Invisalign Itero

Press Release

Apr 25, 2018

Align Technology Announces First Quarter 2018 Financial Results

  • Q1 revenues up 40.8% year-over-year to a record $436.9 million, and diluted EPS of $1.17
  • Q1 operating income up 59.2% year-over-year to $98.2 million or operating margin of 22.5%
  • Q1 total Invisalign case shipments up 30.8% year-over-year to 272.2 thousand
  • Q1 Invisalign cases for teenage patients up 40.9% year-over-year to 69.1 thousand
  • Q1 scanner and services revenues up 84.0% year-over-year to $51.4 million

SAN JOSE, Calif., April 25, 2018 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq:ALGN) today reported financial results for the first quarter ended March 31, 2018. Invisalign case shipments in the first quarter of 2018 (Q1’18) were 272.2 thousand, up 30.8% year-over-year. Americas and International region case shipments were up year-over-year 24.0% and 43.4%, respectively. Beginning Q1'18, Americas region includes North America and LATAM and the International region includes EMEA and APAC. Q1’18 Invisalign cases for teenage patients were 69.1 thousand, up 40.9% year-over-year. Q1’18 revenues were $436.9 million, up 40.8% year-over-year with Q1’18 operating income $98.2 million, up 59.2% year-over-year resulting in an operating margin of 22.5%.  Net profit was $95.9 million, or $1.17 per diluted share, up $0.32 over the prior year.

Commenting on Align’s Q1 2018 results, Align Technology President and CEO Joe Hogan said, “I’m pleased to report better than expected first quarter results and a strong start to the year for Align, with revenues, volumes and EPS above our guidance. Record Q1 revenues were up 41% year-over-year reflecting continued strong Invisalign volume across all geographies and customer channels, as well as iTero scanner sales which were up 84% year-over-year. Q1 Invisalign volume growth of 31% year-over-year was driven by increased utilization including strong teen case growth globally, and expansion of our customer base, which included over 4,200 new Invisalign-trained doctors worldwide.”

GAAP Summary Financial Comparisons
First Quarter Fiscal 2018

  Q1’18 Q4’17 Q1’17  Q/Q Change  Y/Y Change
Invisalign Case Shipments1   272,235   255,030   208,060   +6.7%   +30.8%
Net Revenues $436.9M $421.3M $310.3M   +3.7%   +40.8%
Clear Aligner2 $385.5M $364.2M $282.4M   +5.8%   +36.5%
Scanner & Services $51.4M $57.1M $27.9M   (10.0)%   +84.0%
Net Profit3 $95.9M $10.3M $69.4M   834.0%   38.1%
Diluted EPS3 $1.17 $0.13 $0.85   $1.04   $0.32

Note: Changes and percentages are based on actual values and may effect totals due to rounding
1 Invisalign Shipment figures do not include SmileDirectClub aligners
2 Clear aligner revenue includes revenues from Invisalign clear aligners and SmileDirectClub aligners
3 Q4’17 net profit and diluted EPS includes $86.6 million tax expense, or $1.06 per diluted share negative impact due to the U.S. Tax Cut and Jobs Act

As of March 31, 2018, Align had $673.0 million in cash, cash equivalents and marketable securities compared to $761.5 million as of December 31, 2017. We repurchased approximately 0.4 million shares of stock for $100.0 million in Q1’18 under the April 2016 Repurchase Program. We have $100.0 million remaining available for repurchases under the existing stock repurchase authorization.      

Announcements and Highlights

Today, Align issued the following press releases entitled:

  • Align Introduces New Invisalign Go Clear Aligner System Integrated with iTero Scanner for Mild to Moderate Cases
  • Align Technology To Introduce Two New iTero Scanners Featuring Greater Power and Portability
  • Align Announces China Food and Drug Administration Approval for the iTero Element Scanner

Additional highlights in 2018 include:

  • Announced a new expanded Invisalign product portfolio that includes new options and greater flexibility to treat a broader range of patients.  The new Invisalign product portfolio offers doctors more choices by extending desirable features across the entire portfolio and creating new Invisalign Treatment Packages, as well as new options to treat young patients with early mixed dentition.
  • Announced it is extending the Invisalign product family with Invisalign First clear aligners, designed with features specifically for younger patients with early mixed dentition (with a mixture of primary/baby and permanent teeth).
  • Announced the commercial availability of Vivera Retainers with Precision Bite Ramps, the first retainers in the market that can be customized to provide additional support after deep bite correction.

Q2 2018 Business Outlook

For the second quarter of 2018 (Q2’18), Align provides the following guidance:

  • Net revenues in the range of $460 million to $470 million, up approximately 29% to 32% over the same period a year ago.
  • Invisalign case shipments in the range of 296 thousand to 301 thousand, up approximately 28% to 30% over the same period a year ago.
  • Operating margin in the range of 21.0% to 21.8%
  • Diluted EPS in the range of $1.02 to $1.06

Align Web Cast and Conference Call

Align will host a conference call today, April 25, 2018 at 4:30 p.m. ET, 1:30 p.m. PT, to review its first quarter 2018 results, discuss future operating trends and the business outlook. The conference call will also be web cast live via the Internet.  To access the webcast, go to the “Events & Presentations” section under Company Information on Align’s Investor Relations web site at  To access the conference call, please dial 201-689-8261. An archived audio web cast will be available beginning approximately one hour after the call's conclusion and will remain available for approximately 12 months. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with conference number 13678038 followed by #. For international callers, please dial 201-612-7415 and use the same conference number referenced above. The telephonic replay will be available through 5:30 p.m. ET on May 9, 2018.

About Align Technology, Inc.

Align Technology designs and manufactures the Invisalign® system, the most advanced clear aligner system in the world, and iTero® intraoral scanners and services. Align’s products help dental professionals achieve the clinical results they expect and deliver effective, cutting-edge dental options to their patients. Visit for more information.

For additional information about the Invisalign system or to find an Invisalign provider in your area, please visit For additional information about iTero digital scanning system, please visit

Forward-Looking Statement

This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the second quarter of 2018, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, tax rate including the financial impact of recent U.S. Tax Cuts and Jobs Act and case shipments.  Forward-looking statements contained in this news release and the tables below 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 are only predictions 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, difficulties predicting customer and consumer purchasing behavior, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers, the possibility that the development and release of new products does not proceed in accordance with the anticipated timeline, the possibility that the market for the sale of these new products may not develop as expected, or that the expected benefits of new or existing business relationships will not be achieved as anticipated, the risks relating to Align's ability to sustain or increase profitability or revenue growth in future periods while controlling expenses, growth related risks, including capacity constraints and pressure on our internal systems and personnel, the security of customer and/or patient data is compromised for any reason, continued customer demand for our existing and new products, changes in consumer spending habits as a result of, among other things, prevailing economic conditions, levels of employment, salaries and wages and consumer confidence, the timing of case submissions from our doctors within a quarter, acceptance of our products by consumers and dental professionals, changes to our interpretation of the U.S. Tax Cuts and Jobs Act which may change as we receive additional clarification and implementation guidance, possibly materially, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to develop and successfully introduce new products and product enhancements and the loss of key personnel. These and other risks are detailed from time to time in Align's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2018. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

(in thousands, except per share data)
    Three Months Ended
March 31,
    2018   2017
Net revenues   $ 436,924   $ 310,341    
Cost of net revenues     109,516     74,716    
Gross profit     327,408     235,625    
Operating expenses:          
Selling, general and administrative     199,625     151,148    
Research and development     29,591     22,804    
Total operating expenses     229,216     173,952    
Income from operations     98,192     61,673    
Interest income     2,176     1,195    
Other income (expense), net     177     450    
Net income before provision for (benefit from) income taxes and equity in losses of investee     100,545     63,318    
Provision for (benefit from) income taxes     2,902     (7,223 )  
Equity in losses of investee, net of tax     1,777     1,121    
Net income   $ 95,866   $ 69,420    
Net income per share:          
Basic   $ 1.20   $ 0.87    
Diluted   $ 1.17   $ 0.85    
Shares used in computing net income per share:          
Basic     80,036     79,904    
Diluted     81,628     81,534    
* During Q1'18, we adopted the ASC 606, "Revenues from Contracts with Customers" using the full retrospective method. The adoption of ASC 606 did not have a material impact on our Condensed Consolidated Statements of Operations presented herein.

(in thousands)  
    March 31,
  December 31,
Current assets:          
Cash and cash equivalents   $ 498,003   $ 449,511  
Marketable securities, short-term     164,740     272,031  
Accounts receivable, net     361,459     324,189  
Inventories     35,866     31,688  
Prepaid expenses and other current assets     108,708     80,948  
Total current assets     1,168,776     1,158,367  
Marketable securities, long-term     10,212     39,948  
Property, plant and equipment, net     400,528     348,793  
Equity method investments     52,829     54,606  
Goodwill and intangible assets, net     87,629     89,068  
Deferred tax assets     45,524     49,334  
Other assets     17,233     43,893  
Total assets   $ 1,782,731   $ 1,784,009  
Current liabilities:          
Accounts payable   $ 41,881   $ 36,776  
Accrued liabilities     180,093     195,562  
Deferred revenues     296,011     267,713  
Total current liabilities     517,985     500,051  
Income tax payable     119,349     114,091  
Other long-term liabilities     17,937     15,579  
Total liabilities     655,271     629,721  
Total stockholders' equity     1,127,460     1,154,288  
Total liabilities and stockholders' equity   $ 1,782,731   $ 1,784,009  
* During Q1'18, we adopted the ASC 606, "Revenues from Contracts with Customers" using the full retrospective method. Condensed Consolidated Balance Sheet as of December 31, 2017 has been recasted to comply with the adoption.  

(in thousands)
    Three Months Ended
March 31,
Net income   $ 95,866     $ 69,420    
Net cash provided by operating activities     77,332       47,621    
Net cash provided by (used in) investing activities     109,269       (148,462 )  
Net cash used in financing activities     (139,822 )     (33,001 )  
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash     1,715       2,430    
Net increase (decrease) in cash, cash equivalents, and restricted cash     48,494       (131,412 )  
Cash, cash equivalents, and restricted cash at beginning of the period     450,125       393,019    
Cash, cash equivalents, and restricted cash at end of the period   $ 498,619     $ 261,607    
*During Q1'18, we adopted ASU 2016-18, "Statement of Cash Flows - Restricted Cash" on a retrospective basis. Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2017 has been recasted to comply with the adoption.  

      Q1   Q2   Q3   Q4   Fiscal   Q1    
Invisalign Average Selling Price (ASP):                              
Worldwide ASP     $ 1,270     $ 1,285     $ 1,310     $ 1,305     $ 1,295     $ 1,310      
International ASP     $ 1,345     $ 1,340     $ 1,395     $ 1,400     $ 1,375     $ 1,435      
Invisalign Cases Shipped by Geography:                              
Americas       134,450       148,470       147,660       155,625       586,205       166,665      
International       73,610       83,420       88,405       99,405       344,840       105,570      
Total Cases Shipped       208,060       231,890       236,065       255,030       931,045       272,235      
 YoY % growth       27.1%       31.0%       32.8%       34.2%       31.4%       30.8%      
 QoQ % growth       9.5%       11.5%       1.8%       8.0%           6.7%      
Number of Invisalign Doctors Cases Were Shipped To:                            
Americas       24,595       25,570       25,865       26,480       38,230       27,105      
International       14,270       15,695       16,740       18,505       26,175       19,700      
Total Doctors Cases Shipped To       38,865       41,265       42,605       44,985       64,405       46,805      
Invisalign Doctor Utilization Rates**:                              
North America       5.6       5.9       5.8       6.0       15.8       6.3      
North American Orthodontists       12.6       13.6       13.8       14.0       46.6       15.3      
North American GP Dentists       3.1       3.3       3.1       3.3       8.2       3.4      
International       5.2       5.3       5.3       5.4       13.2       5.4      
Total Utilization Rates       5.4       5.6       5.5       5.7       14.5       5.8      
Number of Invisalign Doctors Trained:                              
Americas       1,040       1,820       1,740       1,685       6,285       1,605      
International       2,220       3,055       2,540       2,400       10,215       2,645      
Total Doctors Trained Worldwide       3,260       4,875       4,280       4,085       16,500       4,250      
Total to Date Worldwide       118,730       123,605       127,885       131,970       131,970       136,220      
Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals. Effective Q1'18, Americas region includes North America and LATAM. International region includes EMEA and APAC. We have recasted historical data to reflect the change.
* Invisalign business metrics exclude SmileDirectClub aligners. 
** # of cases shipped / # of doctors to whom cases were shipped. LATAM utilization rate is not separately disclosed, but included in the total utilization rates. 
(in thousands)    
      Q1   Q2   Q3   Q4   Fiscal   Q1    
Stock-based Compensation (SBC)                              
SBC included in Gross Profit     $ 925     $ 768     $ 833     $ 804     $ 3,330     $ 881      
SBC included in Operating Expenses       13,887       13,477       14,134       14,026       55,524       14,949      
Total SBC Expense     $ 14,812     $ 14,245     $ 14,967     $ 14,830     $ 58,854     $ 15,830      


The outlook figures provided below and elsewhere in this press release are approximate in nature since Align’s business outlook is difficult to predict. Align’s future performance involves numerous risks and uncertainties and the company’s results could differ materially from the outlook provided. Some of the factors that could affect Align’s future financial performance and business outlook are set forth under “Forward Looking Information” above in this press release.

Financial Outlook  
(in millions, except per share amounts and percentages)  
    Q2'18 Guidance    
Net Revenues   $460.0 - $470.0    
Gross Margin   74.2% - 75.0%    
Operating Expenses   $245.0 - $250.0    
Operating Margin   21.0% - 21.8%    
Net Income per Diluted Share   $1.02 - $1.06 (1)  
Business Metrics:   Q2'18    
Case Shipments   296K - 301K    
Capital Expenditure   $65M - $70M    
Depreciation & Amortization   $10M - $11M    
Diluted Shares Outstanding   81.6M (2)  
Stock Based Compensation Expense   $18.3M    
Effective Tax Rate   13.0% (1)  
(1) Includes the benefit from the adoption of the accounting standard update 2016-09 related to share-based compensation expense  
(2) Excludes any stock repurchases during the quarter    

Align Technology
Madelyn Homick
(408) 470-1180

Ethos Communication:
Shannon Mangum Henderson
(678) 261-7803

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Source: Align Technology, Inc.


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