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Dentsply Sirona Reports First Quarter 2025 Results

1. Q1 2025 net sales of $879 million, down 7.7% year-over-year. 2. Organic sales decreased by 4.4%, notably impacted by Byte sales. 3. Adjusted gross margin improved to 56.3%, indicating operational efficiency. 4. Maintaining forecasts for 2025 organic sales between -4.0% and -2.0%. 5. Increased reported sales outlook to $3.60 billion due to currency changes.

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FAQ

Why Neutral?

Despite a drop in net and organic sales, adjusted EPS improved slightly, indicating underlying strength which could stabilize the stock. However, significant sales declines in key segments and the specific reasons for decreased revenue contribute to uncertainty about future performance.

How important is it?

The slight adjustments in EPS amidst declining sales may reassure some investors, but significant performance declines lead to hesitation.

Why Short Term?

Short-term impacts due to immediate revenue results may affect investor sentiment quickly. Future performance relies on executing forecasts mentioned and improving sales momentum, particularly in the U.S.

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Net sales of $879 million decreased (7.7%), organic sales decreased (4.4%) including a (4.0%) Byte sales impactGAAP gross margin of 53.0%, GAAP net income of $20 million or $0.10 per shareAdjusted gross margin of 56.3%, adjusted EBITDA margin of 19.0%, adjusted EPS of $0.43Maintaining FY25 outlook for organic sales and adjusted EPS; increasing reported sales due to F/X changes CHARLOTTE, N.C., May 08, 2025 (GLOBE NEWSWIRE) -- DENTSPLY SIRONA Inc. ("Dentsply Sirona" or the "Company") (Nasdaq: XRAY) today announced its financial results for the first quarter of 2025. First quarter net sales of $879 million decreased (7.7%) (organic sales decreased (4.4%)) compared to the first quarter of 2024. Foreign currency changes negatively impacted first quarter 2025 net sales by approximately ($30) million. Net income was $20 million, or $0.10 per share, compared to a net income of $18 million, or $0.09 per share in the first quarter of 2024. Adjusted earnings per diluted share were $0.43, compared to $0.42 in the first quarter of 2024. A reconciliation of Non-GAAP measures (including organic sales, adjusted EBITDA and margin, adjusted EPS, adjusted free cash flow conversion, and segment adjusted operating income) to GAAP measures is provided below. "In the first quarter, organic sales were roughly flat excluding the Byte sales impact, with growth in two of our three regions. Adjusted EBITDA margin expanded which primarily reflects the benefits from our transformational initiatives and internal financial discipline. We are delivering progress through customer-centric innovation, customer experience improvements, and operational efficiency, while operating in an increasingly uncertain macroeconomic environment," said Simon Campion, President and Chief Executive Officer. "Looking forward, we are maintaining our outlook for organic sales and adjusted EPS and will continue to focus on improving what is within our control to deliver sustainable long-term performance." Q1 25 Summary Results (GAAP) (in millions, except per share amount and percentages) Q1 25Q1 24YoY     Net Sales $879$953(7.7%)Gross Profit $466$506(7.9%)Gross Margin 53.0%53.1% Net Income Attributable to Dentsply Sirona $20$18NMDiluted Earnings Per Share $0.10$0.09NM Q1 25 Summary Results (Non-GAAP)[1] (in millions, except per share amount and percentages) Q1 25Q1 24YoY     Net Sales $879$953(7.7%)Organic Sales Growth %   (4.4%)Adjusted Gross Profit $495$540(8.3%)Adjusted Gross Margin 56.3%56.6% Adjusted EBITDA $168$1604.2%Adjusted EBITDA Margin 19.0%16.8% Adjusted EPS $0.43$0.423.7% NM - not meaningfulPercentages are based on actual values and may not reconcile due to rounding.[1] Organic sales growth, adjusted gross profit, adjusted EBITDA, and adjusted EPS are Non-GAAP financial measures which exclude certain items. Please refer to "Non-GAAP Financial Measures" below for a description of these measures and to the tables at the end of this release for a reconciliation between GAAP and Non-GAAP measures. Q1 25 Segment Results   Net Sales Growth % Organic Sales Growth %     Connected Technology Solutions (4.7%) (0.5%)Essential Dental Solutions (2.7%) 0.4%Orthodontic and Implant Solutions (20.0%) (17.7%)Wellspect Healthcare 3.4% 8.0%Total (7.7%) (4.4%) Q1 25 Geographic Results   Net Sales Growth % Organic Sales Growth %     United States (15.2%) (14.9%)Europe (3.4%) 1.1%Rest of World (2.8%) 3.1%Total (7.7%) (4.4%) Cash Flow and Liquidity Operating cash flow in the first quarter of 2025 was $7 million, compared to $25 million in the first quarter of 2024, primarily due to the unfavorable timing of collections on accounts receivable and a build of inventory during the quarter. In the first quarter of 2025, the Company paid $32 million in dividends. The Company had $398 million of cash and cash equivalents as of March 31, 2025. 2025 Outlook The Company is maintaining its 2025 outlook for organic sales in the range of down (4.0%) to (2.0%), and adjusted EPS in the range of $1.80 to $2.00. The Company is increasing its expected reported sales to a new range of $3.60 billion to $3.70 billion due to changes in foreign exchange rates. This outlook reflects the current state of tariffs and trade policy. Other 2025 outlook assumptions are included in the first quarter 2025 earnings presentation posted on the Investors section of the Dentsply Sirona website at https://investor.dentsplysirona.com. The Company does not provide forward-looking estimates on a GAAP basis as certain information, which may include, but is not limited to, restructuring charges, transformation-related costs, impairment charges, certain tax adjustments, and other significant items, is not available without unreasonable effort and cannot be reasonably estimated. The exact amounts of these charges or credits are not currently determinable but may be significant. Conference Call/Webcast InformationDentsply Sirona’s management team will host an investor conference call and live webcast on May 8th, 2025, at 8:30 am ET. A live webcast of the investor conference call and a presentation related to the call will be available on the Investors section of the Company’s website at https://investor.dentsplysirona.com. For those planning to participate on the call, please register at https://register-conf.media-server.com/register/BIb73584ce1e6f4d81b57af1bfbeec6816. A webcast replay of the conference call will be available on the Investors section of the Company’s website following the call. About Dentsply SironaDentsply Sirona is the world’s largest diversified manufacturer of professional dental products and technologies, with over a century of innovation and service to the dental industry and patients worldwide. Dentsply Sirona develops, manufactures, and markets a comprehensive solutions offering including dental and oral health products as well as other consumable medical devices under a strong portfolio of world-class brands. Dentsply Sirona’s innovative products provide, high-quality, effective and connected solutions to advance patient care and deliver better and safer dental care. Dentsply Sirona’s headquarters is located in Charlotte, North Carolina. The Company’s shares are listed in the United States on Nasdaq under the symbol XRAY. Visit www.dentsplysirona.com for more information about Dentsply Sirona and its products. Contact Information:Investors:Andrea DaleyVice President, Investor Relations+1-704-591-8631InvestorRelations@dentsplysirona.com Press:Marion Par-WeixlbergerVice President, Public Relations & Corporate Communications+43 676 848414588marion.par-weixlberger@dentsplysirona.com Forward-Looking Statements and Associated Risks All statements in this Press Release that do not directly and exclusively relate to historical facts constitute "forward-looking statements." Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control, including those described in Part I, Item 1A, "Risk Factors" of the Company's most recent Annual Report on Form 10-K, and any updating information or other factors which may be described in the Company’s other filings with the Securities and Exchange Commission (the "SEC"). No assurance can be given that any expectation, belief, goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this Press Release or to reflect the occurrence of unanticipated events. Investors should understand it is not possible to predict or identify all such factors or risks. As such, you should not consider the risks identified in the Company’s SEC filings to be a complete discussion of all potential risks or uncertainties associated with an investment in the Company. DENTSPLY SIRONA INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per share amounts)(unaudited)  Three Months Ended March 31,  2025   2024 Net sales$879  $953 Cost of products sold 413   447     Gross profit 466   506     Selling, general, and administrative expenses 358   415 Research and development expenses 36   42 Intangible asset impairments —   6 Restructuring and other costs 9   1     Operating income 63   42     Other income and expenses:   Interest expense, net 19   18 Other (income) expense, net —   (7)    Income before income taxes 44   31 Provision for income taxes 25   14     Net income 19   17     Less: Net loss attributable to noncontrolling interest (1)  (1)    Net income attributable to Dentsply Sirona$20  $18     Earnings per common share attributable to Dentsply Sirona:   Basic$0.10  $0.09 Diluted$0.10  $0.09     Weighted average common shares outstanding:   Basic 199.1   207.4 Diluted 199.8   208.5          DENTSPLY SIRONA INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in millions, except share and per share amounts)(unaudited)  March 31, 2025 December 31, 2024    Assets   Current Assets:   Cash and cash equivalents$398 $272Accounts and notes receivable-trade, net 604  556Inventories, net 612  564Prepaid expenses and other current assets 364  354Total Current Assets 1,978  1,746    Property, plant, and equipment, net 791  766Operating lease right-of-use assets, net 133  136Identifiable intangible assets, net 1,212  1,207Goodwill 1,632  1,597Other noncurrent assets 304  301Total Assets$6,050 $5,753    Liabilities and Equity   Current Liabilities:   Accounts payable$276 $241Accrued liabilities 738  754Income taxes payable 37  45Notes payable and current portion of long-term debt 742  549Total Current Liabilities 1,793  1,589    Long-term debt 1,593  1,586Operating lease liabilities 88  91Deferred income taxes 134  129Other noncurrent liabilities 432  415Total Liabilities 4,040  3,810    Total Equity 2,010  1,943    Total Liabilities and Equity$6,050 $5,753     DENTSPLY SIRONA INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)(unaudited)  Three Months Ended March 31,  2025   2024     Cash flows from operating activities:   Net income$19  $17     Adjustments to reconcile net loss to net cash provided by operating activities:   Depreciation 34   32 Amortization of intangible assets 45   54 Indefinite-lived intangible asset impairment —   6 Deferred income taxes 1   (9)Stock-based compensation expense 10   11 Other non-cash expense 9   19 Changes in operating assets and liabilities:   Accounts and notes receivable-trade, net (31)  27 Inventories, net (26)  (5)Prepaid expenses and other current assets (1)  (28)Other noncurrent assets 4   (6)Accounts payable 14   (28)Accrued liabilities (44)  (50)Income taxes (12)  (2)Other noncurrent liabilities (15)  (13)Net cash provided by operating activities 7   25     Cash flows from investing activities:   Capital expenditures (19)  (34)Cash received on derivative contracts 1   — Cash paid on derivative contracts —   (9)Proceeds from sale of property, plant, and equipment 1   — Net cash used in investing activities (17)  (43)    Cash flows from financing activities:   (Repayments) proceeds on short-term borrowings, net (272)  23 Proceeds from 364-day bridge loan 435   — Cash dividends paid (32)  (29)Repayments on long-term borrowings (2)  (3)Cash paid for deferred financing costs (3)  — Other financing activities, net (3)  (5)Net cash provided by (used in) financing activities 123   (14)Effect of exchange rate changes on cash and cash equivalents 13   (11)Net increase (decrease) in cash and cash equivalents 126   (43)Cash and cash equivalents at beginning of period 272   334 Cash and cash equivalents at end of period$398  $291     Supplemental disclosures of cash flow information:   Interest paid, net of amounts capitalized$13  $15 Non-cash investing activities:   Property, plant and equipment in accounts payable at end of period$22  $24 Exchange of inventory for naming and other rights$14  $—  Non-GAAP Financial Measures In addition to results determined in accordance with U.S. generally accepted accounting principles ("US GAAP"), the Company provides certain measures in this press release, described below, which are not calculated in accordance with US GAAP and therefore represent Non-GAAP measures. These Non-GAAP measures are used by the Company to measure its performance and may differ from those used by other companies. These Non-GAAP measures should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP. Management believes that these Non-GAAP measures are helpful as they provide a measure of the results of operations, and are frequently used by investors and analysts to evaluate the Company’s performance exclusive of certain items that impact the comparability of results from period to period, and which may not be indicative of past or future performance of the Company. Organic Sales The Company defines "organic sales" as the reported net sales adjusted for: (1) net sales from acquired businesses recorded prior to the first anniversary of the acquisition; (2) net sales attributable to disposed businesses in both the current and prior year periods; and (3) the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period's foreign currency exchange rates. Adjusted Operating Income and Margin Adjusted operating income is computed by excluding the following items from operating income (loss) as reported in accordance with US GAAP: (1) Business combination-related costs and fair value adjustments. These adjustments include costs related to consummating and integrating acquired businesses, as well as net gains and losses related to disposed businesses. In addition, this category includes the post-acquisition roll-off of fair value adjustments recorded related to business combinations, except for amortization expense of purchased intangible assets noted below. Although the Company is regularly engaged in activities to find and act on opportunities for strategic growth and enhancement of product offerings, the costs associated with these activities may vary significantly between periods based on the timing, size and complexity of acquisitions and as such may not be indicative of past and future performance of the Company. (2) Restructuring-related charges and other costs. These adjustments include costs related to the implementation of restructuring initiatives, including but not limited to, severance costs, facility closure costs, and lease and contract termination costs, as well as related professional service costs associated with these restructuring initiatives and global transformation activity. The Company is continually seeking to take actions that could enhance its efficiency; consequently, restructuring charges may recur but are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, and as such may not be indicative of past and future performance of the Company. Other costs include gains and losses on the sale of property, legal settlements, executive separation costs, write-offs of inventory as a result of product rationalization, and changes in accounting principles recorded within the period. This category also includes costs related to investigations and associated legal cases and remediation activities, which primarily include legal, accounting and other professional service fees, as well as turnover and other employee-related costs. (3) Goodwill and intangible asset impairments. These adjustments include charges related to goodwill and intangible asset impairments. (4) Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets, which are recorded at fair value. Although these costs contribute to revenue generation and will recur in future periods, their amounts are significantly impacted by the timing and size of acquisitions, and as such may not be indicative of the future performance of the Company. (5) Fair value and credit risk adjustments. These adjustments include the non-cash mark-to-market changes in fair value associated with pension assets and obligations, the credit risk component of hedging instruments, and equity-method investments. Although these adjustments are recurring in nature, they are subject to significant fluctuations from period to period due to changes in the underlying assumptions and market conditions. The non-service component of pension expense is a recurring item, however it is subject to significant fluctuations from period to period due to changes in actuarial assumptions, interest rates, plan changes, settlements, curtailments, and other changes in facts and circumstances. As such, these items may not be indicative of past and future performance of the Company. Adjusted operating margin is calculated by dividing adjusted operating income by net sales. Adjusted Gross Profit and Margin Adjusted gross profit is computed by excluding from gross profit the impact of any of the above adjustments that affect either sales or cost of sales. Adjusted gross margin is calculated by dividing adjusted gross profit by net sales. Adjusted Net Income (Loss) Adjusted net income (loss) consists of net income (loss) as reported in accordance with US GAAP, adjusted to exclude the items identified above, as well as the related income tax impacts of those items. The income tax effect of each pre-tax adjustment was determined based on the tax rate of the jurisdiction in which the related pre-tax adjustment was recorded. Additionally, net income is adjusted for other tax-related adjustments such as discrete or significant adjustments to valuation allowances and other uncertain tax positions, final settlement of income tax audits, discrete tax items resulting from the implementation of restructuring initiatives, the windfall or shortfall relating to exercise of employee stock-based compensation, any difference between the interim and annual effective tax rate, and adjustments relating to prior periods. Management believes that these adjustments for certain tax-related matters are helpful to normalize the tax effects of certain discrete or significant items that are irregular or infrequent in timing and may not be indicative of past or future performance of the Company. Adjusted EBITDA and Margin In addition to the adjustments described above in arriving at adjusted net income, adjusted EBITDA is computed by further excluding any remaining interest expense, net, income tax expense, depreciation and amortization. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales. Adjusted Earnings (Loss) Per Diluted Share Adjusted earnings (loss) per diluted share (adjusted EPS) is computed by dividing adjusted earnings (loss) attributable to Dentsply Sirona stockholders by the diluted weighted average number of common shares outstanding. Adjusted Free Cash Flow and Conversion The Company defines adjusted free cash flow as net cash provided by operating activities minus capital expenditures during the same period, and adjusted free cash flow conversion is defined as adjusted free cash flow divided by adjusted net income (loss). Management believes this Non-GAAP measure is important for use in evaluating the Company’s financial performance as it measures our ability to efficiently generate cash from our business operations relative to earnings. It should be considered in addition to, rather than as a substitute for, net income (loss) as a measure of our performance or net cash provided by operating activities as a measure of our liquidity. DENTSPLY SIRONA INC. AND SUBSIDIARIES(In millions, except percentages)(unaudited) A reconciliation of reported net sales to organic sales by geographic region is as follows:   Three Months Ended March 31, 2025 Q1 2025 Change Three Months Ended March 31, 2024(in millions, except percentages) U.S.EuropeROWTotal U.S.EuropeROWTotal U.S.EuropeROWTotal                Net sales $302$362$215$879 (15.2%)(3.4%)(2.8%)(7.7%) $356$376$221$953Foreign exchange impact      (0.3%)(4.5%)(5.9%)(3.3%)     Organic sales      (14.9%)1.1%3.1%(4.4%)                          Percentages are based on actual values and may not reconcile due to rounding. A reconciliation of reported net sales to organic sales by segment is as follows:   Three Months Ended March 31, 2025 Q1 2025 Change Three Months Ended March 31, 2024(in millions, except percentages) Connected Technology SolutionsEssential Dental SolutionsOrthodontic and Implant SolutionsWellspect HealthcareTotal Connected Technology SolutionsEssential Dental SolutionsOrthodontic and Implant SolutionsWellspect HealthcareTotal Connected Technology SolutionsEssential Dental SolutionsOrthodontic and Implant SolutionsWellspect HealthcareTotal                   Net sales $235$353$217$74$879 (4.7%)(2.7%)(20.0%)3.4%(7.7%) $247$364$271$71$953Foreign exchange impact       (4.2%)(3.1%)(2.3%)(4.6%)(3.3%)      Organic sales       (0.5%)0.4%(17.7%)8.0%(4.4%)                               Percentages are based on actual values and may not reconcile due to rounding. DENTSPLY SIRONA INC. AND SUBSIDIARIES(In millions, except percentages)(unaudited) The Company’s segment adjusted operating income for the three months ended March 31, 2025 and 2024 was as follows:   Three Months Ended March 31,(in millions)  2025  2024      Connected Technology Solutions $7 $2 Essential Dental Solutions  135  115 Orthodontic and Implant Solutions  37  42 Wellspect Healthcare  26  23 Segment adjusted operating income  205  182      Reconciling items expense (income):    All other (a)  87  79 Intangible asset impairments  —  6 Restructuring and other costs  9  1 Interest expense, net  19  18 Other (income) expense, net  —  (7)Amortization of intangible assets  45  54 Depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations  1  — Income before income taxes $44 $31          (a) Includes unassigned corporate headquarters costs. DENTSPLY SIRONA INC. AND SUBSIDIARIES(In millions, except percentages)(unaudited) For the three months ended March 31, 2025, a reconciliation of selected items as reported in the Condensed Consolidated Statements of Operations to adjusted Non-GAAP items is as follows: (in millions, except percentages and per share data) Gross Profit Operatingincome Net IncomeAttributable toDentsply Sirona(a) Diluted EPSGAAP $466  $63  $20 $0.10Non-GAAP Adjustments:        Amortization of Purchased Intangible Assets  28   45   33  0.16Restructuring-Related Charges and Other Costs  —   25   19  0.10Business Combination-Related Costs and Fair Value Adjustments  1   1   1  —Income Tax-Related Adjustments  —   —   14  0.07Adjusted Non-GAAP $495  $134  $87 $0.43GAAP Margin  53.0%  7.1%    Adjusted Non-GAAP Margin  56.3%  15.1%             Weighted average common shares outstanding used in calculating diluted GAAP net loss per common share  199.8Weighted average common shares outstanding used in calculating diluted Non-GAAP net income per common share  199.8(a) The tax expense on the Non-GAAP adjustments totals $4 million which is inclusive of the $14 million income tax-related adjustment above.   Percentages are based on actual values and may not reconcile due to rounding. DENTSPLY SIRONA INC. AND SUBSIDIARIES(In millions, except percentages)(unaudited) For the three months ended March 31, 2024, a reconciliation of selected items as reported in the Condensed Consolidated Statements of Operations to adjusted Non-GAAP items is as follows: (in millions, except percentages and per share data) Gross Profit Operatingincome Net IncomeAttributable toDentsply Sirona(a) Diluted EPSGAAP $506  $42  $18 $0.09Non-GAAP Adjustments:        Amortization of Purchased Intangible Assets  31   54   40  0.19Restructuring-Related Charges and Other Costs  3   17   13  0.06Goodwill and Intangible Asset Impairments  —   6   4  0.02Business Combination-Related Costs and Fair Value Adjustments  —   1   1  —Income Tax-Related Adjustments  —   —   11  0.06Adjusted Non-GAAP $540  $120  $87 $0.42GAAP Margin  53.1%  4.4%    Adjusted Non-GAAP Margin  56.6%  12.6%             Weighted average common shares outstanding used in calculating diluted GAAP net loss per common share  208.5Weighted average common shares outstanding used in calculating diluted Non-GAAP net income per common share  208.5(a) The tax expense on the Non-GAAP adjustments totals $9 million, which is inclusive of the $11 million income tax-related adjustment above.   Percentages are based on actual values and may not reconcile due to rounding. DENTSPLY SIRONA INC. AND SUBSIDIARIES(In millions, except percentages)(unaudited) A reconciliation of reported net income attributable to Dentsply Sirona to adjusted EBITDA and margin for the three months ended March 31, 2025 and 2024 is as follows:   Three Months Ended March 31,(in millions, except percentages)  2025   2024      Net income attributable to Dentsply Sirona $20  $18 Interest expense, net  19   18 Income tax expense  25   14 Depreciation(1)  33   32 Amortization of purchased intangible assets  45   54 Restructuring-related charges and other costs  25   17 Goodwill and intangible asset impairments  —   6 Business combination-related costs and fair value adjustments  1   1 Adjusted EBITDA $168  $160      Net sales $879  $953 Adjusted EBITDA margin  19.0%  16.8% (1) Excludes those depreciation-related amounts which were included as part of the business combination-related adjustments and Restructuring-related charges and other costs.Percentages are based on actual values and may not reconcile due to rounding. A reconciliation of adjusted free cash flow conversion for the three months ended March 31, 2025 and 2024 is as follows:   Three Months Ended March 31,(in millions, except percentages)  2025   2024      Net cash provided by operating activities $7  $25 Capital expenditures  (19)  (34)Adjusted free cash flow $(12) $(9)     Adjusted net income $87  $87 Adjusted free cash flow conversion  (14%)  (10%) Percentages are based on actual values and may not reconcile due to rounding.

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