Elizabeth Anderson — Senior Managing Director, Evercore ISI
Hi, guys. Good afternoon, and thanks for the question. Congrats on another great quarter. I mean, this really helps sort of extend some of the momentum that you built from 2025. Maybe, from a high level first, like, what is it that's sort of like clicking nicely for Envista? Then sort of what areas do you sort of view as having been more difficult to get traction in?
Paul Keel — President and CEO, Envista
I'll take that one. Thanks for kicking us off, Elizabeth. As we talked about on previous calls, you know, Eric and I came to Envista about two years ago now, having been in and around dental for a good portion of our careers. We already knew that dental was an attractive industry and that Envista was well positioned within it. For a variety of reasons, neither the performance of the market nor the business were consistently reflecting those advantages. The plan that we laid out this time last year at the capital markets event centered on improved execution in three principal areas, those being growth, operations, and people, with the thought that they would help bring our performance better in line with the company's potential.
Looking back, assessing our progress in that regard, and, you know, on the growth front, I'd say that the investments we're making in areas like clinical education and customer support and new product development are all beginning to bear fruit. We saw that in the Q1 results as well as 6 quarters now of generally broad-based growth and market share gains. Looking at it operationally, Envista has always been a pretty strong business in this regard, in large part because of our continuous improvement focus that comes through the Envista Business System. During COVID and the turbulence that followed it, though, you know, in all candor, our focus did slip a bit, and that resulted in compression on the gross margin line as well as some overspending in G&A.
We trimmed overhead last year by about $35 million. That has helped speed decision-making, and it's also improved earnings leverage, as we just shared. Now we're starting to get similar traction on the manufacturing front, with 100 basis points of COGS reduction in the quarter. We're really excited about the momentum that we're building on the people front. There were a few openings, as you know, in the management team when I joined, that afforded the opportunity to bring in additional dental market expertise from outside the company to supplement the strong team that was already in place when I arrived. The combination of the two has gelled nicely, you see that in a lot of the metrics we shared on the call.
Collaboration is up, internal promotions are up, engagement is up. All of this is, I think, healthy and helpful. Now in terms of the second half of your question, areas that have been less helpful, you know, of course, we'd have to start with macro uncertainty, and in particular, the impact that has on our customers and patients. If we look back across the last 24 months or so, several of the kind of key market indicators for dental that many of us watched, you know, things like interest rates and unemployment and consumer confidence, all of those were beginning to trend favorably across the back half of 2024. Of course, in Q1 of last year, we had tariffs, which caused an unexpected disturbance to that upward trend. Dental showed its resilience.
Conditions again started firming up in the back half of 2025, then we had the Gulf event heating up in Q1 of this year. Now we're all trying to assess how that might impact conditions moving forward. As this audience knows well, dental has proven its resilience. You know, we saw solid evidence of that in Q1, both in our results and others. In addition to that, Envista, as we've shown, has a portfolio that's well-balanced by segment, by geography, by go-to-market model, that is all helpful. I guess, kind of bringing it to a close, net/net, we're confident that the dental market will weather the current uncertainty, that the continuous improvement you're seeing from Envista will continue. Thanks for the question.
Elizabeth Anderson — Senior Managing Director, Evercore ISI
Yeah, that is helpful. Maybe as a follow-up, like, I know obviously we saw a solid, you know, very good performance this quarter, and you pointed to the 4 extra days that, you know, changed in the back half of the year. Can you just talk about, is it really those sort of macro drivers that are causing you guys to not raise the guidance at this point for the outperformance? Is it just too early in the year? Obviously, you didn't do it 1Q last year either. I'm just trying to sort of calibrate your expectations in terms of how things are faring versus when you originally set the guide. Thanks.
Paul Keel — President and CEO, Envista
Yeah, it's a fair question. You know, as part of our regular process in preparing for these calls, we give very careful thought to full year guidance. We appreciate the spirit of your question. You know, on the plus side, we are seeing stable to slightly upward trends in the dental market. We just walked through the many things that are going in favorably for Envista specifically. We're building a, I think, a pretty good track record now of consistent performance. All of these do give us confidence in continued performance moving forward. As you suggested in your question, you know, you have to balance those with a recognition of the current macro climate.
You know, the frequency and amplitude of the geopolitical shifts over just the past year and a half has to be taken into account. Since we don't give a confidence interval along with our guidance, you know, you need to capture that uncertainty in the guide and, you know, that typically takes the form of a, of a larger buffer, reflecting a less certain environment. Net/net, Elizabeth, I'd say we're encouraged by our progress and feel that reaffirming 2026 guidance, is the most appropriate outlook to provide at this point.
Elizabeth Anderson — Senior Managing Director, Evercore ISI
Great. Thanks so much.
Speaker — Analyst, Leerink Partners
Good evening, thanks for taking the question. Maybe just one quick first point of clarification. You mentioned the implant performance in China in terms of VBP. Can you just remind us what's embedded in guidance on VBP timing?
Paul Keel — President and CEO, Envista
I'll let Eric get in on this one.
Eric Hammes — CFO, Envista
Michael, when we, when we talked in the 4th quarter call, at that point in time, we were looking at ortho and implants, and effectively a VBP process that would start for both of those in the Q2 and/or Q3 timeframe. We don't have certainty on either of those, right? We have modestly updated information. I would say at this point in time, our, you know, best estimate, and to your question, what's included in guidance is both of those VBPs starting the process in, you know, Q2 or Q3. That's maybe the 1st point. What we always remind, I think, our, you know, sell side analysts and investors on is, you know, we are relatively well-prepared as we see the channel in both of those businesses.
We've been going through that process now for, you know, 18 months, particularly as we've seen some of the delays in VBP. We will likely see a little bit of channel, you know, once the process begins. That will mean we will have, you know, a slight compression of revenues in the short term, and then we will see some, you know, some benefits as our businesses, particularly our good, strong global brands, are able to leverage, you know, the important impact of VBP, which is bringing more, you know, customers to the market. You know, no change on the macro. I'd say in line with our guidance, and, you know, we will give you the best information we can as the, you know, market gives us the same.
Speaker — Analyst, Leerink Partners
It's helpful, Eric. Just if I could stay on implants, if you don't mind. Encouraging to see the mid-single-digit growth in the quarter ex China. Can you give us a sense on what component of the growth came from new product launches? I know you mentioned the Nobel S series, but in terms of the Vitality Index contribution from implants, any way to characterize where the growth shook out? Thank you.
Eric Hammes — CFO, Envista
Yeah, I can just talk to that one, Michael. I think it was in my prepared remarks, likely Paul's as well. Big picture the number to hinge on is we grew low single digits in core growth in implants in first quarter. Very different trend as we look at, you know, China versus developed markets. I'll just take those two. We were down, you know, strong double digits in China. That's a nod to what we just talked about in terms of the, you know, start of the VBP process, even though there's nothing, you know, formally confirmed in place, but nonetheless, the market is, you know, showing kind of the signals of that. Within that positive low single digit growth, we were down significantly in China.
We had strong mid-single digit to even high single digit growth in developed markets, roughly, you know, equal when we look at Europe as well as the U.S. Paul mentioned in his, you know, pre-read remarks, Nobel S series. You know, we're seeing good early signals from that. I wouldn't say that at this point in time, new product launches are really significantly contributing to our, you know, implants growth overall. Most of what I think we've talked about in the past has been, you know, the return to growth based on the commercial investments we've put in, the same portfolio, if you will, that we've had, as well as investments into clinical, having also a strong portfolio around the entirety of implants.
You know, we had a very strong growing regenerative biomaterials business this quarter. That's been pretty consistent over the past many quarters. We had good growth in our prosthetics, Procera business, and we continue to have a strong, you know, growth rate, albeit, not a significant percent of the share of our business in the digital space. Good, you know, good performance coming from some early new product launches, but certainly more to come there.
Speaker — Analyst, Leerink Partners
I'm all set. Thank you.
Jeff Johnson — Analyst, Baird
Hi. Good afternoon, guys. I love the first name basis here. We're all such good friends. Just wanted to ask a question, a follow-up question on that implants business. Eric, would we think most of the impact of the VBP prep in China is now done? Do we get another quarter or so of the same kind of headwind before we stabilize for a quarter or two, and then maybe get some tailwinds a quarter or two after that? Just how to think about that, and just what are you hearing on ortho VBP? That's the one that's been harder to get any kind of updates on, it seems like, over the last quarter or two. Thanks.
Eric Hammes — CFO, Envista
Yeah. To your 1st question, Jeff, I would say the significant decrease that I mentioned, double-digit decrease in Q1, we expect that to be the larger % if you will, of the year-on-year impact from VBP. That also presupposes that VBP doesn't get pushed out, delayed or changed. There'll be a little bit of a headwind from it in second quarter. Again, as plans get updated or remain the same, we expect to get more into the sort of the growth part of that. Importantly, though, with prices reduced and volume up. We don't have great better information on the ortho side.
Right now, Q3 is what our planning assumption is. That's effectively how we also went into the year. I think as Paul talked about in the Q4 call, you know, just be mindful that we've got, you know, an implants and an ortho business that's among, you know, dozens, if you will, of other med tech businesses that are also being considered in and around the, you know, the next two quarters. I think that's creating some level of complexity. Right now, our planning assumption is third quarter and, you know, we hope we get some consistency out of that.
Jeff Johnson — Analyst, Baird
Yeah, fair enough. Then just to follow up on pricing, if I could, a 2-parter, I guess. One, you know, you guys have taken some good price. I think we've been surprised at, especially some of the price inelasticity, it seems like on the wires and bracket side, especially. One of your larger distribution peers talking the other day about maybe seeing some additional price increases from manufacturers going through, starting in 2Q of this year. Just how are you thinking about next round of potential price increases? I know you don't want to tip your hand on this call necessarily, but just generally, was it the one and done last year? Do you feel like there might be still some room in this environment?
It looks like you have a new calculation for pricing for your 10-Q. Can you just kinda help us understand, you know, what pricing under the old calculation might have looked like versus what it looks like now, just so we can kind of understand, you know, in our models, how we could really think about this apples-to-apples growth this quarter coming from volume versus price, at least as we modeled it? Thanks.
Paul Keel — President and CEO, Envista
Yeah, Jeff, I'll take the pricing strategy part, then I'll let Eric weigh in on any disclosures in the Q. Our pricing algorithm has been the same since Eric and I joined. We've always thought of dental as a healthcare broadly, dental specifically, as less price elastic than, you know, the broader market. That's what's contributed to, you know, dental generally outgrowing the broader market, both in times of economic expansion and contraction. All of that got turned a little bit sideways in multiple categories during COVID, and I think Envista and our peers all lost sight a little bit of the importance of pricing from kind of the 2022 to 2023 period.
When Eric and I joined, we refocused Envista on this important component, it has both a strategic and an executional element to it. Strategically, our focus always begins with our customers. You know, we want to help them capture greater value, you know, in their offerings, we try to get a portion of that. That's code for saying we try to limit our price increases below procedure price increases. You know, as customers continue to do well, we get a portion of that. Executionally, you have to make price visible. You have to put it on the P&L. You have to put it in people's objectives. You have to show it on your dashboards.
Of course, we have good capabilities in turning those targets into delivery through EBS. We have focused Kaizens on the execution of the pricing strategy that I just articulated. Moving forward, Jeff, all that will remain the same. You know, we got extra price last year because exogenous effects required it. I think customers understood that. Again, we'll have to see what happens with inflation here in response to the situation in the Middle East. If we see inflation coming into the P&L, we'll have to take additional action on the pricing side. The strategy here, our high level kinda algorithm, remains the same. Eric, you wanna talk about the Q?
Eric Hammes — CFO, Envista
Yeah. Thanks for the question, Jeff. Good digging. We didn't expect you to get there that fast. What we disclosed in our Q4 for everybody on the call is that our price methodology changed. I'd say changed slightly. We now calculate price by looking at current quarter price versus prior year full year. The headline really is that's just to reduce volatility. We calculate price internally the way almost every company does by looking at the SKU and the customer. Because we do that, we simply have a better base when we calculate it over the full year.
If we have regular, you know, normal, predictable cycles of price increases, which are traditionally in roughly the 1st quarter timeframe, and we do that rhythmically over the years, there's no impact relative to this methodology and any other methodology. If we have any significant off-cycle price changes, you know, that's where you may start to see some effect. This quarter it was very nominal. It was immaterial in terms of kind of prior method versus current. But the headline is, we're doing it for reasons of getting a better, stable price growth metric, just given how we calculate at the customer and SKU level.
Jeff Johnson — Analyst, Baird
I'm set. Thank you.
Speaker — Analyst, Jefferies
Good afternoon, and thanks for taking the question. Just wanted to ask about, you know, I believe you briefly mentioned in your prepared commentary some headwinds around the Middle East tension. Just wanted to get a sense for what you're seeing in terms of input costs, freight costs around inflation and higher oil prices. You know, what's baked into the guide, if anything. If you do see increases in input costs, do you have methods or ways to offset those? Thank you.
Eric Hammes — CFO, Envista
Thanks, Michael. I'll take that. Maybe just at the highest level before I get into the operations side. Two reinforcing points. Our direct business, if you just look at it from a revenue perspective, the Middle East is less than 1% of our total revenues. If you look at it through the operational lens, we have, I'd call it nominal, very small amount of operations in the Middle East. That really has us primarily focusing on what we would consider kind of the core of your question, which is the second and third order impacts. That's code for, you know, what inflation may end up looking like. I'd just say a couple things on that. One, I would reflect back on, you know, last year's experience that we built through the kind of the whole tariff landscape.
We learned a lot, right? We stood up task forces. We did scenario planning. We had teams that mobilized. You know, while I would not wish that on any company, I would say we feel stronger as a, you know, company having gone through that, because it's sort of now a different version of being able to understand your situation. We have task forces that are in place, have been in place since the beginning of the conflict, and we're focused basically on 2 areas. One is your question, which is fuel costs and logistics. Our supply chain overall is functioning well. The majority of our supply chain moves through ground transportation. We have, like, 5% of our total logistic costs and movement that's ocean and air.
That just simply means the disruption is very minimal. We estimate, like, a mid-single-digit million-dollar type of risk from fuel increases and related surcharges. To your kind of opening question, we're working on mitigation to those. We don't consider those significant in our guidance, we will mitigate. We've also done some work on the second piece, which is the more complex piece. That's really just understanding how all of the, you know, oil and polypropylene and chemical feedstocks may create risk to an inflationary environment. I would just say, number 1, we have it well understood. Secondly, you know, we have mitigation plans that are in place.
Drawing from sort of the same, you know, kind of agility that we had to go through last year with tariffs, right? It's looking at your supply chains and making sure that you're shifting source of supply where possible. It's looking at your own cost structure internally, and then it's using the lever of price if that should need to be the case. I'd say at this point in time, we haven't made changes to the guidance, but we have contemplated what the risks are and what the mitigations are. Unless something goes, you know, significantly kind of off-trend from where it's at, we feel we can mitigate.
Speaker — Analyst, Jefferies
Great. Thank you, Eric. Just, one other one on the Versah acquisition. I believe you mentioned, you know, the system can be used with a broad array of implant systems. From a strategic standpoint, do you have plans to kinda close that off and only make it usable with Envista's implants, or will you keep it open? Thank you.
Eric Hammes — CFO, Envista
No, we'll keep it open. You know, it's a key attribute to clinicians is the versatility of the system. You know, again, we start from what's best for the clinician, so we'll keep it open.
Speaker — Analyst, Jefferies
Great. Thank you.
Jonathan Block — Managing Director, Stifel
Hey, guys. Good afternoon. Paul, you reviewed some new products, you know, that were recently introduced, I believe the amount that you plowed back into the business in terms of growth investments via the bridge, if I'm reading that correctly, you know, really was sort of a step function higher. It seems it was solidly higher than what the bridge suggested in 4Q 2025 and 3Q 2025. Maybe just talk about where the company is with the next wave of innovation. I don't know if you're gonna tell us, you know, where it's focused, but maybe the timeline for some of those initiatives would be helpful.
Paul Keel — President and CEO, Envista
Yeah. Thanks for the question, Jonathan. Starting at the high level, you know, the way the, the model here works is, get the top line growing, good gross margins, generate more gross margin dollars than you could reinvest, fund every accretive new product development and commercial program that you can, you're still gonna have more drop to the bottom line, margins will continue to expand. That's a virtuous cycle 'cause as you invest more in growth, you get more of that top line, you get more of the gross margin dollars and, you know, it's a beautiful thing. I think if you look back, I know you look very closely, you know, across the last 8 quarters, you see that trend playing out. You're exactly right.
We did put more money into new product development and into front-end commercialization in Q1, because we had more money to invest, and we think that those investments will generate continued strong growth. Hopefully, we'll be having this conversation in future quarters as well.
Jonathan Block — Managing Director, Stifel
Okay. Fair enough. Maybe just as a second question, a lot of focus on implants. I'll take it over to E&C. You know, your performance has been very different than the industry in terms of well, outperforming some of the other results. Just how do we think about maybe the durability, and you're coming up on difficult comps? I'm just trying to maybe vet that a little bit. You know, as you lap some of those numbers, again, I don't think the consumable industry, nor diagnostics is a high single-digit, let alone low double-digit grower. Just thoughts on how you're performing its industry, and then any shout-out in terms of how we should think about it considering the comps going forward. Thanks.
Paul Keel — President and CEO, Envista
Let me take the two components of E&C in turn, starting with the consumables piece. Yes, I think you're right. We over the past several quarters have clearly outgrown the consumables market. I think we benefit from a couple of things in that regard. The first is, remember, our metrics business is part of our consumables, the antimicrobial infection prevention business. That has just done very well, has captured a lot of share, and has had a couple meaningful, high impact on new products. We talked about one in the last call. We have a hydrogen peroxide version of a surface disinfectant that's unique on the market. Customers really like it. That has really captured a lot of share.
Second thing, in consumables, echoing a prior question, it's one of the categories that we have found tends to be less on price elastic. It's such a small portion of total clinical spend that a couple percentage increase in the cost of a consumable is a no percentage increase in the cost of a procedure. We probably benefit a little more from price in consumables. To the extent that we focus on that more than others in the market, that would explain a bit of that delta. Coming to diagnostics, we've also outgrown the market. I think we talk about that on every quarter. That's principally driven by three things, John.
The first is this very strong install base and strong brand of DEXIS. As that market starts to turn back positive, you know, what do we have? Three years of compression? We get more than our fair share, because we have such a strong presence there. The second piece, related to diagnostics is that has been a very strong new product generator for us. We had a couple very big launches at the end of 2024, the new CBCT platform. And then, last year, of course, we had the very big IOS launch with Imprevo. That has made a big impact.
The third thing I would say in diagnostics, this is as much a market comment as it is a DEXIS comment, is software is really making an impact in diagnostics. You know, this used to be principally a hardware game, but now, differentiated software and the various AI-enabled solutions that, you know, I know you see when you walk through the booth at the trade show, that's really very exciting stuff. Because we have the largest installed base, we, I think, can have the biggest impact for customers on these sorts of digital add-ons. I think all of that is the reason that we're outgrowing the market in E&C, both on the consumable side and on the diagnostic side.
Jonathan Block — Managing Director, Stifel
All set. Thank you, guys.
Erin Wright — Analyst, Morgan Stanley
Great. Thank you and good evening. On capital deployment, you did announce a buyback, $300 million or buyback program. I guess, you know, I want to make sure none of that's embedded in guidance today that would offer incremental upside to EPS. How are you weighing just M&A versus buybacks? You had a small tuck in. You know, are there a lot of attractive dinks and dunks out there in certain markets? What are you looking at? What is the acquisition pipeline? I guess, how would you characterize it? Thanks.
Paul Keel — President and CEO, Envista
Yeah. Thanks, Erin, for the question. Let me start with the first half with capital deployment, and I'll just reiterate our priorities. Our highest priority clearly remains organic growth. You know, as Jonathan asked about in the previous question, we've ramped both our commercial and new product investments over the past several quarters. We still see the highest risk-adjusted return on any marginal dollar to be a good organic program. That tops the list. We come onto the second half of your question, our second priority being accretive M&A. We have done 3 small deals in the last year or so. Maybe I'll say just a bit more about each in a minute here.
But all were accretive in terms of purchase multiple and financial contributions. We like those. Again, embedded in your question, our third priority is returning surplus cash to shareholders. You know, the incremental $300 million authorization that we announced today, and then we initiated Envista's first-ever repurchase program in Q1 of last year. Now specific to acquisitions, you know, of course, we have a very experienced M&A team. You know, over the last 25 years as Envista's been put together, that had a big M&A component to it. We're well networked across the global dental space, and we continue to see a steady stream of opportunities across the portfolio. For us, we're remaining highly disciplined.
We're focused on those strategically aligned targets that offer the accretive economics that I just mentioned. Let me just kinda walk it through the three deals we did. We like bolt-on acquisitions in areas of existing strength. The Versah deal that we talked about previously is a great example of that.
We're working to better balance our overall implants weighting by increasing our challenger penetration. One of the small deals we did last year nicely fits that description. A third area that we're spending time on is further strengthening our presence in targeted international markets. One of the small deals we did last year was in Turkey, and that's a good example of that third category. You know, in totality, we see plenty of additional runway for us on organically led value creation. We do have a good M&A capability. We view acquisitions as a, you know, as a supplementary arrow in our quiver.
Erin Wright — Analyst, Morgan Stanley
Okay, great. Then on Spark and Ortho, just can you talk a little bit about kind of the strategy there, where it stands today, brackets and wires and Spark? What's the go-to-market strategy? How has it evolved? Any changes that you're seeing from a competitive landscape standpoint on that front? Thanks.
Paul Keel — President and CEO, Envista
Yeah. With Ortho, start at the highest level, it remains a highly under-penetrated category. You know, something like 5% of all clinically appropriate cases where the patient has the wherewithal to pay, get treated in any given year. You know, it's a hugely under-penetrated category. Kinda one click down, roughly 3/4 of all cases get treated with brackets and wires, about 1/4 get treated with clear aligners. That mix has been largely stable over the past couple of years. You know, it moves a little bit quarter by quarter, but that mix is, you know, relatively stable. Our competitive advantage is that we're the only scaled player who has a, you know, a decent size offering in both.
We're clearly the market leader on the traditional fixed orthodontic side and now serving orthodontists. We're, you know, a strong number 2 in the clear aligner segment. You know, having spent a lot of time in orthodontists' offices, you know, I know they value 2 things in particular from Ormco. The first is that we've been there for 60 years, been a market leader. The second is that we don't tell them how to treat. We know that they're the experts. We give them the tools, whether they be brackets and wires or clear aligners, to treat a particular patient in a particular case in the way that they know how.
I think that is why we continually outgrow the market and, you know, have captured share certainly 6 straight years, if not 20-something straight quarters.
Erin Wright — Analyst, Morgan Stanley
Thank you.
Speaker — Analyst, Barclays
Oh, yeah. Thanks for taking my question. Hey, Eric, I just had a quick sort of financial question. I was sort of hoping we could dig into that core growth number of 9.5%. You know, looking back to last year, obviously, you raised prices due to the tariffs, and I'm trying to, you know, parse out how meaningful of an impact that was on a year-over-year basis. Sort of looking at the cadence of your guidance, I'm trying to figure out how big of a headwind that'll be in 3Q this year. Ultimately in 4Q, you have that headwind as well as sort of the days issue that you're benefiting from this quarter. I just wanna make sure I understand the cadence of 2Q, 3Q, and 4Q correctly. Thanks so much.
Eric Hammes — CFO, Envista
Yeah, perfect. Let me try to hit all that, Glenn. Maybe just to start off with the growth in Q1, if you just look at the bridge that we provided, effectively what we're telling you is 9.5% reported core growth. Take the billing days out, take a little bit of the deferral gain out. Our quote, normalized growth, was about 4%. That's just the piece on Q1. You know, I think coincidentally, if you were to look at our same breakdown of growth last year, our published core growth result, 6.5, we also said it normalized to about 4, that was mostly with a little bit of distribution and channel in there and then Spark deferral.
I think that's maybe the first way just to think about the business is we're on this, you know, relatively close normalized 4% core growth. As you think about the cadence for the next couple quarters, I would say, you know, our guidance range, 2%-4% for the year, is a good way to think about Q2 and Q3. The data that we effectively gave you on the 4.5% impact in Q1 relative to billing days is something you should be, you know, taking out of Q4, if you will. That means Q4 could be low to mid-single digit negative, with the underlying business still performing well. If I caught it right on price, I mean, I wouldn't differentiate price in there.
You know, the prices that we put in place, last year around mid-year, we're gonna continue to see in our growth rate as we go through second quarter. Then what we've talked about, I think in our Q4 call, is that pricing would resume to be sort of, more in the normal range x the impact of China.
Speaker — Analyst, Barclays
Okay. I appreciate all that. I guess only, you know, one of the reasons I was asking, because the way you worded the press release, you sort of suggested 2Q and 3Q should sort of be in that published range. If you're anniversarying those price increases that you put in place in the middle of the year, wouldn't 3Q theoretically grow slower than 2Q, all other things being equal?
Eric Hammes — CFO, Envista
I mean, all other things being equal, yes. Of course, we've got, you know, a business portfolio and a bunch of other dynamics. Think about it as being, you know, midpoint of our guidance range, within our guidance range as the right instructive view of Q2 and Q3.
Speaker — Analyst, Barclays
Perfect. Thanks for all the details.
Jason Bednar — Analyst, Piper Sandler
Hey, guys. Apologies for any background noise. I'm at the airport here. Wanted to ask first on Spark. I think it's been a little while since you updated us on where you stand with the percentage of your Ormco accounts that are currently using Spark. Just any details you can provide there just so we can have a sense of, you know, kind of the runway in front of you.
Paul Keel — President and CEO, Envista
You're testing my memory here, Jason, on what those figures are. I don't have them to mind, but the general takeaway is that there's still quite a bit of runway left in terms of our core bracket and wire users converting across. That's true both in individual clinics. It's especially true in DSOs. You heard one of our, you know, our peers report, they do quite well with DSOs, so we have a big opportunity there to gain share. The second thing I would say is that, you know, now Spark is a big enough business that it's no longer focused just on the core Ormco users as it was when we first started out. Now it's calling on all orthodontists.
Although we had a, you know, the leading market share in orthodontics, of course we don't have 100% share. The takeaway would be plenty of room to run still in orthodontics.
Jason Bednar — Analyst, Piper Sandler
Okay. All right. Yeah, fair enough. That's Totally appreciate that. Paul, I'll ask a bigger picture follow-up. Look, you guys have navigated this, the last couple of years since you've been at Envista extremely well, taken some share, turned the business around, you deserve a lot of credit. Maybe on a go-forward basis, trying to think about, you know, how do you still win with your pricing strategy? How do you think about your innovation and pricing strategy knowing that these secular headwinds in dental aren't going away? It seems like inflation and some of the things we're looking at with fuel are, you know, We're hearing more about driving to private label and lower priced equipment, lower priced consumables.
I guess, how do you think about, again, wrapping this all together with your innovation and pricing strategy, how do you think about Envista going forward in that landscape?
Paul Keel — President and CEO, Envista
Yeah, I mean, that's what's great about dental. You know, it's a global market. Unlike every other healthcare category on the planet, every single person is a potential patient. There's no end to the opportunity in the category, and it has persistent excess demand over supply. That's just what propels dental as a category to outgrow the broader market, you know, essentially every single year. We're a beneficiary of that. You know, as you know, our strategy is mostly to take advantage of that rising tide to execute well and to try to bring our performance up in line with the potential that the market and this collection of businesses offers. You know, over time, Eric and I have been in dental now for 20-something years.
If you take care of your customers, you take care of your colleagues, you know, the rest pretty well takes care of itself over time.
Jason Bednar — Analyst, Piper Sandler
All right. Thanks so much.
Speaker — Analyst, Citi
Hi, guys. Thanks for taking the question. I wanna focus a little bit on EBITDA margin cadence for the remainder of the year. Obviously a good result this quarter, even with that step up in growth in-investments. As we think about the remainder of the year, how are you looking to pace growth investments, particularly given the headwind you'll face from fewer selling days in 4Q? I guess in tandem with that, how are you thinking about realizing productivity benefits for the remainder of the year across both the manufacturing productivity and G&A productivity? Thanks.
Eric Hammes — CFO, Envista
Yeah, excellent. Hey, Daniel, welcome to Dental and Envista. Look forward to meeting you in the next couple hours here. I think a couple questions within there. The first one I would say on the growth investment piece, you know, you should think about our bridge that we provided this quarter and the significant, you know, margin impact from growth investments, which Paul well described as fueling our R&D and future growth, as primarily being investments that we put in the business in 2025, and Q1 is really comping against a lower investment quarter last year. That just means that the, you know, the ramp, if you will, isn't as significant as we see things moving sequentially. I think that's 1 important point to consider.
To the point of your margin rate question, I would think about Q2 and Q3 being at a roughly similar margin rate than we just printed in Q1. Because we have better revenue dollars, little bit of cyclicality in Q4, that's where we'll see slightly better margin rates that get us to the roughly midpoint of our 7%-13% adjusted EBITDA growth. I think on the productivity side of the equation, I would just say our playbook and the contribution to margins is really pretty similar, right? We're gonna cadence our growth investments to be sort of in line with how we're gonna grow.
We will continue to use G&A as we have in the past, to be able to help, you know, create margin opportunities and fund, you know, sales, marketing and R&D. Hopefully that gets you home. If you need more, you know, detail, we can get you offline.
Speaker — Analyst, Citi
Yep. Sounds good. Thanks, guys.
Paul Keel — President and CEO, Envista
All right. Hey, thanks, everybody, for tuning in and for the thoughtful questions. It really is a pleasure to work with a group of investors who know the market and the players so well. It leads for a very kind of rich and helpful discussion. I'll briefly underline just a couple of thoughts by way of wrap up on the quarter. First, Q1 was another solid step forward for Envista. We had double digit sales, adjusted EBITDA and EPS growth. Secondly, our performance was broad-based. All our major businesses and most geographies posted strong performance. We had good contribution again from volume, price, and new products. Thirdly, we continue to focus on executing our value creation plan.
I think we have demonstrated ongoing progress on all three of our growth operations and people priorities. Fourth, today we announced an incremental $300 million dollar share repurchase authorization and reaffirmed our 2026 full year guidance. I think I'll leave it there for now. Have a good day and a great week, everyone.