Of the U.S. dentists who said at the end of 2025 that they would make a major equipment purchase in 2026, a large share had not followed through by the fall. The American Dental Association’s Health Policy Institute found that 24.4% of dentists planned such a purchase and 16.1% had made one by the third quarter. The institute surveyed 750 dentists, 704 of them in private practice, for its Q3 2026 update to “The State of the U.S. Dental Economy,” Becker’s Dental Review reported Oct. 7.
Companies that sell chairs, imaging units and scanners to those practices reported the shortfall in their second-quarter numbers. Align Technology’s imaging systems and CAD/CAM services revenue dropped 10.8%. Henry Schein’s U.S. dental equipment sales slipped 1.1%, while its U.S. dental merchandise sales rose 8.3%. At Dentsply Sirona, equipment and instruments revenue held flat.
Dentsply nonetheless swung to a profit. The Charlotte, North Carolina, dental products maker earned $37 million, or 18 cents a diluted share, in the three months ended June 30, after losing $45 million, or 22 cents a share, in the same period of 2025. Net sales declined 4.1% to $898 million from $936 million, or 6.3% in constant currency, the company reported Aug. 6.
A broad group of investment managers held Dentsply shares at the end of June. BlackRock reported 26,711,079 shares, and three Vanguard entities together held more than 22 million, according to InsiderSet’s compilation of 13F filings. State Street held 9,285,298 shares, and the Ariel Appreciation Fund, managed by John W. Rogers Jr., held 8,026,107. Armistice Capital, the New York hedge fund, reported 3,672,000 shares valued at about $39 million. Dimensional Fund Advisors, Brandes Investment Partners and First Eagle also filed positions.
Equipment and Consumables Move on Different Clocks
Dental suppliers sell two broad categories of products. Consumables, such as filling materials, endodontic files, impression materials and preventive products, are used on patients every day and reordered on a routine schedule. Equipment, such as treatment chairs, cone-beam CT units and intraoral scanners, is a capital expense that a practice can push into the next year.
Henry Schein’s results separated the two. The distributor’s total sales reached $3.46 billion in the second quarter, up 6.7%, with 4.6% internal growth. Its global dental sales grew 8.1% to $1.854 billion in the second quarter, or 4.9% on an internal basis. Merchandise rose 9.7%, or 5.9% internally. Equipment rose 3.8%, or 2.2% internally, with U.S. equipment down 1.1% and international equipment up 8.7%. International dental sales overall climbed 10.6%, and U.S. dental sales rose 5.6%. “We delivered strong sales performance and margin improvement in the second quarter,” Chief Executive Fred Lowery said.
Align, the maker of Invisalign, posted total revenue of $1.056 billion, up 4.3% from a year earlier and 1.5% from the first quarter. Its aligner and equipment businesses moved in opposite directions. Clear aligner revenue increased 8.2% to $870.9 million, and case volume set a record at 691,800, up 7.4%. Revenue from imaging systems and CAD/CAM services, the segment that contains iTero scanners, fell 10.8% to $185.3 million, though it rose 0.7% from the first quarter. Chief Executive Joe Hogan pointed to “persistent softness in the capital equipment market.” Align said customers were also choosing lower-priced scanners and leasing or rental programs, which generate less revenue at the time of sale. The company still expects iTero shipments to grow by double digits in 2026.
Envista, which owns Nobel Biocare implants and Spark aligners, grew in both of its segments. Second-quarter sales climbed 7.1% to $730.5 million, and core sales grew 5%. Its Equipment & Consumables segment had $259.5 million in sales, 8.5% core growth and $45.9 million in GAAP operating profit. Its larger Specialty Products & Technologies segment, which includes implants and aligners, recorded $471 million in sales and 3.1% core growth. Envista lifted its 2026 forecast for core sales growth to 3.5% to 4.5% and for adjusted earnings to $1.50 to $1.55 a share. “We built on our fast start in Q1 with continued good performance in Q2,” Chief Executive Paul Keel said.
The ADA’s numbers show the same pattern from inside the practice. Software purchases outran plans, with 19.1% of dentists buying new software against the 16.9% who said they intended to. Equipment purchases fell short, at 16.1% against 24.4%.
The institute’s earlier work described the financial backdrop. Consumer spending on dental care was 4% higher in January 2026 than a year before, according to its first-quarter report. A panel covering the fourth quarter of 2025 found that about one-third of dentists were confident in the U.S. economy and about one-third had too few patients, and that equipment and supply costs had climbed 5% since the start of that year, ADA News reported. Spending on dental services had grown 9% over the period the panel measured, compared with 22% for health care overall and 24% for physician services. More than one-third of dentists planned to drop some insurance networks in 2026, and about 40% planned to hire.
Dentsply’s Quarter, Segment by Segment
Dentsply reports results for four business units. Only one of them grew.
Connected Technology Solutions, which sells equipment and digital dentistry products, recorded $239 million in sales, down 1.5% as reported and 3.8% in constant currency. On the earnings call, Chief Financial Officer John Fortson gave the hardware figure separately. “Equipment and instruments revenue was $137 million, flat year over year with declines in treatment centers,” he said. Imaging, led by Orthophos units in EMEA, partly offset weaker treatment-center sales. Fortson added that Europe, the Middle East and Africa “saw a slight softening of demand for select areas of capital equipment,” and Chief Executive Dan Scavilla linked delayed orders in that region to uncertainty in the Middle East.
Essential Dental Solutions, the consumables unit, recorded $376 million in sales, down 2.7% as reported and 5% in constant currency. An analyst asked whether price increases had helped the unit. “We have not taken anything significant in pricing,” Scavilla answered. Fortson traced part of the decline to distributors reducing the stock they carry. “Sell in is lower year over year as certain distributors reduce their inventory levels,” he said.
Orthodontic and Implant Solutions declined the most. Its sales fell 13.2% to $197 million, or 14.9% in constant currency. Excluding Byte, the unit fell 5.7%, according to a Yahoo Finance summary of the call. Implant sales slipped by a mid-single-digit percentage, and SureSmile clear aligners brought in $40 million, down by double digits.
Wellspect Healthcare, the continence-care business that makes urinary catheters and related products, grew 7.1% to $86 million, or 3.8% in constant currency.
Geographically, constant-currency sales fell 11.6% in the Americas, 3.6% in Europe, the Middle East and Africa, and 1.2% in Asia-Pacific. Dentsply also planned an approximately $8 million cut in dealer inventory during the quarter. Without that cut and without Byte, company-wide sales declined 3.6% in constant currency.
Margins, Cash and a Tariff Refund
Margins widened even as sales fell. GAAP gross margin was 54.9%, up from 52.4%, and adjusted gross margin was 56.4%. Adjusted EBITDA totaled $190 million, a 21.3% margin compared with 21.1%. Adjusted earnings per share were 52 cents, down 1.6%.
Dentsply collected about $44 million in tariff refunds during the quarter. “The tariff refunds translated into a positive $0.17 per share impact,” Fortson told analysts. The refunds also lifted operating cash flow, which more than doubled to $99 million from $48 million, and free cash flow rose to $55 million from $16 million. The company has left tariff refund benefits out of its 2026 adjusted earnings outlook.
That outlook stayed at $3.5 billion to $3.6 billion in net sales and $1.40 to $1.50 in adjusted earnings a share. Executives told analysts they expect third-quarter revenue to decline from the second quarter on normal seasonal patterns, and they expect gains from the turnaround to become visible in the fourth quarter.
“2026 continues to be a year of decisive action as we execute our Return-to-Growth Action Plan,” Scavilla said in the release. “Our second quarter results were in line with expectations.” On the call, he said, “Some parts of the business are improving faster than others.” He also told analysts that “we should not count on a market up or down to drive our growth.”
Armistice and the Other Holders
Armistice’s June-quarter filing listed more than a dozen medical technology and life sciences tools companies, and Dentsply was one of them. The fund raised its Dentsply share count 22% during the quarter, from roughly 3 million shares at the end of March, StockZoa data show. The position accounted for about 0.5% of the portfolio. Armistice also increased its Align stake by 14%, to 180,000 shares worth $30 million. Thermo Fisher Scientific was its largest holding in the group, at $61 million after a 33% increase in shares, followed by Orthofix Medical at $30 million and AngioDynamics at $29 million. Waters, Integer Holdings, Illumina and Boston Scientific were new to the portfolio.
The medical technology names are a small part of a larger portfolio. Armistice reported $8.17 billion across 333 holdings at June 30, according to 13f.info. Its five largest positions were put options on the SPDR S&P 500 ETF Trust and the iShares Russell 2000 ETF, Madrigal Pharmaceuticals, call options on Cytokinetics and Supernus Pharmaceuticals.
BlackRock’s Dentsply stake was valued at $283.4 million and the Ariel Appreciation Fund’s at $85.2 million, InsiderSet data show. Dimensional Fund Advisors held 3,460,636 shares, Brandes 1,127,712 and First Eagle’s U.S. Value fund 851,347. By share count, Armistice’s 3,672,000 shares fell between Ariel’s and Dimensional’s.
Where the Plan Started
The current plan dates to Feb. 26, when Dentsply released full-year 2025 results. Sales for 2025 were $3.68 billion, 3% lower as reported and 4.3% lower in constant currency. Byte, a direct-to-consumer aligner business that Dentsply is closing, accounted for 1.9 points of the constant-currency drop. The company lost $598 million for the year, or $3 a share, including $650 million in goodwill and intangible asset impairments.
In February, Dentsply also announced a restructuring program it expects to save about $120 million a year. It estimated the one-time cost at $55 million to $65 million, mostly to be spent in 2026 and 2027, and said part of the savings would go into product development, clinical education and training its sales force in connected dentistry. The company ended its quarterly dividend, which had cost $128 million in 2025, and said the cash would go toward reducing debt and repurchasing shares. Scavilla described the plan as “going deeper, moving faster and being bolder.”
The first quarter of 2026 ended in a loss. On May 5, Dentsply reported a net loss of $10 million, or 5 cents a share, compared with net income of $20 million in the first quarter of 2025. Net sales of $880 million were flat as reported and 6.7% lower in constant currency. Adjusted earnings per share were 27 cents, compared with 44 cents, and adjusted EBITDA margin was 14.7%, compared with 19%. Operating cash flow rose to $40 million from $7 million, largely from collecting receivables. “We are executing our Return-to-Growth Action Plan as expected,” Scavilla said in May.
From the first quarter to the second, Dentsply’s constant-currency sales decline narrowed slightly, to 6.3% from 6.7%. Adjusted EBITDA margin rose to 21.3% from 14.7%. The company went from a $10 million loss to a $37 million profit, and the $44 million tariff refund, worth 17 cents of the 18 cents in second-quarter earnings per share, accounted for most of that turnaround. Connected Technology Solutions went from 4.4% reported growth in the first quarter to a 1.5% decline in the second, and Wellspect grew in both quarters.
Seven Dealer Agreements in One Year
Dentsply has rebuilt much of its North American distribution this year. On Oct. 6, it said Midwest Dental Equipment & Supply would begin selling its technology portfolio in the United States on Nov. 1, adding equipment to a relationship that had centered on consumables. Financial terms were not disclosed.
Midwest Dental, founded in 1988 and headquartered in Wichita Falls, Texas, calls itself the largest independent, family-owned dental distributor in the Southern U.S. It has sales, service and technical staff in Texas, Oklahoma, New Mexico and Arkansas. “Our customers trust us to help them make the best technology decisions that are right for their practice,” Chief Executive Matt LeVasseur said in Dentsply’s announcement.
The agreement was the seventh North American dealer deal Dentsply has signed or expanded in 2026. The others cover Benco Dental Supply, Burkhart Dental Supply, Nashville Dental, Atlanta Dental Supply and Medline Sinclair in Canada, plus a renewed partnership with Patterson Dental. In August, Scavilla called the Atlanta and Nashville expansions “important building blocks for sustainable commercial growth.”
Lender Terms Through Year-End
An 8-K filed Oct. 8 disclosed amendments, dated Sept. 30, to Dentsply’s revolving credit facility, for which JPMorgan Chase Bank serves as administrative agent, and to three note purchase agreements from 2015, 2016 and 2019. The amendments raise the maximum total leverage ratio and senior leverage ratio for the quarters ending Sept. 30 and Dec. 31, 2026. They also allow an additional EBITDA addback for certain cash charges in those quarters.
The lenders attached conditions. Until Dentsply delivers its compliance certificate for fiscal 2026, it generally may not add new liens or new subsidiary debt beyond what already exists, and its restricted payments are limited, with some exceptions. For a specified period, it must report quarterly on certain initiatives along with their costs and savings. The credit facility carries a new pricing level for its applicable margin and facility fee, and the notes pay higher incremental interest if the total leverage ratio reaches specified thresholds. The filing does not disclose the new ratio levels or the interest rates.
The amendments “are intended to allow the Company to maintain compliance with its debt covenants in all material respects,” the filing said. Fortson signed it.
Dentsply had reduced its borrowings before the amendments. Total debt was $2.224 billion at June 30, $104 million less than the $2.328 billion at the end of 2025, according to the second-quarter release. Cash and equivalents declined to $239 million from $326 million. Dividends paid in the first half came to $32 million, half the $64 million paid a year earlier. The company repurchased 1.3 million shares for about $12 million in the second quarter, its first buyback since the third quarter of 2024, and first-half capital expenditures rose to $96 million from $51 million. Net debt was 3.2 times EBITDA, the same ratio as at the end of March.
Dentsply reports third-quarter results and holds a conference call on Thursday, Nov. 5, at 4:30 p.m. Eastern. The report will cover the first quarter under the amended leverage limits and will be the company’s first since the Midwest Dental announcement. Form 13F filings showing where Armistice, BlackRock, Vanguard, State Street and Ariel stood on Sept. 30 are due by mid-November.
Comments are closed.