Align Technology Announces Second Quarter 2024 Financial Results
Align Technology reported Q2'24 revenues of $1,028.5 million, up 3.1% sequentially and 2.6% YoY. The company achieved a diluted net income per share of $1.28, or $2.41 on a non-GAAP basis. Clear Aligner revenues were $831.7 million, up 1.8% sequentially but down 0.1% YoY, with volumes increasing 6.2% sequentially and 3.2% YoY. Imaging Systems and CAD/CAM Services revenues rose to $196.8 million, a 9.2% sequential and 16.1% YoY increase. Adverse foreign exchange impacts affected revenues and margins. Operating income was $147.0 million with a GAAP operating margin of 14.3% and non-GAAP operating margin of 22.3%. Align also announced a $31.1 million settlement regarding legal matters. Moreover, the company repurchased 0.6 million shares at an average price of $250.73. Looking forward, Align expects Q3'24 revenues between $980M and $1,000M and FY'24 revenue growth of 4%-6% YoY.
- Q2'24 revenues increased 3.1% sequentially and 2.6% YoY to $1,028.5 million.
- Clear Aligner volume increased 6.2% sequentially and 3.2% YoY.
- Imaging Systems and CAD/CAM Services revenues rose 9.2% sequentially and 16.1% YoY.
- Non-GAAP operating margin improved to 22.3%, up 2.5 points sequentially and 1.0 point YoY.
- Adverse foreign exchange impacted total revenues by $18.1 million YoY.
- Clear Aligner revenues were down 0.1% YoY.
- GAAP operating margin fell 2.9 points YoY.
- Net income decreased 8.1% sequentially and 13.6% YoY to $96.6 million.
Insights
Align Technology's Q2 2024 financial results present a mixed picture with some positive trends and challenges. Total revenues of
The company's Imaging Systems and CAD/CAM Services segment showed strong performance, with revenues increasing
Profitability metrics were mixed. While GAAP operating margin declined both sequentially and year-over-year, non-GAAP operating margin improved. This discrepancy is partly due to a
The company's outlook for Q3 and full-year 2024 suggests cautious optimism. The projected revenue growth of
Align Technology's Q2 results reveal interesting market dynamics. The total Invisalign patients surpassing 18 million globally, including over 5 million teens and kids, indicates strong market penetration and acceptance of clear aligners. The
However, the relatively flat Clear Aligner revenues (
The strong performance in Imaging Systems and CAD/CAM Services (
Geographically, the strength in Asia Pacific, EEMA and Latin America regions for teen case starts suggests untapped potential in these markets. However, currency fluctuations, particularly in the Japanese yen, Euro and Brazilian real, are impacting financial results, highlighting the need for effective currency management strategies.
Align Technology's Q2 results highlight the company's ongoing innovation and technological advancements in the digital dentistry space. The strong adoption of the next-gen iTero Lumina scanner is a positive indicator of the company's ability to develop and market cutting-edge products. This technology not only drives equipment sales but also creates a ecosystem that can lead to increased Clear Aligner case starts.
The delay in the commercial launch of the iTero Lumina with restorative capabilities to Q1 2025 is a setback worth noting. While it may impact short-term revenue projections, it also underscores the complexity of developing advanced dental technologies and Align's commitment to product quality.
The company's investment in research, as evidenced by the
The appointment of Emory Wright to focus on scaling Align's next-generation direct fabrication manufacturing platform is intriguing. This suggests potential advancements in manufacturing technology that could improve efficiency, reduce costs and potentially lead to faster turnaround times for aligners - all important factors in maintaining a competitive edge in the market.
Total Invisalign® patients surpasses 18 million globally, including over 5 million teens and kids
-
Q2'24 total revenues of
$1,028.5 million 3.1% sequentially, and increased2.6% year-over-year, and Q2'24 diluted net income per share was$1.28 $2.41 -
Q2'24 total revenues were unfavorably impacted by foreign exchange of approximately
$11.6 million 1.1% sequentially and unfavorably impacted by approximately$18.1 million 1.7% year-over-year(1) -
Q2'24 Imaging Systems and CAD/CAM Services revenues of
$196.8 million 9.2% sequentially, and increased16.1% year-over-year -
Q2'24 Clear Aligner revenues of
$831.7 million 1.8% sequentially, and decreased0.1% year-over-year -
Clear Aligner volume of 642.7 thousand cases increased
6.2% sequentially, and increased3.2% year-over-year -
Q2'24 Clear Aligner volume for teens increased
8.8% sequentially, and increased8.0% year-over-year to 216.7 thousand cases -
Q2'24 operating income of
$147.0 million 14.3% , non-GAAP operating margin of22.3% - Q2'24 GAAP operating margin was unfavorably impacted by foreign exchange of approximately 0.6 points sequentially and unfavorably impacted by approximately 1.2 points year-over-year(1)
During the quarter ended June 30, 2024, we agreed, in principle, to settle legal matters for a total of
Q2'24 operating income was
Commenting on Align's Q2’24 results, Align Technology President and CEO Joe Hogan said, “Overall, I am pleased to report solid second quarter results. Total Q2’24 revenues of
Continued Hogan, “For Clear Aligners, Q2’24 volumes increased
(1) For more information, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
Financial Summary - Second Quarter Fiscal 2024
|
Q2'24 |
|
Q1'24 |
|
Q2'23 |
|
Q/Q Change |
|
Y/Y Change |
|
Clear Aligner Shipments* |
642,725 |
|
605,060 |
|
622,615 |
|
+ |
|
+ |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
Net Revenues |
|
|
|
|
|
|
+ |
|
+ |
|
Clear Aligner |
|
|
|
|
|
|
+ |
|
(0.1)% |
|
Imaging Systems and CAD/CAM Services |
|
|
|
|
|
|
+ |
|
+ |
|
Net Income |
|
|
|
|
|
|
(8.1)% |
|
(13.6)% |
|
Diluted EPS |
|
|
|
|
|
|
( |
|
( |
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
+ |
|
+ |
|
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. |
||||||||||
*Clear Aligner shipments include Doctor Subscription Program Touch-Up cases. |
||||||||||
As of June 30, 2024, we had over
During the quarter, we completed a
Q2'24 Announcement Highlights
-
On June 3, 2024, Align announced the award of twelve research grants totaling
$300,000 - On May 22, 2024, Align announced that it appointed Emory Wright to executive vice president, direct fabrication manufacturing platform, transitioning his current responsibilities for global operations, including treatment planning, to focus on scaling Align’s next generation direct fabrication manufacturing platform, working in close collaboration with Srini Kaza, who was promoted to executive vice president, research and development. Dr. Mitra Derakhshan assumed responsibility for global treatment planning in the newly created role of executive vice president, chief clinical officer, global treatment planning and clinical services. And Jitse Marree, vice president, global aligner manufacturing will continue to lead global clear aligner manufacturing operations while assuming responsibility for Mr. Wright’s remaining global operations functions. The announcement also stated that Mr. Wright plans to retire in 2026.
-
On April 1, 2024, Align announced that the Invisalign® Palatal Expander System was included in the Australian Register of Therapeutic Goods and the New Zealand Web Assisted Notification of Devices Database, and is commercially available in both
Australia and New Zealand . It is expected to be available in other APAC markets pending regulatory approvals starting in 2024.
Q2'24 Stock Repurchase
During Q2'24, we repurchased approximately 0.6 million shares of our common stock at an average price per share of
Fiscal 2024 Business Outlook
Turning to our outlook, assuming no circumstances occur beyond our control, we provide the following business outlook for Q3'24 and fiscal 2024:
Third quarter 2024 outlook:
For Q3’24, we are providing the following business outlook:
-
We expect our Q3 worldwide revenues to be in the range of
$980M $1,000M - We expect Clear Aligner volume to be down sequentially as a result of Q3 seasonality, and Clear Aligner ASPs to be down sequentially, primarily due to foreign exchange and product mix
- We also expect Systems and Services revenues to be down sequentially because of Q3 seasonality
- We expect our Q3’24 GAAP operating margin to be below Q3’23 GAAP operating margin and Q3’24 non-GAAP operating margin to be flat to Q3’23 non-GAAP operating margin
Full year 2024 outlook:
For fiscal 2024, we are providing the following business outlook:
-
We expect fiscal 2024 total revenue growth to be up
4% to6% year-over-year, due in part to lower Clear Aligner ASPs from continued unfavorable foreign exchange and product mix. In addition, our revised revenue outlook reflects our anticipated commercial launch of the iTero™ Lumina with restorative capabilities to occur in Q1’25, instead of 2024 as previously anticipated - We expect fiscal 2024 GAAP operating margin to be slightly below 2023 GAAP operating margin and 2024 non-GAAP operating margin to be above the 2023 non-GAAP operating margin
-
We expect investments in capital expenditures for fiscal 2024 to be approximately
$100M
Align Webcast and Conference Call
We will host a conference call today, July 24, 2024, at 4:30 p.m. ET, 1:30 p.m. PT, to review our second quarter 2024 results, discuss future operating trends, and our 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, participants may register for the call at https://edge.media-server.com/mmc/p/uj2uqd8r/. An archived audio webcast will be available 2 hours after the call's conclusion and will remain available for one month.
About Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles ("GAAP") in
These non-GAAP financial measures exclude certain items that may not be indicative of our fundamental operating performance, including foreign currency exchange rate impacts, the effects of stock-based compensation, amortization of certain acquired intangibles, restructuring and other charges, acquisition-related costs, associated tax impacts and discrete cash and non-cash charges or gains that are included in the most directly comparable GAAP financial measure.
Our management believes that the use of certain non-GAAP financial measures provides 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. 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 are used by our institutional investors and the analyst community to help them analyze the performance of our business.
There are material limitations to using non-GAAP financial measures as they are not prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Non-GAAP financial measures exclude certain items that may have a material impact upon our reported financial results, which can limit their usefulness for comparison purposes. 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 both a GAAP and non-GAAP basis and by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial 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, superior to, 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 herein and not to rely on any single financial measure to evaluate our business. For more information on these non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the tables 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 266 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide. Over the past 27 years, Align has helped doctors treat over 18.2 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.
Invisalign, iTero, exocad, Align, Align Digital Platform and iTero Lumina are trademarks of Align Technology, Inc.
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding our ability to successfully control our business and operations and pursue our strategic growth drivers, our expectations regarding the release, availability, regulatory clearance, effectiveness and customer desire for new products and technologies, our expectations regarding the timing of settlements of litigation matters, our expectations for market opportunities, our expectations for Q3'24 worldwide revenues, Clear Aligner volumes, Clear Aligner ASP, Systems and Services revenues and GAAP and non-GAAP operating margin, and 2024 total revenues, Clear Aligner ASP, and GAAP and non-GAAP operating margin, as well as capital expenditures. 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:
- macroeconomic conditions, including inflation, fluctuations in currency exchange rates, rising interest rates, market volatility, weakness in general economic conditions and recessions and the impact of efforts by central banks and federal, state and local governments to combat inflation and recession;
-
customer and consumer purchasing behavior and changes in consumer spending habits as a result of, among other things, prevailing macroeconomic conditions, levels of employment, salaries and wages, debt obligations, discretionary income, inflationary pressure, declining consumer confidence, and the military conflict in
Ukraine and in theMiddle East ; - variations in our geographic, channel and product mix, product adoption, and selling prices regionally and globally, including product mix shifts to lower priced products or to products with a higher percentage of deferred revenue;
- competition from existing and new competitors;
- declines in, or the slowing of the growth of, sales of our clear aligners and intraoral scanners domestically and/or internationally and the impact either would have on the adoption of Invisalign products;
-
the economic and geopolitical ramifications of the military conflict in the
Middle East andUkraine , including trade disruptions, tariffs, sanctions, or boycotts, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, any of which could adversely impact our operations and assets; - 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, errors or defects in software or hardware requiring remediation and that the market for the sale of these new or enhanced products may not develop as expected;
- the timing and availability and cost of raw materials, components, products and other shipping and supply chain constraints and disruptions;
- unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
- 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;
- our ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers;
-
a tougher consumer demand environment in
China generally, especially for manufacturers and service providers whose headquarters or primary operations are not based inChina ; - the risks relating to our ability to sustain or increase profitability or revenue growth in future periods (or minimize declines) while controlling expenses;
- expansion of our business and products;
- 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 our systems or networks, including any customer and/or patient data contained therein, for any reason;
- the timing of case submissions from our doctor customers within a quarter as well as an increased manufacturing costs per case; 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 ("SEC"), including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 28, 2024 and our latest Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which was filed with the SEC on May 3, 2024. 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net revenues |
|
$ |
1,028,490 |
|
|
$ |
1,002,173 |
|
|
$ |
2,025,921 |
|
|
$ |
1,945,320 |
|
Cost of net revenues |
|
|
305,862 |
|
|
|
288,564 |
|
|
|
605,477 |
|
|
|
571,057 |
|
Gross profit |
|
|
722,628 |
|
|
|
713,609 |
|
|
|
1,420,444 |
|
|
|
1,374,263 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
452,262 |
|
|
|
453,193 |
|
|
|
904,084 |
|
|
|
892,884 |
|
Research and development |
|
|
92,193 |
|
|
|
88,485 |
|
|
|
184,052 |
|
|
|
175,932 |
|
Litigation settlement loss |
|
|
31,127 |
|
|
|
— |
|
|
|
31,127 |
|
|
|
— |
|
Total operating expenses |
|
|
575,582 |
|
|
|
541,678 |
|
|
|
1,119,263 |
|
|
|
1,068,816 |
|
Income from operations |
|
|
147,046 |
|
|
|
171,931 |
|
|
|
301,181 |
|
|
|
305,447 |
|
Interest income and other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
|
3,301 |
|
|
|
4,421 |
|
|
|
7,693 |
|
|
|
6,758 |
|
Other income (expense), net |
|
|
(6,481 |
) |
|
|
(4,763 |
) |
|
|
(6,622 |
) |
|
|
(5,992 |
) |
Total interest income and other income (expense), net |
|
|
(3,180 |
) |
|
|
(342 |
) |
|
|
1,071 |
|
|
|
766 |
|
Net income before provision for income taxes |
|
|
143,866 |
|
|
|
171,589 |
|
|
|
302,252 |
|
|
|
306,213 |
|
Provision for income taxes |
|
|
47,302 |
|
|
|
59,775 |
|
|
|
100,660 |
|
|
|
106,601 |
|
Net income |
|
$ |
96,564 |
|
|
$ |
111,814 |
|
|
$ |
201,592 |
|
|
$ |
199,612 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.28 |
|
|
$ |
1.46 |
|
|
$ |
2.68 |
|
|
$ |
2.60 |
|
Diluted |
|
$ |
1.28 |
|
|
$ |
1.46 |
|
|
$ |
2.68 |
|
|
$ |
2.60 |
|
Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
75,184 |
|
|
|
76,524 |
|
|
|
75,180 |
|
|
|
76,722 |
|
Diluted |
|
|
75,223 |
|
|
|
76,689 |
|
|
|
75,315 |
|
|
|
76,897 |
|
ALIGN TECHNOLOGY, INC. |
||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands) |
||||||
|
|
June 30,
|
|
December 31,
|
||
ASSETS |
|
|
|
|
||
|
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
761,429 |
|
$ |
937,438 |
Marketable securities, short-term |
|
|
20,682 |
|
|
35,304 |
Accounts receivable, net |
|
|
1,020,135 |
|
|
903,424 |
Inventories |
|
|
259,492 |
|
|
296,902 |
Prepaid expenses and other current assets |
|
|
350,634 |
|
|
273,550 |
Total current assets |
|
|
2,412,372 |
|
|
2,446,618 |
|
|
|
|
|
||
Marketable securities, long-term |
|
|
— |
|
|
8,022 |
Property, plant and equipment, net |
|
|
1,277,826 |
|
|
1,290,863 |
Operating lease right-of-use assets, net |
|
|
122,174 |
|
|
117,999 |
Goodwill |
|
|
454,493 |
|
|
419,530 |
Intangible assets, net |
|
|
115,705 |
|
|
82,118 |
Deferred tax assets |
|
|
1,577,856 |
|
|
1,590,045 |
Other assets |
|
|
197,898 |
|
|
128,682 |
|
|
|
|
|
||
Total assets |
|
$ |
6,158,324 |
|
$ |
6,083,877 |
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
105,792 |
|
$ |
113,125 |
Accrued liabilities |
|
|
555,458 |
|
|
525,780 |
Deferred revenues |
|
|
1,378,867 |
|
|
1,427,706 |
Total current liabilities |
|
|
2,040,117 |
|
|
2,066,611 |
|
|
|
|
|
||
Income tax payable |
|
|
103,783 |
|
|
116,744 |
Operating lease liabilities |
|
|
98,301 |
|
|
96,968 |
Other long-term liabilities |
|
|
158,215 |
|
|
173,065 |
Total liabilities |
|
|
2,400,416 |
|
|
2,453,388 |
|
|
|
|
|
||
Total stockholders’ equity |
|
|
3,757,908 |
|
|
3,630,489 |
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
6,158,324 |
|
$ |
6,083,877 |
ALIGN TECHNOLOGY, INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(in thousands) |
||||||||
|
|
Six Months Ended
|
||||||
|
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
188,491 |
|
|
$ |
451,672 |
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
Net cash used in investing activities |
|
|
(192,077 |
) |
|
|
(178,314 |
) |
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
Net cash used in financing activities |
|
|
(163,275 |
) |
|
|
(259,892 |
) |
|
|
|
|
|
||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(9,196 |
) |
|
|
(3,523 |
) |
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(176,057 |
) |
|
|
9,943 |
|
Cash, cash equivalents, and restricted cash at beginning of the period |
|
|
938,519 |
|
|
|
942,355 |
|
Cash, cash equivalents, and restricted cash at end of the period |
|
$ |
762,462 |
|
|
$ |
952,298 |
|
ALIGN TECHNOLOGY, INC. |
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INVISALIGN BUSINESS METRICS |
||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
||||||
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
||||||
Number of Invisalign Trained Doctors Cases Were Shipped To |
|
|
82,730 |
|
|
83,440 |
|
|
85,195 |
|
|
83,700 |
|
|
83,510 |
|
|
86,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Invisalign Trained Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
9.5 |
|
|
9.8 |
|
|
9.6 |
|
|
9.1 |
|
|
9.5 |
|
|
9.9 |
North American Orthodontists |
|
|
28.7 |
|
|
29.2 |
|
|
28.8 |
|
|
25.9 |
|
|
28.2 |
|
|
28.8 |
North American GP Dentists |
|
|
4.9 |
|
|
5.2 |
|
|
4.9 |
|
|
5.0 |
|
|
4.9 |
|
|
5.3 |
International |
|
|
6.2 |
|
|
6.6 |
|
|
6.1 |
|
|
6.5 |
|
|
6.3 |
|
|
6.7 |
Total Utilization Rates** |
|
|
7.1 |
|
|
7.5 |
|
|
7.1 |
|
|
7.1 |
|
|
7.2 |
|
|
7.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,335 |
|
$ |
1,335 |
|
$ |
1,320 |
|
$ |
1,320 |
|
$ |
1,350 |
|
$ |
1,295 |
* # of cases shipped / # of doctors to whom cases were shipped |
||||||||||||||||||
** LATAM utilization rate is not separately disclosed but included in the total utilization rates |
||||||||||||||||||
*** Clear Aligner revenues / Case shipments |
||||||||||||||||||
Note: During the third quarter of 2023, we began including Touch Up cases in Case revenues that were previously included in Non-Case revenues and have recast business metrics for the periods presented above accordingly. |
||||||||||||||||||
ALIGN TECHNOLOGY, INC. |
|||||||||||||||||||||
STOCK-BASED COMPENSATION |
|||||||||||||||||||||
(in thousands) |
|||||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|||||||
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
|||||||
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
SBC included in Gross Profit |
|
$ |
1,807 |
|
$ |
1,901 |
|
$ |
1,974 |
|
$ |
1,780 |
|
$ |
7,462 |
|
$ |
2,064 |
|
$ |
2,582 |
SBC included in Operating Expenses |
|
|
35,928 |
|
|
35,959 |
|
|
37,628 |
|
|
37,049 |
|
|
146,564 |
|
|
36,724 |
|
|
44,446 |
Total SBC |
|
$ |
37,735 |
|
$ |
37,860 |
|
$ |
39,602 |
|
$ |
38,829 |
|
$ |
154,026 |
|
$ |
38,788 |
|
$ |
47,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ALIGN TECHNOLOGY, INC. |
|||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION+ |
|||||||||
CONSTANT CURRENCY NET REVENUES |
|||||||||
(in thousands, except percentages) |
|||||||||
Sequential constant currency analysis: |
|||||||||
|
|
Three Months Ended |
|
|
|||||
|
|
June 30,
|
|
March 31,
|
|
Impact % of Revenue |
|||
GAAP net revenues |
|
$ |
1,028,490 |
|
$ |
997,431 |
|
|
|
Constant currency impact (1) |
|
|
11,598 |
|
|
|
1.1 |
% |
|
Constant currency net revenues (1) |
|
$ |
1,040,088 |
|
|
|
|
||
|
|
|
|
|
|
|
|||
GAAP Clear Aligner net revenues |
|
$ |
831,738 |
|
$ |
817,251 |
|
|
|
Clear Aligner constant currency impact (1) |
|
|
9,547 |
|
|
|
1.1 |
% |
|
Clear Aligner constant currency net revenues (1) |
|
$ |
841,285 |
|
|
|
|
||
|
|
|
|
|
|
|
|||
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
196,752 |
|
$ |
180,180 |
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
2,051 |
|
|
|
1.0 |
% |
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
198,803 |
|
|
|
|
||
Year-over-year constant currency analysis: |
|||||||||
|
|
Three Months Ended June 30, |
|
|
|||||
|
|
2024 |
|
2023 |
|
Impact % of Revenue |
|||
GAAP net revenues |
|
$ |
1,028,490 |
|
$ |
1,002,173 |
|
|
|
Constant currency impact (1) |
|
|
18,077 |
|
|
|
1.7 |
% |
|
Constant currency net revenues (1) |
|
$ |
1,046,567 |
|
|
|
|
||
|
|
|
|
|
|
|
|||
GAAP Clear Aligner net revenues |
|
$ |
831,738 |
|
$ |
832,674 |
|
|
|
Clear Aligner constant currency impact (1) |
|
|
14,702 |
|
|
|
1.7 |
% |
|
Clear Aligner constant currency net revenues (1) |
|
$ |
846,440 |
|
|
|
|
||
|
|
|
|
|
|
|
|||
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
196,752 |
|
$ |
169,499 |
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
3,374 |
|
|
|
1.7 |
% |
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
200,126 |
|
|
|
|
||
Note: |
||
(1) |
We define constant currency net revenues as total net revenues excluding the effect of foreign exchange rate movements and use it to determine the percentage for the constant currency impact on net revenues on a sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues. The percentage for the constant currency impact on net revenues is calculated by dividing the constant currency impact in dollars (numerator) by constant currency net revenues in dollars (denominator). |
|
(+) |
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release. |
|
ALIGN TECHNOLOGY, INC. |
||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+ |
||||||
CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN |
||||||
(in thousands, except percentages) |
||||||
Sequential constant currency analysis: |
||||||
|
|
Three Months Ended |
||||
|
|
June 30,
|
|
March 31,
|
||
GAAP gross profit |
|
$ |
722,628 |
|
$ |
697,816 |
Constant currency impact on net revenues |
|
|
11,598 |
|
|
|
Constant currency gross profit |
|
$ |
734,227 |
|
|
|
|
|
Three Months Ended |
||||
|
|
June 30,
|
|
March 31,
|
||
GAAP gross margin |
|
70.3 |
% |
|
70.0 |
% |
Gross margin constant currency impact (1) |
|
0.3 |
|
|
|
|
Constant currency gross margin (1) |
|
70.6 |
% |
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
Three Months Ended June 30, |
||||
|
|
2024 |
|
2023 |
||
GAAP gross profit |
|
$ |
722,628 |
|
$ |
713,609 |
Constant currency impact on net revenues |
|
|
18,077 |
|
|
|
Constant currency gross profit |
|
$ |
740,705 |
|
|
|
|
|
Three Months Ended June 30, |
||||
|
|
2024 |
|
2023 |
||
GAAP gross margin |
|
70.3 |
% |
|
71.2 |
% |
Gross margin constant currency impact (1) |
|
0.5 |
|
|
|
|
Constant currency gross margin (1) |
|
70.8 |
% |
|
|
|
Note: |
||
(1) |
We define constant currency gross margin as constant currency gross profit as a percentage of constant currency net revenues. Gross margin constant currency impact is the increase or decrease in constant currency gross margin compared to the GAAP gross margin. |
|
(+) |
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release. |
|
ALIGN TECHNOLOGY, INC. |
||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+ |
||||||
CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING MARGIN |
||||||
(in thousands, except percentages) |
||||||
Sequential constant currency analysis: |
||||||
|
|
Three Months Ended |
||||
|
|
June 30,
|
|
March 31,
|
||
GAAP income from operations |
|
$ |
147,046 |
|
$ |
154,135 |
Income from operations constant currency impact (1) |
|
|
7,617 |
|
|
|
Constant currency income from operations (1) |
|
$ |
154,663 |
|
|
|
|
|
Three Months Ended |
||||
|
|
June 30,
|
|
March 31,
|
||
GAAP operating margin |
|
14.3 |
% |
|
15.5 |
% |
Operating margin constant currency impact (2) |
|
0.6 |
|
|
|
|
Constant currency operating margin (2) |
|
14.9 |
% |
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
Three Months Ended June 30, |
||||
|
|
2024 |
|
2023 |
||
GAAP income from operations |
|
$ |
147,046 |
|
$ |
171,931 |
Income from operations constant currency impact (1) |
|
|
14,924 |
|
|
|
Constant currency income from operations (1) |
|
$ |
161,970 |
|
|
|
|
|
Three Months Ended June 30, |
||||
|
|
2024 |
|
2023 |
||
GAAP operating margin |
|
14.3 |
% |
|
17.2 |
% |
Operating margin constant currency impact (2) |
|
1.2 |
|
|
|
|
Constant currency operating margin (2) |
|
15.5 |
% |
|
|
|
Notes: |
||
(1) |
We define constant currency income from operations as GAAP income from operations excluding the effect of foreign exchange rate movements for GAAP net revenues and operating expenses on a sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues and operating expenses using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues and operating expenses. |
|
(2) |
We define constant currency operating margin as constant currency income from operations as a percentage of constant currency net revenues. Operating margin constant currency impact is the increase or decrease in constant currency operating margin compared to the GAAP operating margin. |
|
(+) |
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release. |
|
ALIGN TECHNOLOGY, INC. |
||||||||||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+ |
||||||||||||||||
| FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY | ||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP gross profit |
|
$ |
722,628 |
|
|
$ |
713,609 |
|
|
$ |
1,420,444 |
|
|
$ |
1,374,263 |
|
Stock-based compensation |
|
|
2,582 |
|
|
|
1,901 |
|
|
|
4,646 |
|
|
|
3,708 |
|
Amortization of intangibles (1) |
|
|
3,678 |
|
|
|
2,810 |
|
|
|
7,402 |
|
|
|
5,584 |
|
Restructuring charges (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
Non-GAAP gross profit |
|
$ |
728,888 |
|
|
$ |
718,320 |
|
|
$ |
1,432,492 |
|
|
$ |
1,383,547 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross margin |
|
|
70.3 |
% |
|
|
71.2 |
% |
|
|
70.1 |
% |
|
|
70.6 |
% |
Non-GAAP gross margin |
|
|
70.9 |
% |
|
|
71.7 |
% |
|
|
70.7 |
% |
|
|
71.1 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP total operating expenses |
|
$ |
575,582 |
|
|
$ |
541,678 |
|
|
$ |
1,119,263 |
|
|
$ |
1,068,816 |
|
Stock-based compensation |
|
|
(44,446 |
) |
|
|
(35,959 |
) |
|
|
(81,170 |
) |
|
|
(71,887 |
) |
Amortization of intangibles (1) |
|
|
(875 |
) |
|
|
(879 |
) |
|
|
(1,738 |
) |
|
|
(1,746 |
) |
Restructuring and other charges (2) |
|
|
357 |
|
|
|
123 |
|
|
|
357 |
|
|
|
300 |
|
Litigation settlement loss |
|
|
(31,127 |
) |
|
|
— |
|
|
|
(31,127 |
) |
|
|
— |
|
Non-GAAP total operating expenses |
|
$ |
499,491 |
|
|
$ |
504,963 |
|
|
$ |
1,005,585 |
|
|
$ |
995,483 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
|
$ |
147,046 |
|
|
$ |
171,931 |
|
|
$ |
301,181 |
|
|
$ |
305,447 |
|
Stock-based compensation |
|
|
47,028 |
|
|
|
37,860 |
|
|
|
85,816 |
|
|
|
75,595 |
|
Amortization of intangibles (1) |
|
|
4,553 |
|
|
|
3,689 |
|
|
|
9,140 |
|
|
|
7,330 |
|
Restructuring and other charges (2) |
|
|
(357 |
) |
|
|
(123 |
) |
|
|
(357 |
) |
|
|
(308 |
) |
Litigation settlement loss |
|
|
31,127 |
|
|
|
— |
|
|
|
31,127 |
|
|
|
— |
|
Non-GAAP income from operations |
|
$ |
229,397 |
|
|
$ |
213,357 |
|
|
$ |
426,907 |
|
|
$ |
388,064 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating margin |
|
|
14.3 |
% |
|
|
17.2 |
% |
|
|
14.9 |
% |
|
|
15.7 |
% |
Non-GAAP operating margin |
|
|
22.3 |
% |
|
|
21.3 |
% |
|
|
21.1 |
% |
|
|
19.9 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income before provision for income taxes |
|
$ |
143,866 |
|
|
$ |
171,589 |
|
|
$ |
302,252 |
|
|
$ |
306,213 |
|
Stock-based compensation |
|
|
47,028 |
|
|
|
37,860 |
|
|
|
85,816 |
|
|
|
75,595 |
|
Amortization of intangibles (1) |
|
|
4,553 |
|
|
|
3,689 |
|
|
|
9,140 |
|
|
|
7,330 |
|
Restructuring and other charges (2) |
|
|
(357 |
) |
|
|
(123 |
) |
|
|
(357 |
) |
|
|
(308 |
) |
Litigation settlement loss |
|
|
31,127 |
|
|
|
— |
|
|
|
31,127 |
|
|
|
— |
|
Non-GAAP net income before provision for income taxes |
|
$ |
226,217 |
|
|
$ |
213,015 |
|
|
$ |
427,978 |
|
|
$ |
388,830 |
|
ALIGN TECHNOLOGY, INC. |
||||||||||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
||||||||||||||||
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP provision for income taxes |
|
$ |
47,302 |
|
|
$ |
59,775 |
|
|
$ |
100,660 |
|
|
|
106,601 |
|
Tax impact on non-GAAP adjustments |
|
|
(2,059 |
) |
|
|
(17,209 |
) |
|
|
(15,095 |
) |
|
|
(28,835 |
) |
Non-GAAP provision for income taxes |
|
$ |
45,243 |
|
|
$ |
42,566 |
|
|
$ |
85,565 |
|
|
$ |
77,766 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP effective tax rate |
|
|
32.9 |
% |
|
|
34.8 |
% |
|
|
33.3 |
% |
|
|
34.8 |
% |
Non-GAAP effective tax rate |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
|
$ |
96,564 |
|
|
$ |
111,814 |
|
|
$ |
201,592 |
|
|
$ |
199,612 |
|
Stock-based compensation |
|
|
47,028 |
|
|
|
37,860 |
|
|
|
85,816 |
|
|
|
75,595 |
|
Amortization of intangibles (1) |
|
|
4,553 |
|
|
|
3,689 |
|
|
|
9,140 |
|
|
|
7,330 |
|
Restructuring and other charges (2) |
|
|
(357 |
) |
|
|
(123 |
) |
|
|
(357 |
) |
|
|
(308 |
) |
Litigation settlement loss |
|
|
31,127 |
|
|
|
— |
|
|
|
31,127 |
|
|
|
— |
|
Tax impact on non-GAAP adjustments |
|
|
2,059 |
|
|
|
17,209 |
|
|
|
15,095 |
|
|
|
28,835 |
|
Non-GAAP net income |
|
$ |
180,974 |
|
|
$ |
170,449 |
|
|
$ |
342,413 |
|
|
$ |
311,064 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per share |
|
$ |
1.28 |
|
|
$ |
1.46 |
|
|
$ |
2.68 |
|
|
$ |
2.60 |
|
Non-GAAP diluted net income per share |
|
$ |
2.41 |
|
|
$ |
2.22 |
|
|
$ |
4.55 |
|
|
$ |
4.05 |
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing diluted net income per share |
|
|
75,223 |
|
|
|
76,689 |
|
|
|
75,315 |
|
|
|
76,897 |
|
Notes: |
||
(1) |
Amortization of intangible assets related to certain acquisitions. |
|
(2) |
Restructuring and other charges recorded in gross profit and operating expenses primarily relate to severance costs or revisions to initial severance cost estimates. |
|
(+) |
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release. |
|
ALIGN TECHNOLOGY, INC. |
||
Q3 2024 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
GAAP operating margin |
|
slightly below |
Stock-based compensation |
|
~ |
Amortization of intangibles (1) |
|
~ |
Non-GAAP operating margin |
|
~ |
ALIGN TECHNOLOGY, INC. |
||
FISCAL 2024 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
GAAP operating margin |
|
slightly below |
Stock-based compensation |
|
~ |
Amortization of intangibles (1) |
|
~ |
Litigation settlement (2) |
|
~ |
Non-GAAP operating margin |
|
above |
(1) |
Amortization of intangible assets related to certain acquisitions. |
|
(2) |
Full-year impact of Q2'24 litigation settlement. |
|
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240724236017/en/
Align Technology
Madelyn Valente
(909) 833-5839
mvalente@aligntech.com
Zeno Group
Sarah Johnson
(828) 551-4201
sarah.johnson@zenogroup.com
Source: Align Technology, Inc.
FAQ
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