Align Technology Announces Third Quarter 2022 Financial Results
Align Technology reported Q3'22 results with total revenues of $890.3 million, down 12.4% year-over-year. Clear Aligner revenues declined 12.5% year-over-year, totaling $732.8 million. The company faced substantial foreign exchange impacts, decreasing revenues by $57.4 million year-over-year. Operating income was $143.7 million with a 16.1% operating margin, impacted by foreign exchange as well. Align celebrated reaching 14 million Invisalign patients and opened its first EMEA manufacturing facility in Poland.
- Achieved milestone of 14 million Invisalign patients.
- Opened first EMEA manufacturing facility in Poland.
- Launched several innovative products to enhance the Align Digital Platform.
- Total revenues decreased 8.2% sequentially and 12.4% year-over-year.
- Clear Aligner revenues declined 12.5% year-over-year.
- Foreign exchange significantly impacted revenues, totaling $57.4 million loss year-over-year.
Company delivering on innovation roadmap; expanding geographically with first EMEA manufacturing facility; and celebrating 14 millionth Invisalign patient milestone
-
Q3'22 total revenues of
, and diluted net income per share of$890.3 million $0.93
-
Q3’22 revenues were unfavorably impacted by foreign exchange of approximately
sequentially and approximately$25.1 million year over year (1)$57.4 million
-
Q3'22 operating income of
and operating margin of$143.7 million 16.1%
- Q3'22 operating margin was unfavorably impacted by foreign exchange of approximately 1.6 points sequentially and approximately 3.5 points year over year (1)
-
Q3'22 Clear Aligner revenues of
and Clear Aligner volume of 577.2 thousand cases$732.8 million
-
Q3'22 Imaging Systems and CAD/CAM Services revenues of
million$157.5
(1) Non-GAAP measure.
Commenting on Align's third quarter results,
*Non-GAAP measure
Financial Summary
|
Q3'22 |
Q2'22 |
Q3'21 |
Q/Q Change |
Y/Y Change |
||||||||||||
Invisalign Case Shipments |
|
577,170 |
|
598,990 |
|
655,150 |
|
(3.6 |
)% |
|
(11.9 |
)% |
|||||
GAAP |
|
|
|
|
|
||||||||||||
Net Revenues |
|
|
|
|
(8.2 |
)% |
|
(12.4 |
)% |
||||||||
Clear Aligner |
|
|
|
|
(8.2 |
)% |
|
(12.5 |
)% |
||||||||
Imaging Systems and CAD/CAM Services |
|
|
|
|
(8.0 |
)% |
|
(11.7 |
)% |
||||||||
Net Income |
|
|
|
|
(35.5 |
)% |
|
(59.8 |
)% |
||||||||
Diluted EPS |
$ |
0.93 |
$ |
1.44 |
$ |
2.28 |
($ |
0.51 |
) |
($ |
1.35 |
) |
|||||
Non-GAAP |
|
|
|
|
|
||||||||||||
Net Income |
|
|
|
|
(32.2 |
)% |
|
(53.4 |
)% |
||||||||
Diluted EPS |
$ |
1.36 |
$ |
2.00 |
$ |
2.87 |
($ |
0.64 |
) |
($ |
1.51 |
) |
As of
Align continues to deliver on its innovation roadmap and during Q3'22, we began to commercialize several new products and services we had previously announced would come to market in the second half of 2022, including the following:
- ClinCheck® Live Update for 3D controls enables real-time ClinCheck treatment plan modifications that improve practice productivity significantly, while also improving quality of treatment plans;
- Invisalign® Practice App provides mobile integration with the Invisalign® Doctor Site and enables doctors to manage their practice at their fingertips;
- Invisalign® Personal Plan automatically applies a doctor's specific treatment preferences for comprehensive cases, enhancing efficiency and step-changing treatment planning consistency;
- Invisalign Smile Architect™ software is designed for GP dentists to create and visualize orthodontic-restorative treatment plans for their patients using iTero digital scans, and wide-smile photo on the Invisalign Go™ platform; and
- Cone Beam Computed Tomography integration feature for ClinCheck digital treatment planning software, a user-friendly tool that combines roots, bone, and crowns into a single three-dimensional model that enables doctors to visualize a patient’s roots as part of the digital treatment planning process.
Q3'22 Announcement Highlights
-
On
September 15, 2022 , we announced the official opening of the firstEurope ,Middle East &Africa ("EMEA") manufacturing facility in Wroclaw,Poland . The new plant is Align’s third regional manufacturing facility worldwide, afterJuarez, Mexico and Ziyang,China . The state-of-the-art facility serves as an operations site for Align’s EMEA business and be part of the global manufacturing of almost 1 million unique clear aligner parts per day.
-
On
September 28, 2022 , we introduced Invisalign® Virtual Care AI software, our next generation remote monitoring solution with new artificial intelligence-assisted capabilities that streamline workflows for doctors and their staff. It includes features such as patient enrollment, setup, and review directly on the Invisalign® Doctor Site without the need to use separate standalone solutions. Invisalign Virtual Care AI software helps doctors remotely monitor Invisalign treatment progress based on their own pre-approved clinical settings and AI-assisted algorithms for Automatic Assessment calibrated to each doctor’s ClinCheck® treatment features. AI-assisted Automated Notifications, based on doctor settings, guide patients to either advance to the next aligner stage if their treatment is tracking well or to stay on their current stage for longer or to contact their doctor if their treatment is not tracking.
-
On
October 3, 2022 , we introduced the latest release of the iTero-exocad Connector™, which integrates iTero™ intraoral camera and Near-infrared imaging ("NIRI") images within exocad DentalCAD 3.1 Rijeka software. This new integration, introduced at the exocad Insights 2022 event in Mallorca,Spain , was designed to support the goal of a seamless, end-to-end workflow for doctors and lab technicians. It optimizes design and fabrication of highly esthetic restorations by providing the ability for dental professionals to visualize the internal and external structure of teeth.
Q4'22 Stock Repurchase
-
We have approximately
remaining available for repurchase of our common stock under our$450.0 million May 2021 Repurchase Program.$1.0 Billion
-
During Q4'22, we expect to repurchase up to
of our common stock through either, or a combination of, open market repurchases or an accelerated stock repurchase agreement.$200.0 million
Align Web Cast and Conference Call
We will host a conference call today,
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
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. 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 limitations to using non-GAAP financial measures as 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 herein 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 tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
About
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, Smile Architect, Invisalign Go, and ClinCheck are trademarks of
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding our business strategies and our confidence regarding execution of those strategies, market opportunities, factors, events and circumstances impacting macro-economic conditions and predictability, consumer confidence, inflation and foreign currency exchange rates, our beliefs regarding the impact of new products and innovations, and our positioning and ability to lead the digital transformation of dentistry. 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 macro-economic conditions, levels of employment, salaries and wages, inflationary pressure, declining consumer confidence, and the military conflict in
Ukraine ;
- the impact of the COVID-19 pandemic and its variants 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;
-
the economic and geopolitical ramifications of the military conflict in
Ukraine , including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, any of which may or will continue to adversely impact our operations and research and development activities inside and outside ofRussia ;
- the timing and availability and cost of raw materials, components, products and other shipping and supply chain constraints;
- unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
- 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 clear aligners and 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, 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;
-
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 doctors within a quarter as well as an increased manufacturing costs per case;
- foreign operational, political, military and other risks relating to our 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
|
||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(in thousands, except per share data) |
||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||
Net revenues |
$ |
890,348 |
|
$ |
1,015,906 |
$ |
2,833,120 |
|
$ |
2,921,485 |
||||
Cost of net revenues |
|
271,179 |
|
|
260,750 |
|
817,046 |
|
|
730,693 |
||||
Gross profit |
|
619,169 |
|
|
755,156 |
|
2,016,074 |
|
|
2,190,792 |
||||
Operating expenses: |
|
|
|
|
||||||||||
Selling, general and administrative |
|
398,547 |
|
|
428,409 |
|
1,264,402 |
|
|
1,257,445 |
||||
Research and development |
|
76,966 |
|
|
65,587 |
|
221,738 |
|
|
177,839 |
||||
Total operating expenses |
|
475,513 |
|
|
493,996 |
|
1,486,140 |
|
|
1,435,284 |
||||
Income from operations |
|
143,656 |
|
|
261,160 |
|
529,934 |
|
|
755,508 |
||||
Interest income and other income (expense), net: |
|
|
|
|
||||||||||
Interest income |
|
1,685 |
|
|
401 |
|
2,607 |
|
|
2,427 |
||||
Other income (expense), net |
|
(22,700 |
) |
|
427 |
|
(48,805 |
) |
|
34,476 |
||||
Total interest income and other income (expense), net |
|
(21,015 |
) |
|
828 |
|
(46,198 |
) |
|
36,903 |
||||
Net income before provision for income taxes |
|
122,641 |
|
|
261,988 |
|
483,736 |
|
|
792,411 |
||||
Provision for income taxes |
|
49,941 |
|
|
81,019 |
|
163,938 |
|
|
211,352 |
||||
Net income |
$ |
72,700 |
|
$ |
180,969 |
$ |
319,798 |
|
$ |
581,059 |
||||
|
|
|
|
|
||||||||||
Net income per share: |
|
|
|
|
||||||||||
Basic |
$ |
0.93 |
|
$ |
2.29 |
$ |
4.08 |
|
$ |
7.36 |
||||
Diluted |
$ |
0.93 |
|
$ |
2.28 |
$ |
4.07 |
|
$ |
7.29 |
||||
Shares used in computing net income per share: |
|
|
|
|
||||||||||
Basic |
|
78,093 |
|
|
78,904 |
|
78,408 |
|
|
78,971 |
||||
Diluted |
|
78,237 |
|
|
79,516 |
|
78,652 |
|
|
79,677 |
||||
|
||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands) |
||||||
|
|
|
||||
ASSETS |
|
|
||||
|
|
|
||||
Current assets: |
|
|
||||
Cash and cash equivalents |
$ |
1,044,523 |
$ |
1,099,370 |
||
Marketable securities, short-term |
|
46,242 |
|
71,972 |
||
Accounts receivable, net |
|
859,629 |
|
897,198 |
||
Inventories |
|
320,903 |
|
230,230 |
||
Prepaid expenses and other current assets |
|
229,283 |
|
195,305 |
||
Total current assets |
|
2,500,580 |
|
2,494,075 |
||
|
|
|
||||
Marketable securities, long-term |
|
50,256 |
|
125,320 |
||
Property, plant and equipment, net |
|
1,199,880 |
|
1,081,926 |
||
Operating lease right-of-use assets, net |
|
116,031 |
|
121,257 |
||
|
|
377,616 |
|
418,547 |
||
Intangible assets, net |
|
91,711 |
|
109,709 |
||
Deferred tax assets |
|
1,524,584 |
|
1,533,767 |
||
Other assets |
|
52,144 |
|
57,509 |
||
|
|
|
||||
Total assets |
$ |
5,912,802 |
$ |
5,942,110 |
||
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
||||
|
|
|
||||
Current liabilities: |
|
|
||||
Accounts payable |
$ |
138,918 |
$ |
163,886 |
||
Accrued liabilities |
|
383,618 |
|
607,315 |
||
Deferred revenues |
|
1,286,867 |
|
1,152,870 |
||
Total current liabilities |
|
1,809,403 |
|
1,924,071 |
||
|
|
|
||||
Income tax payable |
|
127,059 |
|
118,072 |
||
Operating lease liabilities |
|
96,694 |
|
102,656 |
||
Other long-term liabilities |
|
185,024 |
|
174,597 |
||
Total liabilities |
|
2,218,180 |
|
2,319,396 |
||
|
|
|
||||
Total stockholders’ equity |
|
3,694,622 |
|
3,622,714 |
||
|
|
|
||||
Total liabilities and stockholders’ equity |
$ |
5,912,802 |
$ |
5,942,110 |
||
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(in thousands) |
||||||||
|
Nine Months Ended
|
|||||||
|
2022 |
2021 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
||||||
Net cash provided by operating activities |
$ |
424,025 |
|
$ |
899,695 |
|
||
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
||||||
Net cash used in investing activities |
|
(157,506 |
) |
|
(255,719 |
) |
||
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
||||||
Net cash used in financing activities |
|
(301,498 |
) |
|
(356,759 |
) |
||
|
|
|
||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
(20,422 |
) |
|
(10,241 |
) |
||
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
(55,401 |
) |
|
276,976 |
|
||
Cash, cash equivalents, and restricted cash at beginning of the period |
|
1,100,139 |
|
|
961,474 |
|
||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
1,044,738 |
|
$ |
1,238,450 |
|
||
INVISALIGN BUSINESS METRICS |
|||||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|||||||
|
|
2021 |
|
2021 |
|
2021 |
|
2021 |
|
2022 |
|
2022 |
|
2022 |
|||||||
Invisalign Average Selling Price (ASP) |
|
$ |
1,195 |
|
$ |
1,185 |
|
$ |
1,195 |
|
$ |
1,200 |
|
$ |
1,250 |
|
$ |
1,220 |
|
$ |
1,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Number of Invisalign Doctors Cases Were Shipped To |
|
|
78,605 |
|
|
83,465 |
|
|
85,500 |
|
|
83,540 |
|
|
82,440 |
|
|
82,275 |
|
|
84,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Invisalign Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
9.1 |
|
|
9.9 |
|
|
9.8 |
|
|
9.3 |
|
|
9.2 |
|
|
9.3 |
|
|
8.9 |
North American Orthodontists |
|
|
26.8 |
|
|
29.4 |
|
|
29.7 |
|
|
26.9 |
|
|
26.8 |
|
|
26.8 |
|
|
25.9 |
North American GP Dentists |
|
|
4.8 |
|
|
5.3 |
|
|
5.0 |
|
|
5.1 |
|
|
5.0 |
|
|
5.1 |
|
|
4.8 |
International |
|
|
6.8 |
|
|
7.1 |
|
|
6.5 |
|
|
6.8 |
|
|
6.4 |
|
|
6.4 |
|
|
6.0 |
Total Utilization Rates** |
|
|
7.6 |
|
|
8.0 |
|
|
7.7 |
|
|
7.6 |
|
|
7.3 |
|
|
7.3 |
|
|
6.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,265 |
|
$ |
1,265 |
|
$ |
1,280 |
|
$ |
1,290 |
|
$ |
1,350 |
|
$ |
1,335 |
|
$ |
1,270 |
* # 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 |
|
||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
Fiscal |
Q1 |
Q2 |
Q3 |
||||||||||||||||
|
2021 |
2021 |
2021 |
2021 |
2021 |
2022 |
2022 |
2022 |
||||||||||||||||
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
||||||||||||||||
SBC included in Gross Profit |
$ |
1,306 |
$ |
1,418 |
$ |
1,451 |
$ |
1,458 |
$ |
5,633 |
$ |
1,514 |
$ |
1,614 |
$ |
1,651 |
||||||||
SBC included in Operating Expenses |
|
25,935 |
|
27,437 |
|
26,951 |
|
28,380 |
|
108,703 |
|
30,107 |
|
32,526 |
|
31,267 |
||||||||
Total SBC |
$ |
27,241 |
$ |
28,855 |
$ |
28,402 |
$ |
29,838 |
$ |
114,336 |
$ |
31,621 |
$ |
34,140 |
$ |
32,918 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION |
|||||||||
CONSTANT CURRENCY NET REVENUES |
|||||||||
(in thousands, except percentages) |
|||||||||
Sequential constant currency analysis: |
|||||||||
|
Three Months Ended |
|
|||||||
|
2022 |
2022 |
Impact % of Revenue |
||||||
GAAP net revenues |
$ |
890,348 |
$ |
969,553 |
|
||||
Constant currency impact (1) |
|
25,072 |
|
2.7 |
% |
||||
Constant currency net revenues (1) |
$ |
915,420 |
|
|
|||||
|
|
|
|
||||||
GAAP Clear Aligner net revenues |
$ |
732,837 |
$ |
798,398 |
|
||||
Clear Aligner constant currency impact (1) |
|
20,957 |
|
2.8 |
% |
||||
Clear Aligner constant currency net revenues (1) |
$ |
753,794 |
|
|
|||||
|
|
|
|
||||||
GAAP Imaging Systems and CAD/CAM Services net revenues |
$ |
157,511 |
$ |
171,155 |
|
||||
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
4,115 |
|
2.5 |
% |
||||
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
$ |
161,626 |
|
|
Year-over-year constant currency analysis: |
|||||||||
|
Three Months Ended
|
|
|||||||
|
2022 |
2021 |
Impact % of Revenue |
||||||
GAAP net revenues |
$ |
890,348 |
$ |
1,015,906 |
|
||||
Constant currency impact (1) |
|
57,383 |
|
6.1 |
% |
||||
Constant currency net revenues (1) |
$ |
947,731 |
|
|
|||||
|
|
|
|
||||||
GAAP Clear Aligner net revenues |
$ |
732,837 |
$ |
837,593 |
|
||||
Clear Aligner constant currency impact (1) |
|
47,445 |
|
6.1 |
% |
||||
Clear Aligner constant currency net revenues (1) |
$ |
780,282 |
|
|
|||||
|
|
|
|
||||||
GAAP Imaging Systems and CAD/CAM Services net revenues |
$ |
157,511 |
$ |
178,313 |
|
||||
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
9,938 |
|
5.9 |
% |
||||
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
$ |
167,449 |
|
|
|||||
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). Refer to "About Non-GAAP Financial Measures" section of press release. |
|
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 |
||||
|
|
|
|
|
||
GAAP gross profit |
|
$ |
619,169 |
|
$ |
687,559 |
Constant currency impact on net revenues |
|
|
25,072 |
|
|
|
Constant currency gross profit |
|
$ |
644,241 |
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
||
GAAP gross margin |
|
69.5 |
% |
|
70.9 |
% |
Gross margin constant currency impact (1) |
|
0.8 |
|
|
|
|
Constant currency gross margin (1) |
|
70.3 |
% |
|
|
Year-over-year constant currency analysis: |
||||||
|
|
Three Months Ended
|
||||
|
|
|
2022 |
|
|
2021 |
GAAP gross profit |
|
$ |
619,169 |
|
$ |
755,156 |
Constant currency impact on net revenues |
|
|
57,383 |
|
|
|
Constant currency gross profit |
|
$ |
676,552 |
|
|
|
|
Three Months Ended
|
||||
|
|
2022 |
|
|
2021 |
|
GAAP gross margin |
|
69.5 |
% |
|
74.3 |
% |
Gross margin constant currency impact (1) |
|
1.8 |
|
|
|
|
Constant currency gross margin (1) |
|
71.3 |
% |
|
|
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. |
Refer to "About Non-GAAP Financial Measures" section of press release.
|
||||||
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 |
|||||
|
2022 |
|
||||
GAAP income from operations |
$ |
143,656 |
$ |
188,196 |
||
Income from operations constant currency impact (1) |
|
18,279 |
|
|||
Constant currency income from operations (1) |
$ |
161,935 |
|
|||
|
Three Months Ended |
|||||
|
2022 |
|
||||
GAAP operating margin |
16.1 |
% |
19.4 |
% |
||
Operating margin constant currency impact (2) |
1.6 |
|
|
|||
Constant currency operating margin (2) |
17.7 |
% |
|
|||
Year-over-year constant currency analysis: |
||||||
|
Three Months Ended
|
|||||
|
2022 |
2021 |
||||
GAAP income from operations |
$ |
143,656 |
$ |
261,160 |
||
Income from operations constant currency impact (1) |
|
42,235 |
|
|||
Constant currency income from operations (1) |
$ |
185,891 |
|
|||
|
Three Months Ended
|
|||||
|
2022 |
2021 |
||||
GAAP operating margin |
16.1 |
% |
25.7 |
% |
||
Operating margin constant currency impact (2) |
3.5 |
|
|
|||
Constant currency operating margin (2) |
19.6 |
% |
|
|||
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. |
Refer to "About Non-GAAP Financial Measures" section of press release.
|
||||||||||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
||||||||||||||||
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
GAAP gross profit |
$ |
619,169 |
|
$ |
755,156 |
|
$ |
2,016,074 |
|
$ |
2,190,792 |
|
||||
Stock-based compensation |
|
1,651 |
|
|
1,451 |
|
|
4,779 |
|
|
4,175 |
|
||||
Amortization of intangibles (1) |
|
2,644 |
|
|
2,354 |
|
|
7,524 |
|
|
6,704 |
|
||||
Non-GAAP gross profit |
$ |
623,464 |
|
$ |
758,961 |
|
$ |
2,028,377 |
|
$ |
2,201,671 |
|
||||
|
|
|
|
|
||||||||||||
GAAP gross margin |
|
69.5 |
% |
|
74.3 |
% |
|
71.2 |
% |
|
75.0 |
% |
||||
Non-GAAP gross margin |
|
70.0 |
% |
|
74.7 |
% |
|
71.6 |
% |
|
75.4 |
% |
||||
|
|
|
|
|
||||||||||||
GAAP total operating expenses |
$ |
475,513 |
|
$ |
493,996 |
|
$ |
1,486,140 |
|
$ |
1,435,284 |
|
||||
Stock-based compensation |
|
(31,267 |
) |
|
(26,951 |
) |
|
(93,900 |
) |
|
(80,323 |
) |
||||
Amortization of intangibles (1) |
|
(825 |
) |
|
(960 |
) |
|
(2,607 |
) |
|
(2,735 |
) |
||||
Acquisition-related costs (2) |
|
— |
|
|
— |
|
|
— |
|
|
(104 |
) |
||||
Non-GAAP total operating expenses |
$ |
443,421 |
|
$ |
466,085 |
|
$ |
1,389,633 |
|
$ |
1,352,122 |
|
||||
|
|
|
|
|
||||||||||||
GAAP income from operations |
$ |
143,656 |
|
$ |
261,160 |
|
$ |
529,934 |
|
$ |
755,508 |
|
||||
Stock-based compensation |
|
32,918 |
|
|
28,402 |
|
|
98,679 |
|
|
84,498 |
|
||||
Amortization of intangibles (1) |
|
3,469 |
|
|
3,314 |
|
|
10,131 |
|
|
9,439 |
|
||||
Acquisition-related costs (2) |
|
— |
|
|
— |
|
|
— |
|
|
104 |
|
||||
Non-GAAP income from operations |
$ |
180,043 |
|
$ |
292,876 |
|
$ |
638,744 |
|
$ |
849,549 |
|
||||
|
|
|
|
|
||||||||||||
GAAP operating margin |
|
16.1 |
% |
|
25.7 |
% |
|
18.7 |
% |
|
25.9 |
% |
||||
Non-GAAP operating margin |
|
20.2 |
% |
|
28.8 |
% |
|
22.5 |
% |
|
29.1 |
% |
||||
|
|
|
|
|
||||||||||||
GAAP total interest income and other income (expense), net |
$ |
(21,015 |
) |
$ |
828 |
|
$ |
(46,198 |
) |
$ |
36,903 |
|
||||
Arbitration award gain (3) |
|
— |
|
|
— |
|
|
— |
|
|
(43,403 |
) |
||||
Non-GAAP total interest income and other income (expense), net |
$ |
(21,015 |
) |
$ |
828 |
|
$ |
(46,198 |
) |
$ |
(6,500 |
) |
||||
|
|
|
|
|
||||||||||||
GAAP net income before provision for income taxes |
$ |
122,641 |
|
$ |
261,988 |
|
$ |
483,736 |
|
$ |
792,411 |
|
||||
Stock-based compensation |
|
32,918 |
|
|
28,402 |
|
|
98,679 |
|
|
84,498 |
|
||||
Amortization of intangibles (1) |
|
3,469 |
|
|
3,314 |
|
|
10,131 |
|
|
9,439 |
|
||||
Acquisition-related costs (2) |
|
— |
|
|
— |
|
|
— |
|
|
104 |
|
||||
Arbitration award gain (3) |
|
— |
|
|
— |
|
|
— |
|
|
(43,403 |
) |
||||
Non-GAAP net income before provision for income taxes |
$ |
159,028 |
|
$ |
293,704 |
|
$ |
592,546 |
|
$ |
843,049 |
|
||||
|
||||||||||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
||||||||||||||||
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
GAAP provision for income taxes |
|
49,941 |
|
$ |
81,019 |
|
$ |
163,938 |
|
$ |
211,352 |
|
||||
Tax impact on non-GAAP adjustments |
|
3,300 |
|
|
6,605 |
|
|
18,405 |
|
|
19,978 |
|
||||
Tax related non-GAAP items (4) |
|
(682 |
) |
|
(22,494 |
) |
|
(21,916 |
) |
|
(57,339 |
) |
||||
Non-GAAP provision for income taxes |
$ |
52,559 |
|
$ |
65,130 |
|
$ |
160,427 |
|
$ |
173,991 |
|
||||
|
|
|
|
|
||||||||||||
GAAP effective tax rate |
|
40.7 |
% |
|
30.9 |
% |
|
33.9 |
% |
|
26.7 |
% |
||||
Non-GAAP effective tax rate |
|
33.1 |
% |
|
22.2 |
% |
|
27.1 |
% |
|
20.6 |
% |
||||
|
|
|
|
|
||||||||||||
GAAP net income |
$ |
72,700 |
|
$ |
180,969 |
|
$ |
319,798 |
|
$ |
581,059 |
|
||||
Stock-based compensation |
|
32,918 |
|
|
28,402 |
|
|
98,679 |
|
|
84,498 |
|
||||
Amortization of intangibles (1) |
|
3,469 |
|
|
3,314 |
|
|
10,131 |
|
|
9,439 |
|
||||
Acquisition-related costs (2) |
|
— |
|
|
— |
|
|
— |
|
|
104 |
|
||||
Arbitration award gain (3) |
|
— |
|
|
— |
|
|
— |
|
|
(43,403 |
) |
||||
Tax impact on non-GAAP adjustments |
|
(3,300 |
) |
|
(6,605 |
) |
|
(18,405 |
) |
|
(19,978 |
) |
||||
Tax related non-GAAP items (4) |
|
682 |
|
|
22,494 |
|
|
21,916 |
|
|
57,339 |
|
||||
Non-GAAP net income |
$ |
106,469 |
|
$ |
228,574 |
|
$ |
432,119 |
|
$ |
669,058 |
|
||||
|
|
|
|
|
||||||||||||
GAAP diluted net income per share |
$ |
0.93 |
|
$ |
2.28 |
|
$ |
4.07 |
|
$ |
7.29 |
|
||||
Non-GAAP diluted net income per share |
$ |
1.36 |
|
$ |
2.87 |
|
$ |
5.49 |
|
$ |
8.40 |
|
||||
|
|
|
|
|
||||||||||||
Shares used in computing diluted net income per share |
|
78,237 |
|
|
79,516 |
|
|
78,652 |
|
|
79,677 |
|
||||
Notes: | ||
(1) |
Amortization of intangible assets related to certain acquisitions |
|
(2) |
Acquisition-related costs for professional fees related to our 2020 exocad acquisition | |
(3) |
Gain from the SDC arbitration award regarding the value of Align's capital account balance | |
(4) |
Amortization and related adjustments to the benefit from the transferred intangible assets of our Swiss entity |
Refer to "About Non-GAAP Financial Measures" section of press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005471/en/
(909) 833-5839
mvalente@aligntech.com
(828) 551-4201
sarah.johnson@zenogroup.com
Source:
FAQ
What were the total revenues for Align Technology in Q3'22?
How did Align Technology's Clear Aligner revenues perform in Q3'22?
What was the impact of foreign exchange on Align Technology's Q3'22 revenue?
What is the significance of the 14 millionth Invisalign patient milestone?