ALGN Q1 Earnings and Revenues Top Estimates, Stock Up in After-market

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].