Q2 2026 DENTSPLY SIRONA Inc Earnings Call Transcript
Key Points
- Adjusted EPS was flat year-over-year at $0.52, despite revenue headwinds, with a positive $0.17 per share impact from tariff refunds.
- Operating cash flow improved significantly to $99 million in Q2 2026, up from $48 million in the prior year quarter, driven by tariff refunds and better working capital management.
- Wellspect Healthcare delivered strong performance with 7.1% revenue growth, supported by new product launches and continued adoption of NOIs products.
- The company expanded its U.S. distribution footprint by partnering with Atlanta Dental, Nashville Dental, and Medline Sinclair in Canada, which is expected to drive future growth.
- Clinical education initiatives, including the Global Implant Summit and endodontic forums, are strengthening customer relationships and supporting long-term growth.
- The company repurchased 1.3 million shares at an average price below $10, marking the first buyback since Q3 2024, reflecting disciplined capital allocation.
- DS Core, the digital platform, gained traction with 4 European DSO groups beginning implementation, highlighting the value of integrated digital workflows.
- APAC region showed strong growth in CAD/CAM and milling systems, with double-digit growth in Milling Systems and continued adoption of connected technology solutions.
- The company maintained its 2026 outlook for net sales of $3.5 billion to $3.6 billion and adjusted EPS of $1.40 to $1.50, excluding tariff refunds and incremental tariffs.
- New CFO John Fortson brings extensive experience in transformation and capital allocation, which is expected to strengthen financial discipline and execution.
- Revenue declined 4.1% as reported and 6.3% on a constant currency basis, with adjusted revenue down 3.6% after excluding Byte and dealer inventory reductions.
- OIS segment revenue fell 13.2% as reported, with adjusted decline of 5.7%, driven by lower volumes in premium implants in the Americas and APAC, and double-digit decline in SureSmile in the U.S.
- CTS segment revenue declined 1.5% as reported, with CAD/CAM down mid-single digits due to lower volumes in the Americas and unfavorable price mix in EMEA.
- EDS segment revenue declined 2.7% as reported, impacted by lower volumes in the Americas and EMEA, with distributor inventory reductions in Europe affecting sell-in.
- The company expects Q3 2026 earnings to be below Q2 2026 levels, excluding tariff refunds, due to normal seasonality and continued investment in growth initiatives.
- Incremental tariff impacts and lower volumes negatively affected gross profit, partially offset by tariff refunds, with ongoing tariff costs expected to persist.
- The company faces uncertainty from the Middle East conflict, leading to deferred capital equipment investment decisions in EMEA.
- U.S. implant sales are lagging behind competitors, with the company still in the early stages of its turnaround, and growth is not expected until 2027.
- The company's net debt-to-EBITDA ratio remains elevated at 3.2x, with a continued focus on debt reduction, limiting financial flexibility.
- The company has not implemented significant price increases since September 2025, which may limit margin expansion in the near term.
Good day. Thank you for standing by. Welcome to DENTSPLY SIRONA's Q2 2026 earnings conference call. (Operator Instructions) 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.
Thank you, operator, and good afternoon, 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 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
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