Align Technology(ALGN) - 2025 Q1 - Quarterly Results

Executive Summary & Q1'25 Financial Highlights 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 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][3] - Q1'25 marks the highest year-over-year growth rate for both adult and teen patients since 2021[3] Operational Highlights & Milestones 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] - Q1 Clear Aligner volumes in orthodontic and GP dentist channels increased year-over-year, with record GP dentist utilization for a first quarter[3] - Continued adoption of the iTero™ Lumina scanner platform and launch of iTero Lumina with restorative software at the end of March[3] Detailed Financial Performance (Q1'25) This section details Align Technology's Q1'25 financial performance, including revenue breakdown, profitability, and cash flow Revenue Breakdown 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] Profitability and EPS 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 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] Corporate and Strategic Updates Align Technology updated on product launches, stock repurchases, and regulatory and tariff developments Recent Announcements and Product Launches 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] - Invisalign System with mandibular advancement commercially available in Australia and New Zealand[8] - Launched Align™ X-ray Insights in EU and UK, an AI-based solution for 2D radiograph analysis[8] - Added restorative capabilities to iTero Lumina™ intraoral scanner and launched iTero Lumina™ Pro for efficient ortho-restorative workflows[8] - Invisalign Palatal Expander System approved and commercially available in Turkey[8] Stock Repurchase Program 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] - Initiated a new plan to repurchase the remaining $225.0 million under the $1.0 billion January 2023 Stock Repurchase Program[12] - Repurchased $129.0 million as of March 31, 2025, under the new plan[12] Regulatory and Tariff Updates 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] - 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=