Align Technology Announces Record Third Quarter 2021 Financial Results
Align Technology reported Q3'21 revenues of $1.016 billion, a 38.4% increase year-over-year and a 0.5% sequential rise. Clear Aligner revenues stood at $837.6 million, up 34.9% year-over-year but down 0.4% sequentially. The company achieved an operating margin of 25.7%, a slight decrease from the previous quarter. Notably, the total volume of Clear Aligners for teens rose 26.6% year-over-year. Align’s cash and equivalents reached $1.2 billion as of Sept 30, 2021. Outlook for FY 2021 anticipates revenues between $3.90 billion and $3.95 billion, indicating growth of 58% to 60% compared to 2020.
- Q3'21 total revenues increased by 38.4% year-over-year to $1.016 billion.
- Clear Aligner volume for teens rose by 26.6% year-over-year to 206,000 cases.
- Cash and cash equivalents reached $1.2 billion as of September 30, 2021.
- Imaging Systems and CAD/CAM Services revenues increased by 57.3% year-over-year to $178.3 million.
- FY 2021 revenue guidance expected between $3.90 billion and $3.95 billion, a growth of 58% to 60%.
- Q3'21 Clear Aligner revenues decreased by 0.4% sequentially.
- Diluted EPS fell from $2.51 in Q2'21 to $2.28 in Q3'21, a decrease of $0.23.
Achieves 11 Millionth Invisalign Patient Milestone
iTero Scanner Installed-base Reaches 50,000 Units Worldwide
- Q3 total revenues up
38.4% year-over-year to record$1.01 6 billion and up0.5% sequentially - Q3 diluted net income per share of
$2.28 ; Q3 non-GAAP diluted net income per share of$2.87 - Q3 operating margin of
25.7% , down 0.9 points sequentially and up 1.6 points year-over-year - Q3 Clear Aligner volume for teens up
26.6% year-over-year to a record 206.0 thousand cases and up13.8% sequentially - Q3 Imaging Systems and CAD/CAM Services record revenues of
$178.3 million , up57.3% year-over-year and up5.0% sequentially
TEMPE, Ariz., Oct. 27, 2021 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq: ALGN), a leading global medical device company that designs, manufactures, and sells the Invisalign system of clear aligners, iTero intraoral scanners, and exocad CAD/CAM software for digital orthodontics and restorative dentistry, today reported financial results for the third quarter of fiscal 2021 (“Q3'21”). Q3'21 total revenues were
Commenting on Align's Q3'21 results, Align Technology President and CEO Joe Hogan said, “I’m pleased to report strong third quarter results with revenue growth of
Financial Summary - Third Quarter Fiscal 2021
| Q3'21 | Q2'21 | Q3'20 | Q/Q Change | Y/Y Change | |||||||
| Invisalign Case Shipments | 655,150 | 665,575 | 496,065 | (1.6)% | +32.1% | ||||||
| GAAP | |||||||||||
| Net Revenues | +0.5% | +38.4% | |||||||||
| Clear Aligner | (0.4)% | +34.9% | |||||||||
| Imaging Systems and CAD/CAM Services | +5.0% | +57.3% | |||||||||
| Net Income | (9.4)% | +29.8% | |||||||||
| Diluted EPS | $2.28 | ($0.23) | +$0.52 | ||||||||
| Non-GAAP | |||||||||||
| Net Income | (5.6)% | +28.5% | |||||||||
| Diluted EPS | $2.87 | ($0.17) | +$0.62 | ||||||||
As of September 30, 2021, we had
Recent Announcements – October 2021:
Product
- On October 27, 2021, we announced the findings of a multi-center clinical study, “Reflected near-infrared light versus bite-wing radiography for the detection of proximal caries: a multicenter prospective clinical study conducted in private practices,” published in the Journal of Dentistry (Oct. 24, 2021) which validates and further demonstrates the significant benefits of the iTero Element 5D imaging system as an aid in detection and monitoring of interproximal caries lesions above the gingiva without harmful radiation.
Q3'21 Announcement Highlights:
Corporate
- On July 21, 2021, we announced our new offices in Israel to support long term growth for the iTero scanner and services business which are atop one of the three high-rise buildings that make up the “Global Towers” in Petach Tikva, Israel.
- On July 20, 2021, we announced our plans to showcase our digital portfolio at the International Dental Show 2021 (IDS) in Cologne, Germany on September 22-25, 2021. Together, the Align and exocad booths represented our biggest IDS exhibition space to date, showcasing our many innovative products and services.
Product
- On August 2, 2021, we announced an exclusive supply and distribution agreement with Ultradent Products Inc., a leading developer and manufacturer of high-tech dental materials, devices, and instruments worldwide. As part of the multi-year agreement, Align will begin offering Invisalign trained doctors an exclusive professional whitening system with the leading Opalescence PF whitening formula from Ultradent, optimized for use with Invisalign clear aligners and Vivera retainers.
FY 2021 Business Outlook
For 2021, Align provides the following guidance:
- Net revenues are expected to be in the range
$3.90 billion to$3.95 billion , up approximately58% to60% over full-year 2020. We also expect revenue growth for the second half of 2021 to be at the high end of our long-term operating model target of20% to30% - On a GAAP basis, we anticipate our 2021 operating margin to be around
25.0% - Non-GAAP operating margin is expected to be approximately 3 points higher than GAAP operating margin for 2021
- In addition, during Q4'21 we expect to repurchase up to
$100 million of our common stock through either or a combination of open market repurchases or an accelerated stock repurchase agreement
Align Web Cast and Conference Call
Align will host a conference call today, October 27, 2021, at 4:30 p.m. ET, 1:30 p.m. PT, to review its third quarter 2021 results, discuss future operating trends and its business outlook. The conference call will also be webcast live via the Internet. To access the webcast, go to the “Events & Presentations” section under Company Information on Align's Investor Relations website at http://investor.aligntech.com. To access the conference call, please dial 201-689-8261. An archived audio webcast will be available beginning approximately one hour after the call's conclusion and will remain available for approximately one month. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with conference number 13723267 followed by #. For international callers, please dial 201-612-7415 and use the same conference number referenced above. The telephonic replay will be available through 5:30 p.m. ET on November 10, 2021.
About Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we may provide investors with certain non-GAAP financial measures which may include gross profit, gross margin, operating expenses, income from operations, operating margin, interest income and other income (expense), net, net income before provision for (benefit from) income taxes, provision for (benefit from) income taxes, effective tax rate, net income and/or diluted net income per share, which exclude certain items that may not be indicative of our fundamental operating performance including discrete cash and non-cash charges or gains that are included in the most directly comparable GAAP measure. Unless otherwise indicated, when we refer to non-GAAP financial measures they will exclude the effects of stock-based compensation, amortization of certain acquired intangibles, non-cash deferred tax assets and associated amortization related to the intra-entity transfer of non-inventory assets, acquisition-related costs, and arbitration award gain, and, if applicable, any associated tax impacts.
We use non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that the use of certain non-GAAP financial measures provide meaningful supplemental information regarding our recurring core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal evaluation of period-to-period comparisons. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they will be provided to and used by our institutional investors and the analyst community to help them analyze the performance of our business.
There are limitations to using non-GAAP financial measures, though, because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our GAAP financial measures to the comparable Non-GAAP financial measures included in this presentation and not to rely on any single financial measure to evaluate our business. For more information on these non-GAAP financial measures, please see the table captioned “Unaudited GAAP to Non-GAAP Reconciliation.”
About Align Technology, Inc.
Align Technology designs and manufactures the Invisalign® system, the most advanced clear aligner system in the world, iTero® intraoral scanners and services, and exocad® CAD/CAM software. These technology building blocks enable enhanced digital orthodontic and restorative workflows to improve patient outcomes and practice efficiencies for over 210 thousand doctor customers and is key to accessing Align's 500 million consumer market opportunity worldwide. Align has helped doctors treat over 11.6 million patients with the Invisalign system and is driving the evolution in digital dentistry through the Align Digital Platform, our integrated suite of unique, proprietary technologies and services delivered as a seamless, end-to-end solution for patients and consumers, orthodontists and GP dentists, and lab/partners. Visit www.aligntech.com for more information.
For additional information about the Invisalign system or to find an Invisalign doctor in your area, please visit www.invisalign.com. For additional information about the iTero digital scanning system, please visit www.itero.com. For additional information about exocad dental CAD/CAM offerings and a list of exocad reseller partners, please visit www.exocad.com.
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including quotations from management regarding confidence in our products and services, and statements regarding the availability of products and certain business metrics on either or both a GAAP or non-GAAP basis for 2021, including, but not limited to, anticipated net revenues and growth rate for the year and, in particular, the second half of 2021, operating margin, and in connection with the timing, means and amount of anticipated stock repurchases. Forward-looking statements contained in this news release relating to expectations about future events or results are based upon information available to Align as of the date hereof. Readers are cautioned that these forward-looking statements reflect our best judgments based on currently known facts and circumstances and are subject to risks, uncertainties, and assumptions that are difficult to predict. As a result, actual results may differ materially and adversely from those expressed in any forward-looking statement.
Factors that might cause such a difference include, but are not limited to:
- the impact of the COVID-19 pandemic on the health and safety of our employees, customers, patients, and our suppliers, as well as the physical and economic impacts of the various recommendations, orders, and protocols issued by local and national governmental agencies in light of continual evolution of the pandemic, including any periodic reimplementation of preventative measures in various global locations;
- difficulties predicting customer and consumer purchasing behavior and changes in consumer spending habits as a result of, among other things, prevailing economic conditions, levels of employment, salaries and wages, inflation and consumer confidence, particularly in light of the pandemic and as pandemic-related restrictions are eased regionally and globally;
- unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
- increasing competition from existing and new competitors;
- rapidly evolving and groundbreaking advances that fundamentally alter the dental industry or the way new and existing customers market and provide products and services to consumers;
- the ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- declines in, or the slowing of the growth of, sales of our intraoral scanners domestically and/or internationally and the impact either would have on the adoption of Invisalign products;
- the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers;
- the possibility that the development and release of new products or enhancements to existing products do not proceed in accordance with the anticipated timeline or may themselves contain bugs or errors requiring remediation and that the market for the sale of these new or enhanced products may not develop as expected;
- a tougher consumer demand environment in China generally, especially for manufacturers and service providers whose headquarters or primary operations are not based in China;
- the risks relating to our ability to sustain or increase profitability or revenue growth in future periods (or minimize declines) while controlling expenses;
- the impact of excess or constrained capacity at our manufacturing and treat operations facilities and pressure on our internal systems and personnel;
- the compromise of customer and/or patient data for any reason;
- the timing of case submissions from our doctors within a quarter as well as an increased manufacturing costs per case;
- foreign operational, political and other risks relating to our international manufacturing operations; and
- the loss of key personnel, labor shortages or work stoppages for us or our suppliers.
The foregoing and other risks are detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (SEC) on February 26, 2021 and our latest Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, which was filed with the SEC on August 4, 2021. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net revenues | $ | 1,015,906 | $ | 734,144 | $ | 2,921,485 | $ | 1,637,421 | ||||
| Cost of net revenues | 260,750 | 200,056 | 730,693 | 484,649 | ||||||||
| Gross profit | 755,156 | 534,088 | 2,190,792 | 1,152,772 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 428,409 | 312,492 | 1,257,445 | 852,365 | ||||||||
| Research and development | 65,587 | 44,527 | 177,839 | 126,420 | ||||||||
| Total operating expenses | 493,996 | 357,019 | 1,435,284 | 978,785 | ||||||||
| Income from operations | 261,160 | 177,069 | 755,508 | 173,987 | ||||||||
| Interest income and other income (expense), net: | ||||||||||||
| Interest income | 401 | 329 | 2,427 | 2,788 | ||||||||
| Other income (expense), net | 427 | 7,147 | 34,476 | (12,368 | ) | |||||||
| Total interest income and other income (expense), net | 828 | 7,476 | 36,903 | (9,580 | ) | |||||||
| Net income before provision for (benefit from) income taxes | 261,988 | 184,545 | 792,411 | 164,407 | ||||||||
| Provision for (benefit from) income taxes | 81,019 | 45,174 | 211,352 | (1,452,493 | ) | |||||||
| Net income | $ | 180,969 | $ | 139,371 | $ | 581,059 | $ | 1,616,900 | ||||
| Net income per share: | ||||||||||||
| Basic | $ | 2.29 | $ | 1.77 | $ | 7.36 | $ | 20.54 | ||||
| Diluted | $ | 2.28 | $ | 1.76 | $ | 7.29 | $ | 20.45 | ||||
| Shares used in computing net income per share: | ||||||||||||
| Basic | 78,904 | 78,824 | 78,971 | 78,729 | ||||||||
| Diluted | 79,516 | 79,163 | 79,677 | 79,078 | ||||||||
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| September 30, 2021 | December 31, 2020 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 1,237,822 | $ | 960,843 | |
| Accounts receivable, net | 855,037 | 657,704 | |||
| Inventories | 207,116 | 139,237 | |||
| Prepaid expenses and other current assets | 155,332 | 91,754 | |||
| Total current assets | 2,455,307 | 1,849,538 | |||
| Property, plant and equipment, net | 1,002,769 | 734,721 | |||
| Operating lease right-of-use assets, net | 92,727 | 82,553 | |||
| Goodwill | 426,594 | 444,817 | |||
| Intangible assets, net | 115,794 | 130,072 | |||
| Deferred tax assets | 1,502,250 | 1,552,831 | |||
| Other assets | 54,668 | 35,151 | |||
| Total assets | $ | 5,650,109 | $ | 4,829,683 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 174,916 | $ | 142,132 | |
| Accrued liabilities | 545,286 | 405,582 | |||
| Deferred revenues | 1,070,113 | 777,887 | |||
| Total current liabilities | 1,790,315 | 1,325,601 | |||
| Income tax payable | 125,986 | 105,748 | |||
| Operating lease liabilities | 74,352 | 64,445 | |||
| Other long-term liabilities | 142,694 | 100,024 | |||
| Total liabilities | 2,133,347 | 1,595,818 | |||
| Total stockholders’ equity | 3,516,762 | 3,233,865 | |||
| Total liabilities and stockholders’ equity | $ | 5,650,109 | $ | 4,829,683 | |
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Nine Months Ended September 30, | |||||||
| 2021 | 2020 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net cash provided by operating activities | $ | 899,695 | $ | 280,756 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Net cash used in investing activities | (255,719 | ) | (186,840 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Net cash used in financing activities | (356,759 | ) | (28,360 | ) | |||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (10,241 | ) | (568 | ) | |||
| Net increase in cash, cash equivalents, and restricted cash | 276,976 | 64,988 | |||||
| Cash, cash equivalents, and restricted cash at beginning of the period | 961,474 | 551,134 | |||||
| Cash, cash equivalents, and restricted cash at end of the period | $ | 1,238,450 | $ | 616,122 | |||
ALIGN TECHNOLOGY, INC.
INVISALIGN BUSINESS METRICS
| Q1 | Q2 | Q3 | Q4 | Fiscal | Q1 | Q2 | Q3 | ||||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2020 | 2021 | 2021 | 2021 | ||||||||||||||||
| Invisalign Average Selling Price (ASP): | |||||||||||||||||||||||
| Comprehensive Products ASP | $ | 1,340 | $ | 1,330 | $ | 1,245 | $ | 1,230 | $ | 1,275 | $ | 1,265 | $ | 1,250 | $ | 1,255 | |||||||
| Non-Comprehensive Products ASP | $ | 1,050 | $ | 1,035 | $ | 1,005 | $ | 1,000 | $ | 1,020 | $ | 1,030 | $ | 1,040 | $ | 1,050 | |||||||
| Number of Invisalign Doctors Cases Were Shipped To: | |||||||||||||||||||||||
| Americas | 32,315 | 22,165 | 34,625 | 38,165 | 49,615 | 38,975 | 40,740 | 41,310 | |||||||||||||||
| International | 28,535 | 25,945 | 35,380 | 38,585 | 52,445 | 39,630 | 42,725 | 44,190 | |||||||||||||||
| Total Doctors Cases Shipped To | 60,850 | 48,110 | 70,005 | 76,750 | 102,060 | 78,605 | 83,465 | 85,500 | |||||||||||||||
| Invisalign Doctor Utilization Rates*: | |||||||||||||||||||||||
| North America | 6.9 | 4.8 | 8.4 | 8.7 | 19.8 | 9.1 | 9.9 | 9.8 | |||||||||||||||
| North American Orthodontists | 18.9 | 11.0 | 24.1 | 25.0 | 67.3 | 26.8 | 29.4 | 29.7 | |||||||||||||||
| North American GP Dentists | 3.6 | 2.5 | 4.2 | 4.5 | 9.6 | 4.8 | 5.3 | 5.0 | |||||||||||||||
| International | 5.1 | 4.7 | 6.4 | 6.9 | 14.5 | 6.8 | 7.1 | 6.5 | |||||||||||||||
| Total Utilization Rates** | 5.9 | 4.6 | 7.1 | 7.4 | 16.1 | 7.6 | 8.0 | 7.7 | |||||||||||||||
* # of cases shipped / # of doctors to whom cases were shipped
** LATAM utilization rate is not separately disclosed but included in the total utilization rates
ALIGN TECHNOLOGY, INC.
STOCK-BASED COMPENSATION
(in thousands)
| Q1 | Q2 | Q3 | Q4 | Fiscal | Q1 | Q2 | Q3 | ||||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2020 | 2021 | 2021 | 2021 | ||||||||||||||||
| Stock-based Compensation (SBC): | |||||||||||||||||||||||
| SBC included in Gross Profit | $ | 1,347 | $ | 891 | $ | 1,247 | $ | 1,234 | $ | 4,719 | $ | 1,306 | $ | 1,418 | $ | 1,451 | |||||||
| SBC included in Operating Expenses | 21,580 | 24,116 | 23,982 | 24,030 | 93,708 | 25,935 | 27,437 | 26,951 | |||||||||||||||
| Total SBC | $ | 22,927 | $ | 25,007 | $ | 25,229 | $ | 25,264 | $ | 98,427 | $ | 27,241 | $ | 28,855 | $ | 28,402 | |||||||
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| GAAP gross profit | $ | 755,156 | $ | 534,088 | $ | 2,190,792 | $ | 1,152,772 | |||||||
| Stock-based compensation | 1,451 | 1,247 | 4,175 | 3,485 | |||||||||||
| Amortization of intangibles (1) | 2,354 | 2,700 | 6,704 | 4,350 | |||||||||||
| Non-GAAP gross profit | $ | 758,961 | $ | 538,035 | $ | 2,201,671 | $ | 1,160,607 | |||||||
| GAAP gross margin | 74.3 | % | 72.7 | % | 75.0 | % | 70.4 | % | |||||||
| Non-GAAP gross margin | 74.7 | % | 73.3 | % | 75.4 | % | 70.9 | % | |||||||
| GAAP total operating expenses | $ | 493,996 | $ | 357,019 | $ | 1,435,284 | $ | 978,785 | |||||||
| Stock-based compensation | (26,951) | (23,982) | (80,323) | (69,678) | |||||||||||
| Amortization of intangibles (1) | (960) | (580) | (2,735) | (2,175) | |||||||||||
| Acquisition related costs (2) | — | (314) | (104) | (7,621) | |||||||||||
| Non-GAAP total operating expenses | $ | 466,085 | $ | 332,143 | $ | 1,352,122 | $ | 899,311 | |||||||
| GAAP income from operations | $ | 261,160 | $ | 177,069 | $ | 755,508 | $ | 173,987 | |||||||
| Stock-based compensation | 28,402 | 25,229 | 84,498 | 73,163 | |||||||||||
| Amortization of intangibles (1) | 3,314 | 3,280 | 9,439 | 6,525 | |||||||||||
| Acquisition related costs (2) | — | 314 | 104 | 7,621 | |||||||||||
| Non-GAAP income from operations | $ | 292,876 | $ | 205,892 | $ | 849,549 | $ | 261,296 | |||||||
| GAAP operating margin | 25.7 | % | 24.1 | % | 25.9 | % | 10.6 | % | |||||||
| Non-GAAP operating margin | 28.8 | % | 28.0 | % | 29.1 | % | 16.0 | % | |||||||
| GAAP total interest income and other income (expense), net | $ | 828 | $ | 7,476 | $ | 36,903 | $ | (9,580) | |||||||
| Acquisition related costs (2) | — | — | — | 10,187 | |||||||||||
| Arbitration award gain (3) | — | — | (43,403) | — | |||||||||||
| Non-GAAP total interest income and other income (expense), net | $ | 828 | $ | 7,476 | $ | (6,500) | $ | 607 | |||||||
| GAAP net income before provision for income taxes | $ | 261,988 | $ | 184,545 | $ | 792,411 | $ | 164,407 | |||||||
| Stock-based compensation | 28,402 | 25,229 | 84,498 | 73,163 | |||||||||||
| Amortization of intangibles (1) | 3,314 | 3,280 | 9,439 | 6,525 | |||||||||||
| Acquisition related costs (2) | — | 314 | 104 | 17,808 | |||||||||||
| Arbitration award gain (3) | — | — | (43,403) | — | |||||||||||
| Non-GAAP net income before provision for income taxes | $ | 293,704 | $ | 213,368 | $ | 843,049 | $ | 261,903 | |||||||
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED
(in thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| GAAP provision for (benefit from) income taxes | $ | 81,019 | $ | 45,174 | $ | 211,352 | $ | (1,452,493) | |||||||
| Tax impact on non-GAAP adjustments | 6,605 | 1,093 | 19,978 | 20,931 | |||||||||||
| Tax related non-GAAP items (4) | (22,494) | (10,763) | (57,339) | 1,485,286 | |||||||||||
| Non-GAAP provision for income taxes | $ | 65,130 | $ | 35,504 | $ | 173,991 | $ | 53,724 | |||||||
| GAAP effective tax rate | 30.9 | % | 24.5 | % | 26.7 | % | (883.5) | % | |||||||
| Non-GAAP effective tax rate | 22.2 | % | 16.6 | % | 20.6 | % | 20.5 | % | |||||||
| GAAP net income | $ | 180,969 | $ | 139,371 | $ | 581,059 | $ | 1,616,900 | |||||||
| Stock-based compensation | 28,402 | 25,229 | 84,498 | 73,163 | |||||||||||
| Amortization of intangibles (1) | 3,314 | 3,280 | 9,439 | 6,525 | |||||||||||
| Acquisition related costs (2) | — | 314 | 104 | 17,808 | |||||||||||
| Arbitration award gain (3) | — | — | (43,403) | — | |||||||||||
| Tax impact on non-GAAP adjustments | (6,605) | (1,093) | (19,978) | (20,931) | |||||||||||
| Tax related non-GAAP items (4) | 22,494 | 10,763 | 57,339 | (1,485,286) | |||||||||||
| Non-GAAP net income | $ | 228,574 | $ | 177,864 | $ | 669,058 | $ | 208,179 | |||||||
| GAAP diluted net income per share | $ | 2.28 | $ | 1.76 | $ | 7.29 | $ | 20.45 | |||||||
| Non-GAAP diluted net income per share | $ | 2.87 | $ | 2.25 | $ | 8.40 | $ | 2.63 | |||||||
| Shares used in computing diluted net income per share | 79,516 | 79,163 | 79,677 | 79,078 | |||||||||||
Notes:
(1) Amortization of intangible assets related to our exocad acquisition.
(2) During 2021, acquisition related costs were for professional fees related to our exocad acquisition. During 2020, acquisition costs included third party advisory, legal, tax, accounting, banking, valuation, and other professional or consulting fees and foreign exchange losses related to a forward contract for the purchase commitment related to our exocad acquisition.
(3) During Q1'21, we recorded a
(4) During Q1'20, we recorded a one-time net tax benefit for the deferred tax asset and certain costs associated with the intra-entity transfer of certain intellectual property rights and assets to our Swiss subsidiary. For the periods presented, we recorded amortization and certain adjustments to the benefit from the transferred intangible assets of our Swiss entity.
Refer to “About Non-GAAP Financial Measures” section of press release.
ALIGN TECHNOLOGY, INC.
FY21 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION
| Range | |||
| GAAP Operating Margin | to | ||
| Stock-based compensation | |||
| Amortization of intangibles (1) | |||
| Non-GAAP Operating Margin | to | ||
(1) Amortization of intangible assets related to our exocad acquisition in 2020
| Align Technology | Zeno Group |
| Madelyn Valente | Sarah Johnson |
| (408) 470-1180 | (828) 551-4201 |
| mvalente@aligntech.com | sarah.johnson@zenogroup.com |
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