cb0ace8d58e68b5ce859b7ee321ecba44ea53a57d8f5729097621f70d0d87b02

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Clear Aligner Segment | **731.7**  **[0001097149-23-000005_algn-q422earningspressrele.htm:0]**  | **789.8**  **[0001097149-23-000046_algn-20230331.htm:27]**  | **832.7**  **[0001097149-23-000054_algn-q223earningspressrele.htm:0]**  | **794.9**  **[0001097149-23-000075_algn-q323earningspressrele.htm:0]**  | **781.9**  **[0001097149-24-000007_algn-q423earningspressrele.htm:1]**  | **817.3**  **[0001097149-24-000026_algn-q124earningspressrele.htm:0]**  | **831.7**  **[0001097149-24-000045_algn-q224earningspressrele.htm:0]**  | **786.8**  **[0001097149-24-000053_algn-q324earningspressrele.htm:0]**  |
| Systems and Services Segment | **169.9**  **[0001097149-23-000005_algn-q422earningspressrele.htm:0]**  | **153.3**  **[0001097149-23-000046_algn-20230331.htm:27]**  | **169.5**  **[0001097149-23-000054_algn-q223earningspressrele.htm:0]**  | **165.3**  **[0001097149-23-000075_algn-q323earningspressrele.htm:0]**  | **174.8**  **[0001097149-24-000007_algn-q423earningspressrele.htm:1]**  | **180.2**  **[0001097149-24-000026_algn-q124earningspressrele.htm:0]**  | **196.8**  **[0001097149-24-000045_algn-q224earningspressrele.htm:0]**  | **191.0**  **[0001097149-24-000053_algn-q324earningspressrele.htm:0]**  |
| Total Net Revenues | **901.5**  **[0001097149-23-000005_algn-q422earningspressrele.htm:0]**  | **943.1**  **[0001097149-23-000046_algn-20230331.htm:27]**  | **1,002.2**  **[0001097149-23-000054_algn-q223earningspressrele.htm:0]**  | **960.2**  **[0001097149-23-000075_algn-q323earningspressrele.htm:0]**  | **956.7**  **[0001097149-24-000007_algn-q423earningspressrele.htm:1]**  | **997.4**  **[0001097149-24-000026_algn-q124earningspressrele.htm:0]**  | **1,028.5**  **[0001097149-24-000045_algn-q224earningspressrele.htm:0]**  | **977.9**  **[0001097149-24-000053_algn-q324earningspressrele.htm:0]**  |

6d1d51dcbdf3a61a6e58252d4d2fb5fd22f825c581affc37f97fbde15cd32d0c

| Metric [USD Million] | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2023 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2022 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S.                 | **432.1**  **[0001097149-24-000033_algn-20240331.htm:24]**  | **438.5**  **[0001097149-24-000049_algn-20240630.htm:25]**  | **421.2**  **[0001097149-24-000060_algn-20240930.htm:25]**  | N/A     | **411.1**  **[0001097149-23-000046_algn-20230331.htm:20]**  | N/A     | N/A     | N/A     |
| Switzerland          | **251.8**  **[0001097149-24-000033_algn-20240331.htm:24]**  | **270.9**  **[0001097149-24-000049_algn-20240630.htm:25]**  | **216.6**  **[0001097149-24-000060_algn-20240930.htm:25]**  | N/A     | **313.1**  **[0001097149-23-000046_algn-20230331.htm:20]**  | N/A     | N/A     | N/A     |
| Other International  | **313.6**  **[0001097149-24-000033_algn-20240331.htm:24]**  | **319.0**  **[0001097149-24-000049_algn-20240630.htm:25]**  | **340.0**  **[0001097149-24-000060_algn-20240930.htm:25]**  | N/A     | **218.9**  **[0001097149-23-000046_algn-20230331.htm:20]**  | N/A     | N/A     | N/A     |

e503789dfead904bfd8d46e86958584b8a9e7748e9b115c7ca1f3fd19d8b31c3

| Metric / Quarter                                      | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Invisalign Cases with Digital Scanner in Americas (%) | **92.5**  **[0001097149-23-000013_algn-20221231.htm:79]**  | **93.1**  **[0001097149-23-000046_algn-20230331.htm:26]**  | **94.0**  **[0001097149-23-000059_algn-20230630.htm:29]**  | **94.6**  **[0001097149-23-000082_algn-20230930.htm:30]**  | **95.1**  **[0001097149-24-000011_algn-20231231.htm:79]**  | **95.6**  **[0001097149-24-000033_algn-20240331.htm:30]**  | **95.9**  **[0001097149-24-000049_algn-20240630.htm:32]**  | **96.1**  **[0001097149-24-000060_algn-20240930.htm:31]**  |
| Invisalign Cases Digitally by NA Orthodontists (%)    | **97.4**  **[0001097149-23-000013_algn-20221231.htm:79]**  | **97.7**  **[0001097149-23-000046_algn-20230331.htm:26]**  | **97.9**  **[0001097149-23-000059_algn-20230630.htm:29]**  | **97.9**  **[0001097149-23-000082_algn-20230930.htm:30]**  | **98.0**  **[0001097149-24-000011_algn-20231231.htm:79]**  | **98.2**  **[0001097149-24-000033_algn-20240331.htm:30]**  | **98.2**  **[0001097149-24-000049_algn-20240630.htm:32]**  | **98.2**  **[0001097149-24-000060_algn-20240930.htm:31]**  |
| Utilization Rate NA Orthodontists (cases/doctor)      | **24.8**  **[0001097149-23-000005_algn-q422earningspressrele.htm:9]**  | **26.2**  **[0001097149-23-000046_algn-20230331.htm:26]**  | **26.4**  **[0001097149-23-000059_algn-20230630.htm:29]**  | **28.8**  **[0001097149-23-000082_algn-20230930.htm:30]**  | **25.9**  **[0001097149-24-000007_algn-q423earningspressrele.htm:10]**  | **28.2**  **[0001097149-24-000033_algn-20240331.htm:30]**  | **28.8**  **[0001097149-24-000049_algn-20240630.htm:32]**  | **28.3**  **[0001097149-24-000060_algn-20240930.htm:31]**  |
| Utilization Rate NA GP (cases/doctor)                 | **5.0**  **[0001097149-23-000005_algn-q422earningspressrele.htm:9]**  | **4.9**  **[0001097149-23-000046_algn-20230331.htm:26]**  | **5.2**  **[0001097149-23-000059_algn-20230630.htm:29]**  | **4.9**  **[0001097149-23-000082_algn-20230930.htm:30]**  | **5.0**  **[0001097149-24-000007_algn-q423earningspressrele.htm:10]**  | **4.9**  **[0001097149-24-000033_algn-20240331.htm:30]**  | **5.3**  **[0001097149-24-000049_algn-20240630.htm:32]**  | **5.0**  **[0001097149-24-000060_algn-20240930.htm:31]**  |
| International Doctor Utilization Rate (cases/doctor)  | **6.5**  **[0001097149-23-000005_algn-q422earningspressrele.htm:9]**  | **6.2**  **[0001097149-23-000046_algn-20230331.htm:26]**  | **6.6**  **[0001097149-23-000059_algn-20230630.htm:29]**  | **6.1**  **[0001097149-23-000082_algn-20230930.htm:30]**  | **6.5**  **[0001097149-24-000007_algn-q423earningspressrele.htm:10]**  | **6.3**  **[0001097149-24-000033_algn-20240331.htm:30]**  | **6.7**  **[0001097149-24-000049_algn-20240630.htm:32]**  | **6.2**  **[0001097149-24-000060_algn-20240930.htm:31]**  |

9cad83ac8abd7c5bbfc70ecfbdf69262bd013982d1645f91e3b07ecd7c10fb15

c75a42cac96ed1b6b952c42ca528a0a7d9e07a0992e14f70aacc62861e69f53b

Align Technology, Inc. is a global medical device company specializing in the design, manufacture, and marketing of Invisalign® clear aligners, which are used by orthodontists and general dental practitioners to treat malocclusions, or misaligned teeth **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]**. The company also provides Vivera™ retainers for retention, iTero™ intraoral scanners and services for dentistry, and exocad™ CAD/CAM software for dental laboratories and practitioners **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]**. Align operates through two main segments: Clear Aligner and Imaging Systems and CAD/CAM Services, with the Invisalign system being the principal product line **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]** **[0001097149-24-000049_algn-20240630.htm:54]**.

1. **Clear Aligner** - Develops and markets Invisalign® clear aligners, which are used to treat teeth misalignment by orthodontists and general dental practitioners **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]**.
   - **Vivera™ Retainers** - Offers retainers designed to maintain teeth alignment post-treatment **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]**.
2. **Imaging Systems and CAD/CAM Services** - Provides iTero™ intraoral scanners and services for dental practices, along with exocad™ CAD/CAM software for dental laboratories and practitioners **[0001097149-24-000011_algn-20231231.htm:7]** **[0001097149-24-000011_algn-20231231.htm:104]**.

cb05edcd778f9a39cd00c62629c94404f6f318bbe8a9e2cbe4931a93db4ba995

1. Given the continued sluggish consumer demand in the U.S., especially impacting patient throughput and treatment conversion rates, what specific strategies are you implementing to stimulate growth in your orthodontic and dental channels amid these challenges?

2. With the recent restructuring actions, including the elimination of key executive roles and workforce reductions, how do you plan to maintain operational effectiveness and support your growth initiatives, particularly in scaling critical technologies like direct 3D printing?

3. Considering the pressures on capital equipment sales due to high interest rates and economic conditions, how confident are you in driving adoption of the new Lumina scanner, especially with the upcoming restorative software release, and what measures are you taking to incentivize purchases in this tough market?

4. International markets like China have shown growth for Align, but with geopolitical tensions and varying economic conditions globally, how sustainable is this growth, and what strategies are you employing to mitigate risks and capitalize on opportunities in these regions?

5. As you invest heavily in future technologies amidst a period of economic malaise and restructuring, how are you balancing these long-term investments with the need to deliver margin accretion and meet near-term financial performance expectations?

4cbc37ebd3d96090a9f873944ecf8db44667229a144e3f20cf9918821a25313c

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

0d4f6ef8d21924d212fb56cd739619fdefd9f74206905dc616aa72e012af87bb

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  1. **Worldwide Revenues**: Expected to be in the range of **$995 million to $1.015 billion**  **[ALGN_3403402_8]** .
  2. **Clear Aligner Volume and ASPs**: Expected to be slightly up sequentially  **[ALGN_3403402_8]** .
  3. **Systems and Services Revenues**: Expected to be up sequentially, consistent with typical Q4 seasonality  **[ALGN_3403402_8]** .
  4. **GAAP Operating Margin**: Expected to be slightly lower than **14%**, primarily due to restructuring charges  **[ALGN_3403402_8]** .
  5. **Non-GAAP Operating Margin**: Anticipated to be slightly up sequentially  **[ALGN_3403402_8]** .
  6. **Capital Expenditures for Fiscal 2024**: Expected to be above **$100 million**  **[ALGN_3403402_8]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  - **Q3 2024**:
    1. **Worldwide Revenues**: Expected to be in the range of **$980 million to $1 billion**  **[ALGN_3394147_6]** .
    2. **Clear Aligner Volume**: Expected to be down sequentially  **[ALGN_3394147_6]** .
    3. **Clear Aligner ASPs**: Expected to be down sequentially  **[ALGN_3394147_6]** .
    4. **Systems and Services Revenues**: Expected to be down sequentially  **[ALGN_3394147_6]** .
    5. **GAAP Operating Margin**: Expected to be below Q3 2023  **[ALGN_3394147_6]** .
    6. **Non-GAAP Operating Margin**: Expected to be flat compared to Q3 2023  **[ALGN_3394147_6]** .
  - **FY 2024**:
    1. **Total Revenue Growth**: Expected to be up **4% to 6% year-over-year**  **[ALGN_3394147_7]** .
    2. **GAAP Operating Margin**: Expected to be slightly below 2023  **[ALGN_3394147_7]** .
    3. **Non-GAAP Operating Margin**: Expected to be above 2023  **[ALGN_3394147_7]** .
    4. **Capital Expenditures**: Expected to be approximately **$100 million**  **[ALGN_3394147_7]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  - **Q2 2024**:
    1. **Worldwide Revenues**: Expected to be in the range of **$1.030 billion to $1.050 billion**  **[ALGN_3380474_8]** .
    2. **Clear Aligner Volume**: Expected to be up sequentially  **[ALGN_3380474_8]** .
    3. **Clear Aligner ASP**: Expected to be down slightly sequentially  **[ALGN_3380474_8]** .
    4. **Systems and Services Revenue**: Expected to be up sequentially  **[ALGN_3380474_8]** .
    5. **GAAP and Non-GAAP Operating Margin**: Expected to be slightly above Q1 2024  **[ALGN_3380474_8]** .
  - **FY 2024**:
    1. **Total Revenue Growth**: Expected to be up **6% to 8%** versus 2023  **[ALGN_3380474_8]** .
    2. **Clear Aligner ASPs**: Expected to be slightly up year-over-year  **[ALGN_3380474_9]** .
    3. **GAAP and Non-GAAP Operating Margin**: Expected to be slightly above 2023  **[ALGN_3380474_9]** .
    4. **Capital Expenditures**: Expected to be approximately **$100 million**  **[ALGN_3380474_9]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024
- **Guidance**:
  1. **Worldwide Revenues**: Expected to be in the range of **$960 million to $980 million**  **[ALGN_3371381_7]** .
  2. **Clear Aligner Volume and ASPs**: Expected to be up slightly sequentially  **[ALGN_3371381_7]** .
  3. **Systems and Services Revenue**: Expected to be down slightly sequentially  **[ALGN_3371381_7]** .
  4. **GAAP and Non-GAAP Operating Margin**: Expected to be slightly above Q1 2023  **[ALGN_3371381_7]** .
  5. **Total Revenues for FY 2024**: Expected to be up mid-single digits over 2023  **[ALGN_3371381_7]** .
  6. **Clear Aligner and Systems and Services Revenues**: Expected to grow year-over-year  **[ALGN_3371381_7]** .
  7. **Clear Aligner ASPs**: Expected to be up slightly year-over-year  **[ALGN_3371381_7]** .
  8. **Capital Expenditures**: Expected to be approximately **$100 million**  **[ALGN_3371381_7]** .

801b5ef757c29f81e4898c5663348ab8c072a59fe93a0fe6d92c94e8afe01d66

Invisalign Cases with Digital Scanner in Americas (%)

Invisalign Cases Digitally by NA Orthodontists (%)

Utilization Rate NA Orthodontists (cases/doctor)

Utilization Rate NA GP (cases/doctor)

International Doctor Utilization Rate (cases/doctor)

ac85ab550271d94e7ad1d6c252da01d38501b41f1dd9f988825c92619374a686

- Traditional orthodontic treatments using metal brackets and wires  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Clear aligner products manufactured and distributed by various companies, both within and outside the U.S.  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Direct-to-consumer (DTC) companies providing clear aligners directly to consumers  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Doctors manufacturing retainers and custom clear aligners using 3D printing technology  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Traditional dental conglomerates and companies dedicated primarily to scanner development and sales in the intraoral scanner market  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Traditional PVS impressions used for clear aligner therapy or other dental procedures  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Traditional bite wing 2D dental x-rays for detecting interproximal caries  **[0001097149-24-000011_algn-20231231.htm:28]** .
- Traditional medical device companies, laboratories, startups, and Dental Support Organizations (DSOs) manufacturing custom aligners  **[0001097149-24-000011_algn-20231231.htm:43]** .
- Large consumer product companies potentially supplying orthodontic products  **[0001097149-24-000011_algn-20231231.htm:43]** .

d710aab425450100443abd0d6e46cdd808c726c5b81689f88ad050c6d04f3217

| Program Details           | Program 1                  | Program 2                  |
|---------------------------|----------------------------|----------------------------|
| Approval Date             | May 2021  **[0001097149-24-000060_algn-20240930.htm:21]**                | January 2023  **[0001097149-24-000060_algn-20240930.htm:21]** **[0001097149-24-000060_algn-20240930.htm:78]**         |
| End Date/Duration         | Completed in March 2023  **[0001097149-24-000060_algn-20240930.htm:21]** | No expiration date  **[0001097149-24-000060_algn-20240930.htm:21]** **[0001097149-24-000060_algn-20240930.htm:78]**   |
| Total additional amount   | **$1.0 billion**  **[0001097149-24-000060_algn-20240930.htm:21]**        | **$1.0 billion**  **[0001097149-24-000060_algn-20240930.htm:21]** **[0001097149-24-000060_algn-20240930.htm:78]**     |
| Remaining authorization   | **$0**  **[0001097149-24-000060_algn-20240930.htm:21]**                  | **$225.0 million**  **[0001097149-24-000060_algn-20240930.htm:41]** **[0001097149-24-000060_algn-20240930.htm:25]**   |
| Details                   | Program completed  **[0001097149-24-000060_algn-20240930.htm:21]**       | $275.0 million repurchase planned for Q4 2024-Q1 2025  **[0001097149-24-000060_algn-20240930.htm:41]** **[0001097149-24-000060_algn-20240930.htm:25]**  |

d42d38cf1fdbfa88363499dafd85c6edc802dc00914eea1d8e2bcde23297a07e

U.S.

Switzerland

China

Other International

- Americas

- International

- Non-case

Netherlands

Total Revenue

de17c7224cd49b3661b238fd8818010a59b35897e819422e6a21eb1771818d14

Clear Aligner

Systems and Services

- Scanners and Services

dd298292f894cef074ae2d3a6567731d716c04ac00e06b377399d0f1291dff26

**Quarterly guidance for Q4 2024:**
- **Worldwide Revenues**: $995 million to $1.015 billion  **[ALGN_3403402_8]**  (raised from $980 million to $1.0 billion  **[ALGN_3394147_6]** )  
- **Clear Aligner Volume**: slightly up sequentially  **[ALGN_3403402_8]**  (raised from “down sequentially”  **[ALGN_3394147_6]** )  
- **Clear Aligner ASPs**: slightly up sequentially  **[ALGN_3403402_8]**  (raised from “down sequentially”  **[ALGN_3394147_6]** )  
- **Systems and Services Revenues**: up sequentially  **[ALGN_3403402_8]**  (raised from “down sequentially”  **[ALGN_3394147_6]** )  
- **GAAP Operating Margin**: slightly lower than 14%  **[ALGN_3403402_8]**  (no change from “below Q3 2023”  **[ALGN_3394147_6]** )  
- **Non-GAAP Operating Margin**: slightly up sequentially  **[ALGN_3403402_8]**  (raised from “flat compared to Q3 2023”  **[ALGN_3394147_6]** )  

**Annual guidance for FY 2024:**
- **Capital Expenditures**: above $100 million  **[ALGN_3403402_8]**  (raised from $100 million  **[ALGN_3394147_7]** )  

a672dd5d86a725031297422c343799ccfeb1ffadf4ca1d2e1e205d9a9a858706

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1997  **[0001097149-24-000011_algn-20231231.htm:95]**    | Present  | Current auditor   |

353a3460ba807bd1d7d0975be8e29f7841a947a8786263606c9f612425cc9f7c

e2ec7ed9b6c943a062ef74b11bd481095d98c108d1950808a358d1fe87df87c7

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue (Q3 2024): $977.9 million (+2% YoY)  **[0001097149-24-000060_algn-20240930.htm:24]** **[0001097149-23-000082_algn-20230930.htm:32]** **[0001097149-23-000082_algn-20230930.htm:23]**   
- Clear Aligner: $786.8 million (-1% YoY)  **[0001097149-24-000060_algn-20240930.htm:24]** **[0001097149-23-000082_algn-20230930.htm:32]** **[0001097149-23-000082_algn-20230930.htm:23]**   
- **Systems & Services: $191.0 million (+16% YoY)**  **[0001097149-24-000060_algn-20240930.htm:24]** **[0001097149-23-000082_algn-20230930.htm:32]** **[0001097149-23-000082_algn-20230930.htm:23]**   
- U.S.: $421.2 million (0% YoY)  **[0001097149-24-000060_algn-20240930.htm:25]** **[0001097149-24-000060_algn-20240930.htm:33]** **[0001097149-23-000082_algn-20230930.htm:24]**   
- **Switzerland: $216.6 million (-17% YoY)**  **[0001097149-24-000060_algn-20240930.htm:25]** **[0001097149-24-000060_algn-20240930.htm:33]** **[0001097149-23-000082_algn-20230930.htm:24]**   
- **Other International: $340.0 million (+22% YoY)**  **[0001097149-24-000060_algn-20240930.htm:25]** **[0001097149-24-000060_algn-20240930.htm:33]** **[0001097149-23-000082_algn-20230930.htm:24]**   

aee2f2b34df0d9d494a436acede6b33dab778be15afdea93a3a9de976f43b197

102ff14c2b5a887b69c5f95ae544d392644e57208250191d1eea677362db4680

Total Clear Aligner case volume (thousands)

Percentage of Invisalign cases submitted with a digital scanner in the Americas (percent)

Percentage of Invisalign cases submitted with a digital scanner in International region (percent)

Percentage of Invisalign cases submitted with a digital scanner by North American orthodontists (percent)

Total utilization rate of Invisalign cases per doctor (cases per doctor)

North American orthodontist utilization rate of Invisalign cases (cases per doctor)

North American GP utilization rate of Invisalign cases (cases per doctor)

International doctor utilization rate of Invisalign cases (cases per doctor)

Percentage year-over-year increase in Clear Aligner case volume for teenage patients (percent)

4e14beac039ee2800db6572522b45cfc99844b95d3c716ac83e690b32f457bd9

- **Align Technology reports stable demand and market conditions, providing confidence in their guidance and growth outlook.**  **[ALGN_3380474_23]** ,  **[ALGN_3380474_13]** ,  **[ALGN_3380474_19]**
- **The new iTero Lumina intraoral scanner has received enthusiastic response from orthodontic and general dentistry communities, and is expected to set a new industry standard and drive growth.**  **[ALGN_3380474_23]**
- **The Digital Subscription Program (DSP) is very popular among doctors, contributing incremental volume and revenue growth, with continued expansion planned.**  **[ALGN_3380474_25]**

800a4963f4554eda074896a68a878773d7b8f654615517e205e1295c6b0ee59a

1. **Restructuring and Margin Outlook**  
   **Q:** What's the nature of the restructuring and its impact on margins?  
   **A:** Align is undergoing restructuring involving a reduction of about **700 employees**, approximately **twice the size** of last year's restructuring.  **[ALGN_3403402_27]**  This move aims to create room for investment in key growth areas like **Direct Fab, 5-minute ClinCheck, and Lumina restorative**, while also delivering **year-over-year operating margin accretion in 2025**.  **[ALGN_3403402_27]**  The restructuring will help fund these initiatives and position the company for future growth.  **[ALGN_3403402_27]** 

2. **Macro Conditions and US Market Softness**  
   **Q:** How is the macro environment affecting the US market versus international?  
   **A:** The US market is facing challenges due to **low consumer confidence and economic concerns**, impacting patient throughput and case acceptance rates.  **[ALGN_3403402_10]** **[ALGN_3403402_12]** **[ALGN_3403402_19]**  Both the orthodontic and dental channels are equally pressured.  **[ALGN_3403402_19]**  In contrast, international markets, particularly **China and parts of Europe**, have shown better performance.  **[ALGN_3403402_12]** **[ALGN_3403402_15]** **[ALGN_3403402_27]** 

3. **Operating Margin Expansion and Investments**  
   **Q:** Are you committing to operating margin expansion in '25 despite investments?  
   **A:** Yes, Align is committed to **year-over-year operating margin accretion in 2025**, even while investing in initiatives like **Direct 3D Printing Fabrication, 5-minute ClinCheck, and Lumina**.  **[ALGN_3403402_13]** **[ALGN_3403402_16]**  The restructuring provides room to make these investments while still improving margins.  **[ALGN_3403402_13]** **[ALGN_3403402_16]** 

4. **3D Printing Initiative and Gross Margin Impact**  
   **Q:** How will the 3D printing initiative impact gross margins?  
   **A:** Initially, the **Direct Fab 3D printing** will have a higher cost until scaled up, which may dilute gross margins in 2025.  **[ALGN_3403402_16]**  However, as production scales over the next **2 to 3 years**, Align expects significant improvements in productivity and reduced material costs, positively impacting gross margins.  **[ALGN_3403402_16]** **[ALGN_3403402_17]** 

5. **Top Line Growth Expectations in 2025**  
   **Q:** What are your top line expectations for 2025?  
   **A:** While not providing specific guidance, Align indicates that starting from the **fourth quarter** is a good baseline.  **[ALGN_3403402_24]**  Future growth will depend on economic conditions, with additional contributions expected from new products like **Lumina restorative**.  **[ALGN_3403402_24]**  More details will be provided as 2025 approaches.  **[ALGN_3403402_14]** **[ALGN_3403402_24]** 

6. **Teen Market Dynamics**  
   **Q:** What's your assessment of the teen market performance?  
   **A:** Internationally, especially in **Asia**, the teen market showed strong performance with products like **Invisalign First and Invisalign Palatal Expander**.  **[ALGN_3403402_17]**  In the US, **orthodontic customers are challenged**, with lower close rates among teens due to economic pressures, leading some practices to revert to **wires and brackets** to maintain profitability.  **[ALGN_3403402_17]** 

7. **iTero Scanner and Lumina Rollout**  
   **Q:** How is the iTero growth progressing with Lumina rollout?  
   **A:** Despite pressure on capital equipment sales, the **Lumina scanner**, a **brand-new platform**, has captured doctors' attention, resulting in strong sales even in a traditionally slower third quarter.  **[ALGN_3403402_18]**  The **restorative workflow** is expected to launch in the **first quarter of next year**, further supporting growth.  **[ALGN_3403402_18]** 

8. **GLP-1 Medications Impact**  
   **Q:** Is demand for GLP-1 drugs affecting Invisalign sales?  
   **A:** While some speculate that spending on **GLP-1 medications** might impact discretionary spending on treatments like Invisalign, Align hasn't quantified this effect.  **[ALGN_3403402_23]**  They believe the **broader economic environment and low consumer confidence** are the more significant factors affecting demand.  **[ALGN_3403402_23]** 

9. **China Market Performance**  
   **Q:** Can you elaborate on the positive performance in China?  
   **A:** China showed strong results during the **teen season**, with increased sales to more doctors and higher utilization.  **[ALGN_3403402_15]**  There was good adoption of products like **Invisalign First**, contributing to the strong performance in this market.  **[ALGN_3403402_15]** 

10. **ASPs and Factors Affecting Them**  
    **Q:** What factors are affecting ASPs, and what's the outlook?  
    **A:** ASPs have been impacted by factors like **VAT in the UK**, which will anniversary at the beginning of next year.  **[ALGN_3403402_22]** **[ALGN_3403402_26]**  Currency headwinds have also played a role.  **[ALGN_3403402_22]**  Looking ahead, Align expects ASPs to be **flat to slightly down**, with percentages in the range of **1.1% down year-over-year**.  **[ALGN_3403402_22]** 

11. **Costco Partnership and Financing Initiatives**  
    **Q:** What's the status of the Costco partnership and financing initiatives?  
    **A:** The **Costco partnership** has had some success but is not yet material to the business.  **[ALGN_3403402_14]**  It's part of a **brand strategy** to leverage the strong Invisalign brand.  **[ALGN_3403402_14]**  Align is also working on **financing initiatives** to help consumers who are financially challenged, aiming to increase case acceptance rates.  **[ALGN_3403402_14]** 

1105b5c09db31104e3221c1a22e304c1522eea2e6afece9fd6fcf0c8f117fd93

- **Investing in Key Technologies for Future Growth:** Align is heavily investing in critical future technologies such as **3D printing** and the next phases of the **Lumina scanner**, which they believe will revolutionize the orthodontic industry and position the company for another growth cycle when the market rebounds.  **[ALGN_3403402_29]** **[ALGN_3403402_20]** **[ALGN_3403402_16]**
- **Strong Adoption of iTero Lumina Scanner:** Despite economic challenges, the new **iTero Lumina scanner** has captured doctors' attention, leading to strong sales and providing a foundation for future growth, especially with the upcoming **restorative software release in Q1 '25**.  **[ALGN_3403402_25]** **[ALGN_3403402_18]**
- **Significant Growth in International Markets:** Align reported strong growth in markets like **China and the Asia Pacific region**, with record teen case starts driven by products like **Invisalign First** and the **Palatal Expander**, indicating underpenetrated global markets and substantial future opportunities.  **[ALGN_3403402_20]** **[ALGN_3403402_15]** **[ALGN_3403402_17]**

a0ddf01ab37ca31d7ace3c45694f509c3da55c9ed1e82f80161aa717f2842b21

- **Macro uncertainties**, including higher inflation and interest rates, might impact consumer demand for Align's products.  **[ALGN_3380474_23]**
- **Investors are concerned about potential weakness in consumer discretionary spending**, with reports of downticks in March that could affect Invisalign demand. Align's management indicates stability but acknowledges differences across regions.  **[ALGN_3380474_19]**
- To drive growth in Clear Aligner volumes amid tougher comparisons, **Align may need to increase investments in marketing and traffic generation**, potentially impacting profitability margins.  **[ALGN_3380474_19]**

cd42f53697e8cca4fe32113923eb5eab49b798f0b1bc96f5ebeb9f9152a29e62

1. **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.  **[ALGN_3394147_9]**  Over **1 percentage point** of the reduction is related to foreign exchange.  **[ALGN_3394147_9]**  Customers are buying more lower-priced products, like the Doctor Subscription Program, which has a lower ASP but better gross margins.  **[ALGN_3394147_9]** 

2. **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.  **[ALGN_3394147_10]**  The delay accounts for slightly less than **1%** of total revenue.  **[ALGN_3394147_10]** 

3. **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.  **[ALGN_3394147_13]**  The company is mindful of operating expenses and aims to deliver volume while maintaining profitability.  **[ALGN_3394147_13]** 

4. **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.  **[ALGN_3394147_19]**  The lower ASPs are offset by better margins, and the company is not seeing market-driven price declines but adapting to customer preferences.  **[ALGN_3394147_19]** 

5. **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.  **[ALGN_3394147_14]**  Growth occurred globally, demonstrating success in attracting new doctors and re-engaging previous ones.  **[ALGN_3394147_14]** 

6. **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**.  **[ALGN_3394147_15]**  The process involves significant equipment work and sourcing new resin, requiring time to ensure efficiency and capacity.  **[ALGN_3394147_15]** 

7. **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.  **[ALGN_3394147_22]**  The team anticipates a strong teen quarter in the third quarter, which is historically the largest for China.  **[ALGN_3394147_22]** 

8. **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.  **[ALGN_3394147_21]**  They expect market stability and are pleased with progress in the GP (General Practitioner) business and DSOs (Dental Service Organizations).  **[ALGN_3394147_21]** 

9. **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.  **[ALGN_3394147_10]**  Growth was strong globally, reflecting adoption of various products and new doctors entering the ecosystem.  **[ALGN_3394147_10]** 

10. **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.  **[ALGN_3394147_18]**  Programs like the Costco pilot are designed to improve conversion by connecting potential patients with doctors.  **[ALGN_3394147_18]**  These initiatives may affect ASP due to product mix but are intended to boost overall volume and margins.  **[ALGN_3394147_18]** 

676f8243aa4381953ca9941951f4577ad28952346b1dfa90eee1209d8cf36aec

- **Align Technology announced a global reorganization and restructuring, including headcount reductions**, which may indicate cost pressures and challenges in the business.  **[ALGN_3403402_29]** **[ALGN_3403402_20]** **[ALGN_3403402_3]**
- **Investments in new technologies like 3D printing are expected to be dilutive to gross margins in fiscal year 2025**, suggesting near-term margin pressure before benefits are realized in 2-3 years.  **[ALGN_3403402_16]** **[ALGN_3403402_17]**
- **Reduced R&D spending (down 4% year-over-year) and significantly lower CapEx spending** could signal a reduction in investment towards future growth initiatives.  **[ALGN_3403402_20]**

a076fc6bcef11d139b98bc6890014173285d8dedd592b39705c90acae5ea1faf

- **Strong cash flow generation allowed Align to execute a $350 million share repurchase last quarter**, demonstrating confidence in the company's future prospects.  **[ALGN_3371381_29]**
- **Expansion of the Invisalign Doctor Subscription Program (DSP) globally** is expected to drive future revenue growth as more doctors adopt and utilize the program.  **[ALGN_3371381_22]**
- **Positive outlook for the Chinese market**, with improved predictability and a strong competitive position, contributing to growth in 2024.  **[ALGN_3371381_11]**

75da1925c6c1c49f830c73654e17cca90524023b7fc783f9cdfd30e2344c4ccd

1. **Raised Guidance and Outlook**  
   **Q:** What drove the raise in full-year guidance?  
   **A:** Management increased the full-year revenue outlook for Clear Aligners from mid-single digits to a midpoint of **7%**, citing **continued stability** in the market and strong execution on core strategies. New products like **Lumina** and **Invisalign Palatal Expander (IPE)** are expected to supplement growth, particularly in the teen segment. This combination of stability and innovation gives them confidence in the updated guidance.  **[ALGN_3380474_20]** 

2. **Operating Margin and Investments**  
   **Q:** Why is operating margin guidance only slightly up despite higher revenues?  
   **A:** Although revenues are increasing, operating margins are only slightly up due to continued investments in go-to-market activities and new products like **Lumina** and **IPE**. These investments are expected to drive growth, especially in the second half. Management emphasized balancing growth initiatives with profitability, and they aim for sequential improvement in operating margin while delivering year-over-year expansion.  **[ALGN_3380474_14]** **[ALGN_3380474_21]** 

3. **Demand Environment Stability**  
   **Q:** Did you see a downturn in demand like others did in March?  
   **A:** Unlike other consumer discretionary companies, Align did **not** experience a downtick in March. The demand environment remained **stable** globally, with both adult and teen segments holding up well. Management attributes this stability to their international business, which benefits from varying demand patterns across regions.  **[ALGN_3380474_11]** **[ALGN_3380474_18]** 

4. **Growth in Teen and Tween Market**  
   **Q:** How will new products impact growth in the teen segment?  
   **A:** The introduction of the **Invisalign Palatal Expander (IPE)** and **Invisalign First** allows Align to address **20%** of the pre-teen (tween) market they couldn't serve before. These products are expected to attract more orthodontists to begin Phase I treatments, potentially driving significant growth in the teen segment over time. However, acceptance in the orthodontic community may take time.  **[ALGN_3380474_12]** **[ALGN_3380474_19]** 

5. **Patient Financing Impact**  
   **Q:** Are tougher lending standards affecting patient financing?  
   **A:** Roughly **one-third** of cases in the U.S. receive external financing, but management perceives the lending environment as **stable**. While higher interest rates last year caused some sticker shock, they believe patients and providers have adjusted. Align is assisting doctors by offering extended payment terms and working with partners to provide better financing options to patients.  **[ALGN_3380474_16]** 

6. **Lumina Scanner Launch**  
   **Q:** What is the progress and impact of the Lumina scanner launch?  
   **A:** The **Lumina** scanner, a new platform six years in the making, has received enthusiastic responses, particularly from orthodontists. Its speed and simplicity are unmatched, and while it's still early in the rollout, it's expected to set a new industry standard and contribute to growth. The full restorative capabilities are anticipated in the **fourth quarter**.  **[ALGN_3380474_22]** 

7. **U.S. Orthodontic Market Trends**  
   **Q:** Is there structural change in the U.S. orthodontic market?  
   **A:** Management observed more **stability** in the U.S. orthodontic market this year compared to last, with both teen and adult segments performing well. While new products like **Lumina** and **IPE** are strengthening their position, they caution against projecting a major shift, noting that the market can fluctuate month to month.  **[ALGN_3380474_23]** 

8. **Investments in 3D Printing**  
   **Q:** How is spending on 3D printing impacting finances?  
   **A:** Investments in 3D printing, including the acquisition of **Cubicure**, are part of their R&D spending aimed at building a scalable platform for direct fabrication printing. While the spending varies over time, management is committed to balancing these investments with growth in their core business.  **[ALGN_3380474_17]** 

f13cf6ab165a8b450b90a4ed142bce81033aa73a1ec297604b38807ef079ebab

1. **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.  **[ALGN_3371381_13]** 

2. **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.  **[ALGN_3371381_17]** 

3. **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.  **[ALGN_3371381_16]** 

4. **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.  **[ALGN_3371381_20]** 

5. **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.  **[ALGN_3371381_11]** 

6. **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.  **[ALGN_3371381_22]** 

7. **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.  **[ALGN_3371381_21]** 

8. **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.  **[ALGN_3371381_29]** 

9. **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.  **[ALGN_3371381_25]** 

10. **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.  **[ALGN_3371381_14]** 

11. **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.  **[ALGN_3371381_23]** 

12. **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.  **[ALGN_3371381_18]** 

13. **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.  **[ALGN_3371381_12]** 

14. **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.  **[ALGN_3371381_26]** 

15. **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.  **[ALGN_3371381_27]** 

16. **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.  **[ALGN_3371381_24]** 

17. **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.  **[ALGN_3371381_15]** 

18. **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.  **[ALGN_3371381_28]** 

19. **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.  **[ALGN_3371381_19]** 

3bbd7a3fe70826fc7f774d5c0ff71ce022347c5414a16807980038e44bcaace6

- **Conservative revenue guidance for 2024 in the Systems and Services segment, despite new product launches like the iTero Lumina scanner, reflects management's concerns about macroeconomic uncertainties impacting growth.**  **[ALGN_3371381_25]**
- **Delays and uncertainties in scaling direct 3D printing initiatives may postpone anticipated cost savings and margin improvements, as management cannot specify when significant benefits will materialize.**  **[ALGN_3371381_17]**
- **Product mix shift toward lower-priced products may offset the benefits of price increases, limiting revenue growth and margin expansion despite higher prices on other products.**  **[ALGN_3371381_10]**

e7a5e748cc34565a3f8d1438dcdf223cb356547ea1f8ac38548b1d9d96f141f1

- **Increasing doctor utilization and expansion of the doctor base globally**, indicating successful investments in training and market penetration. This growth occurred across the globe, not just in one region.  **[ALGN_3394147_14]**
- **Strong adult case volume growth, achieving the highest quarter in many quarters**, reflecting robust demand and stability in the adult segment.  **[ALGN_3394147_21]**
- **Improved margins despite lower ASPs**, due to a shift to higher-margin products and cost efficiencies, allowing for **increased non-GAAP operating margin guidance for 2024**.  **[ALGN_3394147_11]** **[ALGN_3394147_13]**

3694d699486e0d0164d5f7052ace89d1eccf2558284f0eb281c861435becc6a2

Align Technology Inc (ALGN)

Financials