Financial Data and Key Metrics Changes - In Q3 2025, the company reported sales of $670 million, with core sales increasing by 9.4% year-over-year, aided by foreign exchange contributing approximately 200 basis points [12][16] - Adjusted EBITDA margin was 14.5%, up 540 basis points from the prior year, driven by improved gross margins and strong G&A productivity [13][22] - Adjusted EPS for the quarter was $0.32, more than double the Q3 2024 result, with year-to-date adjusted EPS reaching $0.82, a 67% increase over the same period last year [6][13] Business Line Data and Key Metrics Changes - Specialty products and technology revenue grew 13% year-on-year, with core sales up 10.6%, while the orthodontics business, particularly Spark, saw high teens growth before deferral benefits [17][18] - The equipment and consumables segment experienced core sales growth of 7.3%, with double-digit growth in consumables [19] - Diagnostics core sales growth was modestly positive for the second consecutive quarter, supported by new product launches [66] Market Data and Key Metrics Changes - The company maintained a strong position in the orthodontic market, with Spark aligners achieving profitability and significant growth, outperforming the overall aligner market [30][11] - In North America, the company reported above-market growth in implants, with a strong performance in both premium and challenger segments [42] - The dental market remains stable, although macroeconomic uncertainties continue to impact discretionary procedures [23] Company Strategy and Development Direction - The company is focused on growth, operations, and people, with significant investments in R&D and marketing to support new product launches and market share gains [7][10] - The company aims to achieve fleet average margins for Spark aligners, leveraging economies of scale and a comprehensive product portfolio [27][28] - Continued expansion in key markets, including China, is a priority, with ongoing monitoring of regulatory changes impacting the implant market [36][49] Management's Comments on Operating Environment and Future Outlook - Management noted that underlying patient demand remains stable but below long-term levels, with macroeconomic uncertainty affecting some segments [23] - The company is optimistic about future growth, expecting continued margin and market share gains, particularly in the Spark business [11][30] - Management anticipates that the tariff landscape will remain fluid but is on track to offset tariff costs for the full year [39] Other Important Information - The company has repurchased over $140 million worth of shares year-to-date as part of a $250 million two-year repurchase authorization [21] - A new multipurpose diagnostic center is being developed in Finland, enhancing the company's innovation capabilities in dental imaging [9] Q&A Session Summary Question: What is the trajectory of margins for the Spark business now that it is profitable? - Management expects Spark margins to eventually reach fleet average, supported by cost improvements and commercial efficiencies [27][28] Question: Can you elaborate on the market share of the Spark business? - Spark has consistently outgrown the global aligner category, achieving high teens growth in Q3, significantly outperforming the overall market [29][30] Question: What are the expectations regarding the VBP impact in China? - Management expects a destocking phase followed by a new price level and restocking impact, but anticipates VBP 2 to be smaller than VBP 1 [49] Question: How is the company positioned in the implant market? - The company has seen four consecutive quarters of positive growth in implants, with strong new product launches contributing to this momentum [42] Question: What is the outlook for the diagnostics business? - The diagnostics segment has shown positive growth for two consecutive quarters, aided by new product launches and improving market conditions [66]

Core Insights - Angelalign reported strong 1H25 results with revenue increasing 33% YoY to US$161 million, driven by rapid overseas business expansion [1] - Total clear aligner case volume reached 225,800, up 48% YoY, exceeding the historical average of ~41% [1] - Attributable net profit margin improved significantly to 9.1%, supported by effective cost control measures [1] Domestic Business - Domestic clear aligner case shipments reached 108,600, a 14% YoY increase, driven by strategic price adjustments [2] - Despite solid volume growth, domestic revenue remained flat at US$90 million compared to 1H24 due to ASP reduction [2] - Pricing pressure is expected to persist, influenced by high patient price sensitivity and recent aligner VBP renewal in Shaanxi [2] Overseas Business - Overseas clear aligner case shipments reached 117,200, a 103% YoY increase, with revenue increasing 123% YoY to US$72 million [3] - Operating losses narrowed to US$5 million, primarily due to delayed staff recruitment and operation of overseas manufacturing facilities [3] - Expected widening of operating losses in 2H25E due to increased marketing spending, lower GPM, and higher tariffs [3] Investment Outlook - The company maintains a BUY rating, raising forecasts for 2025E case shipments and revenue based on stronger-than-expected growth in 1H25 [4] - A target price of HK$86.47 is derived from SOTP valuation, assigning 15x 2025E P/E to the domestic business and 8x 2025E P/S to the overseas business [4]