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Shares used in computing net income per share basic (thousands)

Shares used in computing net income per share diluted (thousands)

822777dc497e12a2564c5feef9d4d8f72daee8174017f6459444d72a85b2b419

Align Technology’s cash and cash equivalents dropped sharply in Q2 2024 due to a combination of factors. The primary reasons were the significant cash outflows related to **investing activities** (including major expenditures for acquisitions and property, plant, and equipment) and **financing activities** (driven notably by substantial share repurchases and other financing-related payments). These negative flows outweighed the positive contributions from operating activities, and when combined with a minor negative impact from foreign exchange changes, resulted in a **net decrease of $176,057 thousand** in cash, cash equivalents, and restricted cash during this period.  **[0001097149-24-000049_algn-20240630.htm:42]** **[0001097149-24-000045_algn-q224earningspressrele.htm:8]** 

Why did cash and cash equivalents drop so sharply in Q2 2024?

While the overall Q4 2023 total assets increased by **$135,930 thousand** compared to the prior period, there were components that declined. In Q4 2023, **inventories** dropped from **$338,752 thousand** to **$296,902 thousand** and **marketable securities** (both short-term and long-term) decreased from a combined **$99,512 thousand** to **$43,326 thousand**. These declines in inventories and marketable securities partially offset the increases in accounts receivable, property, plant, and equipment, goodwill, and other assets.  **[0001097149-24-000011_algn-20231231.htm:101]** 

What caused total assets to decline in Q4 2023?

The documents do not provide specific reasons for the decrease in common stock value in Q4 2023. It is noted that the common stock figure for Q3 was **8** and decreased to **7** in Q4, but the documents do not elaborate on any factors contributing to this change.  **[0001097149-23-000082_algn-20230930.htm:3]** **[0001097149-24-000060_algn-20240930.htm:3]** **[0001097149-24-000049_algn-20240630.htm:3]** **[0001097149-24-000033_algn-20240331.htm:3]** **[0001097149-24-000011_algn-20231231.htm:101]** 

Why did the common stock value decrease in Q4 2023?

The drop in ALGN's long-term marketable securities in Q1 2024 was primarily driven by three factors. **Maturities and reclassification** of securities were key, as securities that were nearing maturity were shifted from long-term to short-term. This was accompanied by **unrealized losses** resulting from changes in interest rates and credit spreads, totaling **$539 thousand** in unrealized losses. Additionally, the company made **portfolio adjustments** to manage liquidity and risk exposure by reducing its holdings in long-term securities in favor of other asset classes or shorter-term investments.  **[0001097149-24-000033_algn-20240331.htm:8]** 

What drove the drop in long-term marketable securities in Q1 2024?

The documents note that **Other assets increased from $128,682 thousand at December 31, 2023, to $197,898 thousand at June 30, 2024**; however, they do not provide specific reasons for this notable rise.  **[0001097149-24-000049_algn-20240630.htm:3]** 

What led to the notable rise in other assets in Q2 2024?

e02d15fdc6c00e0c21f6816c52bd4102f0a88c51b93fb63471fb144753d2619a

Operating cash flow in Q4 2023 was notably low due to **timing-related tax payments** and a **spike in prepaid expenses** that directly reduced the available cash. Additionally, **seasonal factors** and the **timing of operations**, including lower teen case starts typical for this period, contributed to the weaker operating cash flow during the quarter.  **[ALGN_3371381_29]** **[ALGN_3371381_29]** **[ALGN_3371381_6]** **[ALGN_3371381_1]** 

Why was Operating Cash Flow so low in Q4 2023?

The significant drop in operating cash flow in Q1 2024 was driven by several factors. Despite an increase in net income, ALGN experienced a marked shift in deferred taxes—from a benefit of **$(18,417) thousand** in Q1 2023 to an expense of **$18,047 thousand** in Q1 2024—which reduced cash flow.  **[0001097149-24-000033_algn-20240331.htm:5]**  Moreover, there were substantial working capital changes, including a much larger outflow for prepaid expenses and other assets (**$79,160 thousand** versus **$26,850 thousand** in Q1 2023) and for accounts receivable (**$69,589 thousand** versus **$32,734 thousand**), as well as a swing in accrued and other long-term liabilities from a cash inflow in Q1 2023 to an outflow in Q1 2024.  **[0001097149-24-000033_algn-20240331.htm:5]** **[0001097149-24-000033_algn-20240331.htm:38]**  Finally, a decline in deferred revenues further contributed to the decrease.

What drove the significant drop in Operating Cash Flow in Q1 2024?

The **Other non-cash operating activities** turned negative in Q1 2024 primarily because the company recorded a **gain on an equity investment**, which reduced the non-cash operating activities amount, resulting in a negative value of **$(2,359) thousand** compared to positive figures in previous quarters.  **[0001097149-24-000033_algn-20240331.htm:5]** **[0001097149-24-000033_algn-20240331.htm:38]** 

Why did Other Non-Cash Operating Activities turn negative in Q1 2024?

In Q1 2024, the large negative acquisition outlay was primarily due to the **acquisition of Cubicure GmbH**, a leader in direct 3D printing solutions, which is aligned with Align Technology's strategy to scale its 3D printing operations and enhance its aligner manufacturing capabilities.  **[0001097149-24-000033_algn-20240331.htm:5]** **[ALGN_3380474_8]** **[0001097149-24-000026_algn-q124earningspressrele.htm:1]** 

What caused the large negative Acquisition outlay in Q1 2024?

The documents do not provide specific details about what led to the impairment recorded in Q4 2023. However, it is noted that impairments typically occur when the **fair value of an investment declines below its carrying value** and the decline is deemed to be **other-than-temporary**. This situation can be driven by factors such as **changes in market conditions**, **financial difficulties of the investee**, or **strategic decisions by the company**.  **[0001097149-24-000011_algn-20231231.htm:103]** 

What led to recording an impairment of equity investment in Q4 2023?

f61db4a3a0e0ec78125304f3fce6789b94f049cadc1e62545404f7ca64434962

Cash and cash equivalents (USD, thousands)

Accounts receivable, net of allowance for doubtful accounts (USD, thousands)

Inventories (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Property, plant and equipment, net (USD, thousands)

Operating lease right-of-use assets, net (USD, thousands)

Goodwill (USD, thousands)

Intangible assets, net (USD, thousands)

Deferred tax assets (USD, thousands)

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Accounts payable (USD, thousands)

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Total liabilities and stockholders’ equity (USD, thousands)

d447caf457dec882657281e869e4d65e838fde42e7486525d5998482f846815a

Net cash provided by operating activities [USD, thousands]

Net cash used in investing activities [USD, thousands]

Net cash used in financing activities [USD, thousands]

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash [USD, thousands]

Net increase (decrease) in cash, cash equivalents, and restricted cash [USD, thousands]

Cash, cash equivalents, and restricted cash at beginning of period/year [USD, thousands]

Cash, cash equivalents, and restricted cash at end of period/year [USD, thousands]

fd80da4a9ee3c565d5024f7c3fad3f70e68f92af4fea5cfac78b621cb73086eb

9a709a5a05939db41f280f6807e8ede1db19ae63f34720ec3d8b69e640a378fb

dfe48329a397c3af22a8139b53ebcc010b7c0c087b9370b9d6722747725057ca

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

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Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

54003d013307449cdc573bc08bf19a2a1c6b33300ff1905e9d026020b62d7cd4

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)

ALIGN TECHNOLOGY (ALGN)

Financials