Dental products company Dentsply Sirona (NASDAQ: XRAY) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 6.2% year on year to $961 million. On the other hand, the company’s full-year revenue guidance of $3.55 billion at the midpoint came in 3.4% below analysts’ estimates. Its non-GAAP profit of $0.27 per share was 6% below analysts’ consensus estimates.

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“We delivered results in line with our expectations this quarter while making meaningful progress against our clear, focused priorities and strengthening execution across the business,” said Dan Scavilla, President and Chief Executive Officer.

Company Overview

With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ: XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Dentsply Sirona’s 2% annualized revenue growth over the last five years was tepid. This was below our standards and is a poor baseline for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Dentsply Sirona’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.7% annually.

Dentsply Sirona also reports sales performance excluding currency movements, which are outside the company’s control and not indicative of demand. Over the last two years, its constant currency sales averaged 5.5% year-on-year declines. Because this number is lower than its normal revenue growth, we can see that foreign exchange rates have boosted Dentsply Sirona’s performance.

This quarter, Dentsply Sirona reported year-on-year revenue growth of 6.2%, and its $961 million of revenue exceeded Wall Street’s estimates by 4.2%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Dentsply Sirona’s high expenses have contributed to an average operating margin of negative 8.8% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Looking at the trend in its profitability, Dentsply Sirona’s operating margin decreased by 25.8 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 9.3 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

This quarter, Dentsply Sirona generated a negative 14.5% operating margin. The company's consistent lack of profits raise a flag.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Dentsply Sirona, its EPS declined by 2.3% annually over the last five years while its revenue grew by 2%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Dentsply Sirona’s earnings to better understand the drivers of its performance. As we mentioned earlier, Dentsply Sirona’s operating margin expanded this quarter but declined by 25.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Dentsply Sirona reported adjusted EPS of $0.27, up from $0.26 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects Dentsply Sirona’s full-year EPS of $1.59 to shrink by 4.1%.

Key Takeaways from Dentsply Sirona’s Q4 Results

We enjoyed seeing Dentsply Sirona beat analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded up 8.1% to $13.76 immediately following the results.

Big picture, is Dentsply Sirona a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).