Reports focused on a beat against expectations and a raise to full-year guidance, with some analysts framing the updated outlook as a positive for the stock's valuation; the company also flagged risks tied to its China exposure.
Source: SEC EDGAR XBRL company facts. Latest period shown: FY26 Q3.
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| Period | Revenue growth, TTM YoY | Operating margin (TTM) | FCF margin (TTM) |
|---|---|---|---|
| FY24 Q4 | -2.2% | -41.4% | 12.1% |
| FY25 Q1 | -2.3% | -41.8% | 10.7% |
| FY25 Q2 | 0.8% | 6.0% | 10.1% |
| FY25 Q3 | 4.7% | 7.2% | 10.0% |
| FY25 Q4 | 8.3% | 7.9% | 8.5% |
| FY26 Q1 | 12.1% | 8.5% | 7.8% |
| FY26 Q2 | 11.9% | 9.6% | 8.7% |
| FY26 Q3 | 9.8% | 25.4% | 8.4% |
Profit is outgrowing sales
The profit growth is driven by margin, not volume. Revenue over the twelve months to Q3 2026 was $2.9 billion, up 9.8% year over year. The operating margin reached 25.4%, up 18.2 percentage points from a year earlier, the mechanism that converts modest revenue growth into a large profit jump.
Buybacks amplify the per-share effect. The average diluted share count fell 2.8% over the year, so each share's claim on profit grows faster than profit itself.
The cash story moves the other way. Free cash flow was $242.0 million over the twelve months, down 7.8% year over year. Operating cash flow rose just 0.6% to $301.8 million, and capital spending of $59.8 million (2.1% of revenue) does not close the gap. The free-cash-flow margin fell to 8.4%, down 1.6 percentage points. Reported profit and cash generated are moving in opposite directions over the same period.
Growth has slowed
The operating margin of 25.4% is above every past quarterly reading in the company's record, which has ranged from −51.4% to 13.5%. It sits outside the historical band, not at a peak within it.
Revenue growth of 9.8% is higher than 78% of past quarterly readings (−29.9% to 30.1%), though the rate was down 2.1 percentage points from the quarter earlier.
Cash conversion is in the lower quarter of the company's history even as the profit margin is at its highest.
The value hinges on margins more than growth
Our model shows the value is sensitive to both levers. A free-cash-flow margin 1 percentage point lower would lower the value by 12.5%. The free-cash-flow margin is the variable that moved against the company over the past year, down 1.6 percentage points, making the model's exposure to it the figure that bears on the counterpoint.
What the filings cannot tell you at Envista Holdings
These figures run to Q3 2026 from the company's own filings. They cannot confirm, explain, or rule out anything in the press reports, including the guidance-raise framing or the China risk the company flagged. The net income and operating margin figures bear on the earnings beat reports focused on; the free-cash-flow figures bear on whether that profit growth is converting into cash at the same rate.