Unveils Next-Generation iTero Lumina™
Intraoral Scanner Featuring a 3X Wider Field of Capture1 in a 50%
Smaller Wand2 that Delivers Faster Scanning, Higher Accuracy3, and
Superior Visualization4 for Greater Practice Efficiency
Q4 and FY2023 total revenues up 6.1% year
over year and up 3.4% year over year, respectively
Major 2023 milestones: 17 million
Invisalign® patients, 4 million Vivera™ retainers, and 100 thousand
iTero™ scanner units
- 2023 total revenues of $3.9 billion, Clear Aligner revenues of
$3.2 billion and Systems and Services revenues of $662.9
million
- 2023 revenues were unfavorably impacted by foreign exchange of
approximately $36.3 million compared to 2022(5)
- 2023 operating margin of 16.7%, non-GAAP operating margin of
21.4%, and diluted net income per share of $5.81, non-GAAP diluted
net income per share of $8.61
- 2023 operating margin was favorably impacted by foreign
exchange of approximately 0.7 points compared to 2022(5)
- Repurchased $600 million of common stock in 2023
- Q4 total revenues of $956.7 million, and diluted net income per
share of $1.64, non-GAAP diluted net income per share of $2.42
- Q4 revenues were unfavorably impacted by foreign exchange of
approximately $12.8 million sequentially and favorably impacted by
approximately $13.8 million year over year(5)
Align Technology, Inc. (Nasdaq: ALGN), a
leading global medical device company that designs, manufactures,
and sells the Invisalign® system of clear aligners, iTero™
intraoral scanners, and exocad™ CAD/CAM software for digital
orthodontics and restorative dentistry, today reported financial
results for the fourth quarter ("Q4'23") and year ended December
31, 2023 ("2023"). Q4'23 total revenues were $956.7 million, down
0.4% sequentially and up 6.1% year-over-year. Q4'23 Clear Aligner
revenues were $781.9 million, down 1.6% sequentially and up 6.9%
year-over-year. Q4'23 Clear Aligner volume was down 1.6%
sequentially and down 0.6% year-over-year. Q4'23 Imaging Systems
and CAD/CAM Services revenues were $174.8 million, up 5.8%
sequentially and up 2.9% year-over-year. Q4’23 Clear Aligner
revenues were unfavorably impacted by foreign exchange of
approximately $10.7 million or 1.4% sequentially and favorably
impacted by approximately $12.0 million or 1.6% year over year.(5)
Q4'23 Imaging Systems and CAD/CAM Services revenues were
unfavorably impacted by foreign exchange of approximately $2.1
million or 1.2% sequentially and favorably impacted by
approximately $1.9 million or 1.1% year over year.(5) Q4'23
operating income was $171.5 million resulting in an operating
margin of 17.9%. Q4'23 operating margin was unfavorably impacted by
foreign exchange of approximately 0.6 points sequentially and
favorably impacted by approximately 0.6 points year over year.(5)
Q4'23 net income was $124.0 million, or $1.64 per diluted share. On
a non-GAAP basis, Q4'23 net income was $183.5 million, or $2.42 per
diluted share.
2023 Clear Aligner revenues of $3.2 billion were unfavorably
impacted by foreign exchange of approximately $29.7 million or 0.9%
compared to 2022.(5) 2023 Imaging Systems and CAD/CAM Services
revenues of $662.9 million were unfavorably impacted by foreign
exchange of approximately $6.6 million or 1.0% compared to 2022.(5)
During Q4’23, we incurred a total of $14.0 million of restructuring
and other charges, primarily related to post-employment
benefits.
Commenting on Align's Q4'23 and 2023 results, Align Technology
President and CEO Joe Hogan said, “I am pleased to report fourth
quarter results with better-than-expected revenues and earnings,
primarily reflecting a sequential increase in clear aligner volume
for adults and non-comprehensive cases, growth in Canada and the
EMEA region, as well as increased revenues from systems and
services. Fourth quarter revenues were up year-over-year primarily
reflecting an increase in clear aligner volumes for teens and
Invisalign DSP touch-up cases, as well as growth in the EMEA and
APAC regions. For fiscal 2023, total revenues were up year over
year, and we delivered fiscal 2023 non-GAAP operating margin above
21%, as expected. As of Q4, we achieved 17 million Invisalign®
patients—including 4.7 million teens, as well as 4 million Vivera™
retainer cases, and over 100 thousand iTero™ scanners sold."
Hogan continued by announcing the launch of the company's latest
iTero Lumina scanner, "Today, I’m excited to unveil a breakthrough
technology — the iTero Lumina™ intraoral scanner - with 3X wider
field of capture in a 50% smaller wand that delivers faster
scanning, higher accuracy, and superior visualization for greater
practice efficiency. iTero Lumina quickly, easily, and accurately
captures more data while delivering exceptional scan quality and
photorealistic visuals that remove the need for intraoral photos
altogether. Doctors can now scan at twice the speed with a wide
field of capture, multi angled scanning, and a large capture
distance, meaning they can capture more dentition in greater detail
throughout the scanning process. Align has filed over 30 patent
applications covering technology related to the iTero Lumina
intraoral scanner. I believe iTero Lumina has the potential to set
a new standard of care for dental practices by simplifying the
scanning of complex oral regions, while offering superior
chair-side visualization and a more comfortable experience for
patients, especially kids.”
(1) Compared to the field of view of the iTero Element™ 5D
imaging system, when the iTero Lumina™ intraoral scanner’s scanning
distance is 12 mm.* (2) Compared to iTero Element™ 5D imaging
system wand, excluding the wand cable.* (3) The iTero Lumina™
intraoral scanner has scientifically proven greater accuracy* for
your clinical orthodontic needs. (4) For Invisalign record-taking
cases only. Based on a survey in September 2023 of n=22 users who
participated in a global limited market release, working with iTero
Lumina™ intraoral scanner for an average period of 6 months,
representing both Invisalign trained general practitioners and
orthodontists in NA, EU and APAC, who were presented with a 4 point
level of agreement scale from strongly agree to strongly disagree
with the following statements: “iTero Lumina™ intraoral scanner 3D
model is comparable to that of an intraoral photo.” and “iTero
Lumina™ intraoral scanner photorealistic scans enable orthodontic
clinical assessment the same way intraoral photos do.” and “iTero
Lumina™ intraoral scanner 3D model’s superior 3D model eliminates
the need to take intraoral photos.” and “iTero Lumina™ intraoral
scanner 3D model’s superior 3D model boosts patient engagement.”*
*Data on file at Align Technology, as of November 15, 2023. (5) For
more information, please see the tables captioned "Unaudited GAAP
to Non-GAAP Reconciliation."
Financial Summary - Fourth Quarter
Fiscal 2023
Q4'23
Q3'23
Q4'22
Q/Q Change
Y/Y Change
Clear Aligner Shipments*
592,635
602,335
596,155
(1.6)%
(0.6)%
GAAP
Net Revenues
$956.7M
$960.2M
$901.5M
(0.4)%
+6.1%
Clear Aligner
$781.9M
$794.9M
$731.7M
(1.6)%
+6.9%
Imaging Systems and CAD/CAM Services
$174.8M
$165.3M
$169.9M
+5.8%
+2.9%
Net Income
$124.0M
$121.4M
$41.8M
+2.1%
+196.9%
Diluted EPS
$1.64
$1.58
$0.54
+$0.06
+$1.10
Non-GAAP
Net Income(6)
$183.5M
$164.3M
$134.2M
+11.7%
+36.7%
Diluted EPS(6)
$2.42
$2.14
$1.73
+$0.28
+$0.69
Financial Summary - Fiscal
2023
2023
2022
Y/Y Change
Clear Aligner Shipments*
2,408,520
2,398,370
+0.4%
GAAP
Net Revenues
$3,862.3M
$3,734.6M
+3.4%
Clear Aligner
$3,199.3M
$3,072.6M
+4.1%
Imaging Systems and CAD/CAM Services
$662.9M
$662.1M
+0.1%
Net Income
$445.1M
$361.6M
+23.1%
Diluted EPS
$5.81
$4.61
+$1.20
Non-GAAP
Net Income(6)
$659.2M
$608.2M
+8.4%
Diluted EPS(6)
$8.61
$7.76
+$0.85
Changes and percentages are based on actual values. Certain
tables may not sum or recalculate due to rounding. *Clear Aligner
shipments include Doctor Subscription Program Touch-Up cases.
(6) In Q4'22, we changed our methodology for the computation of
the non-GAAP effective tax rate to a long-term projected tax rate
and have given effect to the new methodology from January 1,
2022.
As of December 31, 2023, we had $980.8 million in cash, cash
equivalents and short-term and long-term marketable securities
compared to over $1.3 billion as of September 30, 2023. As of
December 31, 2023, we had $300.0 million available under a
revolving line of credit.
Commenting on Align's 2023 results, Align Technology CFO and EVP
Global Finance, John Morici said, "I am pleased with our fourth
quarter and fiscal 2023 results, and I am especially proud of our
continued focused execution of our product roadmap and innovation
pipeline. We are committed to delivering on our strategic growth
drivers of International Expansion, Patient Demand, Orthodontist
Utilization, and GP Dentist Treatment to extend our leadership in
digital orthodontics and dentistry. I believe that the next wave of
innovation that we are introducing into the market will further
differentiate Align and allow us to increase our share of the large
untapped market opportunity of 22 million annual orthodontic case
starts as well as the additional 600 million consumers who could
benefit from a healthy beautiful smile using Invisalign® clear
aligners."
Q4'23 Announcement
Highlights
- On November 6, 2023, we announced the opening of Align's 2024
Annual Research Award Program to support clinical and scientific
dental research in universities across the globe. Under the
program, up to $300,000 is being awarded to university faculty for
scientific and technological research initiatives to advance
patient care in the fields of orthodontics and dentistry. Align
Technology’s Research Award Program has funded approximately $3
million in research since the program’s inception in 2010.
- On December 5, 2023, we announced the appointments to Align's
board of directors of Mojdeh Poul, former EVP and Group President
of 3M Health Care, and Kevin Conroy, President, Chief Executive
Officer, and Chairman of the Board of Exact Sciences.
- On December 13, 2023, we announced that Health Canada issued an
updated medical device license to Align for the Invisalign® Palatal
Expander system* ("IPE"). The updated license for broad patient
applicability includes growing children, teens, and adults (with
surgery or other techniques).
- On December 18, 2023, we announced that the U.S. Food and Drug
Administration ("FDA") cleared Align’s IPE system* for commercial
availability in the U.S. The FDA 510(k) clearance is for broad
patient applicability, including growing children, teens, and
adults (with surgery or other techniques). The IPE system is
available on a limited basis in Canada and the U.S. It is expected
to be available in other markets pending future applicable
regulatory approvals.
- On January 2, 2024, Align completed the acquisition of
privately-held Cubicure GmbH, a pioneer in direct 3D printing
solutions for polymer additive manufacturing that develops,
produces, and distributes innovative materials, equipment, and
processes for novel 3D printing solutions.
*Based on a survey in August 2023 in Canada of 10 Invisalign
trained orthodontists who participated in the IPE system Technical
Design Assessment and have treated at least 1 patient age 6-11
years with IPE. Data on file at Align Technology, Inc. as of
October 30, 2023.
Q4'23 Stock Repurchases
In October 2023, we purchased approximately 1.0 million shares
of our common stock at an average price of $190.56 per share
through a $250.0 million Accelerated Share Repurchase* and, in
November and December 2023, we purchased approximately 466 thousand
shares of our common stock at an average price of $214.81 per share
through $100.0 million open market repurchase, both under Align's
current $1.0 billion stock repurchase program.
We have $650.0 million remaining available for repurchase of our
common stock under this stock repurchase program.
*Contract was open, as of Dec. 31, 2023.
Fiscal 2024 Business
Outlook
Turning to our outlook, assuming no circumstances occur beyond
our control, we provide the following framework for Q1 and fiscal
2024:
First quarter 2024
outlook:
- For Q1’24, we expect our worldwide revenues to be in the range
of $960M to $980M, up slightly from Q4’23.
- We expect clear aligner volume and ASPs to be up slightly
sequentially.
- We expect systems and services revenue to be down slightly
sequentially, although less than the historical seasonal decline
given the launch of the iTero Lumina™ for ortho workflows in
Q1’24.
- We expect our Q1’24 GAAP operating margin and non-GAAP
operating margin to be slightly above Q1’23 GAAP operating margin
and non-GAAP operating margin, respectively.
Full year 2024 outlook:
- We expect our 2024 total revenues to be up mid-single digits
over 2023.
- We expect our 2024 clear aligner and systems and services
revenues to grow year over year in the same approximate range as
2024 total revenues.
- We expect our 2024 clear aligner ASPs to be up slightly
year-over-year, primarily due to price increases and favorable
foreign exchange, partially offset by a higher mix of
non-comprehensive products which have lower ASPs.
- We expect our full year 2024 GAAP operating margin and non-GAAP
operating margin to be slightly above the 2023 GAAP operating
margin and non-GAAP operating margin, respectively.
- For 2024, we expect investments in capital expenditures to be
approximately $100M. Capital expenditures are expected to primarily
relate to building construction and improvements as well as
manufacturing capacity in support of our continued expansion.
Align Web Cast and Conference
Call
We will host a conference call today, January 31, 2024, at 4:30
p.m. ET, 2:30 p.m. MT, to review our fourth quarter and full year
2023 results, discuss future operating trends, and our business
outlook. The conference call will also be webcast live via the
Internet. To access the webcast, go to the "Events &
Presentations" section under Company Information on Align's
Investor Relations website at http://investor.aligntech.com. To
access the conference call, participants may register for the call
by clicking here. Once registered, participants will receive an
email with dial-in number and unique PIN number to access the live
event. An archived audio webcast will be available 2 hours after
the call's conclusion and will remain available for one month.
About Non-GAAP Financial
Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with generally
accepted accounting principles in the United States ("GAAP"), we
may provide investors with certain non-GAAP financial measures
which may include constant currency net revenues, constant currency
gross profit, constant currency gross margin, constant currency
income from operations, constant currency operating margin, gross
profit, gross margin, operating expenses, income from operations,
operating margin, interest income and other income (expense), net,
net income before provision for income taxes, provision for income
taxes, effective tax rate, net income and/or diluted net income per
share, which excludes certain items that may not be indicative of
our fundamental operating performance including, foreign currency
exchange rate impacts and discrete cash and non-cash charges or
gains that are included in the most directly comparable GAAP
measure. In Q4'22, we changed to a long-term non-GAAP effective tax
rate in our computation of the non-GAAP income tax provision to
provide better consistency across reporting periods. Our previous
methodology for calculating our non-GAAP effective tax rate
included certain non-recurring and period-specific items, that
produced fluctuating effective tax rates that management does not
believe are reflective of the Company's long-term effective tax
rate. We have given effect to this new methodology effective
January 1, 2022. Unless otherwise indicated, when we refer to
non-GAAP financial measures they will exclude the effects of
stock-based compensation, amortization of certain acquired
intangibles, restructuring and other charges, acquisition-related
costs, and associated tax impacts.
Our management believes that the use of certain non-GAAP
financial measures provides meaningful supplemental information
regarding our recurring core operating performance. We believe that
both management and investors benefit from referring to these
non-GAAP financial measures in assessing our performance and when
planning, forecasting, and analyzing future periods. We believe
these non-GAAP financial measures are useful to investors both
because (1) they allow for greater transparency with respect to key
metrics used by management in its financial and operational
decision-making and (2) they are used by our institutional
investors and the analyst community to help them analyze the
performance of our business.
There are limitations to using non-GAAP financial measures as
they are not prepared in accordance with GAAP and may be different
from non-GAAP financial measures used by other companies. The
non-GAAP financial measures are limited in value because they
exclude certain items that may have a material impact upon our
reported financial results. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which charges are excluded from the non-GAAP
financial measures. We compensate for these limitations by
analyzing current and future results on a GAAP as well as a
non-GAAP basis and also by providing GAAP measures in our public
disclosures. The presentation of non-GAAP financial information is
meant to be considered in addition to, not as a substitute for or
in isolation from, the directly comparable financial measures
prepared in accordance with GAAP. We urge investors to review the
reconciliation of our GAAP financial measures to the comparable
non-GAAP financial measures included herein and not to rely on any
single financial measure to evaluate our business. For more
information on these non-GAAP financial measures, please see the
tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
About Align Technology,
Inc.
Align Technology designs and manufactures the Invisalign®
system, the most advanced clear aligner system in the world, iTero™
intraoral scanners and services, and exocad™ CAD/CAM software.
These technology building blocks enable enhanced digital
orthodontic and restorative workflows to improve patient outcomes
and practice efficiencies for over 256 thousand doctor customers
and are key to accessing Align’s 600 million consumer market
opportunity worldwide. Over the past 26 years, Align has helped
doctors treat approximately 17 million patients with the Invisalign
system and is driving the evolution in digital dentistry through
the Align Digital Platform™, our integrated suite of unique,
proprietary technologies and services delivered as a seamless,
end-to-end solution for patients and consumers, orthodontists and
GP dentists, and lab/partners. Visit www.aligntech.com for more
information.
For additional information about the Invisalign system or to
find an Invisalign doctor in your area, please visit
www.invisalign.com. For additional information about the iTero
digital scanning system, please visit www.itero.com. For additional
information about exocad dental CAD/CAM offerings and a list of
exocad reseller partners, please visit www.exocad.com.
Invisalign, iTero, exocad, Align, Align Digital Platform, iTero
Element and iTero-exocad Connector are trademarks of Align
Technology, Inc.
Forward-Looking
Statements
This news release, including the tables below, contains
forward-looking statements, including statements of beliefs and
expectations regarding anticipated capital expenditures, clear
aligner volumes, clear aligner ASPs, iTero scanner and services
revenue, total revenues and operating margin, customer and consumer
demand trends and market opportunities, our ability to successfully
control our business and operations and pursue our strategic growth
drivers, our expectations regarding the timing and impact of new
products and technologies, our beliefs for the impacts of our stock
repurchase programs and our ability to generate cash flow, and our
beliefs regarding the trajectory of our business. Forward-looking
statements contained in this news release relating to expectations
about future events or results are based upon information available
to Align as of the date hereof. Readers are cautioned that these
forward-looking statements reflect our best judgments based on
currently known facts and circumstances and are subject to risks,
uncertainties, and assumptions that are difficult to predict. As a
result, actual results may differ materially and adversely from
those expressed in any forward-looking statement.
Factors that might cause such a difference include, but are not
limited to:
- macroeconomic conditions, including inflation, fluctuations in
currency exchange rates, rising interest rates, market volatility,
weakness in general economic conditions and recessions and the
impact of efforts by central banks and federal, state and local
governments to combat inflation and recession;
- customer and consumer purchasing behavior and changes in
consumer spending habits as a result of, among other things,
prevailing macro-economic conditions, levels of employment,
salaries and wages, debt obligations, discretionary income,
inflationary pressure, declining consumer confidence, and military
conflicts in Ukraine and the Middle East;
- the economic and geopolitical ramifications of the hostilities
in the Middle East as well as the military conflict in Ukraine,
including sanctions, retaliatory sanctions, nationalism, supply
chain disruptions and other consequences, any of which may or will
continue to adversely impact our operations and assets and our
research and development activities;
- variations in our product mix, product adoption and selling
prices regionally and globally;
- competition from existing and new competitors;
- declines in, or the slowing of growth of, sales of our clear
aligners or intraoral scanners domestically and/or internationally
and the impact either would have on the adoption of Invisalign
products;
- the timing and availability and cost of raw materials,
components, products and other shipping and supply chain
constraints, disruptions or costs;
- unexpected or rapid changes in the growth or decline of our
domestic and/or international markets;
- rapidly evolving and groundbreaking advances that fundamentally
alter the dental industry or the way new and existing customers
market and provide products and services to consumers;
- the ability to protect and enforce our intellectual property
rights;
- continued compliance with regulatory requirements;
- the willingness and ability of our customers to maintain and/or
increase product utilization;
- the possibility that the development and release of new
products or enhancements to existing products do not proceed in
accordance with the anticipated timeline or may themselves contain
bugs, errors or defects in software or hardware requiring
remediation and that the market for the sale of these new or
enhanced products may not develop as expected;
- a tougher consumer demand environment in China generally,
especially for manufacturers and service providers whose
headquarters or primary operations are not based in China;
- the risks relating to our ability to sustain or increase
profitability or revenue growth in future periods (or minimize
declines) while controlling expenses;
- expansion of our business and products;
- the impact of excess or constrained capacity at our
manufacturing and treat operations facilities and pressure on our
internal systems and personnel;
- the compromise of our systems or networks, including any
customer and/or patient data contained therein, for any
reason;
- the timing of case submissions from our doctor customers within
a quarter as well as an increased manufacturing costs per
case;
- foreign operational, political, military and other risks
relating to our operations; and
- the loss of key personnel, labor shortages or work stoppages
for us or our suppliers.
The foregoing and other risks are detailed from time to time in
our periodic reports filed with the Securities and Exchange
Commission, including, but not limited to, our Annual Report on
Form 10-K for the year ended December 31, 2022, which was filed
with the Securities and Exchange Commission ("SEC") on February 27,
2023 and our latest Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, which was filed with the SEC on November
3, 2023. Align undertakes no obligation to revise or update
publicly any forward-looking statements for any reason.
ALIGN TECHNOLOGY, INC. UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net revenues
$
956,726
$
901,515
$
3,862,260
$
3,734,635
Cost of net revenues
287,202
283,814
1,155,397
1,100,860
Gross profit
669,524
617,701
2,706,863
2,633,775
Operating expenses:
Selling, general and administrative
402,503
410,067
1,703,379
1,674,469
Research and development
82,160
83,520
346,830
305,258
Restructuring and other charges
13,316
11,453
13,316
11,453
Total operating expenses
497,979
505,040
2,063,525
1,991,180
Income from operations
171,545
112,661
643,338
642,595
Interest income and other income
(expense), net:
Interest income
4,978
2,760
17,258
5,367
Other income (expense), net
(3,643
)
(100
)
(19,392
)
(48,905
)
Total interest income and other income
(expense), net
1,335
2,660
(2,134
)
(43,538
)
Net income before provision for income
taxes
172,880
115,321
641,204
599,057
Provision for income taxes
48,866
73,546
196,151
237,484
Net income
$
124,014
$
41,775
$
445,053
$
361,573
Net income per share:
Basic
$
1.64
$
0.54
$
5.82
$
4.62
Diluted
$
1.64
$
0.54
$
5.81
$
4.61
Shares used in computing net income per
share:
Basic
75,703
77,541
76,426
78,190
Diluted
75,802
77,683
76,568
78,420
ALIGN TECHNOLOGY, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands)
December 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
937,438
$
942,050
Marketable securities, short-term
35,304
57,534
Accounts receivable, net
903,424
859,685
Inventories
296,902
338,752
Prepaid expenses and other current
assets
273,550
226,370
Total current assets
2,446,618
2,424,391
Marketable securities, long-term
8,022
41,978
Property, plant and equipment, net
1,290,863
1,231,855
Operating lease right-of-use assets,
net
117,999
118,880
Goodwill
419,530
407,551
Intangible assets, net
82,118
95,720
Deferred tax assets
1,590,045
1,571,746
Other assets
128,682
55,826
Total assets
$
6,083,877
$
5,947,947
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
113,125
$
127,870
Accrued liabilities
525,780
454,374
Deferred revenues
1,427,706
1,343,643
Total current liabilities
2,066,611
1,925,887
Income tax payable
116,744
124,393
Operating lease liabilities
96,968
100,334
Other long-term liabilities
173,065
195,975
Total liabilities
2,453,388
2,346,589
Total stockholders’ equity
3,630,489
3,601,358
Total liabilities and stockholders’
equity
$
6,083,877
$
5,947,947
ALIGN TECHNOLOGY, INC. UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
Year Ended December
31,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by operating
activities
$
785,776
$
568,732
CASH FLOWS FROM INVESTING
ACTIVITIES
Net cash used in investing activities
(195,943
)
(213,316
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used in financing activities
(598,340
)
(501,686
)
Effect of foreign exchange rate changes on
cash, cash equivalents, and restricted cash
4,671
(11,514
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(3,836
)
(157,784
)
Cash, cash equivalents, and restricted
cash at beginning of the period
942,355
1,100,139
Cash, cash equivalents, and restricted
cash at end of the period
$
938,519
$
942,355
ALIGN TECHNOLOGY, INC. INVISALIGN BUSINESS METRICS
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2022
2022
2022
2022
2023
2023
2023
2023
Number of Invisalign Trained Doctors
Cases Were Shipped To
82,445
82,290
84,430
82,895
82,730
83,440
85,195
83,700
Invisalign Trained Doctor Utilization
Rates*:
North America
9.4
9.6
9.2
9.2
9.5
9.8
9.6
9.1
North American Orthodontists
27.8
28.1
27.6
26.7
28.7
29.2
28.8
25.9
North American GP Dentists
5.0
5.1
4.8
5.0
4.9
5.2
4.9
5.0
International
6.4
6.4
6.0
6.5
6.2
6.6
6.1
6.5
Total Utilization Rates**
7.3
7.4
7.0
7.2
7.1
7.5
7.1
7.1
Clear Aligner Revenue Per Case
Shipment***:
$
1,335
$
1,315
$
1,245
$
1,225
$
1,335
$
1,335
$
1,320
$
1,320
* # of cases shipped / # of doctors to whom cases were shipped
** LATAM utilization rate is not separately disclosed but included
in the total utilization rates *** Clear Aligner revenues / Case
shipments as of Q4'23 Note: During the third quarter of 2023, we
began including Touch Up cases revenues that were previously
included in Non-Case revenues and have recast business metrics for
the periods presented above accordingly.
ALIGN TECHNOLOGY, INC. STOCK-BASED COMPENSATION (in
thousands)
Q1
Q2
Q3
Q4
Fiscal
Q1
Q2
Q3
Q4
Fiscal
2022
2022
2022
2022
2022
2023
2023
2023
2023
2023
Stock-based Compensation (SBC):
SBC included in Gross Profit
$
1,514
$
1,614
$
1,651
$
1,659
$
6,438
$
1,807
$
1,901
$
1,974
$
1,780
$
7,462
SBC included in Operating Expenses
30,107
32,526
31,267
33,029
126,929
35,928
35,959
37,628
37,049
$
146,564
Total SBC
$
31,621
$
34,140
$
32,918
$
34,688
$
133,367
$
37,735
$
37,860
$
39,602
$
38,829
$
154,026
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP
RECONCILIATION+ CONSTANT CURRENCY NET REVENUES (in thousands,
except percentages)
Sequential constant currency analysis:
Three Months Ended
December 31, 2023
September 30, 2023
Impact % of Revenue
GAAP net revenues
$
956,726
$
960,214
Constant currency impact (1)
12,782
1.3
%
Constant currency net revenues
(1)
$
969,508
GAAP Clear Aligner net revenues
$
781,912
$
794,939
Clear Aligner constant currency impact
(1)
10,711
1.4
%
Clear Aligner constant currency net
revenues (1)
$
792,623
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
174,814
$
165,275
Imaging Systems and CAD/CAM Services
constant currency impact (1)
2,071
1.2
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
176,885
Year-over-year constant currency analysis:
Three Months Ended
December 31,
2023
2022
Impact % of Revenue
GAAP net revenues
$
956,726
$
901,515
Constant currency impact (1)
(13,818
)
(1.5
) %
Constant currency net revenues
(1)
$
942,908
GAAP Clear Aligner net revenues
$
781,912
$
731,654
Clear Aligner constant currency impact
(1)
(11,957
)
(1.6
) %
Clear Aligner constant currency net
revenues (1)
$
769,955
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
174,814
$
169,861
Imaging Systems and CAD/CAM Services
constant currency impact (1)
(1,860
)
(1.1
) %
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
172,954
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ CONSTANT CURRENCY NET REVENUES CONTINUED (in thousands,
except percentages)
Current year versus prior year constant currency analysis:
Year Ended December
31,
2023
2022
Impact % of Revenue
GAAP net revenues
$
3,862,260
$
3,734,635
Constant currency impact (1)
36,267
0.9
%
Constant currency net revenues
(1)
$
3,898,527
GAAP Clear Aligner net revenues
$
3,199,329
$
3,072,585
Clear Aligner constant currency impact
(1)
29,683
0.9
%
Clear Aligner constant currency net
revenues (1)
$
3,229,012
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
662,931
$
662,050
Imaging Systems and CAD/CAM Services
constant currency impact (1)
6,583
1.0
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
669,514
Note: (1) We define constant currency net revenues as total net
revenues excluding the effect of foreign exchange rate movements
and use it to determine the percentage for the constant currency
impact on net revenues on a sequential, year-over-year and current
year versus prior year basis. Constant currency impact in dollars
is calculated by translating the current period GAAP net revenues
using the foreign currency exchange rates that were in effect
during the previous comparable period and subtracting it by the
current period GAAP net revenues. The percentage for the constant
currency impact on net revenues is calculated by dividing the
constant currency impact in dollars (numerator) by constant
currency net revenues in dollars (denominator). (+) Changes and
percentages are based on actual values. Certain tables may not sum
or recalculate due to rounding. Refer to "About Non-GAAP Financial
Measures" section of press release.
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN (in
thousands, except percentages)
Sequential constant currency analysis:
Three Months Ended
December 31, 2023
September 30,
2023
GAAP gross profit
$
669,524
$
663,076
Constant currency impact on net
revenues
12,782
Constant currency gross profit
$
682,306
Three Months Ended
December 31, 2023
September 30,
2023
GAAP gross margin
70.0
%
69.1
%
Gross margin constant currency impact
(1)
0.4
Constant currency gross margin
(1)
70.4
%
Year-over-year constant currency analysis:
Three Months Ended
December 31,
2023
2022
GAAP gross profit
$
669,524
$
617,701
Constant currency impact on net
revenues
(13,805
)
Constant currency gross profit
$
655,719
Three Months Ended
December 30,
2023
2022
GAAP gross margin
70.0
%
68.5
%
Gross margin constant currency impact
(1)
(0.4
)
Constant currency gross margin
(1)
69.5
%
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN (in
thousands, except percentages)
Current year versus prior year constant currency analysis:
Year Ended December
31,
2023
2022
GAAP gross profit
$
2,706,863
$
2,633,775
Constant currency impact on net
revenues
36,310
Constant currency gross profit
$
2,743,174
Year Ended December
31,
2023
2022
GAAP gross margin
70.1
%
70.5
%
Constant currency impact on net
revenues(1)
0.3
Constant currency gross
margin(1)
70.4
%
Note:
(1) We define constant currency gross margin as constant
currency gross profit as a percentage of constant currency net
revenues. Gross margin constant currency impact is the increase or
decrease in constant currency gross margin compared to the GAAP
gross margin. (+) Changes and percentages are based on actual
values. Certain tables may not sum or recalculate due to rounding.
Refer to "About Non-GAAP Financial Measures" section of press
release.
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING
MARGIN (in thousands, except percentages)
Sequential constant currency analysis:
Three Months Ended
December 31, 2023
September 30,
2023
GAAP income from operations
$
171,545
$
166,346
Income from operations constant currency
impact (1)
8,226
Constant currency income from
operations (1)
$
179,771
Three Months Ended
December 31, 2023
September 30,
2023
GAAP operating margin
17.9
%
17.3
%
Operating margin constant currency impact
(2)
0.6
Constant currency operating margin
(2)
18.5
%
Year-over-year constant currency analysis:
Three Months Ended
December 31,
2023
2022
GAAP income from operations
$
171,545
$
112,661
Income from operations constant currency
impact (1)
(8,305
)
Constant currency income from
operations (1)
$
163,240
Three Months Ended
December 31,
2023
2022
GAAP operating margin
17.9
%
12.5
%
Operating margin constant currency impact
(2)
(0.6
)
Constant currency operating margin
(2)
17.3
%
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING
MARGIN CONTINUED (in thousands, except percentages)
Current year versus prior year constant currency analysis:
Year Ended December
31,
2023
2022
GAAP income from operations
$
643,338
$
642,595
Income from operations constant currency
impact (1)
31,988
Constant currency income from
operations (1)
$
675,326
Year Ended December
31,
2023
2022
GAAP operating margin
16.7
%
17.2
%
Operating margin constant currency impact
(2)
0.7
Constant currency operating margin
(2)
17.3
%
Notes:
(1) We define constant currency income from operations as GAAP
income from operations excluding the effect of foreign exchange
rate movements for GAAP net revenues and operating expenses on a
sequential, year-over-year and current year versus prior year
basis. Constant currency impact in dollars is calculated by
translating the current period GAAP net revenues and operating
expenses using the foreign currency exchange rates that were in
effect during the previous comparable period and subtracting it by
the current period GAAP net revenues and operating expenses. (2) We
define constant currency operating margin as constant currency
income from operations as a percentage of constant currency net
revenues. Operating margin constant currency impact is the increase
or decrease in constant currency operating margin compared to the
GAAP operating margin. (+) Changes and percentages are based on
actual values. Certain tables may not sum or recalculate due to
rounding. Refer to "About Non-GAAP Financial Measures" section of
press release.
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED+ FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY (in
thousands, except per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
GAAP gross profit
$
669,524
$
617,701
$
2,706,863
$
2,633,775
Stock-based compensation
1,780
1,659
7,462
6,438
Amortization of intangibles (1)
2,773
2,610
11,182
10,134
Restructuring charges (2)
673
2,866
673
2,866
Non-GAAP gross profit
$
674,750
$
624,836
$
2,726,180
$
2,653,213
GAAP gross margin
70.0
%
68.5
%
70.1
%
70.5
%
Non-GAAP gross margin
70.5
%
69.3
%
70.6
%
71.0
%
GAAP total operating expenses
$
497,979
$
505,040
$
2,063,525
$
1,991,180
Stock-based compensation
(37,049
)
(33,029
)
(146,564
)
(126,929
)
Amortization of intangibles (1)
(866
)
(810
)
(3,497
)
(3,417
)
Restructuring and other charges (2)
(13,316
)
(11,453
)
(13,316
)
(11,453
)
Non-GAAP total operating
expenses
$
446,748
$
459,748
$
1,900,148
$
1,849,381
GAAP income from operations
$
171,545
$
112,661
$
643,338
$
642,595
Stock-based compensation
38,829
34,688
154,026
133,367
Amortization of intangibles (1)
3,639
3,420
14,679
13,551
Restructuring and other charges (2)
13,989
14,319
13,989
14,319
Non-GAAP income from operations
$
228,002
$
165,088
$
826,032
$
803,832
GAAP operating margin
17.9
%
12.5
%
16.7
%
17.2
%
Non-GAAP operating margin
23.8
%
18.3
%
21.4
%
21.5
%
GAAP net income before provision for
income taxes
$
172,880
$
115,321
$
641,204
$
599,057
Stock-based compensation
38,829
34,688
154,026
133,367
Amortization of intangibles (1)
3,639
3,420
14,679
13,551
Restructuring and other charges (2)
13,989
14,319
13,989
14,319
Non-GAAP net income before provision
for income taxes
$
229,337
$
167,748
$
823,898
$
760,294
ALIGN TECHNOLOGY, INC. UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED
(in thousands, except per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
GAAP provision for income taxes
$
48,866
$
73,546
$
196,151
$
237,484
Tax impact on non-GAAP adjustments (3)
(2,998
)
(39,997
)
(31,415
)
(85,426
)
Non-GAAP provision for income taxes
(3)
$
45,868
$
33,549
$
164,736
$
152,058
GAAP effective tax rate
28.3
%
63.8
%
30.6
%
39.6
%
Non-GAAP effective tax rate (3)
20.0
%
20.0
%
20.0
%
20.0
%
GAAP net income
$
124,014
$
41,775
$
445,053
$
361,573
Stock-based compensation
38,829
34,688
154,026
133,367
Amortization of intangibles (1)
3,639
3,420
14,679
13,551
Restructuring and other charges (2)
13,989
14,319
13,989
14,319
Tax impact on non-GAAP adjustments (3)
2,998
39,997
31,415
85,426
Non-GAAP net income (3)
$
183,469
$
134,199
$
659,162
$
608,236
GAAP diluted net income per
share
$
1.64
$
0.54
$
5.81
$
4.61
Non-GAAP diluted net income per share
(3)
$
2.42
$
1.73
$
8.61
$
7.76
Shares used in computing diluted net
income per share
75,802
77,683
76,568
78,420
Notes: (1) Amortization of intangible assets related to certain
acquisitions (2) During the fourth quarters of 2022 and 2023, we
initiated restructuring plans to increase efficiencies across the
organization and lower the overall cost structure. Restructuring
charges recorded to Cost of net revenues and operating expenses
primarily related to post-employment benefits, lease termination
charges and asset impairments in 2022 and post-employment benefits
in 2023. (3) In Q4'22, we changed our methodology for the
computation of the non-GAAP effective tax rate to a long-term
projected tax rate and have given effect to the new methodology
from January 1, 2022. (+) Changes and percentages are based on
actual values. Certain tables may not sum or recalculate due to
rounding. Refer to "About Non-GAAP Financial Measures" section of
press release.
ALIGN TECHNOLOGY, INC. Q1 2024 OUTLOOK - GAAP TO NON-GAAP
RECONCILIATION
GAAP Operating Margin
slightly above 14.2%
Stock-based compensation
~4.0%
Amortization of intangibles (1)
~0.4%
Non-GAAP Operating Margin
slightly above 18.5%
ALIGN TECHNOLOGY, INC. FISCAL 2024 OUTLOOK - GAAP TO NON-GAAP
RECONCILIATION
GAAP Operating Margin
slightly above 16.7%
Stock-based compensation
~4.4%
Amortization of intangibles (1)
~0.4%
Non-GAAP Operating Margin
slightly above 21.4%
(1) Amortization of intangible assets related to certain
acquisitions
Refer to "About Non-GAAP Financial Measures" section of press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131111055/en/
Align Technology Madelyn Valente
(909) 833-5839 mvalente@aligntech.com
Zeno Group Sarah Johnson (828)
551-4201 sarah.johnson@zenogroup.com
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