REVENUE RECOGNITION
Revenues are derived primarily from the sale of dental equipment and dental and healthcare consumable products. Revenues are measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.
Net sales disaggregated by product category were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in millions) | | 2025 | | 2024 | | 2023 |
| | | | | | |
| Equipment & Instruments | | $ | 578 | | | $ | 553 | | | $ | 628 | |
| CAD/CAM | | 458 | | | 509 | | | 541 | |
| Connected Technology Solutions | | $ | 1,036 | | | $ | 1,062 | | | $ | 1,169 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Essential Dental Solutions | | $ | 1,469 | | | $ | 1,454 | | | $ | 1,468 | |
| | | | | | |
| Orthodontics | | $ | 227 | | | $ | 299 | | | $ | 339 | |
| Implants & Prosthetics | | 623 | | | 674 | | | 701 | |
| Orthodontic and Implant Solutions | | $ | 850 | | | $ | 973 | | | $ | 1,040 | |
| | | | | | |
| Wellspect Healthcare | | $ | 325 | | | $ | 304 | | | $ | 288 | |
| | | | | | |
| Total net sales | | $ | 3,680 | | | $ | 3,793 | | | $ | 3,965 | |
Net sales disaggregated by geographic region were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in millions) | | 2025 | | 2024 | | 2023 |
| | | | | | |
| United States | | $ | 1,182 | | | $ | 1,348 | | | $ | 1,437 | |
| Europe | | 1,576 | | | 1,518 | | | 1,550 | |
| Rest of World | | 922 | | | 927 | | | 978 | |
| | | | | | |
| Total net sales | | $ | 3,680 | | | $ | 3,793 | | | $ | 3,965 | |
Contract Assets and Liabilities
The Company does not typically have contract assets in the course of its business. Contract liabilities, which represent billings in excess of revenue recognized, are primarily related to deferred revenue associated with loyalty points earned but not yet redeemed by customers under the Company’s loyalty point program and advanced billings for customer orthodontic treatments where the performance obligation has not yet been satisfied. The Company had deferred revenue of $74 million and $33 million presented in Accrued liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheets at December 31, 2025. The Company recorded deferred revenue of $95 million and $49 million presented in Accrued liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheets at December 31, 2024. The Company recognized $111 million of revenue for the year ended December 31, 2025 which was previously deferred as of December 31, 2024. The Company recognized $79 million of revenue for the year ended December 31, 2024 which was previously deferred as of December 31, 2023. The Company expects to recognize most of the remaining deferred revenue in net sales within the next twelve months.
Allowance for Doubtful Accounts
Accounts and notes receivable-trade, net are stated net of allowances for doubtful accounts and trade discounts, which were $12 million and $14 million at December 31, 2025 and 2024, respectively. For the years ended December 31, 2025 and 2024, changes to the allowance for doubtful accounts, including write-offs of accounts receivable that were previously reserved, were not significant. Changes to the allowance for doubtful accounts are presented in Selling, general, and administrative expenses in the Consolidated Statements of Operations.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.