Align Technology(US:ALGN)2025-05-08 21:14Financial Performance - Total net revenues for Q1 2025 were $979 million, a decrease of 1.8% year-over-year[117] - Net income for Q1 2025 was $93 million, with diluted net income per share of $1.27[117] - For the three months ended March 31, 2025, Clear Aligner net revenues decreased by $20 million compared to the same period in 2024, primarily due to a decrease in ASP and a product mix shift to lower-priced products[121] - Systems and Services net revenues increased by $2 million, driven by a $12 million increase in scanner wand sales, partially offset by a $9 million decrease in scanner system sales[123] - Gross profit for Clear Aligner was $562.1 million with a gross margin of 70.5%, down from $579.1 million and 70.9% in the same period of 2024[124] - Income from operations for Clear Aligner was $260.2 million with an operating margin of 32.7%, down from $286.2 million and 35.0% in 2024[136] Revenue Breakdown - Clear Aligner revenues were $797 million, down 2.5% year-over-year, while case volume increased by 6.2%[117] - Imaging Systems and CAD/CAM Services revenues rose to $182 million, an increase of 1.2% year-over-year[117] - The average selling price for Clear Aligners decreased from $1,350 in Q1 2024 to $1,240 in Q1 2025, an 8.1% decline[117] - Total case volume for Clear Aligners reached 642.3 thousand, up 6.2% from 605.1 thousand in Q1 2024[119] Expenses and Costs - Research and development expenses increased to $97.2 million, representing 9.9% of net revenues, compared to $91.9 million and 9.2% in 2024[131] - Selling, general and administrative expenses decreased to $447.6 million, accounting for 45.7% of net revenues, compared to $451.8 million and 45.3% in 2024[128] - Legal settlement losses of $4.2 million were recorded for the three months ended March 31, 2025, representing 0.4% of net revenues[134] Cash Flow and Capital Expenditures - Cash and cash equivalents stood at $873 million as of March 31, 2025[117] - The company expects capital expenditures for fiscal year 2025 to be between $100 million and $150 million, primarily for technology upgrades and additional manufacturing capacity[148] - For the three months ended March 31, 2025, cash flows from operations were $53 million, driven by a net income of approximately $93 million[150] - Net cash used in investing activities was $25 million, primarily for purchases of property, plant, and equipment[150] - Net cash used in financing activities totaled $207 million, mainly due to $201 million for share repurchases and $20 million for payroll taxes related to equity awards[151] Balance Sheet and Investments - As of March 31, 2025, the company had cash and cash equivalents of $873 million, down from $1,044 million at the end of 2024[147] - The carrying value of investments in privately held companies was $188.2 million as of March 31, 2025, unchanged from December 31, 2024[168] Risks and Economic Factors - The company is exposed to interest rate risk, but an immediate 10% change in interest rates would not have a material adverse impact on future operating results[161] - Foreign currency exchange rate fluctuations could materially impact the company's results of operations and financial condition, with a potential 10% change in exchange rates being significant[165] - Rising inflationary trends have impacted both revenues and costs globally, with uncertainty regarding the ability to offset higher costs through price increases[166] - The company has not historically used derivative financial instruments to manage exposure to interest rate changes[162] Workforce - The number of employees decreased by 2.2% year-over-year to 21,200 as of March 31, 2025[117]