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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 147 added, 301 removed, 227 unchanged (66% of the section changed)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the Company’s operations and business environment.

MD&A is provided as a supplement to, and should be read in conjunction with, the Consolidated Financial Statements and Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K.

The following discussion includes forward-looking statements that involve certain risks and uncertainties.

See Part I, Item 1, “Business - Forward-Looking Statements and Associated Risks.”

2024 Operational Summary

For the year ended December 31, 2024,

• Net sales decreased 4.3% compared to the prior year.

On an organic basis (a Non-GAAP measure as defined under the heading “Key Performance Measurements” below) net sales decreased 3.5% for the year ended December 31, 2024 compared to the prior year.

Net sales were negatively impacted by approximately 0.8% due to the strengthening of the U.S.

dollar over the prior year period.

• Net loss was $910 million as compared to net loss of $132 million for the prior year primarily due to higher goodwill and intangible asset impairment charges of $1,014 million compared to $307 million in the prior year.

Diluted loss per share was $4.48 compared to diluted loss per share of $0.62 in the prior year.

• Cash from operations was $461 million, as compared to $377 million in the prior year.

Company Profile

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is a discussion and analysis of the financial condition and results of the operations of DENTSPLY SIRONA Inc.

and its consolidated subsidiaries for the year ended December 31, 2025.

This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

The discussion summarizing the significant factors affecting the results of operations and financial condition of DENTSPLY SIRONA Inc.

for the year ended December 31, 2024 can be found in Part II, “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), which was filed with the Securities and Exchange Commission on February 27, 2025.

DENTSPLY SIRONA Inc.

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The Company’s shares of common stock are listed in the United States on the Nasdaq stock market under the symbol XRAY.

Segment Descriptions

A description of the products and services provided within each of the Company’s four reportable segments is provided below.

Connected Technology Solutions

This segment includes the design, manufacture, and sales of the Company’s dental technology and equipment products.

These products include the Equipment & Instruments and CAD/CAM product categories.

Dental CAD/CAM technologies are products designed for dental professionals to support numerous digital workflows for procedures such as dental restorations through integrations with DS Core, our cloud-based platform.

Essential Dental Solutions

This segment includes the development, manufacture, and sales of the Company’s value-added endodontic, restorative, and preventive consumable products and small equipment used by dental professionals for the treatment of patients.

Offerings in this segment also include specialized treatment products including products used in the creation of dental appliances.

Orthodontic and Implant Solutions

This segment includes the design, manufacture, and sales of the Company’s various digital implant systems and innovative dental implant products, digital dentures and dental professional-directed aligner solutions.

Offerings in this segment also include application of our digital services and technology, including those provided by DS Core, our cloud-based platform.

Wellspect Healthcare

This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management.

This category consists mainly of urology catheters and other healthcare-related consumable products.

2025 Operational Summary

For the year ended December 31, 2025,

• Net sales decreased 3.0% compared to the prior year.

On a constant currency basis (a Non-GAAP measure as defined under the heading “Key Performance Measurements” below), net sales decreased 4.3% for the year ended December 31, 2025 compared to the prior year.

Net sales were positively impacted by approximately 1.3% due to the weakening of the U.S.

dollar over 2025.

• Net loss was $598 million as compared to net loss of $910 million for the prior year, primarily due to lower goodwill and intangible asset impairment charges of $650 million compared to $1,014 million in the prior year.

Diluted loss per share was $3.00 compared to diluted loss per share of $4.48 in the prior year.

• Cash flow from operations was $235 million, as compared to $461 million in the prior year.

The Company conducts business through four reportable segments:

(1) Connected Technology Solutions, (2) Essential Dental Solutions, (3) Orthodontic and Implant Solutions, and (4) Wellspect Healthcare.

For further information on each of these segments including the product lines which comprise them, refer to Item 8, Note 6, Segment and Geographic Information, in the Notes to Consolidated Financial Statements of this Form 10-K.

Recent Developments

As previously disclosed in the Company’s Current Report on Form 8-K filed February 11, 2025, the Company has initiated a process to evaluate strategic alternatives for its Wellspect Healthcare business.

There is no deadline or definitive timetable set for completion of the strategic alternatives process or assurance that the process will result in a transaction.

The Company does not intend to make further announcements regarding the review of strategic alternatives unless and until the Board of Directors approves a course of action or otherwise determines further disclosure is appropriate or necessary.

As previously disclosed in the Company’s Current Report on Form 8-K filed January 14, 2026, the Company entered into new non-exclusive distribution agreements with Patterson Dental Holdings, a leading supplier of products and services to the dental health end market, for the distribution of dental equipment in the United States.

This renewed partnership reflects both companies’ commitment to supporting dental professionals with advanced technologies and expert service while setting a clear focus on driving growth and innovation in the years ahead.

The impact of global economic conditions

Markets in several regions, particularly Europe, continue to experience varying degrees of pressures inhibiting growth and face concerns about the systemic impacts of adverse economic conditions and geopolitical events.

Changes in economic conditions, supply chain constraints, higher energy costs, labor shortages, the conflict in Ukraine, and geopolitical tensions in the Middle East and Russia, have all contributed to a period of higher inflation across the industry and the regions in which the Company operates.

As a result, the Company has experienced higher prices for certain raw materials, including electronic components, which have led to a negative impact on margins.

We expect a continuation of inflationary pressure on the cost of both raw materials and wages into 2025, the effect of which will depend on our ability to successfully mitigate and offset the related impacts.

The challenging macroeconomic conditions have also negatively impacted demand for the Company’s products and may continue to do so in the future.

Specifically, higher interest rates have put pressure on the ability and willingness of our customers to obtain financing for equipment purchases, which adversely affects volumes for these products.

The higher cost of borrowing has also reduced patient demand for elective dental procedures, which affects sales of the Company’s offerings more broadly.

The Company has also faced additional competitive pressure for lower-priced options for equipment and other products by dental practices, in particular for imaging products and implants.

While the Company has taken steps to address competitive pressures, such as the reintroduction of its Orthophos SL 2D and 3D products, these trends may continue.

While patient volumes have largely remained stable in the United States, the impact of macroeconomic declines and high interest rates has been particularly a pparent in Germany, which represented 11% of the Company’s sales for the year ended December 31, 2024.

Germany was in a recession for most of 2023, largely due to persistent high inflation and falling household spending.

Although conditions, including inflation, marginally improved in 2024, demand for investments in new dental equipment continued to be weak, and economic forecasts by the German government project limited growth in 2025.

The Company anticipates that the challenging macroeconomic and market conditions in Germany are likely to persist and negatively impact sales of equipment into next year.

In anticipation of a continued inflationary trend and potentially deteriorating macroeconomic environment, we have attempted to mitigate these pressures through the following actions, among others:

• Driving strategic procurement initiatives to leverage alternative sources of raw materials and transportation;

• Implementing cost-containment measures, as well as intensifying continuous improvement and restructuring programs in our manufacturing and distribution facilities and other areas of our business, including the most recent restructuring plan approved by the Board of Directors on July 29, 2024;

• Optimizing our customer management and implementing strategic investments in our commercial sales organization in key markets, particularly the United States;

• Refining our focus on developing a winning portfolio with global scale to maximize market share in a competitive pricing environment.

The impact of the Israel-Hamas war

The terrorist attacks by Hamas militants crossing the border from Gaza to Israel in October 2023 and the subsequent military response by the Israeli government in Gaza has resulted in significant unrest and uncertainty within that region.

During the course of 2024, the state of Israel has also been a target of coordinated missile and drone attacks launched by the Republic of Iran and by Iran’s terrorist proxy organization in Lebanon.

Although a cease-fire agreement was signed between Hamas and the Israeli government in January 2025, the potential for a long-term peace deal and greater stability remains uncertain.

A resumption of the violence or the involvement of other terrorist groups or foreign powers in the region could impact our employees and operations in future periods.

Additionally, in May 2024, in response to ongoing military actions, the government of Turkey implemented restrictions on the import of goods manufactured within Israel for sale in the Turkish market.

Various headwinds are expected to weigh on global growth in 2026, due in large part to increasing uncertainties related to global trade policies and inflation.

Changes in trade policy, supply chain constraints, higher energy costs, labor shortages, and geopolitical tensions have all contributed to the risk of higher inflation and general economic uncertainty across the industry and the regions in which the Company operates.

The challenging macroeconomic conditions have impacted consumer confidence, the ability and willingness of clinicians to obtain financing to purchase equipment, and consumer discretionary spending for elective procedures, leading to adverse impacts on the Company’s results of operations, particularly in the United States.

The Company has taken actions to attempt to mitigate the effects of challenging macroeconomic conditions and may take further actions in the future.

Recent tariff policies

As disclosed in Part I, Item 1A, “Risk Factors,” the Company’s business is subject to risks related to, among other factors, tariffs and other trade protection measures put in place by the United States and other countries.

government has implemented or is in the process of implementing various tariffs on the importation of goods from certain countries, a number of which are applicable to the Company’s supply chain, operations, and sales, and the tariffs enacted or proposed by the Trump Administration and retaliatory tariffs by other countries could make it significantly more difficult or costly for the Company to import certain products or materials to the United States, or export products or materials from the United States to other countries.

Currently, a small portion of the products, materials, and components used in our products are imported from China, and a significant share of the dental equipment that we sell in the United States is manufactured in Europe.

Europe is also a major market for our products, including certain consumable products made in the United States, while sales in China represent less than 5% of the Company’s global sales on an annual basis.

We continue to monitor and evaluate the ongoing and potential impacts of the tariffs and changes in trade policy, whether implemented or proposed, on our supply chain, costs, net sales and profitability.

We have implemented and continue to evaluate additional strategies that would mitigate such impacts, including competitive pricing strategies to offset tariffs and evaluating potential sourcing options that work with our vendors and merchants to seek to minimize products sourced from high tariff rate countries, both for existing products and for new product development.

The impact that these tariffs and changes in trade policy will ultimately have on our financial results remains uncertain, including the impact on demand for our products in certain markets if prices rise as a consequence of import tariffs.

For additional information, see Part I, Item 1A, “Risk Factors”.

The impact of geopolitical conflicts

Geopolitical conflicts are expected to continue to shape market dynamics and pose general threats to financial stability in affected regions, including ongoing tensions from both the Russia-Ukraine conflict and the conflict in the Middle East.

Overall, the Company’s operations in Russia, Ukraine, and Israel have not been materially impacted by these conflicts.

The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one site in southern Israel, both of which remain open and continue to operate normally.

For the twelve months ended December 31, 2025, net sales of products produced at these sites comprised approximately 3% of our consolidated net sales and approximately 13% of the net sales of the Orthodontic and Implant Solutions segment.

Net assets within Israel totaled $156 million as of December 31, 2025, consisting primarily of investments in subsidiaries and affiliates, acquired technology, property, plant and equipment, cash, and inventory associated with our operations in the country.

In May 2024, in response to ongoing military actions by Israel in the Gaza strip, the government of Turkey implemented restrictions on the import of goods manufactured within Israel for sale in the Turkish market, which were still in effect as of December 31, 2025.

Sales of our products made in Israel and sold in Turkey have historically represented approximately 1% of our global sales of the Implant & Prosthetic Solutions reporting unit, but this product category is an area of relatively high potential growth.

The loss of sales to Turkey in 2024 was partially offset by sales of implants produced outside of Israel.

The loss of sales to Turkey has been partially offset by sales of implants produced outside of Israel.

It is not clear when these restrictions will be lifted or if other countries will institute similar restrictions.

The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one site in southern Israel, which together employ approximately 350 associates.

These facilities remain open and continue to operate.

We may, however, decide to discontinue production at these facilities for the safety of our employees, or we could face future production slowdowns or interruptions at either location due to the impacts of the war, including personnel absences as a number of our employees have been called to active military duty, or due to other resource constraints such as the inability to source materials for production.

For the year ended December 31, 2024, net sales of products produced at these sites comprised approximately 3% o f our consolidated net sales an d 13% of the net sales of the Orthodontic and Implant Solutions segment.

Net assets within Israel totaled $180 million as of December 31, 2024, consisting primarily of acquired technology, property, plant and equipment, cash, and inventory associated with our operations in the country.

Overall, the Company’s operations in Israel have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or fixed asset impairments for the year ended December 31, 2024 due to the conflict.

The Company continues to monitor developments and prepare contingency plans to limit potential disruption to its operations in the future.

Additionally, we sell products from across our portfolio to distributors of dental products and direct to dental practices within Israel and its neighboring countries which may face reduced patient traffic and demand for our products in the near term.

Net sales for products sold to our customers in Israel comprised approximately 1% of our consolidated net sales for the year ended December 31, 2024.

The impact of the war in Ukraine

In February 2022, because of the invasion of Ukraine by Russia, economic sanctions were imposed by the United States, the European Union, and certain other countries on Russian financial institutions and businesses.

Due to the medical nature of our products, the current sanctions have not materially restricted our ability to continue selling many of our products to customers located in Russia.

The Company also sources certain raw materials and components from Russia and Ukraine and has taken actions to minimize any adverse impacts from disrupted supply chains related to these items.

The Company’s operations in Ukraine consist primarily of R&D activities, which continue from locations that focus on the safety of employees.

Ov erall, the Company’s operations in Russia and Ukraine have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or asset impairments for the year ended December 31, 2024 as a result of the conflict.

For the year ended December 31, 2024, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $64 million.

For the twelve months ended December 31, 2025, net sales in Russia and Ukraine were approximately 3% of our consolidated net sales, and net assets in these countries were $94 million as of December 31, 2025.

These net assets include $56 million of cash and cash equivalents held within Russia as of December 31, 2025, as well as inventory and trade accounts receivable.

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Additionally, beginning in September 2024, as a result of further restrictions by European financial institutions on receiving payments from Russia, our capacity to receive intercompany payments for the delivery of our products into Russia has been partially reduced, which further limits our ability to use cash received from sales in Russia for our general purposes.

It is unclear whether the remaining financial institutions which the Company relies upon for bank transfers from Russia will ultimately be able to continue facilitating payments, or for how long.

If these restrictions on cash transfers from Russia worsen, or if we are not able to obtain long-term relief from these restrictions, we may need to take additional actions, including potential suspension of our business in Russia.

A significant escalation or expansion of the economic disruption from the conflict could interrupt our supply chain, broaden inflationary costs, impair our assets located in Russia, result in a loss of sales, and have a material adverse effect on our results of operations.

For additional discussion of associated risks, refer to Part I, Item 1A, “Risk Factors” - Risks Related to Our Global Operations.

Business Drivers

The primary drivers of organic sales (as defined below) include macroeconomic factors, global dental industry demand, innovation and new product launches by the Company, as well as continued investments in sales and marketing resources to drive demand creation, including clinical education.

Drivers of changes in net sales on a constant currency basis (as defined below) include macroeconomic factors, global dental industry demand, innovation and new product launches by the Company, as well as continued investments in sales and

marketing resources to drive demand creation, including clinical education.

On a short-term basis, sudden changes in the macroeconomic environment, supply chain challenges, or changes in distributor inventory levels can and have impacted the Company’s sales.

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The timing of annual price increases, promotional activities, as well as changes in inventory levels at distributors contribute to this fluctuation.

Also, the Company distributes approximately two-thirds of its dental consumable and technology and equipment products through third-party distributors whose inventory levels tend to increase in the period leading up to a price increase and decline in the period following the implementation of a price increase, although these fluctuations are mitigated by limits on purchases ahead of these increases.

Also, the Company distributes approximately two-thirds of its dental consumable and technology and equipment products through third-party distributors whose inventory levels may increase in the period leading to a price increase and decline in the period following a price increase, although the Company seeks to anticipate and limit material fluctuations in purchasing behavior as applicable.

Changes in distributors’ inventory levels have impacted the Company’s consolidated net sales in the past and may continue to do so in the future.

In addition, the Company may from time to time engage in new distributor relationships that could cause fluctuations in consolidated net sales and operating income.

Distributor inventory levels may fluctuate and differ from the Company’s projections and market demand, resulting in the Company’s forecast of future results being different than expected.

We expect that distributor inventory levels will likely fluctuate and differ from the Company’s projections and market demand, resulting in the Company’s forecast of future results being different than expected.

There can be no assurance that the Company’s distributors and customers will maintain levels of inventory or patterns of build and liquidation timing in accordance with the Company’s predictions or history.

In addition, we expect changes in the Company’s distribution model, including a reduced emphasis on distributor-held inventory, will likely increase variability in ordering patterns and further contribute to fluctuations in net sales and operating income.

Any of these fluctuations could be material to the Company’s consolidated financial statements.

For more information about the drivers of our business and related risks, see Part I, Item 1, “Business” and Part I, Item 1A, “Risk Factors.”

Restructuring Programs

On July 29, 2024, the Board of Directors of the Company approved an additional plan to restructure the Company’s business to improve operational performance and drive stockholder value creation (the “2024 Plan”).

The Company expects to incur between $35 million and $50 million in non-recurring charges under the 2024 Plan.

The Company anticipates that the 2024 Plan will be substantially completed by the end of 2025 and result in $80 million to $100 million in annual cost savings.

For details on this plan including the nature of the non-recurring charges incurred during the year, refer to Note 18, Restructuring and Other Costs, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K, and to the discussion under the heading “Material Trends in Capital Resources” within MD&A.

Impact of Foreign Currencies

Due to the Company’s global footprint, movements in foreign currency exchange rates may have a material impact on its reported net sales and pre-tax income.

With approximately two-thirds of the Company’s net sales originating from regions

outside the United States, the Company’s net sales and results of operations are negatively impacted by the strengthening, or positively impacted by the weakening, of the U.S.

dollar compared to the primary currencies in which the Company operates.

While the Company employs financial instruments to hedge some of its transactional foreign exchange exposure, these activities do not insulate it completely from those exposures, particularly from the currency exposure arising from translation of non-U.S.

dollar functional currency subsidiaries.

During fiscal year 2024, both net sales and gross profit were adversely impacted due to the significant strengthening of the U.S.

dollar against foreign currencies.

The continued strength of the U.S.

dollar could continue to adversely impact the Company’s results.

Distribution Arrangements

In July 2024, the Company delivered a one-year notice of non-renewal in connection with its non-exclusive distribution agreements with Patterson Companies, Inc.

(“Patterson”) for the distribution of dental equipment in the United States and Canada.

It is anticipated that Patterson will continue to be one of the Company’s two largest distributors as a percentage of the Company’s global revenue during the one-year notice period.

The Company intends to continue to engage in discussions for new distribution agreements with Patterson.

However, failure to successfully renegotiate the distribution agreements or secure potential new agreements with another distributor could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company has not incurred any charges against earnings in 2024 related to non-renewal of the distribution agreements.

For additional information, see Part 1, Item 1A, “Risk Factors.”

Byte Aligners Business

On October 24, 2024, the Company announced the voluntary suspension of the sale and marketing of its Byte aligner system and impression kits while the Company conducted a review of certain regulatory requirements related to these products.

The Company’s decision was made in communication with the U.S.

Food and Drug Administration (the “FDA”) and resulted in suspension of the shipment and processing of new and recently placed orders for Byte aligners and impression kits through the remainder of 2024.

In January 2025, the Company announced plans that the Byte aligners would no longer be offered to new patients, and the Company now plans to utilize certain Byte resources elsewhere in the aligners portfolio to create orthodontic demand, support a digital clinical workflow, enhance the customer experience, and improve patient monitoring.

On October 24, 2024, the Company announced the voluntary suspension of the sale and marketing of its Byte aligner system and impression kits.

In January 2025, the Company announced plans that the Byte aligners would no longer be offered to new patients.

As a result of these developments, in the fourth quarter of 2024, the Company recorded $187 million in impairments of assets pertaining to the Byte business including a trademark, fixed assets, capitalized software and working capital.

In addition to these impairments, the Company recorded an accrual for expected customer refund and other reimbursement payments stemming from the cessation of sales and business realignment, which resulted in a $35 million reduction to net sales.

The suspension of sales in the fourth quarter of 2024 also resulted in a decline in aligner revenues as compared to the prior period.

The suspension of sales in the fourth quarter of 2024 also resulted in a decline in aligner revenues in 2025 as compared to the prior year.

For additional information refer to Item 8, Note 18, Restructuring and Other Costs, in the Notes to Consolidated Financial Statements of this Form 10-K, as well as the Results of Operations discussion below.

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The Company presents net sales comparing the current year periods to the prior year periods.

In addition, the Company also presents the changes in net sales on an organic sales basis, which is a Non-GAAP measure.

The Company defines “organic sales” as the reported net sales adjusted for:

(1) net sales from acquired and divested businesses recorded prior to the first anniversary of the acquisition or divestiture;

(2) net sales attributable to discontinued product lines 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 currency exchange rates.

Our measure of organic sales may differ from those used by other companies and should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP.

Organic sales is an important internal measure for the Company, and its senior management receives a monthly analysis of operating results that includes organic sales.

In addition, the Company also presents changes in net sales on a constant currency basis, which is a Non-GAAP measure.

The Company defines “constant currency” as the reported net sales adjusted for the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period’s currency exchange rates.

Constant currency is an important internal measure for the Company, and its senior management receives a monthly analysis of operating results that includes constant currency.

The performance of the Company is measured on this metric along with other performance metrics.

The Company discloses changes in organic sales to allow investors to evaluate the performance of the Company’s operations exclusive of the items listed above that may impact the comparability of results from period to period and may not be indicative of past or future performance of the normal operations of the Company.

The Company believes that this supplemental information is helpful in understanding underlying net sales trends.

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 3,793 $ 3,965 $ (172) (4.3 %)

Unfavorable foreign exchange impact

Organic sales (3.5 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was primarily driven by lower volumes in the Connected Technology Solutions segment across all regions, lower volumes of orthodontic and lab products within the Orthodontic and Implant Solutions segment, and lower volumes in the Essential Dental Solutions segment, primarily in the United States.

These decreases were partially offset by growth in the Wellspect Healthcare segment.

The Company discloses changes in constant currency to allow investors to evaluate the performance of the Company’s operations exclusive of the impact of foreign currency changes that may impact the comparability of results from period to period and may not be indicative of past or future performance of the normal operations of the Company.

believes that this supplemental information is helpful in understanding underlying net sales trends.

Our measure of constant currency may differ from those used by other companies and should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Net Sales by Segment

Net sales by segment and percentage changes in net sales as reported and on a constant currency basis were as follows:

Percentage Change

Net Sales by Segment

(in millions, except percentages) 2025 vs.

United States Europe Rest of World

2025 2024 As Reported 1

Constant Currency 1

As Reported Constant Currency As Reported Constant Currency As Reported Constant Currency

Connected Technology Solutions $ 1,036 $ 1,062 (2.5)% (3.8)% (12.4)% (12.4)% 5.8% 1.6% (2.8)% (2.0)%

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 1,062 $ 1,169 $ (107) (9.2 %)

Unfavorable foreign exchange impact

Organic sales (8.2 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was primarily due to lower volumes of imaging equipment, instruments, CAD/CAM equipment, and treatment centers across all three regions, driven in part by competitive pressures particularly from lower-cost competitors, as well as unfavorable economic conditions.

The trend of lower volumes for these products is expected to continue into 2025.

Essential Dental Solutions 1,469 1,454 1.1% (0.2)% (4.3)% (4.4)% 3.9% (0.1)% 5.4% 6.3%

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 1,454 $ 1,468 $ (14) (0.9 %)

Unfavorable foreign exchange impact

Organic sales (0.1 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was due to lower volumes of preventive consumable products across all three regions and lower volumes of restorative and endodontic products in the United States.

The decrease was partially offset by higher volumes for endodontic products in Rest of World.

Orthodontic and Implant Solutions 850 973 (12.6)% (13.4)% (24.6)% (24.6)% (0.5)% (3.7)% (8.4)% (6.9)%

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 973 $ 1,040 $ (67) (6.5 %)

Unfavorable foreign exchange impact

Organic sales (5.5 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales for the year was primarily driven by a decrease in volume for implants and prosthetics products across the United States and Europe, and weaker sales of aligners in the United States which were negatively impacted by the suspension of the sale and marketing of Byte aligner system and impression kits.

The decrease was partially offset by increased sales of SureSmile aligners in Europe and of implants products in Rest of World.

Wellspect Healthcare 325 304 6.6% 3.9% 2.6% 4.0% 6.3% 2.7% 35.4% 36.2%

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 304 $ 288 $ 16 5.9 %

Favorable foreign exchange impact 0.1 %

Organic sales 5.8 %

Percentages are based on actual values and may not recalculate due to rounding.

The increase in organic sales was primarily driven by higher volumes across all regions, particularly in Europe, primarily driven by new product launches.

Net Sales by Region

United States

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 1,348 $ 1,437 $ (89) (6.2 %)

Foreign exchange impact — %

Organic sales (6.2 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was primarily due to changes in the operation of our direct-to-consumer aligners business during the course of the year, and particularly during the fourth quarter as described above under the heading “Byte Aligners Business.” Prior to the suspension of sales of aligners and impression kits beginning in October 2024, legislative trends relating to teledentistry in certain states had already prompted us to make adjustments to the Byte business model which resulted in reductions of sales of aligners by approximately $15 million during the first nine months of 2024.

The subsequent suspension of sales in October resulted in a decline in revenues relative to the prior year, and we also recorded an estimate of customer refund and other reimbursement payments stemming from these actions which resulted in an additional $35 million reduction to revenue for the year ended December 31, 2024.

In addition to the impact from Byte, the decrease in sales in the United States was also due to lower volumes for consumables products within the Essential Dental Solutions segment, lower volumes for implants and prosthetics products, and lower volumes of products within the Connected Technology Solutions segment.

These decreases were partially offset by lower

customer incentives and higher volumes of Wellspect products as a result of new product launches.

Organic sales were also negatively affected by wholesale volumes for CAD/CAM products relative to the year ended December 31, 2023 due in part to timing of distributor orders.

Volumes of CAD/CAM units held by distributors at December 31, 2024 decreased $8 million compared to the beginning of 2024, whereas volumes of CAD/CAM inventory held by distributors at December 31, 2023 remained consistent with the beginning of 2023.

Volumes of imaging products held by distributors at December 31, 2024 decreased $7 million compared to the beginning of 2024, whereas volumes of imaging products held by distributors at December 31, 2023 increased by $1 million compared to the beginning of 2023.

Distributor inventory levels for both CAD/CAM and imaging products remained low as of December 31, 2024 relative to historical averages.

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 1,518 $ 1,550 $ (32) (2.1 %)

Favorable foreign exchange impact 0.1 %

Organic sales (2.2 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was primarily due to lower volumes of products within the Connected Technology Solutions segment and lower volumes of implants and prosthetics products within the Orthodontic and Implant Solutions segment.

These decreases were partially offset by positive performance in the Wellspect Healthcare segment with new product launches, and higher volumes of SureSmile aligners in the Orthodontic and Implant Solutions segment.

Rest of World

A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows:

Year Ended December 31,

(in millions, except percentages) 2024 2023 $ Change % Change

Net sales $ 927 $ 978 $ (51) (5.1 %)

Unfavorable foreign exchange impact

Organic sales (1.5 %)

Percentages are based on actual values and may not recalculate due to rounding.

The decrease in organic sales was primarily driven by lower volumes and unfavorable pricing for Connected Technology Solutions products, particularly in Japan, which saw lower volumes due to competitive pressures.

These decreases were partially offset by increased volumes for implant and endodontic products, particularly in China.

The local volume-based procurement program in China resulted in increased volumes for implants products during 2024, particularly during the first half of the year, with a decline in the second half of the year due to current macroeconomic conditions.

Total $ 3,680 $ 3,793 (3.0)% (4.3)% (12.3)% (12.3)% 3.8% —% (0.6)% 0.4%

(1) Constant currency sales are a Non-GAAP measure in which the reported net sales are adjusted for the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period’s currency exchange rates.

The foreign currency impact is the only reconciling item between as reported and constant currency sales.

Total net sales

The total net sales decrease on a constant currency basis was driven by lower volumes in the Orthodontic and Implant Solutions segment as a result of the suspension of Byte sales, as well as lower volumes of CAD/CAM and implants products, particularly in the United States.

The decrease was partially offset by higher volumes of preventive and restorative and treatment centers products.

Connected Technology Solutions

The net sales decrease on a constant currency basis was primarily due to lower volumes of CAD/CAM products, most notably in the United States, driven in part by competitive pressures including pricing.

The decrease was partially offset by higher volumes of imaging in Europe and Rest of World and treatment center equipment in all regions.

Volumes of CAD/CAM products held by distributors at December 31, 2025 decreased by approximately $19 million compared to the beginning of 2025, and volumes of CAD/CAM products held by distributors at December 31, 2024 decreased approximately $8 million compared to the beginning of 2024.

Volumes of imaging products held by distributors at December 31, 2025 decreased approximately $1 million compared to the beginning of 2025, and volumes of imaging products held by distributors at December 31, 2024 decreased approximately $7 million compared to the beginning of 2024.

Distributor inventory levels for both CAD/CAM and imaging products at December 31, 2025 remain below historical averages.

Essential Dental Solutions

The net sales decrease on a constant currency basis was primarily driven by higher customer incentives on preventive and restorative products.

The decrease was partially offset by higher volumes of preventive and restorative products and new endodontics products.

Volumes for consumables products held by distributors at December 31, 2025 decreased by approximately $4 million compared to the beginning of 2025, and volumes for consumables products at December 31, 2024

remained consistent with the beginning of 2024.

Orthodontic and Implant Solutions

The net sales decrease on a constant currency basis was driven by lower volumes of clear aligners in the United States, primarily related to the suspension of Byte sales, as well as lower volumes for implants and prosthetics products.

The decrease was partially offset by higher volumes of orthodontic products in Europe.

Additionally, during 2025, the Company refined its estimate of expected customer refunds for the Byte aligner business, resulting in a $14 million adjustment that increased sales, which also partially offset the decrease to net sales.

Wellspect Healthcare

The net sales increase on a constant currency basis was primarily a result of higher volumes and new product launches.

Year Ended December 31,

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Percentages are based on actual values and may not recalculate due to rounding.

Gross profit declined due to lower volumes and the impact of the Byte refunds as described above, higher manufacturing and input costs, and unfavorable mix, particularly within the Connected Technology Solutions segment.

These drivers were partially offset by lower customer incentives, and a decrease in warranty costs and inventory obsolescence charges.

Gross profit as a percentage of net sales decreased primarily due to unfavorable product mix and pricing for CAD/CAM, implants, imaging, and tariff costs.

These decreases were partially offset by a benefit from foreign currency translation.

Operating Expenses

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Research and development expenses 150 165 (15) (9.0 %)

Goodwill and intangible asset impairments 1,014 307 707 NM

Restructuring costs 53 67 (14) NM

Goodwill and intangible asset impairments 650 1,014 (364) (35.9 %)

Restructuring costs 24 53 (29) (54.7 %)

SG&A as a percentage of net sales 39.1 % 42.3 % (320) bps

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Percentages are based on actual values and may not recalculate due to rounding.

NM - Not meaningful

SG&A Expenses

SG&A expenses decreased primarily due to lower headcount costs, lower travel costs, and lower professional service costs.

The decrease was also due to lower sales and advertising costs for Byte products after the suspension of sales noted above.

The overall decrease in expenses was partially offset by an increase in general and administrative costs within the Orthodontic and Implant Solutions segment, primarily as a result of bad debt expense for the write-off of Byte receivables.

R&D expenses decreased compared to the prior year as the Company continues to take a disciplined approach with ongoing investments in digital workflow solutions, product development initiatives, and software development, including the clinical application suite and cloud deployment.

The Company expects to continue to maintain a level of investment in R&D that is at least 4% of annual net sales.

The decrease in SG&A expenses was primarily driven by lower marketing expenses, particularly due to the absence of marketing for Byte products, and lower headcount costs as a result of restructuring and cost-saving initiatives.

R&D expenses decreased as the Company continues to prioritize a disciplined approach with ongoing investments in digital workflow solutions, product development initiatives, and software development, including clinical application suite and cloud deployment.

The Company has historically maintained a level of investment in R&D that is at least 4% of annual net sales, and the Company plans to increase this to at least 5% of annual net sales beginning in 2026.

Goodwill and Intangible Asset Impairments

Goodwill and intangible asset impairments increased compared to the prior year, due to a higher level of impairment charges, specifically related to the goodwill pertaining to the Implant & Prosthetic Solutions reporting unit, a write-off of the Byte trademark, and certain intangible assets within the Connected Technology Solutions segment.

For further information, see Item 8, Note 11, Goodwill and Intangible Assets, in the Notes to Consolidated Financial Statements of this Form 10-K.

During the year ended December 31, 2025, we recorded pre-tax Goodwill and intangible asset impairment of $525 million and $125 million, respectively.

See Note 11, Goodwill and Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Restructuring and Other Costs

During the year ended December 31, 2024, we recorded net expense of $53 million of restructuring costs which consist primarily of charges associated with the restructuring plans announced in February 2023 and July 2024.

For further information, see Item 8, Note 18, Restructuring and O ther Costs, in the Notes to Consolidated Financial Statements of this Form 10-K.

During the year ended December 31, 2025, we recorded net expense of $24 million of restructuring costs which consist primarily of charges associated with the restructuring plan announced in 2024.

For further information, see Item 8, Note 18, Restructuring and Other Costs, in the Notes to Consolidated Financial Statements of this Form 10-K.

Segment Adjusted Operating Income

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Connected Technology Solutions

The decrease in segment adjusted operating income is due to the lower sales volumes noted above, unfavorable manufacturing leverage from lower volumes, and unfavorable product mix as a result of lower sales for certain higher margin CAD/CAM equipment products.

These decreases were partially offset by lower headcount-related costs and product warranty and return costs.

The decrease in segment adjusted operating income is due to lower net sales on a constant currency basis and tariff costs, partially offset by favorable manufacturing variances, lower headcount-related costs, and lower marketing costs.

Essential Dental Solutions

Segment adjusted operating income is flat due to favorable product mix and favorable pricing being offset primarily by the lower volumes noted above.

The increase in segment adjusted operating income is due to lower headcount costs and professional service costs, partially offset by lower sales on a constant currency basis, unfavorable pricing, and tariff costs.

Orthodontic and Implant Solutions

The decrease in segment adjusted operating income is due to the impact from suspending sales of Byte clear aligners to new customers in October 2024 as previously described, the Byte refunds and inventory write-offs, and higher distribution and manufacturing costs.

As noted above, operating income was also unfavorably impacted by a decline in sales for implant and prosthetics products, as well as higher general and administrative costs primarily as a result of bad debt expense for the write-off of Byte receivables, partly offset by lower sales and advertising costs for Byte products.

The increase in segment adjusted operating income is due to favorable adjustments for estimated customer refunds and bad debt reserves for the Byte aligner business, lower headcount costs, and lower marketing costs, partially offset by lower volumes of direct-to-consumer aligners and implants and prosthetics products and tariff costs.

Wellspect Healthcare

The increase in segment adjusted operating income was driven by the increase in organic sales noted above due to new product launches, as well as margin improvements due to favorable manufacturing leverage from higher volumes.

The increase in segment adjusted operating income is due to higher net sales on a constant currency basis as a result of new product launches.

Other Income and Expenses

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Interest expense, net $ 88 $ 69 $ 19 28.2 %

Other (income) expense, net (12) 9 (21) NM

Net interest and other expense $ 57 $ 90 $ (33)

Other income, net (24) (12) (12) 93.8 %

Net interest and other income $ 64 $ 57 $ 7

Percentages are based on actual values and may not recalculate due to rounding.

NM - Not meaningful

Interest expense, net

Net interest expense for the year ended December 31, 2024 decreased as compared to the year ended December 31, 2023, driven primarily by lower short-term and other borrowings.

Interest expense, net increased compared to the prior year primarily due to a higher average carrying balance of total borrowings.

Other (income) expense, net

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(32) (21) (11)

Loss from equity method investments — 4 (4)

Defined benefit pension plan expenses 8 8 —

Other non-operating loss — 1 (1)

Other (income) expense, net $ (12) $ 9 $ (21)

(a) Foreign exchange gains include a benefit from our Swiss franc net investment hedge totaling $22 million, offset by revaluation of short-term intercompany receivables and payables of $1 million.

Other income, net $ (24) $ (12) $ (12)

(a) Foreign exchange gains include a benefit from our net investment hedges totaling $40 million, offset by revaluation of short-term intercompany receivables and payables of $8 million.

Income Taxes and Net Loss

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(in millions, except per share data and percentages) 2025 2024 $ Change

Benefit for income taxes $ (26) $ (43) $ 17

Expense (benefit) for income taxes

$ 112 $ (26) $ 138

Effective income tax rate (23.1 %) 2.8 %

2 unchanged sentences

Percentages are based on actual values and may not recalculate due to rounding.

Benefit for income taxes

An income tax benefit of $26 million and $43 million was recorded for the years ended December 31, 2024 and December 31, 2023, respectively.

The increase in tax benefit is primarily due to additional impairments recorded in the year ended December 31, 2024.

An income tax expense of $112 million and an income tax benefit of $26 million were recorded for the years ended December 31, 2025 and December 31, 2024, respectively.

The increase in tax expense is primarily due to a decrease in tax benefit of goodwill and intangible impairments in 2025.

Further information regarding the details of income taxes is presented in Note 16, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.

2023 Compared to 2022

Discussion of the results of operations for the year ended December 31, 2023 as compared to December 31, 2022 was included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 29, 2024.

CRITICAL ACCOUNTING ESTIMATES

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Future events and their effects cannot be determined with absolute certainty.

Therefore, the determination of estimates requires the exercise of judgment.

Therefore, the

determination of estimates requires the exercise of judgment.

Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.

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The Company evaluates these significant factors as facts and circumstances dictate.

Some events as described below could cause results to differ significantly from those determined using estimates.

As described below, some events could cause results to differ significantly from those determined using estimates.

The Company has identified the following accounting estimates as those which are critical to its business and results of operations.

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Goodwill is not amortized;

instead, it is tested for impairment at the reporting unit level annually at April 1 or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired, or if a decision is made to sell a business.

Judgment is involved in determining if an indicator of impairment has occurred during the year.

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These assumptions may vary significantly among the reporting units.

Operating cash flow forecasts are based on approved business-unit operating plans for the early years and historical relationships and projections in later years.

In the development of the forecasted cash flows, the Company applies revenue, gross profit, and operating expense assumptions taking into consideration historical trends as well as future expectations.

Operating cash flow forecasts are based on approved business unit operating plans for the early years and historical relationships and projections in later

In the development of forecasted cash flows, the Company applies revenue, gross profit, and operating expense assumptions taking into consideration historical trends as well as future expectations.

The revenue growth rate assumptions were developed in consideration of future expectations which included, but were not limited to, distribution channel changes, impact from competition, and new product developments for these reporting units.

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Other assumptions are consistent with those applied to goodwill impairment testing.

Goodwill and Indefinite-Lived Intangible Asset Impairment Results

The Company assessed the goodwill of its reporting units and its indefinite-lived intangible assets for impairment as of April 1, 2024.

Based on the Company's April 1 impairment test, it was determined that the fair values of its reporting units and indefinite-lived intangible assets more likely than not exceeded their carrying values, resulting in no impairment.

In the quarter ended September 30, 2024, the Company identified indicators of a more likely than not impairment for two of its reporting units, Orthodontic Aligner Solutions and Implant & Prosthetic Solutions, which together comprise all of the Orthodontic and Implant Solutions segment.

As a result, the Company recorded pre-tax goodwill impairment charges as of September 30, 2024 of $145 million for the Orthodontic Aligner Solutions reporting unit and $359 million for the Implant & Prosthetic Solutions reporting unit, both within the Orthodontic and Implant Solutions segment.

The charges were recorded in Goodwill and intangible asset impairment in the Consolidated Statement of Operations.

The impairment charge related to the Orthodontic Aligner Solutions reporting unit resulted in a full write-off of the remaining goodwill balance for this reporting unit.

In the quarter ended December 31, 2024, the Company identified indicators of a more likely than not impairment for its Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment.

The decline in fair value of this reporting unit was driven by a weaker trend in sales volumes, particularly in North America, increased competition from lower-priced alternatives impacting global markets, and adverse macroeconomic pressures impacting demand for elective dental procedures and premium implant solutions.

These factors contributed to reduced forecasted revenues, lower operating margins, and reduced expectations for future cash flows.

The fair value of the Implant & Prosthetic Solutions reporting unit was computed using a discounted cash flow model with inputs developed using internal projections and market-based data.

As a result, the Company recorded a pre-tax goodwill impairment charge as of December 31, 2024 of $269 million for the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment.

This charge was recorded in Goodwill and intangible asset impairment in the Consolidated Statement of Operations.

Additionally, in the quarter ended December 31, 2024, the Company also identified indicators of more likely than not impairments for certain indefinite-lived intangible assets including trade names and trademarks within the Connected Technology Solutions segment, and certain trade names within the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment.

The decline in fair value of the trade names and trademarks was driven by weakened demand for the Company’s premium equipment and implant products, competitive pricing pressures, and a sustained higher cost of capital, which are contributing to reduced forecasted revenues.

These indefinite-lived intangible assets were evaluated for impairment using an income approach, specifically a relief from royalty methodology.

As a result, the Company recorded indefinite-lived intangible asset impairment charges of $82 million and $1 million for the Connected Technology Solutions and Orthodontic and Implant Solutions segments, respectively, for the three months ended December 31, 2024.

These charges were recorded in Goodwill and intangible asset impairment in the Consolidated Statements of Operations.

The remaining goodwill balance of the Implant & Prosthetic Solutions reporting unit was $503 million as of December 31, 2024, and the carrying values of indefinite-lived intangible assets with impairments in the fourth quarter were $76 million and $149 million for the Implant & Prosthetic Solutions and Connected Technology Solutions reporting units, respectively, as of December 31, 2024.

As the fair values of the Implant & Prosthetic Solutions reporting unit and the indefinite-lived assets within the Implant & Prosthetic Solutions and Connected Technology Solutions reporting units, respectively, continue to approximate carrying value as of December 31, 2024, any further decline in key assumptions could result in additional impairments in future periods.

Based on quantitative and qualitative analyses performed for the other reporting units and the Company’s other indefinite-lived intangible assets, the Company believes there is no indication that the carrying value more likely than not exceeds the fair value in each case as of December 31, 2024.

For the Company's reporting units that were not impaired, the Company applied a hypothetical sensitivity analysis by increasing the discount rate of these reporting units by 50 basis points.

The results of this sensitivity analysis at December 31, 2024, indicate that none of the other reporting units would have been impaired.

Goodwill and Indefinite-Lived Intangible Asset Impairment Test Results

For further information, see Note 11, Goodwill and Intangible Assets, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.

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The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company recognizes in the consolidated financial statements the impact of a tax position if that position is more likely than not of being sustained upon examination by the taxing authorities based on the technical merits of the position.

The Company recognizes in the consolidated financial statements the impact of a tax position if the Company believes that position is more likely than not of being sustained upon examination by the taxing authorities based on the technical merits of the position.

Certain items of income and expense are not reported in tax returns and financial statements in the same year.

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The Company operates within multiple taxing jurisdictions throughout the world and in the normal course of business is examined by taxing authorities in those jurisdictions.

Adjustments to the uncertain tax positions are recorded when taxing authority examinations are completed,

statutes of limitation are closed, changes in tax laws occur or as new information comes to light regarding the technical merits of the tax position.

Adjustments to the uncertain tax positions are recorded when taxing authority examinations are completed, statutes of limitation are closed, changes in tax laws occur or as new information comes to light regarding the technical merits of the tax position.

LIQUIDITY AND CAPITAL RESOURCES

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Effect of exchange rate changes on cash and cash equivalents 31 (24) 55

Net decrease in cash and cash equivalents $ (62) $ (31) $ (31)

Cash provided by operating activities increased compared to the prior year primarily as a result of changes in working capital, including higher collections on accounts receivable due largely to timing of customer remittances, decreased inventory levels, and timing of estimated tax payments.

These increases in operating cash were offset by other changes in working capital including the timing of payments to vendors compared to the prior year.

For the year ended December 31, 2024, the number of days for sales outstanding in accounts receivable decreased by 4 days to 55 days at December 31, 2024 as compared to 59 days at December 31, 2023, and the number of days of sales in inventory decreased by 2 days to 124 days at December 31, 2024 as compared to 126 days at December 31, 2023.

The cash used in investing activities increased compared to the prior year primarily due to higher capital expenditures of $31 million, lower net cash proceeds on settlement of derivatives of $38 million, and in the prior year, the Company’s sale of a minority interest investment resulted in proceeds of $13 million.

Net increase (decrease) in cash and cash equivalents $ 54 $ (62) $ 116

Cash provided by operating activities decreased compared to the prior year primarily as a result of lower sales and changes in working capital, including higher accounts receivable due largely to timing of sales and customer remittances and higher build of inventory during the current period.

For the year ended December 31, 2025, the number of days for sales outstanding in accounts receivable increased by 7 days to 62 days at December 31, 2025 as compared to 55 days at December 31, 2024, and the number of days of sales in inventory increased by 7 days to 131 days at December 31, 2025 as compared to 124 days at December 31, 2024.

Cash used by investing activities decreased compared to the prior year primarily due to lower capital expenditures of $49 million and lower net cash payments on settlement of derivatives of $7 million.

For the year ended December 31, 2024, capital expenditures were $180 million, and for the year ended December 31, 2025, capital expenditures were $131 million.

The Company estimates capital expenditures to be in the range of appr oximately $160 million to $190 million for the twelve months ending December 31, 2025 and expects these investments to include expenses for the ongoing implementation of a new global Enterprise Resource Planning (“ERP”) system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.

The decrease of cash used in financing activities compared to the prior year was primarily driven by an increase in net borrowings of $51 million on short-term debt compared to the prior year and a decrease in cash paid on share repurchases of $50 million compared to the prior year.

The decrease of cash used in financing activities was mostly offset by an increase of $10 million in dividends paid compared to the prior year and an increase of $81 million in payments on long-term borrowings compared to the prior year.

The Company estimates that capital expenditures will be in the range of approximately $125 million to $150 million for the twelve months ending December 31, 2026 and expects these investments to include expenses for the ongoing implementation of a new global Enterprise Resource Planning (“ERP”) system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.

On March 19, 2025, the Company entered into a 364-day term loan of $435 million with a maturity date of March 18, 2026 (the “Bridge Loan Facility”).

The proceeds were $432 million, net of issuance fees totaling $3 million.

The net proceeds from the Bridge Loan Facility were used to repay indebtedness under the Company’s commercial paper facility and pre-fund repayment of certain other short-term indebtedness.

Subsequently, on June 12, 2025, the Company issued $550 million aggregate principal amount of 8.375% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055 (the “Notes”) through a public offering.

The proceeds from the sale of the Notes were $545 million, after deduction of underwriters’ fees.

On June 12, 2025, the Company used a portion of these proceeds to repay in full the outstanding principal and accrued interest due under the Bridge Loan Facility, which was then terminated as a result of the repayment.

The Company intends to use the remaining proceeds from the sale of the Notes for general corporate purposes.

Cash used in financing activities decreased compared to the prior year primarily due to an increase in net proceeds on long-term borrowings of $552 million and a decrease in cash paid on share repurchases of $250 million offset by an increase in cash paid for deferred financing costs of $16 million, an increase in payments on long-term borrowings of $59 million, and a decrease of short-term borrowings of $513 million.

The Company’s total borrowings increased by a net $193 million during the year ended December 31, 2025.

During the year ended December 31, 2024, the Company repurchased approximately 9.4 million shares under its open market share repurchase plan for a cost of $250 million at a volume-weighted average price of $26.65.

During the year ended December 31, 2025, the Company had no repurchases of common stock under the stock repurchase program.

On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion.

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At December 31, 2025, the Company held 64.9 million shares of treasury stock.

On February 23, 2026, the Company’s Board of Directors eliminated the declaration of quarterly dividends on the Company’s common stock starting in the quarter ending March 31, 2026.

The Company’s ratio of total net debt to total capitalization was as follows:

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The Company’s revolving credit facility, term loans and senior notes contain certain covenants relating to the Company’s operations and financial condition.

The most restrictive of these covenants are:

(1) a ratio of total debt outstanding to total capital not to exceed 0.6, and (2) a ratio of operating income excluding depreciation and amortization to interest expense of not less than 3.0 times, in each case, as such terms are defined in the relevant agreement.

Any breach of any such covenants would result in a default under the existing debt agreements that would permit the lenders to declare all borrowings under such debt agreements to be immediately due and payable and, through cross default provisions, would entitle the Company’s other lenders to accelerate their loans.

On December 24, 2025, the Company entered into agreements with the applicable noteholders to amend certain provisions of its private placement notes and also obtained consent of the requisite lenders under its revolving credit facility to amend provisions of that credit agreement.

See Note 14, Financing Arrangements, in the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for more information.

At December 31, 2025, the Company was in compliance with these covenants.

The Company expects on an ongoing basis to be able to finance operating cash require ments, capital expenditures, and debt service from the current cash, cash equivalents, cash flows from operations and amounts available under its existing borrowing facilities.

The Company expects on an ongoing basis to be able to finance operating cash requirements, capital expenditures, and debt service from the current cash, cash equivalents, cash flows from operations and amounts available under its existing borrowing facilities.

The Company’s credit facilities are further discussed in Note 14, Financing Arrangements, in the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

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At December 31, 2025, the Company held $49 million of precious metals on consignment from several financial institutions.

Under these consignment arrangements, the financial institutions own the precious metal, and, accordingly, the

Company does not report this consigned inventory as part of its inventory on the Consolidated Balance Sheets.

Under these consignment arrangements, the financial institutions own the precious metal, and, accordingly, the Company does not report this consigned inventory as part of its inventory on the Consolidated Balance Sheets.

These consignment agreements allow the Company to acquire the precious metal at market rates at a point in time, which is approximately the same time, and for the same price as alloys are sold to the Company’s customers.

If the financial institutions would discontinue offering these consignment arrangements, and if the Company could not obtain other comparable arrangements, the Company may be required to obtain third-party financing to fund an ownership position to maintain precious metal inventory at operational levels.

If the financial institutions discontinue offering these consignment arrangements, and if the Company could not obtain other comparable arrangements, the Company may be required to obtain third-party financing to fund an ownership position to maintain precious metal inventory at operational levels.

For additional details, see Item 7A “Quantitative and Qualitative Disclosure About Market Risk - Consignment Arrangements.”

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The Company’s scheduled contractual cash obligations at December 31, 2025 were as follows:

(in millions)

(in millions) Within

Long-term borrowings, including finance leases $ 228 $ 287 $ 914 $ 847 $ 2,276

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Material Trends in Capital Resources

In connection with the 2024 Plan, the Company anticipates a net reduction in the Company’s global workforce of approximately 2% to 4%.

The Company anticipates that the 2024 Plan will be substantially completed by the end of 2025 and result in $80 million to $100 million in annual cost savings.

The proposed changes are subject to co-determination processes with employee representative groups in countries where required.

As of December 31, 2024, in conjunction with the 2024 Plan, the Company has incurred $28 million in restructuring charges from inception, primarily related to employee transition, severance payments and employee benefits.

Actions taken under the 2024 Plan seek to further streamline the Company’s operations and global footprint, as well as improve alignment of the Company’s cost structure with its strategic growth objectives.

The Company expects to incur between $35 million and $50 million in non-recurring restructuring charges under the 2024 Plan which are expected to be expensed and paid in cash by the end of 2025.

On February 14, 2023, the Board of Directors of the Company approved a plan to restructure the business through a new operating model with five global business units, optimize central functions and overall management infrastructure, and implement other efforts aimed at cost savings (the “2023 Plan”).

The Company estimated a reduction in its global workforce of approximately 8% to 10% and annual cost savings of approximately $200 million pursuant to the 2023 Plan.

The target for cost savings has been substantially met, with the benefits mostly offset in the short term by additional investments in sales personnel, the Company’s new global ERP system, and other transformation initiatives.

As of December 31, 2024, in conjunction with the 2023 Plan, the Company incurred $87 million in restructuring charges, from inception, primarily related to employee transition, severance payments, employee benefits, and facility closure costs, and $20 million in other non-recurring costs related to restructuring activities, which mostly consist of consulting, legal and other professional service fees.

Remaining restructuring charges attributable to the 2023 Plan are not expected to be material.

The estimates of the charges and expenditures that the Company expects to incur in connection with the 2024 Plan, and the timing thereof, are subject to several assumptions, including local law requirements in various jurisdictions and co-determination aspects in countries where required.

Actual amounts may differ materially from estimates.

In addition, the Company may incur additional charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the 2024 Plan.

For further information, refer to Note 18, Restructuring and Other Costs, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.

Beginning in the second quarter of 2022, the Company’s financial results have also been impacted by the costs associated with the internal investigation conducted by the Audit and Finance Committee of the Company’s Board of Directors, along with associated litigation and an external investigation by the SEC, both of which are ongoing.

For the year ended December 31, 2022, these costs totaled approximately $61 million.

For the year ended December 31, 2023, these costs totaled $19 million.

The costs in 2023 were offset by a $17 million gain from release of employee compensation accruals resulting from a settlement in the three months ended September 30, 2023.

For the year ended December 31, 2024, these costs totaled $11 million.

The Company expects that it will continue to incur such costs into 2025 pertaining to the matters described in Note 21, Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

See Note 14, Financing Arrangements, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

On February 24, 2026, the Company’s Board of Directors approved the 2026 Plan to improve operational performance and drive stockholder value creation.

In connection with the 2026 Plan, the Company expects to incur non-recurring charges in the approximate range of $55 million to $65 million, the majority of which will be expensed and paid in cash in 2026 and 2027.

The 2026 Plan is anticipated to result in approximately $120 million in annualized cost savings.

The Company intends to reinvest a portion of the anticipated savings in targeted return-to-growth initiatives, including investments in accelerated innovation, clinical education, and sales team education focused on connected dentistry.

NEW ACCOUNTING PRONOUNCEMENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis