Align Technology(ALGN) - 2024 Q4 - Annual Results

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]