Align Technology (ALGN) Q4 Revenues Top, Margins Expand

Core Viewpoint - Align Technology, Inc. reported strong fourth-quarter fiscal 2023 results with adjusted earnings per share (EPS) of $2.42, reflecting a 39.9% increase year over year, surpassing the Zacks Consensus Estimate by 11% [1] Financial Performance - Fourth-quarter revenues increased by 6.1% year over year to $956.7 million, exceeding the Zacks Consensus Estimate by 3% [2] - Full-year revenues for 2023 reached $3.86 billion, up 3.4% from 2022, also surpassing the Zacks Consensus Estimate by 0.8% [2] Segment Analysis - Clear Aligner segment revenues rose by 6.9% year over year to $781.9 million, driven by higher average selling prices and non-case revenues, despite lower volumes [3] - Imaging Systems & CAD/CAM Services revenues increased by 2.9% to $174.8 million in the quarter [3] Margins and Expenses - Gross profit for the fourth quarter was $669.5 million, an 8.4% increase year over year, with a gross margin expansion of 146 basis points to 70.0% [4] - Operating income increased by 48.9% to $184.9 million, with an operating margin expansion of 556 basis points to 19.3% [4] Cash Flow and Financial Position - At the end of the fourth quarter, cash and cash equivalents were $937.4 million, down from $1.23 billion at the end of the third quarter [5] - Cumulative net cash provided by operating activities was $785.8 million, up from $738.9 million in the previous quarter [5] Future Guidance - For 2024, Align Technology anticipates mid-single-digit revenue growth compared to 2023, with a Zacks Consensus Estimate of $4.06 billion [6] - The company plans to invest approximately $100 million in capital expenditures for building improvements and manufacturing capacity [6] Strategic Developments - The company gained FDA clearance for the Invisalign Palatal Expander System and launched the new iTero Lumina intraoral scanner, enhancing practice efficiency [7] - Continued focus on international expansion, patient demand, and orthodontist utilization to maintain leadership in digital orthodontics and dentistry [7]