Envista Holdings Corporation

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

Good afternoon. Thanks for joining Invista's fourth quarter 2025 earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and 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 the 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 in these remarks to company-specific financial metrics relate to the fourth 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. Thanks, Jim. Good afternoon and welcome, everyone. On today's call, I'll kick us off with some opening thoughts on our Q4 and 2025 performance. our progress implementing the Value Creation Plan that we communicated in March of last year, and our guidance for 2026. Eric will then take us through the numbers in more detail, and I'll wrap up with some closing thoughts before we open it up for Q&A. Let's start with the Value Creation Plan that we shared at our Capital Markets Day early last year. In our view, a good plan should be both achievable and aspirational, timely as well as timeless. A good plan should authentically describe who you are today and who you're striving to be tomorrow. Centered on the four foundational components that you see here, we think our plan does exactly this. We're guided by our purpose of partnering with dental professionals to improve patient lives. We're centered on our circle values of customer centricity, innovation, respect, leadership, and continuous improvement. We're focused on our three key priorities. of growth, operations, and people. And our plan is framed by our medium-term financial objectives of 2% to 4% core growth, driving 4% to 7% EBITDA, and 7% to 10% EPS growth, all underpinned by free cash flow conversion of 100% or better. Today, I'll focus on the strategic and operational progress that we're making in implementing this plan as well as our financial performance relative to our medium-term objectives. Let's begin with Q4 and 2025 progress on the next slide. Slide five is organized by the three priorities that I just mentioned. Beginning with growth on the left side of the chart, ours was widespread. All businesses posted positive growth for the quarter and year, and all outgrew their respective markets in Q4, resulting in continued share gains across the portfolio. Consistent with what we've discussed on previous calls, increased new product activity and clinical training are contributing meaningfully to our accelerating growth. We trained 30% more customers in 2025, and we generated close to $100 million in revenues from products introduced in just the last 12 months. I'll touch on a few of these new products on the next slide. And looking to build on this momentum in 2026 and beyond, Q4 marked another quarter of double-digit increases in R&D investment. 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. We reduced G&A spending by over $35 million last year, or about 10%, while maintaining our world-class safety, quality, and customer service levels. We took action in 2025 that we expect will result in roughly a four-point tax rate reduction in 2026. And supported by strong cash flows, we put in place a $250 million share repurchase program in early 2025, a first for Invista, and returned over $160 million to shareholders across the year. Finally, with respect to people, we're working to advance our high-performing continuous improvement culture. We refreshed our management team in mid-2024, bringing in new leaders from the outside to supplement a strong core team that was already in place. 18 months in, we're working very well together, and stability and collaboration at the senior ranks have cascaded across our organization. We saw record participation in our 2025 employee survey with fraud-based increases in employee engagement. We've redoubled our commitment to talent development, with better than half of all management promotions going to existing employees last year, a 40-point increase over 2024. And in addition to taking care of our customers, colleagues, and shareholders, we've also stepped up support of our communities, by reaching more than 19,000 underserved patients last year and donating over $2 million to charitable causes through our INVISTA Smile Project. New product innovation has long been the lifeblood of INVISTA. Having served dentists now for over 130 years and with more than 1,500 patents to our name, we've had a hand in several of the most important dental innovations over time, including the invention of dental implants, the introduction of both self-ligated and conventional orthodontic bracket systems, the first panoramic radiograph, and the now ubiquitous endodontic K-file. We built on this strong heritage in 2025 with key new product launches in all major businesses, and you see some of those listed here. Four major new product introductions in SPARC last year supported that business's robust growth. New platforms in both Premium and Challenger contributed to multiple consecutive quarters of growth for our implants franchise and our fastest full-year performance since 2022. In consumables, launches like Optivon 360, SimplyCore Composite, and Cabicide HP helped propel above-market growth for that business. And we enjoyed another strong year of new product launches in diagnostics, with an entirely new intraoral scanning platform, as well as novel cloud and AI features for our market-leading DTX Studio suite of solutions. We have another strong wave of launches lined up for 2026, and we look forward to sharing more about these as they come to market. Now, having given you a flavor for where we're investing our time, attention, and resources, let's turn to the output from all this work. We'll begin with Q4 results on the left side of the slide. we posted another strong quarter, delivering good revenue, EBITDA, and EPS growth. Core growth came in around 11%, or something closer to the mid-single digits, excluding certain factors that Eric will explain shortly. Strong core growth converted to even stronger EBITDA growth of 22%, driven by Spark turning profitable in Q3, and continued good execution on price, tariff mitigation, and G&A productivity. Adjusted EPS was $0.38, up more than 50% from Q4-24, supported by strong operating profits, share repurchases, and a lower tax rate. Moving to full-year performance in the center of the slide, core growth for 2025 was 6.5%, again broad-based across the portfolio. Adjusted EBITDA was up 26%. resulting in a margin of around 14% or a two-point improvement over 2024. And EPS was up over 60%, aided by many of the same drivers as Q4. All of this contributed to strong free cash flow conversion for 2025 of 114%. Rounding out the slide, you'll see our 2026 guidance in the column on the right. This year, we expect core revenue growth of 2% to 4% and pre-cash flow conversion around 100%, both directly in line with our value creation plan. We're guiding to adjusted EBITDA growth of 7% to 13% and adjusted EPS growth of 13% to 22%, both above our medium-term objective. To summarize my introductory comments, Q4 capped a strong year of progress and performance for Invista. positioning us well for continued improvement here in 2026. And with that, I'll turn it over to Eric to cover the financials in more detail.