Align Technology Announces Third Quarter 2023 Financial Results
- Clear aligner shipments to teenage patients increased 9.9% sequentially and 8.4% YoY
- Company expects to repurchase up to $250.0 million of its common stock in Q4'23
- Q3'23 total revenues were $960.2 million, up 7.8% YoY
- Q3'23 diluted net income per share was $1.58, non-GAAP diluted net income per share was $2.14
- None.
Q3’23 record clear aligner shipments to teenage patients increased
Company expects to repurchase up to
-
Q3'23 total revenues of
$960.2 million 7.8% year-over-year, and diluted net income per share of$1.58 $2.14 -
Q3'23 revenues were unfavorably impacted by foreign exchange of approximately
$2.7 million $4.2 million -
Q3'23 operating income of
$166.3 million 17.3% , non-GAAP operating margin of21.8% - Q3'23 GAAP operating margin was unfavorably impacted by foreign exchange of approximately 0.3 points sequentially and by approximately 0.1 point year-over-year(1)
-
Q3'23 Clear Aligner revenues of
$794.9 million 8.5% year-over-year, and Clear Aligner volume of 602.3 thousand cases increased2.3% year-over-year -
Q3'23 Clear Aligner volume for teens increased
9.9% sequentially and increased8.4% year-over-year to a record 221.8 thousand cases -
Q3'23 Imaging Systems and CAD/CAM Services revenues of
$165.3 million 4.9% year-over-year
Commenting on Align's Q3'23 results, Align Technology President and CEO Joe Hogan said, "Our third quarter results reflect lower than expected demand and a more difficult macro environment than we experienced in the first half of 2023. Dental practices and industry research firms have reported deteriorating trends, including decreased patient visits and increased patient appointment cancellations, along with fewer orthodontic case starts overall, especially among adult patients. The September Gaidge report, which reflect more than 1,200 North American Ortho Practices, shows deceleration for orthodontic treatment with new orthodontic patient appointments down
Q3'23 operating income was
Hogan continued, “We are committed to balancing our investments in near- and long-term growth drivers while delivering improvement in operating margin. As we navigate one of the most challenging operating environments in recent history, with increasing macro-economic pressure on doctors and their patients, we have an enormous opportunity to continue driving adoption of digital orthodontics and restorative dentistry, and a responsibility to optimize our investments for the current environment.”
(1) For more information, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
Financial Summary - Third Quarter Fiscal 2023
|
Q3'23 |
|
Q2'23 |
|
Q3'22 |
|
Q/Q Change |
|
Y/Y Change |
|
Clear Aligner Shipments* |
602,335 |
|
622,615 |
|
588,575 |
|
(3.3)% |
|
+ |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
Net Revenues |
|
|
|
|
|
|
(4.2)% |
|
+ |
|
Clear Aligner |
|
|
|
|
|
|
(4.5)% |
|
+ |
|
Imaging Systems and CAD/CAM Services |
|
|
|
|
|
|
(2.5)% |
|
+ |
|
Net Income |
|
|
|
|
|
|
+ |
|
+ |
|
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
(3.6)% |
|
+ |
|
Diluted EPS |
|
|
|
|
|
|
( |
|
|
|
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding.
|
||||||||||
As of September 30, 2023, we had over
During the quarter, we announced a definitive agreement to acquire privately held Cubicure GmbH, for approximately
Continued Hogan, “Align is in a unique position to continue driving the digital revolution of the dental industry and help doctors transform and grow their practices with Invisalign® clear aligners, iTero™ scanners, and the Align Digital Platform™. We are very excited about recent innovations developed to further revolutionize digital treatment planning for orthodontics and restorative dentistry by providing doctors with greater flexibility, real-time treatment plan modification capabilities and digital solutions to help improve practice productivity and patient experience -– which are even more important to our customers in the current environment. This includes ClinCheck® Live Update for 3D controls, Invisalign® Practice App, Invisalign® Personalized Plan ("IPP"), and Invisalign Smile Architect™, iTero-exocad Connector™, Invisalign® Outcome Simulator Pro, and Invisalign® Virtual Care AI software. These digital tools are continuing to gain adoption and help doctors gain efficiencies. In Q3, ClinCheck® Live Update was used by 41 thousand doctors on more than 560 thousand cases, reducing time spent in modifying treatment by
Q3'23 Announcement Highlights
- On September 6, 2023, we introduced IPE, Align’s first direct 3D printed orthodontic device. IPE provides a safe, comfortable, and clinically effective* alternative to metal palatal expanders that require daily manual turning of a screw in the device as it is embedded in a patient's mouth to achieve expansion. IPE is not currently available for sale in all markets, including the US where it is pending 510(k) clearance.
- On September 6, 2023, we introduced Plan Editor in ClinCheck® treatment planning software, a new tool in the Plan stage of the Align digital workflow that enables enhanced flexibility and customization in Invisalign treatment planning for Invisalign trained orthodontists and general practitioner dentists. Plan Editor in ClinCheck is expected to be commercially available globally in Q1 2024.
- On September 6, 2023, we introduced a new SmartForce™ feature, attachment-free aligner activation feature, that reduces the need for attachments and offers a more aesthetic solution for an enhanced Invisalign patient experience. The new SmartForce feature with attachment-free aligner activation is under development and expected to be commercially available in the first half of 2024.
- On September 6, 2023, we introduced new software innovations to accelerate digital practice transformation. The Align™ Oral Health Suite, including future collaboration with X-Ray Insights, will aid doctors in identifying and educating patients on oral health conditions and improve their oral health. The iTero-exocad Connector™ upcoming release will optimize doctor and lab collaboration and productivity by streamlining case communication in a single channel on the MyiTero™ Portal. Both the Align Oral Health Suite and the latest iTero-exocad connector are expected to be commercially available by the end of 2023. X-Ray Insights is based on dentalXrai technology is expected to be in Limited Market Release in 2023 with select EU customers. Align acquired privately-held dentalXrai GmbH in July 2022.
-
On September 6, 2023, we announced the opening of our new customer education and training center in
Toronto, Canada to promote professional engagement and training about Invisalign clear aligners, iTero scanners, and the Align Digital Platform™ for Align customers. -
On September 6, 2023, we introduced a new doctor enabled direct ship to patient feature in our Vivera™ Retainer Subscription ("VRS") platform that creates a more patient friendly workflow for doctors to offer retainers to their patients and reduces the need for patients to make time consuming unnecessary trips to their doctors' offices to pick up their recurring Vivera retainer orders. The VRS platform is part of Align’s broader Doctor Subscription Program introduced to doctors in
the United States andCanada in 2021.
*Data on file, Align Technology, as of August 2023. Based on data from a multi-site US Early Feasibility Investigational Device Exemption clinical study (n=29 subjects, ages 7-10 years) of expansion treatment with IPEs.
Q4'23 Stock Repurchase
-
We have
$1.0 billion -
During Q4'23, we expect to repurchase up to
$250.0 million
Fiscal 2023 Business Outlook
For 2023, Align provides the following business outlook:
-
For Q4'23, assuming no circumstances occur that are beyond our control, we anticipate our WW Revenue to be in the range of
$920M $940M - We expect both Clear Aligner and Systems and Services Revenues to be down sequentially reflecting a more challenging macro-economic environment for doctors and patients with fewer orthodontic case starts overall; unfavorable FX given the strengthening of the US dollar against key currencies; and longer sales cycles for capital equipment purchases.
- For our Clear Aligner business, we expect clear aligner teen volume to be seasonally lower in Q4’23, and we don’t anticipate improvement in adult volumes. For Q4’23, we also expect clear aligner ASPs to be down sequentially primarily due to the strengthening US dollar.
-
For our Systems and Services business, we anticipate increasing headwinds from macro uncertainty, and potential supply issues related to the war in the
Middle East . - We expect our Q4’23 GAAP operating margin to be down sequentially from Q3’23 due to restructuring primarily related to severance, as we adjust headcount for this environment. We anticipate our Non-GAAP operating margin to be up sequentially from Q3’23.
-
For full year 2023, assuming no circumstances occur that are beyond our control, we anticipate our 2023 WW Revenue to be in the range of
$3.83B $3.85B -
We also expect our full year 2023 GAAP operating margin to be roughly 1-point lower than 2022 and our 2023 Non-GAAP operating margin to be slightly above
21% . -
For 2023, we expect investments in capital expenditures to be approximately
$200M
Align Web Cast and Conference Call
We will host a conference call today, October 25, 2023, at 4:30 p.m. ET, 1:30 p.m. PT, to review our third quarter 2023 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 by clicking here. Once registered, participants will receive an email with dial-in number and unique PIN number to access the live event. 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 in
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 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 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 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 252 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide. Over the past 26 years, Align has helped doctors treat over 16.4 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, and Align Digital Platform 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 availability, regulatory clearance, effectiveness and customer desire for new products and technologies, our expectations for our stock repurchase programs, market opportunities, anticipated clear aligner volumes and ASP, anticipated Systems and Services revenue, our expectations for Q4'23 revenues and GAAP and non-GAAP operating margin, and 2023 revenues 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 macro-economic conditions, levels of employment, salaries and wages, debt obligations, discretionary income, inflationary pressure, declining consumer confidence, and the military conflict in
Ukraine and theMiddle East ; -
the economic and geopolitical ramifications of the military conflict in the
Middle East andUkraine , including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, any of which may or will continue to adversely impact our operations and assets, and our research and development activities inside and outside ofRussia ; - variations in our product mix, product adoption, and selling prices regionally and globally;
- 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 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;
- the 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;
- 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 doctor customers 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 Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission ("SEC") on February 27, 2023, and our latest Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which was filed with the SEC on August 4, 2023. 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
|
|
Nine Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net revenues |
|
$ |
960,214 |
|
|
$ |
890,348 |
|
|
$ |
2,905,534 |
|
|
$ |
2,833,120 |
|
Cost of net revenues |
|
|
297,138 |
|
|
|
271,179 |
|
|
|
868,195 |
|
|
|
817,046 |
|
Gross profit |
|
|
663,076 |
|
|
|
619,169 |
|
|
|
2,037,339 |
|
|
|
2,016,074 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
407,992 |
|
|
|
398,547 |
|
|
|
1,300,876 |
|
|
|
1,264,402 |
|
Research and development |
|
|
88,738 |
|
|
|
76,966 |
|
|
|
264,670 |
|
|
|
221,738 |
|
Total operating expenses |
|
|
496,730 |
|
|
|
475,513 |
|
|
|
1,565,546 |
|
|
|
1,486,140 |
|
Income from operations |
|
|
166,346 |
|
|
|
143,656 |
|
|
|
471,793 |
|
|
|
529,934 |
|
Interest income and other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
|
5,522 |
|
|
|
1,685 |
|
|
|
12,280 |
|
|
|
2,607 |
|
Other income (expense), net |
|
|
(9,757 |
) |
|
|
(22,700 |
) |
|
|
(15,749 |
) |
|
|
(48,805 |
) |
Total interest income and other income (expense), net |
|
|
(4,235 |
) |
|
|
(21,015 |
) |
|
|
(3,469 |
) |
|
|
(46,198 |
) |
Net income before provision for income taxes |
|
|
162,111 |
|
|
|
122,641 |
|
|
|
468,324 |
|
|
|
483,736 |
|
Provision for income taxes |
|
|
40,684 |
|
|
|
49,941 |
|
|
|
147,285 |
|
|
|
163,938 |
|
Net income |
|
$ |
121,427 |
|
|
$ |
72,700 |
|
|
$ |
321,039 |
|
|
$ |
319,798 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.59 |
|
|
$ |
0.93 |
|
|
$ |
4.19 |
|
|
$ |
4.08 |
|
Diluted |
|
$ |
1.58 |
|
|
$ |
0.93 |
|
|
$ |
4.18 |
|
|
$ |
4.07 |
|
Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
76,569 |
|
|
|
78,093 |
|
|
|
76,670 |
|
|
|
78,408 |
|
Diluted |
|
|
76,826 |
|
|
|
78,237 |
|
|
|
76,849 |
|
|
|
78,652 |
|
ALIGN TECHNOLOGY, INC. |
||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(in thousands) |
||||||
|
September 30,
|
|
December 31,
|
|||
ASSETS |
|
|
|
|||
|
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
1,239,013 |
|
$ |
942,050 |
|
Marketable securities, short-term |
|
44,792 |
|
|
57,534 |
|
Accounts receivable, net |
|
904,178 |
|
|
859,685 |
|
Inventories |
|
296,189 |
|
|
338,752 |
|
Prepaid expenses and other current assets |
|
217,632 |
|
|
226,370 |
|
Total current assets |
|
2,701,804 |
|
|
2,424,391 |
|
|
|
|
|
|||
Marketable securities, long-term |
|
18,137 |
|
|
41,978 |
|
Property, plant and equipment, net |
|
1,268,388 |
|
|
1,231,855 |
|
Operating lease right-of-use assets, net |
|
118,966 |
|
|
118,880 |
|
Goodwill |
|
404,295 |
|
|
407,551 |
|
Intangible assets, net |
|
82,741 |
|
|
95,720 |
|
Deferred tax assets |
|
1,591,791 |
|
|
1,571,746 |
|
Other assets |
|
132,429 |
|
|
55,826 |
|
|
|
|
|
|||
Total assets |
$ |
6,318,551 |
|
$ |
5,947,947 |
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||
|
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
99,693 |
|
$ |
127,870 |
|
Accrued liabilities |
|
614,462 |
|
|
454,374 |
|
Deferred revenues |
|
1,408,831 |
|
|
1,343,643 |
|
Total current liabilities |
|
2,122,986 |
|
|
1,925,887 |
|
|
|
|
|
|||
Income tax payable |
|
116,443 |
|
|
124,393 |
|
Operating lease liabilities |
|
98,523 |
|
|
100,334 |
|
Other long-term liabilities |
|
178,733 |
|
|
195,975 |
|
Total liabilities |
|
2,516,685 |
|
|
2,346,589 |
|
|
|
|
|
|||
Total stockholders’ equity |
|
3,801,866 |
|
|
3,601,358 |
|
|
|
|
|
|||
Total liabilities and stockholders’ equity |
$ |
6,318,551 |
|
$ |
5,947,947 |
|
ALIGN TECHNOLOGY, INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(in thousands) |
||||||||
|
|
Nine Months Ended
|
||||||
|
|
2023 |
|
2022 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
738,878 |
|
|
$ |
424,025 |
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
Net cash used in investing activities |
|
|
(182,619 |
) |
|
|
(157,506 |
) |
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
Net cash used in financing activities |
|
|
(248,059 |
) |
|
|
(301,498 |
) |
|
|
|
|
|
||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(11,205 |
) |
|
|
(20,422 |
) |
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
296,995 |
|
|
|
(55,401 |
) |
Cash, cash equivalents, and restricted cash at beginning of the period |
|
|
942,355 |
|
|
|
1,100,139 |
|
Cash, cash equivalents, and restricted cash at end of the period |
|
$ |
1,239,350 |
|
|
$ |
1,044,738 |
|
ALIGN TECHNOLOGY, INC. |
|||||||||||||||||||||
INVISALIGN BUSINESS METRICS |
|||||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|||||||
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
2023 |
|
2023 |
|||||||
Number of Invisalign Trained Doctors Cases Were Shipped To |
|
|
82,445 |
|
|
82,290 |
|
|
84,430 |
|
|
82,895 |
|
|
82,730 |
|
|
83,440 |
|
|
85,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Invisalign Trained Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
9.4 |
|
|
9.6 |
|
|
9.2 |
|
|
9.2 |
|
|
9.5 |
|
|
9.8 |
|
|
9.6 |
North American Orthodontists |
|
|
27.8 |
|
|
28.1 |
|
|
27.6 |
|
|
26.7 |
|
|
28.7 |
|
|
29.2 |
|
|
28.8 |
North American GP Dentists |
|
|
5.0 |
|
|
5.1 |
|
|
4.8 |
|
|
5.0 |
|
|
4.9 |
|
|
5.2 |
|
|
4.9 |
International |
|
|
6.4 |
|
|
6.4 |
|
|
6.0 |
|
|
6.5 |
|
|
6.2 |
|
|
6.6 |
|
|
6.1 |
Total Utilization Rates** |
|
|
7.3 |
|
|
7.4 |
|
|
7.0 |
|
|
7.2 |
|
|
7.1 |
|
|
7.5 |
|
|
7.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,335 |
|
$ |
1,315 |
|
$ |
1,245 |
|
$ |
1,225 |
|
$ |
1,335 |
|
$ |
1,335 |
|
$ |
1,320 |
* # of cases shipped / # of doctors to whom cases were shipped
|
|||||||||||||||||||||
ALIGN TECHNOLOGY, INC. |
||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
Q3 |
||||||||
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
2023 |
|
2023 |
||||||||
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SBC included in Gross Profit |
|
$ |
1,514 |
|
$ |
1,614 |
|
$ |
1,651 |
|
$ |
1,659 |
|
$ |
6,438 |
|
$ |
1,807 |
|
$ |
1,901 |
|
$ |
1,974 |
SBC included in Operating |
|
|
30,107 |
|
|
32,526 |
|
|
31,267 |
|
|
33,029 |
|
|
126,929 |
|
|
35,928 |
|
|
35,959 |
|
|
37,628 |
Total SBC |
|
$ |
31,621 |
|
$ |
34,140 |
|
$ |
32,918 |
|
$ |
34,688 |
|
$ |
133,367 |
|
$ |
37,735 |
|
$ |
37,860 |
|
$ |
39,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
ALIGN TECHNOLOGY, INC. |
||||||||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION |
||||||||
CONSTANT CURRENCY NET REVENUES |
||||||||
(in thousands, except percentages) |
||||||||
Sequential constant currency analysis: |
||||||||
|
|
Three Months Ended |
|
|
||||
|
|
September 30,
|
|
June 30,
|
|
Impact % of
|
||
GAAP net revenues |
|
$ |
960,214 |
|
$ |
1,002,173 |
|
|
Constant currency impact (1) |
|
|
2,720 |
|
|
|
0.3 % |
|
Constant currency net revenues (1) |
|
$ |
962,934 |
|
|
|
|
|
|
|
|
|
|
|
|
||
GAAP Clear Aligner net revenues |
|
$ |
794,939 |
|
$ |
832,674 |
|
|
Clear Aligner constant currency impact (1) |
|
|
2,002 |
|
|
|
0.3 % |
|
Clear Aligner constant currency net revenues (1) |
|
$ |
796,941 |
|
|
|
|
|
|
|
|
|
|
|
|
||
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
165,275 |
|
$ |
169,499 |
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
718 |
|
|
|
0.4 % |
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
165,993 |
|
|
|
|
|
Year-over-year constant currency analysis: |
|||||||||
|
|
Three Months Ended
|
|
|
|||||
|
|
2023 |
|
2022 |
|
Impact % of
|
|||
GAAP net revenues |
|
$ |
960,214 |
|
|
$ |
890,348 |
|
|
Constant currency impact (1) |
|
|
(4,181 |
) |
|
|
|
(0.4)% |
|
Constant currency net revenues (1) |
|
$ |
956,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
GAAP Clear Aligner net revenues |
|
$ |
794,939 |
|
|
$ |
732,837 |
|
|
Clear Aligner constant currency impact (1) |
|
|
(3,763 |
) |
|
|
|
(0.5)% |
|
Clear Aligner constant currency net revenues (1) |
|
$ |
791,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
165,275 |
|
|
$ |
157,511 |
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
(418 |
) |
|
|
|
(0.3)% |
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
164,857 |
|
|
|
|
|
|
| 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. |
||
(+) |
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. | ||
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 |
||||||
|
|
September 30,
|
|
June 30,
|
||||
GAAP gross profit |
|
$ |
663,076 |
|
|
$ |
713,609 |
|
Constant currency impact on net revenues |
|
|
2,720 |
|
|
|
||
Constant currency gross profit |
|
$ |
665,796 |
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
September 30,
|
|
June 30,
|
||||
GAAP gross margin |
|
|
69.1 |
% |
|
|
71.2 |
% |
Gross margin constant currency impact (1) |
|
|
0.1 |
|
|
|
||
Constant currency gross margin (1) |
|
|
69.1 |
% |
|
|
||
|
||||||||
| Year-over-year constant currency analysis: | ||||||||
|
|
Three Months Ended
|
||||||
|
|
2023 |
|
2022 |
||||
GAAP gross profit |
|
$ |
663,076 |
|
|
$ |
619,169 |
|
Constant currency impact on net revenues |
|
|
(4,206 |
) |
|
|
||
Constant currency gross profit |
|
$ |
658,870 |
|
|
|
||
|
|
Three Months Ended
|
||||||
|
|
2023 |
|
2022 |
||||
GAAP gross margin |
|
|
69.1 |
% |
|
|
69.5 |
% |
Gross margin constant currency impact (1) |
|
|
(0.1 |
) |
|
|
||
Constant currency gross margin (1) |
|
|
68.9 |
% |
|
|
||
| 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 |
||||||
|
|
September 30,
|
|
June 30,
|
||||
GAAP income from operations |
|
$ |
166,346 |
|
|
$ |
171,931 |
|
Income from operations constant currency impact (1) |
|
|
3,191 |
|
|
|
||
Constant currency income from operations (1) |
|
$ |
169,537 |
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
September 30,
|
|
June 30,
|
||||
GAAP operating margin |
|
|
17.3 |
% |
|
|
17.2 |
% |
Operating margin constant currency impact (2) |
|
|
0.3 |
|
|
|
||
Constant currency operating margin (2) |
|
|
17.6 |
% |
|
|
||
| Year-over-year constant currency analysis: | ||||||||
|
|
Three Months Ended
|
||||||
|
|
2023 |
|
2022 |
||||
GAAP income from operations |
|
$ |
166,346 |
|
|
$ |
143,656 |
|
Income from operations constant currency impact (1) |
|
|
687 |
|
|
|
||
Constant currency income from operations (1) |
|
$ |
167,033 |
|
|
|
||
|
|
Three Months Ended
|
||||||
|
|
2023 |
|
2022 |
||||
GAAP operating margin |
|
|
17.3 |
% |
|
|
16.1 |
% |
Operating margin constant currency impact (2) |
|
|
0.1 |
|
|
|
||
Constant currency operating margin (2) |
|
|
17.5 |
% |
|
|
||
| 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
|
|
Nine Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
GAAP gross profit |
|
$ |
663,076 |
|
|
$ |
619,169 |
|
|
$ |
2,037,339 |
|
|
$ |
2,016,074 |
|
Stock-based compensation |
|
|
1,974 |
|
|
|
1,651 |
|
|
|
5,682 |
|
|
|
4,779 |
|
Amortization of intangibles (1) |
|
|
2,825 |
|
|
|
2,644 |
|
|
|
8,409 |
|
|
|
7,524 |
|
Restructuring charges (2) |
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
Non-GAAP gross profit |
|
$ |
667,875 |
|
|
$ |
623,464 |
|
|
$ |
2,051,422 |
|
|
$ |
2,028,377 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross margin |
|
|
69.1 |
% |
|
|
69.5 |
% |
|
|
70.1 |
% |
|
|
71.2 |
% |
Non-GAAP gross margin |
|
|
69.6 |
% |
|
|
70.0 |
% |
|
|
70.6 |
% |
|
|
71.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP total operating expenses |
|
$ |
496,730 |
|
|
$ |
475,513 |
|
|
$ |
1,565,546 |
|
|
$ |
1,486,140 |
|
Stock-based compensation |
|
|
(37,628 |
) |
|
|
(31,267 |
) |
|
|
(109,515 |
) |
|
|
(93,900 |
) |
Amortization of intangibles (1) |
|
|
(885 |
) |
|
|
(825 |
) |
|
|
(2,631 |
) |
|
|
(2,607 |
) |
Restructuring and other charges (2) |
|
|
— |
|
|
|
— |
|
|
|
300 |
|
|
|
— |
|
Non-GAAP total operating expenses |
|
$ |
458,217 |
|
|
$ |
443,421 |
|
|
$ |
1,453,700 |
|
|
$ |
1,389,633 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
|
$ |
166,346 |
|
|
$ |
143,656 |
|
|
$ |
471,793 |
|
|
$ |
529,934 |
|
Stock-based compensation |
|
|
39,602 |
|
|
|
32,918 |
|
|
|
115,197 |
|
|
|
98,679 |
|
Amortization of intangibles (1) |
|
|
3,710 |
|
|
|
3,469 |
|
|
|
11,040 |
|
|
|
10,131 |
|
Restructuring and other charges (2) |
|
|
— |
|
|
|
— |
|
|
|
(308 |
) |
|
|
— |
|
Non-GAAP income from operations |
|
$ |
209,658 |
|
|
$ |
180,043 |
|
|
$ |
597,722 |
|
|
$ |
638,744 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating margin |
|
|
17.3 |
% |
|
|
16.1 |
% |
|
|
16.2 |
% |
|
|
18.7 |
% |
Non-GAAP operating margin |
|
|
21.8 |
% |
|
|
20.2 |
% |
|
|
20.6 |
% |
|
|
22.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP total interest income and other income (expense), net |
|
$ |
(4,235 |
) |
|
$ |
(21,015 |
) |
|
$ |
(3,469 |
) |
|
$ |
(46,198 |
) |
Arbitration award gain (5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-GAAP total interest income and other income (expense), net |
|
$ |
(4,235 |
) |
|
$ |
(21,015 |
) |
|
$ |
(3,469 |
) |
|
$ |
(46,198 |
) |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income before provision for income taxes |
|
$ |
162,111 |
|
|
$ |
122,641 |
|
|
$ |
468,324 |
|
|
$ |
483,736 |
|
Stock-based compensation |
|
|
39,602 |
|
|
|
32,918 |
|
|
|
115,197 |
|
|
|
98,679 |
|
Amortization of intangibles (1) |
|
|
3,710 |
|
|
|
3,469 |
|
|
|
11,040 |
|
|
|
10,131 |
|
Restructuring and other charges (2) |
|
|
— |
|
|
|
— |
|
|
|
(308 |
) |
|
|
— |
|
Non-GAAP net income before provision for income taxes |
|
$ |
205,423 |
|
|
$ |
159,028 |
|
|
$ |
594,253 |
|
|
$ |
592,546 |
|
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
|
|
Nine Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
GAAP provision for income taxes |
|
$ |
40,684 |
|
|
$ |
49,941 |
|
|
$ |
147,285 |
|
|
|
163,938 |
|
Tax impact on non-GAAP adjustments (3) |
|
|
418 |
|
|
|
(18,136 |
) |
|
|
(28,417 |
) |
|
|
(45,429 |
) |
Non-GAAP provision for income taxes (3) |
|
$ |
41,102 |
|
|
$ |
31,805 |
|
|
$ |
118,868 |
|
|
$ |
118,509 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP effective tax rate |
|
|
25.1 |
% |
|
|
40.7 |
% |
|
|
31.4 |
% |
|
|
33.9 |
% |
Non-GAAP effective tax rate (3) |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
|
$ |
121,427 |
|
|
$ |
72,700 |
|
|
$ |
321,039 |
|
|
$ |
319,798 |
|
Stock-based compensation |
|
|
39,602 |
|
|
|
32,918 |
|
|
|
115,197 |
|
|
|
98,679 |
|
Amortization of intangibles (1) |
|
|
3,710 |
|
|
|
3,469 |
|
|
|
11,040 |
|
|
|
10,131 |
|
Restructuring and other charges (2) |
|
|
— |
|
|
|
— |
|
|
|
(308 |
) |
|
|
— |
|
Tax impact on non-GAAP adjustments (3) |
|
|
(418 |
) |
|
|
18,136 |
|
|
|
28,417 |
|
|
|
45,429 |
|
Non-GAAP net income (3) |
|
$ |
164,321 |
|
|
$ |
127,223 |
|
|
$ |
475,385 |
|
|
$ |
474,037 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per share |
|
$ |
1.58 |
|
|
$ |
0.93 |
|
|
$ |
4.18 |
|
|
$ |
4.07 |
|
Non-GAAP diluted net income per share (3) |
|
$ |
2.14 |
|
|
$ |
1.63 |
|
|
$ |
6.19 |
|
|
$ |
6.03 |
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing diluted net income per share |
|
|
76,826 |
|
|
|
78,237 |
|
|
|
76,849 |
|
|
|
78,652 |
|
| 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, lease termination charges and asset impairments. |
||
(3) |
In Q4'22, we changed our methodology for the computation of the non-GAAP effective tax rate to a long-term projected tax rate and have given effect to the new methodology from January 1, 2022, and recast previously reported quarterly periods in 2022. |
||
(+) |
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. | ||
Q4 2023 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
|
Three Months Ended |
|
|
|
December 31, 2023 |
GAAP operating margin |
|
less than |
Stock-based compensation |
|
~ |
Amortization of intangibles (1) |
|
~ |
Restructuring charges (2) |
|
~ |
Non-GAAP operating margin |
|
above |
| ALIGN TECHNOLOGY, INC. | ||
FISCAL 2023 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
|
|
Year Ended |
|
|
December 31, 2023 |
GAAP operating margin |
|
approximately |
Stock-based compensation |
|
~ |
Amortization of intangibles (1) |
|
~ |
Restructuring charges (2) |
|
~ |
Non-GAAP operating margin |
|
slightly above |
(1) Amortization of intangible assets related to certain acquisitions. |
||
| (2) Restructuring charges primarily related to severance. | ||
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20231024667630/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
What was the increase in clear aligner shipments to teenage patients in Q3'23?
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What were the Q3'23 total revenues?
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