Guidance Reduction and ASP Decline
Q: Why did you lower guidance and see ASP declines?
A: John Morici explained that the guidance reduction is due to unfavorable foreign exchange impacts and a mix shift toward lower-priced products preferred by customers. - Over 1 percentage point of the reduction is related to foreign exchange. - Customers are buying more lower-priced products, like the Doctor Subscription Program, which has a lower ASP but better gross margins. -

Impact of iTero Restorative Launch Delay
Q: Did the delay of the iTero restorative launch impact guidance?
A: Yes, the full launch of Lumina restorative has been pushed to next year, and the expected revenue for this year was part of the guidance reduction. - The delay accounts for slightly less than 1% of total revenue. -

Non-GAAP EBIT Margin Outlook
Q: How can margins improve despite lower revenue guidance?
A: John Morici stated that despite the lower revenue, they expect operating margins to be slightly up due to better gross margins from lower-stage products with lower ASPs but higher margins. - The company is mindful of operating expenses and aims to deliver volume while maintaining profitability. -

Mix Shift to Lower-Priced Products
Q: Are customers' preference for lower-priced products a concern?
A: Joe Hogan explained that the shift is a response to market demands; offering a variety of products at different price points meets customer needs globally. - The lower ASPs are offset by better margins, and the company is not seeing market-driven price declines but adapting to customer preferences. -

Doctor Utilization Increase
Q: What drove the increase in doctors shipped to number?
A: Joe Hogan noted that the number of doctors increased to over 86,000, reflecting efforts to expand the doctor base and increase utilization. - Growth occurred globally, demonstrating success in attracting new doctors and re-engaging previous ones. -

Direct Manufacturing (Direct Fab) Timeline
Q: What's the timeline for scaling direct fabrication?
A: Joe Hogan indicated that scaling direct fabrication is expected over the next 2 to 3 years. - The process involves significant equipment work and sourcing new resin, requiring time to ensure efficiency and capacity. -

China Market Performance
Q: How did China perform and what's the outlook?
A: Joe Hogan stated that China's performance met expectations, particularly in private Tier 1 and Tier 2 cities. - The team anticipates a strong teen quarter in the third quarter, which is historically the largest for China. -

Adult Case Volume and Macro Environment
Q: What's the trend in adult case volumes and macro expectations?
A: The company saw growth in adult cases, with the highest volume in many quarters. - They expect market stability and are pleased with progress in the GP (General Practitioner) business and DSOs (Dental Service Organizations). -

Teen Cases Growth
Q: Can you elaborate on the acceleration in teen cases?
A: Teen cases grew over 8% quarter-over-quarter and year-over-year. - Growth was strong globally, reflecting adoption of various products and new doctors entering the ecosystem. -

Initiatives Affecting ASP and Volume
Q: How do recent initiatives impact ASP and volume?
A: Changes to the Advantage program aim to drive utilization by providing structure and incentives for doctors to do more cases. - Programs like the Costco pilot are designed to improve conversion by connecting potential patients with doctors. - These initiatives may affect ASP due to product mix but are intended to boost overall volume and margins. -