Envista Raises 2026 Earnings Outlook as Q3 Adjusted EPS Rises 25%

Envista Holdings Corporation (NYSE: NVST) raised its 2026 earnings outlook after third-quarter adjusted earnings per share increased 25%, as revenue growth, pricing and productivity measures supported wider margins despite continued pressure from China’s volume-based procurement program.

The dental products company now expects full-year adjusted EPS of $1.54 to $1.58, compared with its previous range of $1.50 to $1.55. Envista also narrowed its core sales growth forecast to 3.75% to 4.25% from 3.5% to 4.5%, and moved its adjusted EBITDA growth outlook to 12.5% to 14% from 11% to 14%. Its forecast for free cash flow conversion remained about 100%.

For the quarter ended Oct. 2, revenue rose 3.2% to $691 million from $670 million a year earlier. Core sales, which exclude acquisitions, discontinued products and currency translation, increased 2.7%. Management said the global dental market showed no material change from the first half of 2026.

Adjusted EBITDA increased 9% to $105.8 million, while the adjusted EBITDA margin expanded 80 basis points to 15.3%. Adjusted gross margin improved 20 basis points to 56.3%. Envista attributed the profitability gains to higher volume, procurement and pricing initiatives, and factory and selling, general and administrative productivity. Those measures also funded continued growth investments and helped offset inflationary pressure.

Adjusted net income rose to $65.2 million from $53.7 million, and adjusted diluted EPS increased to $0.40 from $0.32. Tax planning also contributed to the adjusted EPS increase, according to the presentation.

On a GAAP basis, net income was $508.3 million, or $3.11 per diluted share, compared with a net loss of $30.3 million, or $0.18 per share, a year earlier. The latest quarter included a $428.1 million realized cumulative foreign-currency translation gain related to the dissolution of certain legal entities. It also included $15.6 million of tariff refunds following a U.S. Supreme Court ruling.

Equipment and Consumables Leads Core Growth

Equipment and Consumables posted revenue of $247.8 million, up from $238.4 million, with core sales growth of 4.1%. Consumables grew at a low-single-digit rate across all major geographies, while Diagnostics recorded mid-single-digit growth across its portfolio.

Adjusted operating profit for the segment increased to $55.5 million from $47.9 million, lifting the margin to 22.4% from 20.1%. Envista said positive pricing and factory and administrative productivity supported the improvement while allowing continued investment in research and development and sales and marketing.

Specialty Products and Technologies generated revenue of $443.7 million, compared with $431.5 million a year earlier, and delivered 2% core sales growth. Spark clear aligner sales rose at a high-single-digit rate, with particular strength in Western Europe and emerging markets. Implant sales increased at a mid-single-digit rate, with growth described as balanced globally.

Brackets and Wires sales fell at a high-single-digit rate, driven by China’s volume-based procurement program. Adjusted operating profit was unchanged at $66.7 million, while the segment margin declined to 15% from 15.5%, reflecting the China impact and continued commercial and R&D investment.

Geographically, Envista reported high-single-digit growth in emerging markets excluding China, mid-single-digit growth in Western Europe and low-single-digit growth in North America. China declined at a double-digit rate.

The company said new products continued to support core growth. Third-quarter launches included an AI-assisted endodontic module for DTX Studio Clinic, the smaller and lighter Orascoptic Ultra HDL visualization system, and the NOMAD Pro 3 handheld X-ray device.

Cash Flow and Capital Allocation

Operating cash flow totaled $77.9 million, broadly stable compared with $78.7 million a year earlier. Free cash flow declined to $63.5 million from $67.9 million as net capital expenditure increased, but represented 97.4% of adjusted net income.

Envista repurchased approximately 400,000 shares during the quarter. Net debt was about 0.6 times adjusted EBITDA.

Management said it plans to reinvest part of the company’s productivity and profitability gains to support future growth. The outlook nevertheless remains subject to uncertainty, including the continuing effect of China’s volume-based procurement program, inflationary pressures and the timing and size of items that are difficult to forecast, such as discrete tax matters, legal provisions and acquisition- or divestiture-related charges.