Core Viewpoint - Align Technology's recent earnings report showed mixed results, with adjusted earnings per share increasing but revenues missing estimates, leading to questions about future performance [2][3][9]. Financial Performance - Adjusted earnings per share for Q2 2025 were $2.49, a 3.3% increase year-over-year, but missed the Zacks Consensus Estimate by 3.1% [2] - GAAP earnings per share rose 43.4% to $1.72 compared to $1.28 in Q2 2024 [2] - Total revenues decreased 1.6% year-over-year to $1.01 billion, missing estimates by 4.6% [3] Segment Analysis - Clear Aligner segment revenues fell 3.3% year-over-year to $804.6 million, with a slight favorable foreign exchange impact of 0.6% [4] - Imaging Systems & CAD/CAM Services revenues increased by 5.6% to $207.8 million, also benefiting from a 0.5% favorable currency impact [4] Margin and Expenses - Gross profit for Q2 was $708.1 million, down 2% year-over-year, with a gross margin of 69.9%, a contraction of 32 basis points [5] - SG&A expenses decreased by 0.8% to $448.7 million, while R&D expenses increased by 4.6% to $96.4 million [5] - Operating income was $163 million, down 8.5% year-over-year, with an operating margin of 16.1%, a decrease of 122 basis points [5] Cash Position - At the end of Q2, cash and cash equivalents stood at $901.2 million, up from $873 million at the end of Q1 [6] - Net cash provided by operating activities was $181.3 million, compared to $188.5 million in Q2 2024 [6] Stock Repurchase - The company repurchased approximately 585.1 thousand shares at an average price of $164.14, completing a $225 million repurchase initiated in Q1 2025 [7] - This marked the completion of a $1 billion stock repurchase program approved in January 2023 [7] Future Outlook - For full-year 2025, Align Technology expects Clear Aligner revenue growth to be flat to slightly up from 2024, with Systems and Services revenues anticipated to grow faster [9] - The Zacks Consensus Estimate for 2025 revenues is $4.16 billion, indicating a 3.9% year-over-year growth [9] - The company expects a GAAP gross margin of 67-68% and an operating margin between 13% and 14% for 2025 [10] - For Q3 2025, worldwide revenues are projected to be between $965 million and $985 million, with the Zacks Consensus Estimate at $1.04 billion [10] Estimate Trends - Estimates for Align Technology have trended downward, with a consensus estimate shift of -15.84% over the past month [11][13] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [13] Industry Comparison - Align Technology operates within the Zacks Medical - Dental Supplies industry, where competitor West Pharmaceutical Services has seen a 2.6% gain over the past month [14] - West Pharmaceutical reported revenues of $766.5 million, a year-over-year increase of 9.2%, and has a Zacks Rank 1 (Strong Buy) [15][16]

Core Insights - Align Technology, Inc. (ALGN) reported second-quarter 2025 adjusted earnings per share (EPS) of $2.49, a 3.3% increase year-over-year, but missed the Zacks Consensus Estimate by 3.1% [1] - The company's revenues for the quarter were $1.01 billion, down 1.6% year-over-year, and also fell short of the Zacks Consensus Estimate by 4.6% [2] - Following the earnings announcement, ALGN's stock experienced a significant decline of 34.2% in after-market trading [1] Revenue Breakdown - ALGN operates in two reportable segments: Clear Aligner and Imaging Systems & CAD/CAM Services [3] - Revenues from the Clear Aligner segment decreased by 3.3% year-over-year to $804.6 million, despite a favorable foreign exchange impact of 0.6% [3] - Imaging Systems & CAD/CAM Services revenues increased by 5.6% to $207.8 million, also benefiting from a 0.5% favorable currency impact [3] Margin Analysis - Gross profit for the second quarter was $708.1 million, a decline of 2% year-over-year, with a gross margin of 69.9%, down 32 basis points [4] - Selling, General and Administrative (SG&A) expenses decreased by 0.8% to $448.7 million, while Research and Development (R&D) expenses rose by 4.6% to $96.4 million [4] - Operating income was $163 million, down 8.5% year-over-year, leading to an operating margin contraction of 122 basis points to 16.1% [4] Financial Position - At the end of the second quarter, ALGN had cash and cash equivalents of $901.2 million, up from $873 million at the end of the first quarter [5] - Net cash provided by operating activities was $181.3 million, compared to $188.5 million at the end of the second quarter of 2024 [5] Stock Repurchase Program - During the quarter, ALGN repurchased approximately 585.1 thousand shares at an average price of $164.14 per share, completing a $225 million open market repurchase initiated in the first quarter of 2025 [6] - This marked the completion of the entire $1 billion stock repurchase program approved in January 2023 [6] Future Outlook - For the full year 2025, ALGN expects Clear Aligner revenue growth to be flat to slightly up from 2024, with Systems and Services revenues anticipated to grow faster [9] - The Zacks Consensus Estimate for 2025 revenues is $4.16 billion, indicating a 3.9% year-over-year growth [9] - For the third quarter, ALGN projects worldwide revenues between $965 million and $985 million, while the Zacks Consensus Estimate is $1.04 billion [11] Additional Insights - ALGN achieved a record number of teen cases, treating over 6 million teens and kids with the Invisalign system globally [14] - Despite the challenges, Clear Aligner volume grew in APAC and EMEA regions, driven by increased utilization among orthodontists and general practitioners [13]

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].