostics, and implants all delivered growth. We again held share in implants while gaining share in all other major businesses. Our strong performance funded another quarter of double-digit increases in strategic R&D and sales and marketing investment. We're seeing good return from these investments, evidenced by several major new product launches in the quarter. including SPARC Junior, a comprehensive aligner solution for younger patients, SPARC StageRx, a digital workflow platform for enhanced clinician support, Orascoptic ErgoZoom, a novel loop system that combines superior ergonomics with adjustable magnification, and DEXIS Imprevo iOS, a significant leap forward in terms of intraoral scanning speed, precision, and versatility. We're also seeing good market traction from previously launched new products, such as Spark on Demand, Spark Retainers, and ByteSync Class 2 Corrector, as well as Nobel BioCare's new multi-unit abutment, which integrates our novel surface treatment with a slimmer emergence profile. The solution is designed to promote soft tissue healing and supports a stronger biologic seal for long-term stability. In terms of customer education, this quarter we trained more than 15,000 clinicians, including hosting several high-impact events balanced across all geographies and businesses. Examples include well-attended CUR and ORMCO forums in Europe and a major Nobel and DEXA symposium in Japan. On the operations front, we continue to enjoy strong contributions from EBS. our continuous improvement methodology that is central to how we deliver results, develop our people, and advance our culture. In addition, we delivered further year-on-year G&A reductions while maintaining high customer service levels. Last quarter, we announced a new R&D and manufacturing facility in China. And in Q3, we broke ground on a new multi-purpose diagnostic center just down the road from our existing facility in Finland. which has long been a hub for innovation in dental imaging. Finally, with respect to people, we continue to advance our high-performing continuous improvement culture, seeing growing momentum in engagement and talent development. This week, we published our 2024 Sustainability Report. Available on our website, the report details the many initiatives that are underway across key focus areas, like expanding access to dental care for underserved populations, Investing in our colleagues and communities, being good stewards of the environment, and building on our Century Plus rock-solid foundation of doing business the right way. Before I turn the call over to Eric, I'll mention some important milestones for our Spark aligner business in Q3. On the growth front, we shipped our one millionth case since launching the business in 2019. We're pleased to have gone from zero to nearly $300 million in revenue in under six years, funded entirely by operating profits generated elsewhere in our portfolio. We're the only orthodontic provider with leading positions in both fixed and aligner therapy, operating in all major geographies, and with a global supply chain that allows us to respond seamlessly to macro and market conditions. This global scale brings me to the second milestone we crossed in the quarter. Last year, we committed to positive operating profit for Spark sometime in the second half of this year, and we reached that level in Q3. Behind this strong momentum, we expect continued margin and market share gains moving forward. These milestones were several years in the making, and we applaud the many contributions from our colleagues, partners, and customers that both got us here and continue to propel us forward. With that, I'll turn the call over to Eric to walk us through the numbers.