Company Developments - Align Technology, Inc. has launched its Invisalign Palatal Expander System in Turkey after receiving approval from the Turkish Medicines and Medical Device Agency, which allows for broad patient applicability including children, teens, and adults [1] - The Invisalign Palatal Expander System is a modern 3D-printed device designed for rapid expansion of the upper jaw during orthodontic treatment, utilizing proprietary technology [4][5] - The system is currently available in multiple markets including the United States, Canada, and the European Union, with plans for further expansion pending regulatory approvals [7][11] Financial Performance - Align Technology has a market capitalization of $15.72 billion, with projected earnings growth of 7.9% in 2024 driven by a 3.9% increase in revenues [3] - The company has demonstrated a trailing four-quarter average earnings surprise of 6.18% [3] - Following the recent product launch, ALGN shares increased by 0.7% to $212.03, indicating a positive market sentiment [2] Industry Context - The global 3D printing market was valued at $3.1 billion in 2023 and is expected to grow at a compound annual growth rate of 26.4% through 2030, highlighting the potential for growth in 3D printing dentistry [10] - Align Technology's offerings, including the Invisalign Palatal Expander System, position the company favorably within the rapidly evolving orthodontics market [8]

Core Insights - Align Technology, Inc. (ALGN) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $2.44, a 0.8% increase year-over-year, surpassing the Zacks Consensus Estimate by 0.4% [1][2] - The company's GAAP EPS for the quarter was $1.39, reflecting a 15.2% decline from $1.64 in the same period of 2023 [2] - Full-year adjusted EPS reached $9.33, an 8.4% increase from 2023, also exceeding the Zacks Consensus Estimate by 0.1% [2] Revenue Performance - Q4 revenues increased by 4% year-over-year to $995.2 million, but fell short of the Zacks Consensus Estimate by 0.2% [3] - Full-year revenues totaled $4.00 billion, marking a 3.5% increase from 2023, aligning with the Zacks Consensus Estimate [3] Segment Analysis - Clear Aligner segment revenues rose 1.6% year-over-year to $794.3 million, with a minor unfavorable foreign exchange impact of 0.1% [4] - Imaging Systems & CAD/CAM Services revenues surged 14.9% to $200.9 million, also experiencing a 0.1% unfavorable currency impact [4] Margin and Expense Overview - Gross profit for the quarter was $696.9 million, up 4.1% year-over-year, with a gross margin of 70%, expanding by 5 basis points [5] - SG&A expenses increased by 5.6% to $425 million, while R&D expenses rose 15.5% to $94.9 million [5] - Operating income totaled $177.1 million, down 4.2% year-over-year, with an operating margin contraction of 153 basis points to 17.8% [5] Financial Position - At the end of Q4, cash and cash equivalents stood at $1.04 billion, up from $937.4 million at the end of Q4 2023 [6] - Cumulative net cash provided by operating activities was $738.2 million, down from $785.8 million at the end of 2023 [6] Stock Repurchase Program - ALGN has $225 million available for repurchases under its $1.0 billion Stock Repurchase Program, authorized in January 2023 [7] Future Guidance - For full-year 2025, ALGN expects low single-digit revenue growth, indicating approximately 2% unfavorable foreign exchange impact [8] - The Zacks Consensus Estimate for 2025 revenues is $4.19 billion, suggesting a 4.8% year-over-year growth [8] - The anticipated GAAP operating margin for 2025 is expected to be slightly above the 2024 level, with a non-GAAP operating margin forecasted at approximately 22.5% [9] Q1 2025 Expectations - For Q1 2025, ALGN projects worldwide revenues between $965 million and $985 million, while the Zacks Consensus Estimate is $1.02 billion [10] Overall Assessment - Align Technology's Q4 results were mixed, with earnings exceeding estimates but revenues falling short [11] - Revenue growth was driven by increased volumes in Clear Aligner and Imaging Systems & CAD/CAM Services [11] - Clear Aligner volume growth was supported by higher shipments across all operational regions, particularly in the EMEA region [12] - The Imaging Systems & CAD/CAM Services segment saw strong growth due to higher average selling prices and improved service revenues [13] - The company achieved significant milestones, including 271.6 thousand active Invisalign-trained practitioners and over 2 billion clear aligners manufactured [14]

Core Insights - Align Technology reported Q4 2024 earnings that closely matched expectations, with a focus on international growth despite currency challenges [2][7] - The company aims for low single-digit revenue growth in fiscal 2025, with mid-single-digit growth projected for Clear Aligner volumes [9] Financial Performance - Non-GAAP EPS for Q4 2024 was $2.44, slightly below the expected $2.45, while revenue reached $995.2 million, just under the anticipated $996 million [2][3] - Year-over-year revenue growth was 4.0%, up from $956.7 million in Q4 2023, and Clear Aligner volume increased by 6.1% to 628,730 units [3][6] - Operating margin (Non-GAAP) decreased to 23.2%, down 0.6 percentage points from the previous year [3] Business Overview - Align Technology is a leader in digital orthodontics, primarily known for its Invisalign clear aligners, which offer an alternative to traditional braces [4] - The company utilizes advanced technologies, including iTero intraoral scanners and CAD/CAM software, to enhance treatment planning and monitoring [4] Strategic Focus - The company is concentrating on international market expansion and product innovation, leveraging 3D printing for scalable production [5] - Align Digital Platform is a key component of its strategy to support growth in both emerging and established markets [5] Market Dynamics - Revenue from systems and services grew by 14.9% compared to Q4 2023, indicating strong consumer interest and market penetration [7] - The stronger U.S. dollar negatively impacted net income per share by approximately $0.14, and decreased demand in the U.S. market affected Clear Aligner sales [7] Operational Metrics - Despite challenges from currency fluctuations and restructuring charges, Align Technology maintained a strong cash position of approximately $1.044 billion after stock repurchases of $275 million in 2024 [8]

Core Insights - Align Technology reported revenue of $995.22 million for the quarter ended December 2024, reflecting a 4% increase year-over-year [1] - The earnings per share (EPS) for the quarter was $2.44, slightly up from $2.42 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate by -0.18%, while the EPS exceeded the consensus estimate by +0.41% [1] Financial Performance Metrics - Clear Aligner shipments were reported at 629, slightly above the estimated average of 623 [4] - Net revenues from Imaging Systems and CAD/CAM Services reached $200.93 million, surpassing the average estimate of $199.65 million, marking a year-over-year increase of +14.9% [4] - Total net revenues from Clear Aligners were $794.29 million, which was below the average estimate of $801.13 million, but still represented a year-over-year growth of +1.6% [4] Market Performance - Align Technology's shares have returned -1.3% over the past month, contrasting with the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Align Technology reported quarterly earnings of $2.44 per share, exceeding the Zacks Consensus Estimate of $2.43 per share, and showing a slight increase from $2.42 per share a year ago [1][2] Financial Performance - The company achieved revenues of $995.22 million for the quarter ended December 2024, which was below the Zacks Consensus Estimate by 0.18%, but an increase from $956.73 million year-over-year [3] - Align Technology has surpassed consensus EPS estimates in all four of the last quarters, while it has only topped revenue estimates once in the same period [2][3] Stock Performance - Align Technology shares have increased approximately 3% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future due to unfavorable estimate revisions [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.27 on revenues of $1.02 billion, and for the current fiscal year, it is $10.10 on revenues of $4.19 billion [8] - The outlook for the Medical - Dental Supplies industry, to which Align Technology belongs, is currently in the bottom 40% of Zacks industries, which may negatively impact stock performance [9]

Financial Data and Key Metrics Changes - Q4 2024 total revenues were $995 million, a 4% increase year-over-year, with Clear Aligner revenues growing 1.6% and Systems and Services revenues increasing 14.9% [9][11][27] - For the full year 2024, total revenues reached $4 billion, reflecting a 3.5% year-over-year increase [11] - Q4 2024 non-GAAP operating margin was 23.2%, up 1.1% sequentially but down 0.6% year-over-year [40] Business Line Data and Key Metrics Changes - Clear Aligner volumes grew 6.1% year-over-year in Q4, with significant growth in EMEA, APAC, and LatAm regions [9][12] - Systems and Services revenues in Q4 were $200.9 million, up 14.9% year-over-year, driven by higher scanner volumes and non-systems revenue [33] - Q4 Clear Aligner average selling price (ASP) was $1,265, down $55 year-over-year due to product mix and higher discounts [30][36] Market Data and Key Metrics Changes - In the Americas, Clear Aligner volumes reflected strength in Latin America and improving trends in North America, while EMEA showed growth from core Europe and emerging markets [12][14] - APAC region growth was driven by China and Japan, with strong performance in emerging markets like India and Thailand [12][14] - The number of doctors submitting cases reached a record 85,700 worldwide in Q4, indicating increased engagement [13] Company Strategy and Development Direction - The company is focused on enhancing clinical outcomes and efficiency in orthodontics, with plans to commercialize the Invisalign Palatal Expander across EMEA in 2025 [17][18] - Continued investment in digital workflows and partnerships with dental support organizations (DSOs) to drive adoption of digital dentistry [22][23] - The launch of the iTero Lumina scanner with restorative capabilities is expected to enhance practice efficiency and patient outcomes [25][59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the competitive landscape, citing innovations that position the company favorably against competitors [69] - The company anticipates mid-single-digit growth in Clear Aligner volumes for 2025, despite macroeconomic uncertainties [67][101] - Management highlighted the importance of new product launches and the potential for growth in the GP channel [90][100] Other Important Information - The company completed a $30 million equity investment in Smile Doctors, enhancing its presence in the DSO market [22][44] - A favorable outcome with UK tax authorities resulted in a $100 million VAT refund, impacting financials positively [31][32] - The company plans to raise Clear Aligner list prices by approximately 3% in March 2025, while removing certain processing fees [47][48] Q&A Session Summary Question: Can you provide more details on the guidance for Clear Aligners? - Management expects mid-single-digit volume growth for Clear Aligners in 2025, reflecting a stable exit from 2024 [67] Question: How do you view competitive dynamics in the market? - Management sees no significant changes in competitive dynamics, with confidence in their innovations and market position [69] Question: What are the expectations for the Lumina scanner launch? - The Lumina scanner is expected to enhance practice efficiency, with positive feedback from orthodontic users [76][78] Question: Can you elaborate on the growth from DSOs? - DSOs are seen as a force multiplier, helping to disseminate technology and efficiency across practices [106]

Revenue Performance - Q4'24 total revenues reached $995.2 million, up 4.0% year-over-year, while FY2024 total revenues were $4.0 billion, up 3.5% year-over-year[1][2][3] - Q4'24 Clear Aligner revenues were $794.3 million, reflecting a 1.6% increase year-over-year, with total Clear Aligner shipments of 628,730 units, up 6.1% year-over-year[4][7] - Q4'24 Systems and Services revenues were $200.9 million, up 14.9% year-over-year, contributing to a total of $768.9 million for FY2024, which is a 16.0% increase from FY2023[4][8] - Clear Aligner volumes for FY2024 totaled 2.5 million cases, representing a 3.5% increase year-over-year[5][8] - GAAP net revenues for fiscal 2024 reached $3,999,012, a 3.5% increase from $3,862,260 in 2023[38] - Clear Aligner net revenues were $3,230,122, up from $3,199,329, reflecting a 1.0% constant currency impact[38] Profitability Metrics - FY2024 operating margin was 15.2%, with a non-GAAP operating margin of 21.8%, while diluted net income per share was $5.62, down 5.3% from FY2023[3][8] - Q4'24 net income was $103.8 million, or $1.39 per diluted share, impacted by foreign exchange losses of approximately $0.14 per diluted share[4][6] - GAAP income from operations for Q4 2024 was $144,149, down from $171,545 in Q4 2023, resulting in an operating margin of 14.5%[41] - Non-GAAP net income for Q4 2024 was $181,644,000, slightly down from $183,469,000 in Q4 2023, representing a decrease of 1.0%[44] - GAAP diluted net income per share for Q4 2024 was $1.39, down from $1.64 in Q4 2023, a decline of 15.2%[44] - Non-GAAP diluted net income per share for Q4 2024 was $2.44, compared to $2.42 in Q4 2023, an increase of 0.8%[44] Cash and Investments - The company repurchased $352.9 million of common stock in 2024, concluding the year with no debt and approximately $1,044 million in cash and cash equivalents[3][10] - Cash and cash equivalents at the end of 2024 were $1,043,887 thousand, up from $937,438 thousand at the end of 2023[33] - The company reported a total stockholders' equity of $3,851,985 thousand as of December 31, 2024, an increase from $3,630,489 thousand in 2023[33] - The company initiated a plan to repurchase $275 million of common stock, with approximately $202.9 million spent by December 31, 2024[18] - As of January 31, 2025, $225 million remains available for stock repurchases under the program approved in January 2023[18] Future Outlook - For Q1'25, the company expects worldwide revenues to be in the range of $965 million to $985 million, down sequentially from Q4 due to unfavorable foreign exchange and lower capital equipment sales[20] - Clear Aligner volume is expected to increase slightly sequentially in Q1'25, while Clear Aligner average selling prices (ASPs) are anticipated to decrease sequentially[20] - The company projects a year-over-year revenue growth of low single digits for 2025, reflecting approximately 2 points of unfavorable foreign exchange[20] - Clear Aligner volume growth for 2025 is expected to be up approximately mid-single digits year-over-year, compared to a 3.5% increase in 2024[20] - The company plans to invest between $100 million and $150 million in capital expenditures for fiscal 2025, primarily for building construction and manufacturing capacity[20] Operational Metrics - The company achieved 271.6 thousand active Invisalign trained practitioners and over 19.5 million Invisalign patients, including over 5.6 million teens and kids[5][6] - The number of Invisalign trained doctors receiving cases in Q4 2024 was 85,685, a slight decrease from 83,700 in Q4 2023[35] - Clear Aligner revenue per case shipment in Q4 2024 was $1,265, down from $1,320 in Q4 2023[35] Cost and Expenses - Total operating expenses increased to $552,792 thousand in Q4 2024 from $497,979 thousand in Q4 2023, driven by higher selling, general and administrative expenses[32] - Total operating expenses for fiscal 2024 were $2,191,531, compared to $2,063,525 in 2023, indicating increased investment in operations[43] - Stock-based compensation for Q4 2024 was $38,848,000, consistent with $38,829,000 in Q4 2023[44] - The company initiated restructuring plans in Q4 2024, incurring restructuring charges of $36,991,000, compared to $13,989,000 in Q4 2023[44] - Legal settlement loss for the year ended December 31, 2024, was $30,968,000, compared to no losses in the previous year[44] Market Position and Strategy - Align Technology completed a $30.0 million equity investment in Smile Doctors, enhancing its market position in the orthodontic sector[9] - Align Technology plans to raise the list price of Clear Aligners by approximately 3% on average in the Americas and EMEA regions starting March 1, 2025[16] - The company is monitoring the U.S./Mexico tariff situation closely, with a potential 25% tariff on goods from Mexico still making it more economical to ship clear aligners from Mexico to the U.S.[17]

The fourth-quarter 2024 earnings season has just kicked off for the MedTech space, with a number of bigwigs scheduled to release their results this week.See the Zacks Earnings Calendar to stay ahead of market-making news.Per the latest Earnings Preview, quarterly results of the broader Medical sector are projected to improve year over year, buoyed by increased demand across multiple industries and a rise in hospital visits. AI-powered algorithms drove innovation in the fourth quarter in diagnostics, cardiov ...

Wall Street analysts forecast that Align Technology (ALGN) will report quarterly earnings of $2.43 per share in its upcoming release, pointing to a year-over-year increase of 0.4%. It is anticipated that revenues will amount to $997.02 million, exhibiting an increase of 4.2% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial ...

Andrii Yalanskyi The following segment was excerpted from Giverny Capital Asset Management's Q4 2024 Letter. My research colleague, John Bleday, and I have spent a lot of our time since he joined us in 2023 looking for companies that have proven ...