Margin Outlook
Q: When will operating margins return to pre-COVID levels?
A: To get margins back up to pre-COVID levels (~25%), we need volume leverage. As volume increases, we'll see operational benefits reflected in our numbers. We're focused on driving growth to achieve this leverage. -

CapEx and Gross Margin Benefits
Q: CapEx guidance is low. When will we see gross margin benefits from 3D printing initiatives?
A: CapEx is lower this year ($100 million) because prior years included significant building investments. With direct 3D printing, we feel confident that as we scale, costs decrease. It's a 1- to 3-year journey to scale technologies like Cubicure, and we'll start seeing benefits as we scale up, but exact timing is hard to specify. -

Impact of New Products on Guidance
Q: Are new products like Lumina and IPE included in 2024 guidance, or is impact more in 2025?
A: It's a ramp starting in 2024. We feel we can play offense with these new products, but need time to scale. Lumina is a new platform, and scaling IP is necessary. This sets a good foundation for future growth, but it's difficult to quantify their impact in current guidance. -

Adult Market and Gross Margin
Q: Are adults returning for treatment? Will noncomprehensive mix benefit gross margin in 2024?
A: We see a more stable economic platform and expect adult trends to continue positively in 2024. Noncomprehensive treatments have lower ASPs but are our highest gross margin products. We expect benefits in gross margin similar to operating margin improvements year-over-year. -

China Sales Performance
Q: How has China revenue performed recently?
A: We felt good about our performance in China last year, benefiting from favorable year-over-year comparisons due to prior COVID shutdowns. As we move into 2024, we feel good about our competitive position in a more predictable China market without the COVID overhead of previous years. -

DSP Growth Expectations
Q: Is there another step function in DSP growth coming? Where do you see it going?
A: DSP has been successful, and as more doctors sign up and see benefits, utilization increases. We're scaling DSP to other parts of the world beyond North America, like EMEA. It's about expanding the program globally to help doctors run their practices efficiently. -

Teens Gaining Share
Q: What's driving share gains against brackets and wires in teens?
A: Multiple factors contribute, including the teen guarantee program, our comprehensive portfolio, DSP programs, and the uniqueness of Invisalign First. These initiatives, along with increased confidence from a firmer economic platform, are helping us gain share. -

Cash Flow Weakness in Q4
Q: Why was operating cash flow weak in Q4?
A: The weakness relates to timing of items like tax payments during the year. Overall, we feel great about our cash flow generation, which gives us flexibility. We used $350 million for share buybacks last quarter. -

Systems & Services Revenue
Q: The revenue guidance for Systems and Services seems low. Can you elaborate?
A: We're expecting mid-single-digit growth in Systems and Services. While Lumina helps, there are macroeconomic uncertainties. We were pleased with Q4 performance but want to ensure proper positioning as we ramp up Lumina. We'll provide updates as we proceed. -

Lumina and iTero Upgrades
Q: Can Lumina kick off a multiyear iTero upgrade cycle?
A: Yes. Lumina is a brand-new platform designed to facilitate upgrades. With 100,000 units sold and about one-third being 5D pluses (upgradeable with a simple switch), we're well-positioned to initiate this upgrade cycle. We've also been aggressively upgrading our installed base to prepare for this move. -

Cubicure and 3D Printing Roadmap
Q: What's the roadmap for Cubicure and Direct 3D printing over the next few years?
A: It's a 1- to 3-year journey to scale up. We know how to make the aligners, but scaling the resin and Cubicure process takes time. We'll report quarterly on our progress, hurdles, and opportunities. -

Adult Volume Growth Assumptions
Q: Is adult volume growth expected to be flat or down in 2024?
A: Both teen and adult segments are expected to be positive year-over-year. We anticipate adults may grow faster than teens, as we've seen in the past, with both contributing to growth. -

Q1 Operating Margin Dip
Q: Why is there a dip in operating margins in Q1?
A: In Q1, we incur certain expenses at the beginning of the year, like payroll taxes and initial investments, which we then leverage throughout the year. This is similar to how expenses were positioned last year in 2023. -

Upfront Costs for Lumina and IPE
Q: Will launches of Lumina and IPE impact margins due to upfront costs?
A: There are some ramp-up expenses in Q1, but not a significant one-time cost. These expenses are factored into our guidance, and we expect year-over-year margins in Q1 to be slightly up, with these costs included. -

DTC Customers and DSO Relationships
Q: Are DTC customers contributing materially? Any changes in DSO relationships?
A: DTC hasn't been our focus, but patients may now seek treatment through doctors more than DTC. We're supporting these customers, but it's hard to quantify the impact now. DSO relationships have strengthened globally, with good partnerships helping both us and the DSOs grow. -

Retainers First in 3D Printing Scale-up
Q: Are some products more amenable to early scaling in 3D printing?
A: Yes. We're focusing on retainers first because they're individual units, making initial scaling more manageable. We'll ramp up from there to comprehensive full cases. -

Upgrade Fee for Lumina
Q: Is there a fee to upgrade from 5D plus to Lumina?
A: Yes, there is a cost to upgrade; it's not free. -

Regional Growth Outlook
Q: Can you break out the 2024 growth outlook between Americas and International?
A: We won't break it out between regions. We felt good about performance across all geographies, especially in the latter half of Q4. We're looking at a stable economic platform globally and feel good about our new products. -

IPE and Lumina Ramp-up
Q: Any key quarters or catalysts for ramping up IPE and Lumina?
A: For Lumina, the restorative scanner for GPs launches in Q3, but sales depend on regulatory approvals worldwide. Currently, we have approvals in the U.S., Canada, and ANZ. For IPE, regulatory constraints apply, with a launch in Q2 in Australia. It's a gradual ramp-up over time. -