Align Technology (ALGN) 2025 Investor Day Summary Company Overview - **Company**: Align Technology (ALGN) - **Event**: 2025 Investor Day - **Date**: May 06, 2025 Key Industry Insights - **Industry**: Orthodontics and Dental Technology - **Market Dynamics**: The orthodontic market has faced unprecedented challenges, including a three-year decline in patient throughput in the U.S. due to various factors, including COVID-19 and economic conditions [64][65]. Core Points and Arguments 1. **Digital Transformation Journey**: Align Technology has been on a 30-year journey of digital transformation, focusing on making tooth movement a standard of care through digital aligners [12][13][17]. 2. **Clinical Viability**: The clinical viability of Invisalign has improved significantly, now reaching 100%, allowing for any case to be treated with Invisalign [38]. 3. **Consumer Demand**: 84% of prospective teen patients prefer Invisalign clear aligners over traditional braces, indicating a strong market demand [66]. 4. **Product Portfolio Expansion**: The company has expanded its product offerings to include solutions for both orthodontic tooth movement and dental facial orthopedic movement, addressing a broader range of clinical needs for kids and teens [90][91]. 5. **Technological Advancements**: Significant investments have been made in technology, including the development of the iTero Lumina scanner and enhancements to the ClinCheck software, which now allows for faster and more efficient treatment planning [58][96]. 6. **Market Growth**: Align Technology has seen growth in the teen segment, with a notable increase in the adoption of products like Invisalign First and Mandibular Advancement [54][67]. 7. **Global Market Presence**: The company maintains a strong global presence, with significant market shares in various regions, including North America, APAC, and EMEA [52]. Additional Important Insights 1. **Consumer Education**: Align Technology emphasizes the importance of educating both doctors and consumers about the benefits of clear aligners and early orthodontic treatment [85][92]. 2. **Compliance Monitoring**: Tools like Invisalign Virtual Care have been developed to help monitor patient compliance, addressing concerns from parents about the effectiveness of removable aligners [94]. 3. **Competitive Landscape**: The primary competition remains traditional wires and brackets, with Align Technology focusing on reducing friction for orthodontists to adopt digital solutions [69][71]. 4. **Market Share**: Align Technology holds a 10% market share in the orthodontic case starts, with a focus on increasing this share through targeted marketing and product development [61]. 5. **Investment in Technology**: The company has invested hundreds of millions in technology to enhance its digital ecosystem, including machine learning and AI capabilities to improve treatment outcomes [37][39]. This summary encapsulates the key points discussed during the Align Technology 2025 Investor Day, highlighting the company's strategic focus on digital transformation, product innovation, and market growth in the orthodontics industry.

Core Viewpoint - Align Technology, Inc. reported better-than-expected earnings for Q1 2025, with adjusted EPS of $2.13, reflecting a 0.5% increase year-over-year, and surpassing the Zacks Consensus Estimate by 7.6% [1]. However, revenues declined 1.8% year-over-year to $979.3 million, impacted by foreign exchange fluctuations [2][10]. Financial Performance - Adjusted EPS for Q1 2025 was $2.13, up 0.5% from the previous year, while GAAP EPS was $1.27, down 8.6% from $1.39 in Q1 2024 [1]. - Total revenues for Q1 2025 were $979.3 million, a decrease of 1.8% year-over-year, but exceeded the Zacks Consensus Estimate by 0.7% [2]. - Gross profit was $680.1 million, down 2.5% year-over-year, with a gross margin of 70%, a contraction of 51 basis points [4]. Segment Performance - The Clear Aligner segment saw revenues decline by 2.5% year-over-year to $796.8 million, affected by a 3.1% unfavorable foreign exchange impact [3]. - Revenues from Imaging Systems & CAD/CAM Services increased by 1.2% to $182.4 million, also facing a 2.8% negative currency impact [3]. Margins and Expenses - Operating income for Q1 2025 was $135.3 million, down 12.2% year-over-year, with an operating margin of 13.8%, a decrease of 164 basis points [4]. - SG&A expenses decreased by 0.9% to $447.6 million, while R&D expenses increased by 5.8% to $97.2 million [4]. Cash Position and Stock Repurchase - At the end of Q1 2025, cash and cash equivalents stood at $873 million, down from $1.04 billion at the end of Q4 2024 [5]. - The company initiated a stock repurchase plan for the remaining $225 million under the previously approved $1 billion program [6]. Guidance - For the full year 2025, Align Technology expects revenue growth between 3.5% to 5.5%, with a Zacks Consensus Estimate of $4.09 billion, indicating a 2.2% year-over-year growth [8]. - For Q2 2025, the company anticipates revenues between $1.05 billion and $1.07 billion, aligning with the Zacks Consensus Estimate of $1.05 billion [9]. Market Position and Growth - Align Technology reported significant milestones, including 280,000 active Invisalign-trained practitioners and 20 million Invisalign patients treated globally [11]. - The Imaging Systems & CAD/CAM Services segment showed strong growth due to improved scanner and wand revenues from leasing rental program upgrades [11].

Company Performance - Align Technology reported quarterly earnings of $2.13 per share, exceeding the Zacks Consensus Estimate of $1.98 per share, but slightly down from $2.14 per share a year ago [1] - The earnings surprise for this quarter was 7.58%, following a previous quarter where the company also surpassed expectations with earnings of $2.44 per share against an estimate of $2.43 [2] - The company posted revenues of $979.26 million for the quarter, surpassing the Zacks Consensus Estimate by 0.67%, but down from $997.43 million in the same quarter last year [3] Stock Performance - Align Technology shares have declined approximately 14.8% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [4] - The current Zacks Rank for Align Technology is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.56 on revenues of $1.05 billion, and for the current fiscal year, it is $9.87 on revenues of $4.09 billion [8] - The outlook for the Medical - Dental Supplies industry, to which Align Technology belongs, is currently in the bottom 36% of over 250 Zacks industries, which may impact stock performance [9]

Q1 2025 Financial Performance - Total revenues reached $979.3 million, a decrease of 1.6% quarter-over-quarter and 1.8% year-over-year[31] - Clear Aligner revenues totaled $796.8 million, up 0.3% quarter-over-quarter but down 2.5% year-over-year[31] - Systems and Services revenues amounted to $182.4 million, down 9.2% quarter-over-quarter but up 1.2% year-over-year[31] - GAAP operating margin was 13.4%, a decrease of 1.1 percentage points quarter-over-quarter and 2.1 percentage points year-over-year[31] Clear Aligner Segment - Worldwide Clear Aligner shipments were 642.3K, an increase of 2.2% quarter-over-quarter and 6.2% year-over-year[33] - Clear Aligner average per case shipment price was $1,240, a decrease of $25 sequentially and $110 year-over-year[96] - Teen and Kids Clear Aligner shipments increased 4.5% quarter-over-quarter and 13.3% year-over-year, reaching approximately 226K[49] Systems and Services Segment - Systems and Services revenues increased 1.2% year-over-year[68] - CAD/CAM and Services revenues represent 49.8% of the Systems and Services business[70] Financial Outlook - The company expects Q2 2025 worldwide revenues to be in the range of $1.05 billion to $1.07 billion[125] - The company expects 2025 year-over-year revenue growth to be in the range of 3.5% to 5.5% at current spot rates[125]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $979.3 million, down 1.6% sequentially and down 1.8% year over year [18] - Q1 clear aligner revenues were $796.8 million, up 0.3% sequentially but down 2.5% year over year [18][20] - Q1 systems and services revenue was $182.4 million, down 9.2% sequentially but up 1.2% year over year [21] - Overall gross margin for Q1 was 69.5%, down 0.6 points sequentially and down 0.5 points year over year [22] - Q1 net income per diluted share was $1.27, down $0.13 sequentially and year over year [26][27] Business Line Data and Key Metrics Changes - Clear aligner volumes grew 6.2% year over year, with significant growth in the EMEA and APAC regions [6][7] - Systems and services revenues were slightly up year over year due to the adoption of the iTero Lumina scanner platform [6][21] - Q1 clear aligner average per case shipment price was $12.40, down $110 year over year due to product mix shifts and discounts [20] Market Data and Key Metrics Changes - North America saw a year-over-year increase in clear aligner volumes, driven by the adoption of Invisalign First and other products [7][9] - EMEA region volumes reflected strong demand across both orthodontic and GP channels [8] - APAC region growth was led by increased utilization in both ortho and GP channels across various markets [8] Company Strategy and Development Direction - The company is focused on innovation in orthodontics, including the launch of the Invisalign Pallet Expander and the iTero Lumina scanner with restorative capabilities [10][12] - Align Technology aims to enhance clinical outcomes and patient experiences through its digital platform and new product offerings [13][40] - The company is committed to expanding its market presence and improving operational efficiencies to drive growth [39][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the clear aligner business despite global economic uncertainties [39] - The company anticipates Q2 2025 revenues to be in the range of $1.05 billion to $1.07 billion, indicating sequential growth [36] - Management highlighted the importance of digital workflows and the role of dental service organizations (DSOs) in driving growth [13][39] Other Important Information - The company received a favorable ruling regarding VAT applicability in the UK, which could enhance patient access to oral health [30] - Align Technology is actively managing tariff impacts through strategic production locations and supply chain adjustments [33][34] Q&A Session Summary Question: Strength in the quarter despite consumer sentiment decline - Management noted good volume growth across regions, particularly in North America, and highlighted the positive impact of new product launches [46][48] Question: Plans to mitigate tariff impacts - Management indicated confidence in their current production locations and supply chain strategies to mitigate tariff impacts [51][53] Question: Insights for the upcoming investor day - Management plans to provide a comprehensive overview of the company's technology and commercial positioning [55][56] Question: Clarification on 2025 revenue guidance and ASPs - Management confirmed that ASPs are expected to remain under pressure due to product mix shifts, but overall revenue growth is anticipated [58][60] Question: Performance of the teen segment - Management highlighted strong growth in the teen segment, driven by new products and effective distribution strategies [62][64] Question: ASP impacts from VAT and FX - Management discussed the potential for ASP improvements if the VAT situation in the UK is resolved favorably and noted that FX could become a positive contributor going forward [71][75]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $979.3 million, down 1.6% sequentially and down 1.8% year over year [18] - Q1 clear aligner revenues were $796.8 million, up 0.3% sequentially but down 2.5% year over year [19] - Q1 systems and services revenue was $182.4 million, down 9.2% sequentially but up 1.2% year over year [20] - Overall gross margin for Q1 was 69.5%, down 0.6 points sequentially and down 0.5 points year over year [22] - Q1 net income per diluted share was $1.27, down $0.13 sequentially and year over year [26] Business Line Data and Key Metrics Changes - Clear aligner volumes grew 6.2% year over year, with significant growth in the EMEA and APAC regions, and North America [6] - Systems and services revenues were slightly up year over year due to the adoption of the iTero Lumina scanner platform [7] - Clear aligner average per case shipment price decreased to $12.40, down $110 year over year due to product mix shifts and discounts [19] Market Data and Key Metrics Changes - North America saw a year-over-year increase in clear aligner volumes, driven by the adoption of Invisalign First for teens and kids [7] - EMEA region volumes reflected strong demand across both orthodontic and GP channels [8] - APAC region growth was driven by increased utilization in both ortho and GP channels across various markets [9] Company Strategy and Development Direction - The company is focused on innovation in orthodontics, including the launch of the Invisalign Pallet Expander system and the iTero Lumina scanner with restorative capabilities [10][11] - Align Technology aims to enhance clinical outcomes and patient experiences through its digital platform and new product offerings [12] - The company is committed to expanding its market presence and improving practice efficiency through digital workflows [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the clear aligner business despite global economic uncertainties and potential headwinds from tariffs [40] - The company anticipates Q2 2025 revenues to be in the range of $1.05 billion to $1.07 billion, indicating sequential growth [36] - For fiscal 2025, Align expects clear aligner volume growth to be mid-single digits year over year, with systems and services revenues growing faster than clear aligner revenues [39] Other Important Information - The company received a favorable ruling regarding VAT applicability for clear aligner sales in the UK, which could enhance patient access to oral health [31] - Align Technology is actively managing its supply chain to mitigate potential tariff impacts, maintaining a strong global presence [34][35] Q&A Session Summary Question: Strength in the quarter despite consumer sentiment decline - Management noted good volume growth across regions, particularly in North America, APAC, and Europe, indicating a decoupling from consumer sentiment trends [46][48] Question: Plans to mitigate tariff impacts - Management stated they are well-positioned to handle tariff impacts through global supply lines and operational adjustments [50][52] Question: Insights for the upcoming investor day - Management indicated that the investor day will provide a comprehensive overview of the company's portfolio and future positioning [56] Question: Clarification on 2025 revenue guidance - Management confirmed that the revenue guidance reflects a slight adjustment in ASP expectations, with clear aligner volumes expected to grow mid-single digits [58][60] Question: ASP dynamics and impacts from VAT - Management explained that the VAT impact from the UK could provide flexibility in pricing, potentially benefiting ASPs if the appeal does not proceed [72][74]

[Executive Summary & Q1'25 Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q1%2725%20Financial%20Highlights) Align Technology reported Q1'25 revenues of $979.3 million, impacted by FX, with growth in Clear Aligner volume and key operational milestones [Q1'25 Key Financial Metrics](index=1&type=section&id=Q1%2725%20Key%20Financial%20Metrics) Align Technology reported Q1'25 total revenues of $979.3 million, a slight decrease year-over-year, significantly impacted by unfavorable foreign exchange. Clear Aligner volume showed growth, especially in teens and growing patients, while Clear Aligner revenues saw a slight year-over-year decline. Imaging Systems and CAD/CAM Services revenues increased year-over-year | Metric | Q1'25 Value | Sequential Change | Year-over-Year Change | | :-------------------------------- | :---------- | :---------------- | :-------------------- | | Total Revenues | $979.3M | -1.6% | -1.8% | | Clear Aligner Revenues | $796.8M | +0.3% | -2.5% | | Clear Aligner Volume | 642.3K cases | +2.2% | +6.2% | | Teen & Growing Patient Aligner Volume | 225.8K cases | +4.5% | +13.3% | | Imaging Systems & CAD/CAM Services Revenues | $182.4M | -9.2% | +1.2% | | GAAP Operating Income | $131.1M | - | - | | GAAP Operating Margin | 13.4% | - | - | | Non-GAAP Operating Margin | 19.1% | -4.1 pts | -0.7 pts | | GAAP Diluted EPS | $1.27 | -$0.13 | -$0.13 | | Non-GAAP Diluted EPS | $2.13 | -$0.31 | -$0.01 | | Cash and Cash Equivalents | $873.0M | -$170.9M | - | - Foreign exchange unfavorably impacted total revenues by approximately **$21.4 million** sequentially and **$31.1 million** year-over-year[2](index=2&type=chunk)[3](index=3&type=chunk) - Q1'25 marks the highest year-over-year growth rate for both adult and teen patients since 2021[3](index=3&type=chunk) [Operational Highlights & Milestones](index=2&type=section&id=Operational%20Highlights%20%26%20Milestones) Align Technology celebrated a significant milestone of 20 million Invisalign patients globally, reflecting strong doctor and consumer confidence. The company also noted increased Clear Aligner volumes in both orthodontic and GP dentist channels, with record utilization for GP dentists in Q1. The iTero Lumina scanner platform continued its adoption, with a new restorative software launch - Reached the **20 million** Invisalign patient 'smilestone', initiating a year-long celebration[3](index=3&type=chunk) - Q1 Clear Aligner volumes in orthodontic and GP dentist channels increased year-over-year, with record GP dentist utilization for a first quarter[3](index=3&type=chunk) - Continued adoption of the iTero™ Lumina scanner platform and launch of iTero Lumina with restorative software at the end of March[3](index=3&type=chunk) [Detailed Financial Performance (Q1'25)](index=3&type=section&id=Detailed%20Financial%20Performance%20(Q1%2725)) This section details Align Technology's Q1'25 financial performance, including revenue breakdown, profitability, and cash flow [Revenue Breakdown](index=3&type=section&id=Revenue%20Breakdown) Align Technology's Q1'25 net revenues were $979.3 million, a 1.6% sequential and 1.8% year-over-year decrease. Clear Aligner revenues were $796.8 million, showing a slight sequential increase but a 2.5% year-over-year decline. Imaging Systems and CAD/CAM Services revenues were $182.4 million, down sequentially but up 1.2% year-over-year | Metric | Q1'25 | Q4'24 | Q1'24 | Q/Q Change | Y/Y Change | | :-------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net Revenues | $979.3M | $995.2M | $997.4M | (1.6)% | (1.8)% | | Clear Aligner Revenues | $796.8M | $794.3M | $817.3M | +0.3% | (2.5)% | | Imaging Systems and CAD/CAM Services | $182.4M | $200.9M | $180.2M | (9.2)% | +1.2% | - Clear Aligner shipments increased by **2.2%** sequentially to **642,305 cases** and by **6.2%** year-over-year[4](index=4&type=chunk) [Profitability and EPS](index=3&type=section&id=Profitability%20and%20EPS) GAAP net income for Q1'25 was $93.2 million, resulting in diluted EPS of $1.27, both down sequentially and year-over-year. Non-GAAP net income was $156.9 million, with diluted EPS of $2.13, also showing declines compared to prior periods | Metric | Q1'25 | Q4'24 | Q1'24 | Q/Q Change | Y/Y Change | | :---------------- | :------ | :------ | :------ | :--------- | :--------- | | GAAP Net Income | $93.2M | $103.8M | $105.0M | (10.2)% | (11.2)% | | GAAP Diluted EPS | $1.27 | $1.39 | $1.39 | ($0.13) | ($0.13) | | Non-GAAP Net Income | $156.9M | $181.6M | $161.4M | (13.6)% | (2.8)% | | Non-GAAP Diluted EPS | $2.13 | $2.44 | $2.14 | ($0.31) | ($0.01) | [Cash and Liquidity](index=3&type=section&id=Cash%20and%20Liquidity) As of March 31, 2025, Align Technology held $873.0 million in cash and cash equivalents, a decrease from $1,043.9 million at the end of Q4'24. The company also had $300.0 million available under its revolving line of credit | Metric | March 31, 2025 | December 31, 2024 | | :---------------------- | :------------- | :---------------- | | Cash and Cash Equivalents | $873.0 million | $1,043.9 million | - Available revolving line of credit: **$300.0 million** as of March 31, 2025[7](index=7&type=chunk) [Corporate and Strategic Updates](index=3&type=section&id=Corporate%20and%20Strategic%20Updates) Align Technology updated on product launches, stock repurchases, and regulatory and tariff developments [Recent Announcements and Product Launches](index=3&type=section&id=Recent%20Announcements%20and%20Product%20Launches) Align Technology made several key announcements, including an upcoming Investor Day, commercial availability of the Invisalign System with mandibular advancement in Australia and New Zealand, a partnership with Bay Football Club, and the launch of Align™ X-ray Insights, an AI-powered software for 2D radiograph analysis in Europe and the UK. Additionally, restorative capabilities were added to the iTero Lumina™ intraoral scanner, and the Invisalign Palatal Expander System was approved in Turkey - Investor Day scheduled for May 6, 2025[8](index=8&type=chunk) - Invisalign System with mandibular advancement commercially available in Australia and New Zealand[8](index=8&type=chunk) - Launched Align™ X-ray Insights in EU and UK, an AI-based solution for 2D radiograph analysis[8](index=8&type=chunk) - Added restorative capabilities to iTero Lumina™ intraoral scanner and launched iTero Lumina™ Pro for efficient ortho-restorative workflows[8](index=8&type=chunk) - Invisalign Palatal Expander System approved and commercially available in Turkey[8](index=8&type=chunk) [Stock Repurchase Program](index=4&type=section&id=Stock%20Repurchase%20Program) During Q1'25, Align Technology completed the remaining $72.1 million of a $275.0 million open market repurchase initiated in Q4'24. A new plan was initiated to repurchase the remaining $225.0 million under the January 2023 approved $1.0 billion stock repurchase program, with $129.0 million repurchased as of March 31, 2025 - Completed **$72.1 million** of the **$275.0 million** Q4'24 open market repurchase[12](index=12&type=chunk) - Initiated a new plan to repurchase the remaining **$225.0 million** under the **$1.0 billion** January 2023 Stock Repurchase Program[12](index=12&type=chunk) - Repurchased **$129.0 million** as of March 31, 2025, under the new plan[12](index=12&type=chunk) [Regulatory and Tariff Updates](index=4&type=section&id=Regulatory%20and%20Tariff%20Updates) Align Technology received a favorable UK VAT ruling, classifying Clear Aligners as 'dental prostheses' for VAT exemption. Regarding tariffs, USMCA compliant goods from Mexico are currently exempt from new US tariffs, but the situation remains fluid. For China, the company expects to mitigate most retaliatory tariff exposure through supply chain adjustments. Israeli goods imported into the U.S. face an estimated $1 million monthly impact from a 10% tariff, which has been factored into guidance - Received a favorable UK VAT ruling on April 24, 2025, determining Clear Aligners are 'dental prostheses' and thus exempt from VAT[12](index=12&type=chunk) - Clear Aligners and Intraoral Scanners made in Mexico and imported into the U.S. are compliant with USMCA and currently exempt from new tariffs, though the situation is fluid[12](index=

Align Technology, Inc. (ALGN) is set to release first-quarter 2025 results on April 30, after the closing bell.The company posted adjusted earnings per share (EPS) of $2.44 in the last reported quarter, which topped the Zacks Consensus Estimate by 0.4%. Align Technology beat on earnings in each of the trailing four quarters, the average surprise being 3.53%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)ALGN’s Q1 EstimatesThe Zacks Consensus Estimate for revenues is pegged at $975 ...

Core Insights - Align Technology (ALGN) shares increased by 14.4% to close at $165.03, following a notable trading volume, contrasting with a 12.6% loss over the past four weeks [1][2] Financial Performance Expectations - The company is set to release its Q1 2025 financial results on April 30, with earnings expected to be $2 per share, reflecting a year-over-year decline of 6.5%. Revenue is projected at $978.1 million, down 1.9% from the previous year [2][3] - The last reported fourth quarter saw earnings surpass the Zacks Consensus Estimate by 0.4%, with expectations for the upcoming quarter to benefit from the commercialization of the Invisalign Palatal Expander system [2][3] Earnings Estimate Trends - The consensus EPS estimate for Align Technology has been revised slightly lower over the past 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook compared to other stocks in the same industry [4] Industry Context - Align Technology operates within the Zacks Medical - Dental Supplies industry, where Cardinal Health (CAH) also operates, finishing the last trading session up 4.4% at $130.45, with a 0.7% return over the past month [4][5] - Cardinal Health's consensus EPS estimate has changed by -0.1% to $2.15, representing a year-over-year increase of 3.4%, and it currently holds a Zacks Rank of 3 (Hold) [5]

Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Align Technology (ALGN) and Merit Medical (MMSI) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings esti ...